Segue Group reported operating profit of ¥2.196 billion for Q2 of the fiscal year ending December 2026, up 3.2x year on year, and raised its full-year forecast to ¥2.6 billion. Profit is expected to be squeezed in H2 as the company advances growth investments. The company explained the various contributing factors and its strategy going forward.
Segue Group reported revenue of ¥15.9 billion for Q2 of the fiscal year ending December 2026, with operating profit of ¥2.196 billion. Gross profit margin rose on contributions from large-scale projects, while operating margin improved to 13.8% from 6.9% in the same period of the previous year. The president highlighted results including revenue at 1.6x, gross profit at 1.7x, operating profit at 3.2x and ordinary profit at 3.2x the previous year's levels.
The company raised its full-year operating profit forecast to ¥2.6 billion, but expects H2 operating profit to be limited to approximately ¥400 million because profit levels were high in H1. The company explained that this reflects the early recognition of revenue from large-scale projects and the impact of investments to support future growth, pointing to a squeeze on H2 profit.
Segue Group's business comprises four segments: BAT, system integration, in-house development and overseas operations. In-house development accounts for 5.7% of revenue but 15.3% of gross profit, indicating a high level of profitability. The company is strengthening its sales activities ahead of the replacement cycle for local governments, while the solid order backlog for recurring-revenue services is supporting its financial base.
The total order backlog declined from the previous fiscal year to ¥15.291 billion, while the order backlog for recurring-revenue services increased to ¥11.099 billion. Cash and deposits stood at ¥9.938 billion, and net assets at ¥7.84 billion, further strengthening the company's financial base. The company is also moving forward with the launch of new products and initiatives related to AI.