Hennge (4475) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 FY2026 reached JPY 6,129M, up 17.7% year-over-year, driven by strong growth in the HENNGE One business segment and recurring net sales growth with strong gross profit margin supported by higher ARPU.

• Operating income increased 13.3% year-over-year to JPY 1,268M, with a margin of 20.7%, and profit attributable to owners of parent rose 11.7% to JPY 884M.

• Active investments in headcount and advertising are underway to support future business expansion, despite a challenging recruitment environment for sales personnel.

• Multiple contracts were acquired from large companies, and stable growth continues among small to mid-size companies, increasing the number of contracted users.

• New services, including HENNGE Endpoint & Managed Security, were launched to enhance the value proposition and address evolving security needs.

Financial highlights

• Gross profit grew 18.9% year-over-year to JPY 5,319M, with gross margin improving to 86.8% and gross profit margin benefiting from higher ARPU.

• ARR and ARPU showed steady quarterly growth, with HENNGE One Pro accounting for about 20% of total ARR and ARPU increasing to JPY 4,016.

• Churn rate for HENNGE One remains low, with an average monthly churn rate of 0.26% and an average contract period exceeding 25 years.

• SG&A expenses increased 20.7% year-over-year, reflecting higher personnel and advertising costs.

• Cash and cash equivalents at Q2 FY2026 stood at JPY 6,088M.

Outlook and guidance

• No change to the full year FY2026 forecast; net sales projected at JPY 12,834M (up 17.5% year-over-year), operating income at JPY 2,057M, and profit attributable to owners of parent at JPY 1,595M.

• Basic earnings per share for the full year projected at JPY 50.06.

• Strategic focus remains on achieving JPY 20 billion in ARR by FY2029 through strengthening sales, accelerating customer acquisition, and enhancing service value.