Q1 delivered higher revenue and profit, but the focus for the first half is whether operating profit builds as planned

Revenue in Q1 FY2027 was ¥29,282 million, operating profit was ¥707 million, ordinary profit was ¥711 million, and quarterly net profit attributable to owners of the parent was ¥428 million. Compared with revenue of ¥24,964 million and operating profit of ¥429 million in the year-earlier period, revenue increased 17.3% and operating profit increased 64.7%, meaning profit growth outpaced revenue growth, which is positive.

The full-year forecasts remain unchanged at revenue of ¥118,500 million, operating profit of ¥3,500 million, ordinary profit of ¥3,500 million, and net profit attributable to owners of the parent of ¥2,100 million. Calculated mechanically, Q1 progress was 24.7% for revenue and 20.2% for operating profit. This is an arithmetic comparison against the 25% benchmark for equal quarterly allocation, not the company's plan, which reflects seasonality, but it indicates that operating profit is progressing more slowly than revenue.

In FY2026 H1, revenue was ¥53,165 million and operating profit was ¥981 million. Accordingly, simply taking half of the full-year forecast for FY2027 H1 gives reference points of ¥59,250 million for revenue and ¥1,750 million for operating profit. Based on Q1 results, Q2 alone would need to generate revenue of ¥29,968 million and operating profit of ¥1,043 million. These are not quarterly targets stated by the company, but the amounts required to reach 50% of the full-year forecast in the first half.

At the next results announcement, the focus should be not only on first-half cumulative revenue and operating profit but also on Q2 standalone margins, including the gross margin and SG&A ratio. Although the Q1 operating margin improved to 2.4%, the company needs to secure ¥2,793 million in operating profit during the remainder of the year to meet its full-year forecast. Whether the full-year forecast is revised, and whether the company itself assesses performance at the half-year point as on plan, above plan or below plan, will be the most important disclosure points.