1Q progress toward the FY2027 full-year forecast is ahead on revenue, while profit improvement needs to be confirmed in the first half.

1Q revenue was ¥4,163 million, operating profit was ¥323 million, ordinary profit was ¥350 million and net profit was ¥237 million. Progress against the full-year forecast was approximately 23.8% for revenue, 18.5% for operating profit, 19.3% for ordinary profit and 19.4% for net profit. Revenue was close to simple quarterly progress of 25%, while profit progress was below that level, indicating that progress is ahead on revenue.

At the next interim results announcement, ¥8,750 million in revenue and ¥875 million in operating profit, representing an even six-month allocation of the full-year forecast, can be used as mechanical checkpoints. However, these are not company-published interim forecasts, but simple calculations that do not reflect seasonality. Therefore, even if actual results fall below these levels, this would not immediately mean that the plan had been missed. We will nevertheless look for the company’s assessment of progress against the full-year forecast for both revenue and operating profit, as well as its plans for projects in the second half.

The 1Q operating margin was approximately 7.8%, below the full-year operating margin of 9.9% for the fiscal year ended March 2026 and the FY2027 full-year forecast of 10.0%. Operating profit increased 20.7% year on year in 1Q, so the profit level itself is improving, but the margin must rise from the interim period onward to achieve the full-year plan. With costs continuing to increase because of stepped-up hiring, investment in training and wage improvements, the key issue will be the extent to which higher project prices and greater revenue scale are translating into profit.

The full-year forecast was unchanged as of the 1Q results, while net profit is expected to decline 4.3% year on year to ¥1,221 million. The assumption that net profit will decline despite increases in operating profit and ordinary profit reflects the fact that the forecast does not include the corporate tax credit under the wage increase promotion tax regime that applied in the previous fiscal year. At the interim results, it will be necessary to separately check whether net profit progress, including the tax burden, is in line with the plan, rather than looking only at operating profit progress.