Serverworks raised its forecast for the year to February 2027 on 15 October, lifting operating profit to ¥1.665bn from ¥1.31bn, an increase of 27.1%. Net profit attributable to owners of the parent rises by more, 70.1%, to ¥1.538bn from ¥904mn. Sales guidance goes up 10.2% to ¥51.995bn from ¥47.184bn.
What management credits
The company says AI model advances have raised the importance of cloud infrastructure and that AI-related inquiries have increased. It also cites the exchange rate: it had assumed ¥150.22 to the dollar for resale revenue, but the first-half actual average was ¥160.48, about ¥10 weaker. Those are the company's reporting assumptions and actual-period rates, not a current quote.
Operating profit is not all demand
On profit, Serverworks points to the end of last year's loss-making project effects and to larger incentives that AWS and Google Cloud offer sales partners under certain conditions. First-half operating profit was ¥924mn against ¥90mn a year earlier. The results presentation says the weaker yen added ¥1.412bn to sales and ¥117mn to gross profit, and that a ¥520mn hit from unprofitable projects in the prior-year period did not recur. It does not disclose the amount of the partner fund at subsidiary G-gen. Management says the fund's size and timing vary by year, so it offers no firm outlook. Each ¥1 move in the yen shifts annual sales by about ¥276mn and operating profit by about ¥23mn, according to the company.
Net profit carries a tax effect
The 70.1% net-profit revision is larger because tax expense is expected to fall sharply, as deferred tax assets are recognised after the recovery of a consolidated subsidiary. That makes it a poor gauge of cloud demand. First-half net profit was ¥806mn against a ¥903mn loss, and the prior-year period carried a ¥742mn goodwill write-off, a ¥143mn tax effect and a ¥100mn loss from fraudulent use, none of which recurred.
The second half
The new guide implies lower second-half operating profit than the first half. In its Q&A the company cites one-off costs expected at year-end, a full half of pay for staff hired earlier and continued strategic pricing to win accounts. It expects second-half sales to exceed the first half's.