Business Brain Showa-Ota (9658) Q1 2027 earnings summary

Executive summary

• Revenue for 1Q FY2026 rose 4.6% year-over-year to 10,516 million yen, with all segments showing higher sales and orders received increasing 5.8% to 10,508 million yen; order backlog rose 5.1% to 13,537 million yen.

• Business/operating profit dropped 54.2% year-over-year to 299 million yen, mainly due to increased R&D, recruitment, and SG&A expenses from AI and new solution investments.

• Profit attributable to owners of parent fell 61.3% year-over-year to 213 million yen.

• Company-wide expenses increased as upfront R&D investment was prioritized, impacting short-term profitability.

• The company revised its interim earnings forecast downward due to temporary profit pressures but maintained its full-year outlook, expecting profitability to improve from 2Q onward.

Financial highlights

• 1Q FY2026 revenue rose 4.6% year-over-year to 10,516 million yen; orders received increased 5.8% to 9,932 million yen.

• Business profit dropped 54.2% year-over-year to 299 million yen, mainly due to increased R&D and recruitment costs.

• Interim business profit forecast for the six months ending September 2026 was revised down by 16.1% to 1,300 million yen.

• Basic EPS for the interim period is now forecast at 36.88 yen (post-stock split); basic EPS for the quarter was 6.56 yen.

• Total assets as of June 30, 2026, were 48,418 million yen, with total equity at 30,747 million yen.

Outlook and guidance

• Six-month forecast to September 30, 2026, revised downward: operating profit now expected at 1,300 million yen (down 16.1% from previous forecast).

• Full-year consolidated earnings forecast remains unchanged, pending further monitoring of order trends and profitability improvements; revenue projected at 43,600 million yen and profit attributable to owners at 2,848 million yen.

• Profitability is expected to recover gradually from 2Q as temporary factors subside.

• Medium-term plan BBS2026 is in its final year, with a focus on upfront R&D and human capital investments.