I'LL (3854) Q2 2026 earnings summary

Executive summary

• Achieved double-digit growth in both sales and profits for 1H FY7/26, driven by large-scale project wins, robust demand for digital transformation, and productivity gains.

• Operating profit increased 25.3% year-over-year to ¥2,831.8 million, with improved project management and higher delivery quality.

• Profit attributable to owners of parent grew 27.2% year-over-year to ¥1,956.1 million, reflecting strong business performance and cost control.

• Upward revision of full-year FY7/26 profit and dividend forecasts due to stronger-than-expected project progress and improved recurring gross profit margins.

• Continued investment in R&D, focusing on AI-driven productivity improvements and new product features.

Financial highlights

• 1H FY7/26 net sales rose 12.1% year-over-year to ¥10,360.8 million; operating profit up 25.3% to ¥2,831.8 million.

• Gross profit margin reached a record 57.9% in Q2; operating profit margin improved to 28.4%.

• Ordinary profit rose 27.5% year-over-year to ¥2,850.2 million, supported by higher interest income and lower commission expenses.

• Net profit for 1H FY7/26 increased 27.2% year-over-year to ¥1,956.1 million.

• Net assets increased to ¥12,366.2 million, with an equity ratio of 71.6%.

Outlook and guidance

• FY7/26 full-year profit forecast revised upward: operating profit now expected at ¥5,500 million (+14.1% vs. initial plan), net sales guidance maintained at ¥20,700 million.

• Net profit per share for the full year is expected to reach ¥161.95.

• Dividend forecast raised to ¥66 per share, with a payout ratio target of 35% or more and DOE of 10%+.

• Growth investment assumptions, including R&D, remain unchanged.

• Guidance reflects potential server delivery delays from semiconductor shortages.