The sharply higher revenue guidance assumes M&A contributions and also requires a recovery in earnings.

Consolidated revenue in Q1 of FY2027, the fiscal year ending March 2027, was ¥3,057 million, up 64.7% year on year. Operating loss was ¥222 million and ordinary loss was ¥213 million, resulting in an operating margin of negative 7.3%. Although revenue expanded, the increase in revenue did not translate directly into operating profit, and the loss widened from ¥174 million in the year-earlier quarter. This will be the first point to check in the next earnings release.

The company’s full-year forecasts for FY2027 are revenue of ¥21,604 million, operating profit of ¥1,573 million, ordinary profit of ¥1,557 million and net income attributable to owners of the parent of ¥1,190 million. FY2026 results were revenue of ¥11,566 million, operating profit of ¥400 million and an operating margin of 3.5%. The full-year forecasts therefore imply revenue growth of 86.8%, operating profit growth of 293.0% and an increase in the operating margin to approximately 7.3%. The company must achieve not only higher revenue but also a simultaneous recovery in profitability.

Q1 revenue was approximately 14.2% of the full-year forecast, while operating profit was negative. If 50% of the full-year forecast is used mechanically as a first-half benchmark, the comparison figures would be revenue of ¥10,802 million and operating profit of ¥786.5 million, but these are not half-year targets provided by the company. The company has also disclosed that demand may be concentrated in the second half, particularly Q4, as medical institutions execute their budgets. Rather than judging performance mechanically by whether it reaches 50% in the first half, it will be necessary to assess how much the loss narrows in H1 and whether the profit required in the second half is realistic.

The revenue increase reflects full-year contributions from ASANO, the consolidation of 有限会社アカサカ歯材社, and growth in the dental distribution business. However, Q1 also included extraordinary income such as a ¥497.319 million gain on reversal of share acquisition rights, resulting in net income of ¥249 million. Accordingly, in FY2027-H1 it will be necessary to assess together not only revenue progress but also the recovery in operating profit and ordinary profit excluding extraordinary income, segment margins, the assumptions underlying the full-year forecasts and whether the forecasts are revised.