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

Financial Results Presentation for the First Quarter of the Fiscal Year Ending June 2027

In the first quarter of the fiscal year ending June 2027, revenue increased 23.5% year on year and adjusted operating profit increased 115.5%, improving both revenue growth and profitability. The full-year forecasts for revenue and profit remain unchanged, and the company considers progress to be on track.

Worth reading
59In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Improvement
Direction inferred from the company’s description.
Scale
23.5
Year-on-year change in net sales (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Earnings presentationFirst quarter of the fiscal year ending June 202711 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥12,031 million+23.5%
Operating profit¥762 million
Gross Profit Margin80.8 %
Operating profit margin6.3 %
Selling, general and administrative expenses¥8,232 million
Results for the three months of the current quarter
Net Sales¥12,031 million
Gross profit¥9,719 million
Operating profit¥762 million
Adjusted operating profit¥1,487 million
Adjusted operating margin12.4%
Full-year earnings forecast
Net Sales
¥52,210 million
Adjusted operating profit
¥5,750 million
Adjusted operating margin
11 %
Adjusted free cash flow margin
5～10
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
On track toward achieving the full-year forecast / strong start
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Questions Was the first-quarter adjusted operating profit margin of 12.4% as expected, and will the full-year forecast be revised? / Answer Although results were slightly above internal expectations, the full-year forecasts for revenue and profit will remain unchanged because the additional profit will be allocated to strategic marketing investments and other initiatives in the second half.
  2. Questions Why net growth in the number of corporate-segment companies using paid plans was limited to 818? / Answer Cancellations among bookkeeping outsourcing users were concentrated following the discontinuation of A-SaaS. Customer acquisition remained solid excluding this one-time impact.
  3. Questions Pricing policy in response to price increases by other companies in the industry / Answer There is no change to the basic policy of assessing the value provided and market conditions before considering appropriate price revisions.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Share-Based Compensation Expense¥392 million
  • Amortization expense for intangible assets arising from M&A¥106 million
  • Other one-time expenses¥225 million
  • Operating income¥762 million
  • Adjusted operating profit¥1,487 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • COGS-to-revenue ratio
    Figures19～22%
  • R&D-to-revenue ratio
    Figures12～15%
  • S&M-to-revenue ratio
    Figures45～48%
  • Adjusted G&A-to-revenue ratio
    Figures7～8%
New initiatives
  • Launch of paid AI agent services for accounting firms
  • Official launch of the freee Client Management AI Agent and freee Agent Hub
  • Launch of freee Accounting for social welfare corporations
  • Launch of accounts receivable management on freee Invoicing
  • Launch of same-day payment on freee Invoicing
  • Enhancement of AI data entry and automated journal-entry features in the mobile app for tax return filing
  • Newly added to TOPIX
Key KPIsA metric the company considers important as a management benchmark.
  • Platform ARR¥45,265 million
    Year on year against the same period last year+21.9%
  • Corporate platform ARR¥36,433 million
    Year on year against the same period last year+24.1%
  • Number of paying customer companies694,707 Deals
    Year on year against the same period last year+11.2%
  • Number of corporate paying customer companies275,447 Deals
    Year on year against the same period last year+11.8%
  • Platform ARPU¥65,162
    Year on year against the same period last year+9.7%
  • Corporate ARPU¥132,277
    Year on year against the same period last year+11.0%
  • AI agent implementations at accounting firms550 companies or more
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Number of paying customer companies694,707 Deals
    Year on year against the same period last year+11.2%
  • Platform ARPU¥65,162
    Year on year against the same period last year+9.7%
  • Number of corporate paying customer companies275,447 Deals
    Year on year against the same period last year+11.8%
  • Corporate ARPU¥132,277
    Year on year against the same period last year+11.0%
Segment results
  • Platform business
    Platform ARR¥45,265 million (YoY +21.9%)
  • Corporate Mid
    Platform ARR¥18,302 million (YoY +29.3%)
Medium-term management plan targets
  • TargetRule of 40
    Target fiscal yearFiscal year ending June 2028
    Target valueRevenue growth rate + adjusted operating profit margin of 40% or higher
  • TargetAdjusted operating margin
    Target fiscal yearFiscal year ending June 2028
    Target value15% or higher
  • TargetCorporate NRR
    Target fiscal yearFiscal year ending June 2027
    Target value110% or higher
Financial targets
  • TargetRevenue growth rate + adjusted operating profit margin
    Target fiscal yearFiscal year ending June 2028
    Target value40% or more
Market Size / Share
  • Small-business back-office labor cost market¥33,500,000,000,000
  • B2B payments market among SMEs¥369,000,000,000,000
  • Medium-term target for freee product penetration in the Corporate segment30 %
Contents of this document
ItemDetails
Document typeEarnings presentation
Fiscal Period CoveredFirst quarter of the fiscal year ending June 2027
Net Sales¥12,031 million (YoY +23.5%)
Operating profit¥762 million
Gross Profit Margin80.8 %
Operating profit margin6.3 %
Selling, general and administrative expenses¥8,232 million
Results for the three months of the current quarterNet Sales ¥12,031 million / Gross profit ¥9,719 million / Operating profit ¥762 million / Adjusted operating profit ¥1,487 million / Adjusted operating margin 12.4%
Full-year earnings forecastNet Sales ¥52,210 million / Adjusted operating profit ¥5,750 million / Adjusted operating margin 11 % / Adjusted free cash flow margin 5～10
Self-assessment against the planOn track toward achieving the full-year forecast / strong start
Segment resultsSegment Platform business / Platform ARR ¥45,265 million (YoY +21.9%), Segment Corporate Mid / Platform ARR ¥18,302 million (YoY +29.3%)
Breakdown of Factors Affecting the ChangeShare-Based Compensation Expense ¥392 million, Amortization expense for intangible assets arising from M&A ¥106 million, Other one-time expenses ¥225 million, Operating income ¥762 million, Adjusted operating profit ¥1,487 million
Key KPIsPlatform ARR ¥45,265 million, Corporate platform ARR ¥36,433 million, Number of paying customer companies 694,707 Deals, Number of corporate paying customer companies 275,447 Deals, Platform ARPU ¥65,162, Corporate ARPU ¥132,277, AI agent implementations at accounting firms 550 companies or more
Unit price and quantity metricsNumber of paying customer companies 694,707 Deals, Platform ARPU ¥65,162, Number of corporate paying customer companies 275,447 Deals, Corporate ARPU ¥132,277
Assumptions Underlying the Business OutlookItem COGS-to-revenue ratio / Figures 19～22%, Item R&D-to-revenue ratio / Figures 12～15%, Item S&M-to-revenue ratio / Figures 45～48%, Item Adjusted G&A-to-revenue ratio / Figures 7～8%
Medium-term management plan targetsTarget Rule of 40 / Target fiscal year Fiscal year ending June 2028 / Target value Revenue growth rate + adjusted operating profit margin of 40% or higher, Target Adjusted operating margin / Target fiscal year Fiscal year ending June 2028 / Target value 15% or higher, Target Corporate NRR / Target fiscal year Fiscal year ending June 2027 / Target value 110% or higher
Financial targetsTarget Revenue growth rate + adjusted operating profit margin / Target fiscal year Fiscal year ending June 2028 / Target value 40% or more
Market Size / ShareSmall-business back-office labor cost market ¥33,500,000,000,000, B2B payments market among SMEs ¥369,000,000,000,000, Medium-term target for freee product penetration in the Corporate segment 30 %
Key points of the Q&AQuestions Was the first-quarter adjusted operating profit margin of 12.4% as expected, and will the full-year forecast be revised? / Answer Although results were slightly above internal expectations, the full-year forecasts for revenue and profit will remain unchanged because the additional profit will be allocated to strategic marketing investments and other initiatives in the second half., Questions Why net growth in the number of corporate-segment companies using paid plans was limited to 818? / Answer Cancellations among bookkeeping outsourcing users were concentrated following the discontinuation of A-SaaS. Customer acquisition remained solid excluding this one-time impact., Questions Pricing policy in response to price increases by other companies in the industry / Answer There is no change to the basic policy of assessing the value provided and market conditions before considering appropriate price revisions.
New initiativesLaunch of paid AI agent services for accounting firms, Official launch of the freee Client Management AI Agent and freee Agent Hub, Launch of freee Accounting for social welfare corporations, Launch of accounts receivable management on freee Invoicing, Launch of same-day payment on freee Invoicing, Enhancement of AI data entry and automated journal-entry features in the mobile app for tax return filing, Newly added to TOPIX
Items this document does not state (11)
Ordinary incomeNet incomeProgress against full-year forecastNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookAnnual 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.

Improved customer acquisition efficiency, particularly in the Corporate Mid segment; an expanded product lineup; stronger industry-specific approaches; progress in cross-selling; greater efficiency in S&M expenses; and a slower pace of headcount growth.

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.
Financial Results Presentation for the First Quarter of the Fiscal Year Ending June 2027 | freee K.K. (4478) timely disclosure | Komori