Can the sharp first-quarter growth be sustained in FY2027-H1?

FY2027-Q1 revenue was ¥13,996 million, up 48.0% year on year, while operating profit was ¥1,608 million, up 584.7%. The operating margin was approximately 11.5%, a substantial improvement from revenue of ¥9,457 million and operating profit of ¥234 million in the same quarter of the previous year. The full-year forecasts are revenue of ¥51,000 million, operating profit of ¥4,000 million, ordinary profit of ¥4,000 million and net income attributable to owners of the parent of ¥5,000 million. Operating profit had reached approximately 40.2% of its full-year forecast in Q1, ahead of revenue at approximately 27.4%.

The company cited stronger sales of memory testers for domestic and overseas markets in its Test Solutions business, increased demand for inspection boards for back-end semiconductor processes, long-term contracts and new customer acquisition in the semiconductor design-related business, and growth in embedded products for the defense, data center, semiconductor and social infrastructure markets in its Systems and Services business as factors behind the increase in profit. However, the company has not disclosed the revenue and profit contribution of each factor or whether deliveries were concentrated in Q1. It is therefore not yet possible to determine whether operating profit of ¥1,608 million represents normal earnings power or a temporary uplift caused by delivery timing.

Using simple evenly distributed half-year progress as a benchmark, H1 revenue of ¥25,500 million and operating profit of ¥2,000 million would be reference points. After deducting Q1 results, Q2 alone would need to generate revenue of ¥11,504 million and operating profit of ¥392 million. These are not the company's H1 guidance figures, but checkpoints obtained by mechanically dividing the full-year forecasts by 50%. Even if Q2 revenue falls below these levels, the impact on the full-year forecasts could remain limited if margins are maintained. If the operating margin also declines alongside revenue, however, the possibility increases that the sharp Q1 growth reflected accelerated revenue recognition.

At the next results announcement, we will look at whether the full-year forecasts of ¥51,000 million in revenue and ¥4,000 million in operating profit are maintained, as well as Q2 revenue, operating profit and operating margin on a standalone basis. In particular, the reliability of the FY2027 full-year plan will depend on whether operating profit continues to lead revenue in terms of progress and whether the other 2 businesses can also sustain profit growth apart from the Test Solutions business.