freee K.K. (4478) Q2 2025 earnings summary

Executive summary

• Annual Recurring Revenue (ARR) surpassed JPY 30 billion, with Corporate segment ARR up 31.7% YoY and Self-employed segment ARR up 21.1% YoY; paying customers increased 19.6% to 564,828, and ARPU rose 8.0% to JPY 53,140.

• Net sales for the six months ended December 31, 2024, rose 29.6% YoY to JPY 15,250 million, with Q2 revenue up 30.1% YoY to JPY 7,874 million, driven by platform business and SaaS customer base expansion.

• Adjusted operating profit for Q2 reached JPY 976 million (12.4% margin), and for the six months was JPY 1,456 million, reversing a prior year loss.

• Profit attributable to owners of parent was JPY 797 million, compared to a loss of JPY 6,206 million a year earlier.

• Number of Corporate segment customers grew 22.7% YoY to 216,357.

Financial highlights

• Gross profit for Q2 was JPY 6,530 million (gross margin 82.9%), and for the period was JPY 12,627 million, up from JPY 9,696 million YoY.

• Adjusted operating profit improved by 52.4 percentage points YoY, and increased JPY 496 million sequentially from Q1.

• Operating profit was JPY 868 million, compared to a loss of JPY 4,715 million in the prior year.

• Basic earnings per share improved to JPY 13.59 from a loss of JPY 106.94 YoY.

• Churn rate remained low at 1.2% overall and 0.6% for corporates, aided by cross-selling.

Outlook and guidance

• Full-year net sales forecast for FY2025.6 is JPY 33,060 million, up 30.0% YoY, with revenue growth target maintained at 30% YoY.

• Adjusted operating profit guidance was raised to JPY 1,800–2,500 million, with a margin of 5.4%–7.6%, and break-even expected on an operating profit and free cash flow basis.

• No dividends are planned for the fiscal year.

• Long-term targets include revenue of JPY 50 billion and net revenue retention rate of 110%+ by FY2027.6.