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Earnings presentation4478freee K.K.Information and Communications, Services and Others

Earnings Presentation Materials for the Nine Months Ended June 2026

For the third quarter of the fiscal year ending June 2026, revenue increased 26.8% year on year to ¥10.901 billion. Platform ARR and the number of companies using paid services also increased. Meanwhile, the adjusted operating margin declined 3.6 percentage points year on year, while the Company continued to launch new services and make growth investments related to AI.

Worth reading
65In focus
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Direction
Mixed performance
Direction inferred from the company’s description.
Scale
10901
¥ million
Wording
Conditional
How definitive the wording is.

Contents of this document

Earnings presentationThird quarter of the fiscal year ending June 202611 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥10,901 million+26.8%
Operating profit margin4.1 %
Results for the three months of the current quarter
Net Sales
¥10,901 million+26.8%
Adjusted operating profit
¥445 million
Adjusted operating margin
4.1 %
Full-year earnings forecast
Net Sales
¥41,930 million
Adjusted operating profit
¥2,520 million
Adjusted free cash flow
1260～2520
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Progressing broadly in line with the plan
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Questions Risk of revenue erosion for the per-seat billing model due to AI agents / Summary of response The Company explained that accounting products are centered on basic fees charged per business location and that seat-based billing accounts for only approximately 3% of total ARR, making the risk of revenue erosion extremely limited.
  2. Questions Risk of AI replacing SaaS products for sole proprietors / Summary of response The Company explained that the risk of replacement by AI has not materialized and that the sole proprietor segment achieved quarterly net ARR growth of ¥1.76 billion, the highest on record.
  3. Questions Difference between freee Agent Hub and Claude Cowork / Summary of response The Company explained that freee Agent Hub differs in that it provides accounting firms with independent workspaces for each client, advanced security, and AI agents optimized for freee workflows.
  4. Questions AI monetization strategy / Summary of response The Company explained its policy of offering AI agents as standard features within its SaaS products and expanding AI-enabled business process outsourcing services, thereby broadening its target beyond customers' IT budgets to include back-office personnel costs.
  5. Questions Purpose of the capital reduction / Summary of response The Company explained that it will reduce stated capital of ¥15 billion and transfer the amount to other retained earnings, securing the distributable amount needed for flexible capital policies, including share repurchases.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Customer acquisition among sole proprietors during the individual tax return filing season
  • New customer acquisition in the corporate segment
  • Expansion of the corporate credit card business
  • Improved customer support efficiency through the use of AI
  • Change in expense classification: reclassified to R&D costs¥150 million
  • Change in expense classification: reclassified to S&M costs¥80 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Sales growth rate+26.0%
COGS-to-revenue ratio18～21%
R&D-to-revenue ratio14～17%
S&M-to-revenue ratio48～51%
Adjusted G&A-to-revenue ratio9～10%
New initiatives
  • Open beta release of the integrated AI agent freee Agent Hub for accounting firms planned by May 2026
  • Launch of the package plan freee for 医療 for medical corporations beginning in March 2026
  • Rebranding of Logikura's service as freee Inventory Management
  • Release of the MCP server freee-mcp as open-source software
  • Investment in strengthening AI-enabled industry-specific products and improving productivity in customer support, sales, and development
Key KPIsA metric the company considers important as a management benchmark.
  • Platform ARR¥42,481 million
    Year on year against the same period last year+23.2%
  • Corporate platform ARR¥32,740 million
    Year on year against the same period last year+26.8%
  • Number of paying customer companies712,265 Engagements
    Year on year against the same period last year+13.6%
  • Platform ARPU¥59,647
    Year on year against the same period last year+8.5%
  • Corporate ARPU¥123,976
    Year on year against the same period last year+7.8%
  • AI chat customer support completion rateAt least 90%
  • Number of users of AI-OCR for individual tax returnsApproximately 95,000
  • Usage of the ChatGPT appApproximately 20,000
  • Pull requests per engineerApproximately 1.5x
    Year on year against the same period last year+1.5%
Unit price and quantity metricsThese figures show sales broken down by price and volume.
Number of paying customer companies
712,265 Engagements+13.6%
Platform ARPU
¥59,647+8.5%
Sole proprietor ARPU
¥21,736+1.1%
Corporate ARPU
¥123,976+7.8%
Segment results
  • Subscription ARR¥9,741 million+12.4%
    SegmentSole proprietors
  • Subscription ARRAmount not stated+24.5%
    Segmentorganizations
  • Platform ARR¥15,522 million+26.1%
    SegmentMid
  • Number of paying customer companies448,155 Engagements+11.3%
    SegmentSole proprietors
  • Number of paying customer companies264,110 Engagements+17.6%
    Segmentorganizations
Medium-term management plan targets
Rule of 40
Target fiscal yearFiscal year ending June 2028
Target valueRevenue growth rate + adjusted FCF margin of 40% or higher
Corporate NRR
Target fiscal yearFiscal year ending June 2027
Target value110% or higher
Market Size / Share
Potential customer baseApproximately 6.6 million
Share of total employees at small businesses71%
freee product penetration in the corporate segment
Fiscal year ended June 2025Approximately 10%
Medium-term targetApproximately 30%
Long-Term Targets50% or higher
B2B payments marketApproximately ¥369 trillion
Back-office labor cost marketApproximately ¥33.5 trillion
Gross profit
¥9,001 million
rate_pct82.6
Contents of this document
ItemDetails
Document typeEarnings presentation
Fiscal Period CoveredThird quarter of the fiscal year ending June 2026
Net Sales¥10,901 million (YoY +26.8%)
Gross profit¥9,001 million
Operating profit margin4.1 %
Results for the three months of the current quarterNet Sales ¥10,901 million (YoY +26.8%) / Adjusted operating profit ¥445 million / Adjusted operating margin 4.1 %
Full-year earnings forecastNet Sales ¥41,930 million / Adjusted operating profit ¥2,520 million / Adjusted free cash flow 1260～2520
Self-assessment against the planProgressing broadly in line with the plan
Segment resultsSole proprietors ¥9,741 million (YoY +12.4%), organizations 非開示 (YoY +24.5%), Mid ¥15,522 million (YoY +26.1%), Sole proprietors 448,155 Engagements (YoY +11.3%), organizations 264,110 Engagements (YoY +17.6%)
Breakdown of Factors Affecting the ChangeFactors Customer acquisition among sole proprietors during the individual tax return filing season / Amount Not disclosed, Factors New customer acquisition in the corporate segment / Amount Not disclosed, Factors Expansion of the corporate credit card business / Amount Not disclosed, Factors Improved customer support efficiency through the use of AI / Amount Not disclosed, Factors Change in expense classification: reclassified to R&D costs / Amount ¥150 million, Factors Change in expense classification: reclassified to S&M costs / Amount ¥80 million
Key KPIsIndicator name Platform ARR / Value ¥42,481 million / Year on year against the same period last year ¥23.2 million, Indicator name Corporate platform ARR / Value ¥32,740 million / Year on year against the same period last year ¥26.8 million, Indicator name Number of paying customer companies / Value 712,265 Engagements / Year on year against the same period last year 13.6 Engagements, Indicator name Platform ARPU / Value ¥59,647 / Year on year against the same period last year ¥8.5, Indicator name Corporate ARPU / Value ¥123,976 / Year on year against the same period last year ¥7.8, Indicator name AI chat customer support completion rate / Value At least 90% / Year on year against the same period last year Not disclosed, Indicator name Number of users of AI-OCR for individual tax returns / Value Approximately 95,000 / Year on year against the same period last year Not disclosed, Indicator name Usage of the ChatGPT app / Value Approximately 20,000 / Year on year against the same period last year Not disclosed, Indicator name Pull requests per engineer / Value Approximately 1.5x / Year on year against the same period last year 1.5 Year on year
Unit price and quantity metricsNumber of paying customer companies 712,265 Engagements (YoY +13.6%) / Platform ARPU ¥59,647 (YoY +8.5%) / Sole proprietor ARPU ¥21,736 (YoY +1.1%) / Corporate ARPU ¥123,976 (YoY +7.8%)
Assumptions Underlying the Business OutlookSales growth rate +26.0% / COGS-to-revenue ratio 18～21% / R&D-to-revenue ratio 14～17% / S&M-to-revenue ratio 48～51% / Adjusted G&A-to-revenue ratio 9～10%
Medium-term management plan targetsRule of 40 Target fiscal year Fiscal year ending June 2028 / Target value Revenue growth rate + adjusted FCF margin of 40% or higher / Corporate NRR Target fiscal year Fiscal year ending June 2027 / Target value 110% or higher
Market Size / SharePotential customer base Approximately 6.6 million / Share of total employees at small businesses 71% / freee product penetration in the corporate segment Fiscal year ended June 2025 Approximately 10% / Medium-term target Approximately 30% / Long-Term Targets 50% or higher / B2B payments market Approximately ¥369 trillion / Back-office labor cost market Approximately ¥33.5 trillion
Key points of the Q&AQuestions Risk of revenue erosion for the per-seat billing model due to AI agents / Summary of response The Company explained that accounting products are centered on basic fees charged per business location and that seat-based billing accounts for only approximately 3% of total ARR, making the risk of revenue erosion extremely limited., Questions Risk of AI replacing SaaS products for sole proprietors / Summary of response The Company explained that the risk of replacement by AI has not materialized and that the sole proprietor segment achieved quarterly net ARR growth of ¥1.76 billion, the highest on record., Questions Difference between freee Agent Hub and Claude Cowork / Summary of response The Company explained that freee Agent Hub differs in that it provides accounting firms with independent workspaces for each client, advanced security, and AI agents optimized for freee workflows., Questions AI monetization strategy / Summary of response The Company explained its policy of offering AI agents as standard features within its SaaS products and expanding AI-enabled business process outsourcing services, thereby broadening its target beyond customers' IT budgets to include back-office personnel costs., Questions Purpose of the capital reduction / Summary of response The Company explained that it will reduce stated capital of ¥15 billion and transfer the amount to other retained earnings, securing the distributable amount needed for flexible capital policies, including share repurchases.
New initiativesOpen beta release of the integrated AI agent freee Agent Hub for accounting firms planned by May 2026, Launch of the package plan freee for 医療 for medical corporations beginning in March 2026, Rebranding of Logikura's service as freee Inventory Management, Release of the MCP server freee-mcp as open-source software, Investment in strengthening AI-enabled industry-specific products and improving productivity in customer support, sales, and development
Items this document does not state (14)
Operating profitOrdinary incomeNet incomeSelling, general and administrative expensesProgress against full-year forecastNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookFinancial targetsAnnual DividendPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlog

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

In the sole proprietorship segment, solid customer acquisition during the individual tax return filing season supported results. In the corporate segment, new customer acquisition, direct channels, cross-selling, and the expansion of the corporate credit card business drove performance. The Company advanced efficiency improvements in customer support and development through the use of AI, while also making strategic investments in AI-related tools, industry-specific product development, and the expansion of its sales organization.

How to read this page

This is not the documentKomori reads the disclosure the company filed and writes this summary. Figures are as stated by the company and are not audited.
Weight is not a verdictIt measures how much this changes what the company had already told the market. It is not a view on the shares.
Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Earnings Presentation Materials for the Nine Months Ended June 2026 | freee K.K. (4478) timely disclosure | Komori