Smaregi (4431) Q1 2026 earnings summary

Executive summary

• Net sales increased 19.1% year-over-year to ¥3,013 million, driven by robust subscription and cashless payment services.

• Operating profit reached ¥589 million, with ordinary profit at ¥592 million for the period, reflecting record sales and marketing investments aimed at accelerating ARR growth.

• Profit attributable to owners of parent was ¥377 million, with basic earnings per share of ¥19.59.

• Annual recurring revenue (ARR) reached a record ¥9.43 billion, up 42.8% year-over-year, with strong contributions from cashless payments and the Netshop Supporters subsidiary.

• Number of employees grew 31.9% year-over-year to 442, reflecting ongoing hiring in engineering, design, sales, and marketing.

Financial highlights

• Gross profit rose 29.6% year-over-year to ¥1,985 million, with gross margin improvement due to higher subscription mix.

• SG&A expenses increased 49.2% year-over-year to ¥1,396 million, mainly from higher personnel and advertising costs.

• Total assets as of July 31, 2025, were ¥10,594 million, with net assets of ¥7,755 million.

• Operating profit margin for Q1 was 19.6%, up 2.0 points sequentially from the previous quarter.

• Cash and deposits stood at ¥5,496 million, up 5.3% year-over-year.

Outlook and guidance

• FY2026 full-year net sales guidance is ¥13,859 million, with Q1 progress at 21.7%.

• Operating profit guidance for FY2026 is ¥2,804–2,954 million, with Q1 progress at 20.0–21.0%.

• ARR target of ¥9.46 billion is expected to be achieved in Q2 FY2026, six months ahead of schedule.

• Basic earnings per share forecast ranges from ¥96.90 to ¥104.69.

• The 3rd Medium-Term Management Plan (FY2027–FY2029) aims for 25–30% CAGR in ARR and expansion into fintech and e-commerce.