Hennge (4475) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY2025 reached JPY 5,205M, up 33.6% year-over-year, driven by strong growth in the HENNGE One business.

• Operating income increased 72.6% year-over-year to JPY 1,119M, with net income up 87.9% to JPY 792M.

• HENNGE One achieved 14% growth in contracted companies and 7.4% growth in users year-over-year.

• Annual Recurring Revenue (ARR) for HENNGE One increased 40.8% year-over-year to JPY 10.38B, surpassing JPY 10 billion for the first time.

• Announced establishment of a U.S. subsidiary and joint venture in 2025 to expand international presence.

Financial highlights

• Gross profit for Q2 FY2025 was JPY 4,474M, up 36.8% year-over-year, with gross margin rising to 86.0%.

• HENNGE One contributed 93.3% of net sales, with professional services and others accounting for 6.7%.

• Operating expenses aligned with plans, with net employee growth of 28 since previous fiscal year-end.

• Operating cash flow turned positive, supported by robust business performance.

• Investing cash flow was negative due to investment securities and headquarters relocation expenditures.

Outlook and guidance

• Full-year net sales forecast revised upward to JPY 10,881M (+4.2% from initial), a 30.1% year-over-year increase.

• Operating profit forecast for the full year is JPY 1,750–1,950M, up 72.4–75.0% year-over-year.

• Net income forecast raised to JPY 1,251–1,391M, with EPS of JPY 38.94–43.29.

• Continued focus on talent acquisition, cybersecurity, and sales activities to drive future ARR growth.

• Aggressive marketing and overseas expansion, including a new US joint venture, are planned.