FLIGHT SOLUTIONS: Q1 FY2027 Earnings Deep Dive Report

This report provides a detailed analysis of the Q1 FY2027 (period ending March 2027) financial results for FLIGHT SOLUTIONS Inc. (Securities Code: 3753). This quarter saw a significant year-on-year increase in revenue and a turnaround to profitability, driven by the successful delivery of a large-scale payment solution project that had been delayed from the previous fiscal year.

Below is a comprehensive analysis of the company's performance highlights, segment-specific trends, progress on key products, and future strategic priorities.

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1. Performance Highlights: Dramatic Turnaround to Profitability via Large-Scale Deliveries

The consolidated financial results for Q1 FY2027 marked a dramatic shift from the operating loss recorded in the same period last year, resulting in high levels of profitability.

• Net Sales : 1,424 million JPY ( +172.0% YoY / +901 million JPY )
• Operating Profit : 301 million JPY (vs. -150 million JPY loss in the same period last year)
• Ordinary Profit : 299 million JPY (vs. -156 million JPY loss in the same period last year)
• Quarterly Net Profit : 203 million JPY (vs. -156 million JPY loss in the same period last year)

[Significance and Context of the Slide Above]

The slide above clearly illustrates the key takeaway of these results: a significant year-on-year increase in revenue and a return to operating profit (an earnings improvement of 452 million JPY) . The company's revenue structure is characterized by quarterly volatility tied to the delivery timing of large-scale payment terminals. The successful delivery of the "Incredist Premium III" large-scale project in June , which had been pushed from the previous quarter (Q4), was the primary driver of this quarter's strong performance.

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2. Segment Trends and Business Topic Analysis

The company operates under two main divisions: the "Product & Financial Service Division (P&F Division)" and the "Value Creation Division (VC Division)." The status of each segment is as follows:

(1) Payment Solutions (P&F Division): The Core Growth Driver

• Net Sales : 1,216 million JPY ( +384.4% YoY)
• Operating Profit : 411 million JPY (vs. -66 million JPY loss in the same period last year)

[Significance and Context of the Slide Above]

This slide is critical as it breaks down payment solution revenue into product-related sales versus recurring (stock) sales. The primary driver of the Q1 revenue surge was product-related sales, which reached 1,040 million JPY . Meanwhile, recurring sales , based on merchant usage, remained steady at 176 million JPY (compared to 177 million JPY in the same period last year), indicating that the company has established a solid foundation of monthly and transaction-based fee income beyond one-off hardware deliveries.

(2) SI Solutions (VC Division): Stability and Organizational Strengthening

• Net Sales : 189 million JPY ( -26.4% YoY)
• Operating Profit : -5 million JPY (vs. 16 million JPY profit in the same period last year)

Revenue and profit declined due to the reactionary drop from large-scale system development projects recorded in the same period last year, as well as assignment delays in certain projects. However, existing development and maintenance projects are generally operating stably and are progressing according to plan. The company is focusing on additional proposals to major entertainment clients and existing customers, acquiring new projects, and improving productivity through AI integration.

(3) Cloud Integration (VC Division): Winning Orders via Collaborative Partners

In addition to initiating a Google Workspace integration project for a major corporate group, development projects for a large non-life insurance company are progressing as planned. The acquisition of projects through new collaborative partners is steadily expanding, and the company is broadening its proposal scope to include areas such as cloud security for local governments.

(4) EC Solutions (VC Division): Launch of "EC-Rider Primo"

• Net Sales : 18 million JPY ( +20.0% YoY)
• Operating Profit : -9 million JPY (vs. -10 million JPY loss in the same period last year; loss narrowed)

Following the launch of the new B2B EC construction package "EC-Rider Primo," the company revamped its website and implemented marketing initiatives. As a result, Q1 inquiries reached 50 (approximately double the plan), with 14 moving to concrete negotiations/proposals and 2 companies starting free trials, building a strong pipeline for future order conversion.

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3. Key Product Status and Future Initiatives

① Multi-Payment Terminal "Incredist Premium III"

Deliveries for existing customers upgrading from older models were completed on June 19, 2026 , contributing fully to Q1 results.

[Significance and Context of the Slide Above]

This slide shows the actual delivery completion on June 19 and outlines preparations for large-scale projects scheduled for the second half of the year . For the company, ensuring internal processes—such as supply chain management, procurement, production, and quality control—is directly linked to achieving the full-year plan. Progress management and profitability assurance for second-half deliveries are the current focus.

② "Tapion": Turning Smartphones into Payment Terminals

The company published a case study on its implementation at MK Taxi , visualizing the value of using business smartphones as mobile payment terminals. By demonstrating benefits such as reduced driver burden and support for electronic money, the company is expanding horizontally through partnerships with event organizers and POS vendors with similar needs.

③ "myVerifist": My Number-Compatible Identity Verification Solution

In line with the social implementation of digital IDs, the company continues to expand functions according to the "myVerifist 2026" roadmap. With an eye on the amendment to the "Act on Prevention of Transfer of Criminal Proceeds" effective April 1, 2027 , the company is strengthening solution proposals for financial institutions and local governments to meet the growing need for strict, in-person identity verification.

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4. Q1 Summary and Future Outlook

Q1 FY2027 got off to a strong start, driven by the completion of the delayed large-scale payment terminal project .

Key points to watch in future performance management include:

1. Steady Delivery Management for Second-Half Large-Scale Projects : Execution of the production and shipping schedule for "Incredist Premium III" projects in the second half.
2. Acquisition and Monetization of New/Additional Projects in the VC Division : Converting "EC-Rider Primo" negotiations and trials into orders, and optimizing resources in the SI sector.
3. Market Development Capturing Regulatory Changes : Promoting "myVerifist" adoption ahead of the April 2027 regulatory amendments and expanding "Tapion" partnerships with POS vendors.

With a balanced approach of revenue expansion centered on large-scale deliveries and the accumulation of recurring revenue bases through cloud, EC, and payment services, the company's efforts toward achieving its full-year plan remain a key focus.