freee K.K. (4478) Q4 2025 earnings summary

Executive summary

• Revenue/net sales grew 30.8% year-over-year to JPY 33,270 million, surpassing guidance, driven by cross-selling, new customer acquisition, and Platform business expansion.

• Achieved profitability in adjusted operating profit (JPY 1,885 million), a turnaround from a JPY 7,562 million loss, and adjusted free cash flow (JPY 1,381 million).

• Profit attributable to owners of parent was JPY 1,370 million, compared to a loss of JPY 10,150 million in the prior year.

• ARR reached JPY 34.3 billion, up 31.8% year-over-year, with paying customers up 13.9% to 606,533 and ARPU up 15.8% to JPY 56,704.

• Strategic investments in product development, AI-driven productivity, and M&A contributed to performance improvements.

Financial highlights

• Gross profit for FY2025.6 was JPY 27,361 million, with a gross margin of 82.2%.

• Adjusted operating profit margin improved to 5.7% from -29.7% the previous year.

• Cash and cash equivalents at period-end were JPY 35,789 million, up from JPY 31,750 million.

• Number of paying customers increased 13.9% year-over-year to 606,533; ARPU rose 15.8% to JPY 56,704.

• Net cash provided by operating activities was JPY 3,661 million, a significant improvement from a JPY 6,767 million outflow in the previous year.

Outlook and guidance

• FY2026.6 revenue is projected to grow 23.0–25.0% year-over-year to JPY 40.9–41.6 billion.

• Adjusted operating profit margin expected to remain at or improve to 6%, with adjusted FCF margin at 3–6%.

• Strategic investments in R&D and S&M will continue, with headcount expected to reach 2,100.

• Targeting Rule of 40 achievement by FY2028, with revenue growth rate and adjusted FCF margin both above 20% by then.

• Continued focus on expanding the SaaS customer base and enhancing customer value.