Will the strong first-quarter earnings progress be sustained in FY2027-H1?

FY2027-Q1 operating revenue increased 6.8% year on year to ¥22,007 million, while operating income rose 25.6% to ¥5,830 million. Operating income growth exceeded operating revenue growth by 18.8 percentage points, marking a start accompanied by improved profitability rather than simple expansion in revenue. The full-year forecasts are ¥90,000 million in operating revenue and ¥19,100 million in operating income. Progress as of the first quarter was 24.5% for operating revenue and 30.5% for operating income, or 24% and 31%, respectively, as presented in the materials.

FY2026-H1, the comparison period, recorded operating revenue of ¥42,068 million and operating income of ¥9,350 million. FY2027-Q1 operating margin was approximately 26.5%, calculated as ¥5,830 million divided by ¥22,007 million, about 4 percentage points above the approximately 22.5% calculated from operating revenue of ¥20,613 million and operating income of ¥4,644 million in the year-earlier period. Whether the operating margin can be maintained at or above approximately 22.2% in the first half will be an important benchmark for assessing the likelihood of achieving full-year operating income of ¥19,100 million.

The earnings summary confirms that operating revenue and operating income increased, but directs readers to separate earnings materials for the factors behind the changes. For the first half, it will be necessary to confirm, on a cumulative basis, which of mobile comprehensive revenue, handset sales revenue, au Denki and the business segment generated the revenue increase, and to what extent higher sales-related costs and costs of sales weighed on profit. Because the company has a single segment, profitability changes cannot be assessed from segment revenue and profit alone.

At the next results announcement, we will first check whether operating revenue and operating income exceed ¥42,068 million and ¥9,350 million, respectively, year on year, and whether the operating margin exceeds approximately 22.2%. We will also check the extent to which first-half progress against the full-year forecasts exceeds approximately 50% for operating revenue and approximately 50% for operating income, whether the ¥19,100 million operating income forecast is maintained or revised, and whether the first-half profit increase resulted from cost control or an improved revenue mix.