First-half results are ahead of earnings and broadly on track for the full-year plan; in Q3, we will assess whether the pace of earnings growth is sustainable.

FY2026-H1 revenue was ¥19,171 million, up 4.0% year on year, operating profit was ¥1,582 million, up 12.3%, ordinary profit was ¥1,618 million, up 13.4%, and interim net profit attributable to owners of the parent was ¥1,018 million, up 28.1%. Progress against the full-year forecasts was 49.8% for revenue, 52.7% for operating profit and 55.0% for net profit, meaning that earnings were ahead of revenue at the first-half stage. The operating margin for the interim period was also approximately 8.3%, improving by about 0.7 percentage points from approximately 7.6% in the same period of the previous year.

However, the 75% level against the full-year forecasts is merely a mechanical benchmark that does not take quarterly seasonality into account. Previous disclosures indicate that revenue and profit tend to be concentrated in Q1 and Q4, owing to the timing of revenue recognition in the Security Systems business and the concentration of bidding projects in the Information Services business. Accordingly, while cumulative Q3 revenue of ¥28,875 million, operating profit of ¥2,250 million and net profit of ¥1,387.5 million should be checked as simple progress benchmarks, it is also necessary to assess whether projects scheduled for recognition in Q4 and the order backlog are sufficient even if these benchmarks are not met.

As of FY2026-Q2, the full-year forecasts remained unchanged at ¥38,500 million in revenue, ¥3,000 million in operating profit, ¥3,050 million in ordinary profit and ¥1,850 million in net profit. Based on first-half results, the second half requires revenue of ¥19,329 million and operating profit of ¥1,418 million, meaning the plan can be achieved with revenue at roughly the same level as in the first half and operating profit below the first-half level. However, if the slowdown in automotive-related growth, adjustments to development staffing and growth-investment expenses continue in the second half, the operating-profit cushion could narrow.

In Q3, we will assess not only cumulative figures but also whether standalone third-quarter revenue and operating profit are disclosed, whether the investment burden in the Information Services business is easing, and whether the Security Systems business is sustaining its high-margin recurring revenue. We will also confirm whether the full-year forecasts of ¥38,500 million in revenue and ¥3,000 million in operating profit, and the annual dividend of ¥70, are maintained or revised.