The FY2027 full-year outlook has fallen from a profit to a loss, and the first-half results will be a test of going-concern risk.

Consolidated revenue for the first quarter of the fiscal year ending March 2027 was ¥2.772 billion, down 10.0% year on year. The operating loss was ¥123 million, the ordinary loss was ¥104 million, and the quarterly net loss attributable to owners of the parent was ¥124 million. While revenue declined, the operating and ordinary losses narrowed from the prior-year quarter, whereas the net loss widened from ¥104 million, indicating that the quality of the improvement was uneven.

In the earnings forecast revision announced on 29 October, the previous full-year forecasts of revenue of ¥13.5 billion, operating profit of ¥140 million and net profit attributable to owners of the parent of ¥110 million were revised to revenue of ¥12.7 billion, an operating loss of ¥235 million and a net loss of ¥750 million. First-quarter progress against the revised revenue forecast was 21.8%, below the 25% share of the fiscal year that had elapsed. A substantial improvement in seasonality or cost reductions in the second half will be required to judge a return to full-year profitability based solely on the narrower first-quarter loss.

In the year-earlier period, FY2026-H1, revenue was ¥6.131 billion, the operating loss was ¥515 million and the interim net loss attributable to owners of the parent was ¥379 million. In FY2027-H1, the key issues will be not only whether revenue recovers, but also whether the operating loss remains below the prior-year ¥515 million and how large the first-half loss is relative to the full-year operating loss forecast of ¥235 million. If first-half operating earnings deteriorate, the full-year forecast revised in October may be revised more conservatively again.

Financially, the equity ratio at the end of the first quarter was 77.8% and net assets were ¥12.779 billion, indicating a certain degree of financial strength. However, the company did not prepare a cash flow statement for the first quarter, and details of operating cash flow and cash at period-end were not disclosed. Regarding the going-concern assumption, the company recognizes a material event giving rise to continuing operating losses but has concluded that no material uncertainty exists, citing cash on hand and its equity ratio. In the next disclosure, we will assess how specifically the company addresses liquidity while losses continue, fixed-cost reduction measures and progress in business restructuring.