Hennge (4475) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2026 rose 20.1% year-over-year to JPY 3,016M, driven by strong growth in the HENNGE One business, which accounted for 94.6% of total sales.

• Gross profit increased 21.8% year-over-year, with gross margin improving to 86.6% due to higher ARPU and stable recurring revenue.

• Operating income was flat year-over-year at JPY 530M, as higher SG&A expenses offset revenue gains.

• Net income declined 9.9% year-over-year to JPY 366M, reflecting increased operating expenses and investments in marketing and personnel.

• Focus remains on expanding a stable customer base and strengthening organizational capabilities, especially in sales.

Financial highlights

• HENNGE One net sales grew 22.2% year-over-year to JPY 2,854M, while professional services and others declined 7.6%.

• Gross profit for the quarter was JPY 2,612M, up from JPY 2,145M year-over-year.

• SG&A expenses rose 28.8% year-over-year, mainly due to increased advertising and personnel costs.

• Operating income margin decreased by 3.5pts to 17.6%.

• Net income margin fell by 4pts to 12.1%.

Outlook and guidance

• Full-year FY2026 net sales forecast is JPY 12,834M (+17.5% YoY), with operating income projected at JPY 2,057M (+14.7% YoY).

• Profit attributable to owners of parent is forecast at JPY 1,595M, up 17.4% year-over-year.

• The company targets JPY 20B in ARR by FY2029, focusing on strengthening sales, expanding customer base, and enhancing service value.

• HENNGE One sales progress is 23.6% of the full-year forecast after Q1.

• Continued proactive investments in marketing and branding to support long-term growth.