[Lttes] Fiscal Year Ending February 2027 Q1 Results | Sales of 21.1 billion yen (+11.5%)

Performance Overview

In the first quarter of the fiscal year ending February 2027, Lttes recorded sales of 21.1 billion yen (YoY +11.5%) and operating profit of 65 million yen (+46.5%), marking a record high. The improved operating profit margin was driven by the carve-out of JAPANDX, leading to a strong start that surpasses plans for both sales and profits. However, net income attributable to owners of the parent was a loss of △68 million yen due to recording a loss as a special loss from the sale of JAPANDX and other subsidiaries. Going forward, the company expects to record gains from the sale of the remaining two subsidiaries and maintains its full-year earnings forecast.

Outlook and Impact on Shareholders

The full-year progress rate stands at 24.8% for sales and 14.2% for operating profit, progressing as planned despite temporary expenses increases. Factors contributing to the decreased profit include one-time costs related to office relocation and upfront investments in AI governance. Nevertheless, the underlying business fundamentals remain solid, with aim to expand sales and profits. Benefits from reduced amortization of goodwill due to carve-out and management cost reductions from excluding the former DX business also support profit growth.