Hakuhodo DY Holdings Inc. (TSE: 2433), Japan's second-largest advertising and marketing group behind Dentsu, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from 1 April to 30 June 2026 — under Japanese GAAP. Revenue rose 3.8% to ¥176,222 million, operating profit climbed 19.4% to ¥3,016 million and ordinary profit rose 4.6% to ¥3,037 million. The group nonetheless booked a net loss attributable to owners of the parent of ¥1,760 million, marginally narrower than the ¥1,816 million loss a year earlier, for a per-share loss of ¥4.90 against ¥4.95.
The comparison is flattering in part because the year-ago quarter was weak: Q1 FY3/26 revenue had fallen 15.2%, operating profit 39.9% and ordinary profit 56.5%. Comprehensive income swung to a positive ¥463 million from a negative ¥1,423 million. Diluted earnings per share are not disclosed — dilutive shares exist, but the company posted a per-share loss for the quarter.
Gross billings, which the group discloses voluntarily under the former accounting standard because it considers the measure useful even though it is not a revenue-recognition disclosure, rose 7.5% to ¥364,297 million. Gross profit — the industry's preferred top-line gauge — increased 5.6% to ¥90,652 million.
Domestic business carries the quarter
Japan did the heavy lifting. Domestic gross billings advanced 8.4% to ¥319,021 million, domestic gross profit rose 8.5% to ¥67,254 million and domestic operating profit jumped 16.4% to ¥16,244 million. Television advertising grew 7.3% and internet media grew 17.0%, the latter boosted by a widened consolidation scope. Selling, general and administrative expenses rose on the same scope change but were absorbed by the revenue increase.
By client sector, Information & Communications billings rose 24.2% and Finance & Insurance 19.7%, the two clear growth leaders. Transport & Leisure and Government & Organisations both declined.
Digital Holdings consolidation widens the scope
The quarter's internet-media growth reflects the newly consolidated Digital Holdings Inc., which entered the reporting perimeter during the period. The addition lifts the group's digital media weighting and accounts for a meaningful share of both the internet-media growth rate and the step-up in SG&A.
Overseas loss widens on a stalled North American top line
The offsetting weakness sat abroad. Overseas gross billings edged up just 1.5% to ¥47,862 million, while overseas gross profit fell 3.1% to ¥24,526 million. The overseas operating loss widened to ¥3,754 million from ¥2,314 million a year earlier, as the North American top line stalled. Overseas remains the group's structural problem: it contributes roughly a quarter of gross profit but subtracts from operating profit every quarter.
Market backdrop
Japan's economy continued a moderate recovery over the quarter, supported by firmer consumption on better employment and income conditions and by capital expenditure tied to AI and semiconductor demand. Resource-price spikes on Middle East tensions and market volatility from further Bank of Japan rate rises clouded the outlook. The domestic advertising market was firm and started the fiscal year above prior-year levels.
Balance sheet and dividend
Total assets stood at ¥907,881 million at 30 June, down from ¥1,081,132 million at the March year-end — a seasonal decline typical of the advertising working-capital cycle. Net assets were ¥397,213 million against ¥402,516 million, with shareholders' equity of ¥383,866 million versus ¥389,128 million. Because the asset base shrank faster than equity, the equity ratio improved to 42.3% from 36.0%.
The dividend plan is unchanged: FY3/26 paid ¥32.00 per share (¥16.00 interim plus ¥16.00 year-end), and FY3/27 is forecast at the same ¥32.00 on the same split.
Full-year guidance untouched
Management left its FY3/27 forecast intact: revenue of ¥910,000 million (+5.7%), operating profit of ¥46,700 million (+4.5%), ordinary profit of ¥47,000 million (+2.0%) and net profit attributable to owners of ¥26,000 million (+55.0%), for EPS of ¥72.42. With only ¥3.0 billion of operating profit booked in Q1 against a ¥46.7 billion full-year target, the guidance leans heavily on the second half — a normal shape for the group, whose first quarter is seasonally its weakest.
| Metric | Q1 FY3/27 | Q1 FY3/26 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 176.22 | 169.82 | +3.8% |
| Gross billings (¥ billion) | 364.30 | 338.88 | +7.5% |
| Gross profit (¥ billion) | 90.65 | 85.85 | +5.6% |
| Operating profit (¥ billion) | 3.02 | 2.53 | +19.4% |
| Ordinary profit (¥ billion) | 3.04 | 2.90 | +4.6% |
| Net loss attrib. to owners (¥ billion) | -1.76 | -1.82 | Loss narrowed |
| Basic EPS (¥) | -4.90 | -4.95 | Loss narrowed |
| Domestic gross billings (¥ billion) | 319.02 | 294.30 | +8.4% |
| Domestic gross profit (¥ billion) | 67.25 | 61.99 | +8.5% |
| Domestic operating profit (¥ billion) | 16.24 | 13.96 | +16.4% |
| Overseas gross billings (¥ billion) | 47.86 | 47.16 | +1.5% |
| Overseas gross profit (¥ billion) | 24.53 | 25.31 | -3.1% |
| Overseas operating loss (¥ billion) | -3.75 | -2.31 | Loss widened |
| Equity ratio (%) | 42.3 | 36.0 | +6.3 pt |
| FY3/27 revenue guidance (¥ billion) | 910.00 | — | +5.7% |
| FY3/27 operating profit guidance (¥ billion) | 46.70 | — | +4.5% |
| FY3/27 ordinary profit guidance (¥ billion) | 47.00 | — | +2.0% |
| FY3/27 net profit guidance (¥ billion) | 26.00 | — | +55.0% |
| FY3/27 EPS guidance (¥) | 72.42 | — | — |
| Annual dividend (¥) | 32.00 | 32.00 | Unchanged |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision. Prior-year comparatives shown for gross billings, gross profit and the domestic/overseas splits are derived from the disclosed year-on-year change rates.