Hennge K.k. · TSE:4475
Hennge K.k — Q3 FY09/2024 Earnings Presentation
69 slides from Hennge K.k's earnings presentation, Aug 9, 2024
Slide 1: Q3 FY09/2024 Consolidated Financial Results
Note: This is a translation of part of the original Japanese version and is provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. Q3 FY09/2024 Consolidated Financial Results HENNGE K.K. (
Slide 2: Table of Contents
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Table of Contents 1. Q3 FY09/2024 Consolidated Financial Results 2. Progress of Q3 FY09/2024 Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: Q3 FY09/2024 Consolidated Financial Results
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Q3 FY09/2024 Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 9 months accumulated comparison) (unit: JPY million) Q3 FY23 Q3 FY24 YoY YoY (%) FY24 Forecast Progress (%) Net sales 4,937 6,061 +1,124 +22.8% 8,316 72.9% (HENNGE One) 4,543 5,
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Quarterly Trend of Net Sales ■ Professional service and others ■ HENNGE One (unit: JPY million) FY21 FY22 FY23 FY24 5
Slide 6: Net Sales
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Net Sales (YoY, 9 months accumulated comparison) Sales for HENNGE One business, our growth driver, shows a steady progress YoY. Total ■ Professional service and others ■ HENNGE One YoY +22.8% (unit: JPY million) (+ JPY 1.12B)
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Quarterly Trend of Gross Profit ● Gross profit margin ■ Gross profit (unit: JPY million) FY21 FY22 FY23 FY24 7
Slide 8: Gross Profit
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Gross Profit (YoY, 9 months accumulated comparison) The gross profit margin increased despite the increases in R&D members and infrastructure costs for HENNGE One from exchange rate fluctuations and security enhancement. Overall,
Slide 9: SG&A
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Structure of Operating Expenses (YoY, 9 months accumulated comparison) SG&A to sales ratio 68.9% SG&A to sales ratio SG&A to sales (YoY) ratio 72.1% Other SG&A increased mainly due to the expansion of the office floor. In additio
Slide 10: SG&A
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Structure of Operating Expenses (QoQ comparison of Q2 FY09/2024 & Q3 FY09/2024) QoQ Other SG&A increased mainly due to the office floor expansion. Other SG&A + JPY 84M Advertising expenses increased as a result of proactive effort
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Quarterly Trend of Net Sales and Operating Expenses ● Net Sales ■ Other SG&A ■ Advertising expenses ■ Business consignment & staffing expenses ■ Personnel expenses ■ R&D expenses ■ Cost of Sales (unit: JPY million) FY21 FY22 FY2
Slide 12: Breakdown of Employees by Function
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Breakdown of Employees by Function 308 (Excluding part-time employees, as of 2024-06-30) 12
Slide 13: Number of Employees
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Number of Employees A net increase of 25 employees compared to the end of the previous fiscal year. ■ Others ■ Professional service ■ Business Dev. ■ HENNGE One Customer Success ■ HENNGE One Sales ■ HENNGE One Dev./ R&D # of em
Slide 14: Business Activities
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Q3 FY09/2024 Consolidated Financial Results (Business Activities) 14
Slide 15: Business Highlights
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Business Highlights ● Advertisements and events ○ Holding “HENNGE Unveiled” (April 2024) We have announced the new features of HENNGE One, “HENNGE File DLP”, and HENNGE One’s rebranding. ○ Exhibiting at “Japan IT Week Spring”
Slide 16: HENNGE Unveiled
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE Unveiled We announced new feature of HENNGE One and its rebranding at “HENNGE Unveiled” held in April 2024. Continue to meet the latest market demands and focus further on our corporate philosophy “Liberation of Technol
Slide 17: Advertising Activities in Q3 FY2024
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Advertising Activities in Q3 FY2024 We carried out activities to deliver the new value of HENNGE One at “HENNGE Unveiled,” “Japan IT Week Spring” and other various events nationwide. (Inside the HENNGE Unveiled venue) (Japan I
Slide 18: HQ Office Floor Expansion
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HQ Office Floor Expansion In June 2024, we expanded the office floor of the headquarters in Shibuya, Tokyo in order to stimulate our internal communication more than ever. 18
Slide 19: KPI Results
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Q3 FY09/2024 Consolidated Financial Results (KPI Results) 19
Slide 20: HENNGE One KPI Highlights
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One KPI Highlights (Progress in 9 months, compared to the end of FY09/2023) # of contracted companies # of contracted users ARR 2,853 companies 2.48M users JPY 8.16B increased by 243 companies increased by 97K users inc
Slide 21: HENNGE One KPI
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of Q3 FY09/2023) # of contracted companies # of contracted users ARR YoY +14.5% YoY +2.4% YoY +24.6% (unit: companies) (unit: users) (unit: JPY million) +361 +58K + JPY companies users
Slide 22: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate There were cancellations triggered by the price revision of license lineups and also by relatively large companies. Rise of churn rate is within the expectation and still at low rate, which
Slide 23: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One Contracted Companies & Users While the price revision of license lineups led to an increase in cancellations, # of contracted companies has steadily increased due to the stable acquisition of small to mid sized cont
Slide 24: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One ARR & ARPU ARR and ARPU increased significantly due to the price revision of license lineups from April 2024. ● HENNGE One ARPU (JPY per user) QoQ + JPY 304 ■ HENNGE One ARR (JPY million) per user QoQ + JPY 0.79B FY2
Slide 25: Progress of FY09/2024 Full-year Forecasts
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Progress of FY09/2024 Full-year Forecasts 25
Slide 26: Our Policy of FY2024
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Our Policy of FY2024 To accelerate mid-term growth in HENNGE One ARR, continuously developing new features and services, providing them to customers, and building a more solid organization by enhancing our talent acquisition c
Slide 27: Progress of Our Policy of FY2024
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Progress of Our Policy of FY2024 YoY growth rate of HENNGE One ARR progresses in line with the plan Marketing activities progress in line with the plan Having difficulty in recruiting, the net increase of headcounts will result
Slide 28: Overview of FY2024 Forecasts
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Overview of FY2024 Forecasts (unit: JPY million) ● There is a high possibility that the net profit will exceed expectations due to the recognition of extraordinary income of JPY 180 million. ● While operating profit and ordinary
Slide 29: FY2024 Forecasts of Sales by Business
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results FY2024 Forecasts of Sales by Business The progress rate of HENNGE One’s sales was at 72.1% against the forecast. Professional service HENNGE One and others (unit: JPY million) (unit: JPY million) ■ Actual ■ Forecast 29
Slide 30: FY2024 Forecasts of Operating Expenses
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results FY2024 Forecasts of Operating Expenses The progress rate of advertising expenses was at 68.4% against the forecast. The progress rate of operating expenses excl. advertising expenses was at 69.9% against the forecast. Operatin
Slide 31: Growth Strategy
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Growth Strategy 31
Slide 32: Corporate Philosophy
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Corporate Philosophy We want to deliver the power of technology as many people as we can. Liberation of Technology テクノロジーの解放 32
Slide 33: Maximize LTV
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Maximize LTV Our growth strategy is to maximize LTV. Currently, Y and r are already in a high number, therefore our focus is to maximize ARR. LTV = ARR × Y × r Y = [Average contract duration in years] r = [Gross profit rate] AR
Slide 34: Maximize ARR
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Maximize ARR ARR ＝ N × n × ARPU maximize N maximize n N = # of contracted companies n = Average # of contracted ● Increase our sales force users per contracted company ● Extend our presence in a wider region Maximize ● Approac
Slide 35: Progress of Our Growth Strategy (HENNGE One)
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) Aim to accelerate ARR growth by focusing on increasing N and ARPU. ARR N n ARPU Average # of YoY # of contracted YoY YoY Average Revenue YoY ARR YoY YoY contracted users per YoY YoY
Slide 36: HENNGE One Family, Supporting Customers' Change
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One Family, Supporting Customers’ Change Supporting customers’ SaaS utilization and continuously liberate technology. HENNGE Cloud Protection HENNGE New HENNGE Secure Download Messaging Security Secure Transfer - Behavi
Slide 37: Growth Strategy on and After FY2024
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Growth Strategy on and After FY2024 By FY25, having HENNGE One ARR growth at mid-20% in CAGR, we aim to exceed JPY 10B for HENNGE One ARR. Focus on increasing the number of contracted companies and raising ARPU (unit: JPY mill
Slide 38: HENNGE
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Slide 39: Appendix (Corporate Overview)
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Appendix (Corporate Overview) 39
Slide 40: Corporate Profile
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Corporate Profile Company name : HENNGE K.K. Executives : Kazuhiro Ogura Representative Director, President and CEO/CTO Kazuaki Miyamoto Representative Director, Executive Senior Vice President Yoshiki Nagatome Director, Execut
Slide 41: Locations
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 41
Slide 42: Corporate Philosophy
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Corporate Philosophy We want to deliver the power of technology as many people as we can. Liberation of Technology テクノロジーの解放 42
Slide 43: History
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results History Our business domain is ever-changing, but our will remains steadfast. Linux server management eCRM software HENNGE One IoT as a Service Establishment software HDE Customers Care (f.k.a. HDE mail service) HENNGE Worksty
Slide 44: Sales Structure by Business
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Sales Structure by Business 92.3% of the net sales comes from HENNGE One business. JPY 6.06B ● HENNGE One ● Professional service and others (as of Q3 FY2024) 44
Slide 45: HENNGE One
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One Provide services that remove obstacles for companies trying to improve productivity by adopting cloud in one-stop. Enhance security and usability of cloud to all the employees by having company-wide implementation.
Slide 46: HENNGE One - Identity
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One - Identity IDaaS provides cross-sectional secure access and SSO for various cloud services used by companies. Access Control ID Federation Customizable policy Administrator Various cloud services SSO Microsoft 365 U
Slide 47: HENNGE One - DLP
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One - DLP Prevent information leaks of confidential corporate information and important data due to mistakenly sent e-mail and file sharing misconfiguration. DLP Secure DL Email DLP Email Archive - PPAP-free - Filtering -
Slide 48: HENNGE One - Cybersecurity
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One - Cybersecurity Improve the level of corporate security in all directions of technology, people, and processes, including measures against ransomware and targeted e-mail attack. HENNGE Cloud Protection HENNGE Tadril
Slide 49: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 2,853 customers in various industries, and has 2.48 million users. Average number of contracted users per contracted company is approximately 869. (as of 2024-06-30) Breakdo
Slide 50: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Appendix (Total Addressable Market) 50
Slide 51: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Number of Companies by Employee Size in Japan There is a huge potential market because cloud adoption will continue to accelerate. Customers’ demands # of employees ID managemnet for 653 ■ # of companies by each employee scale
Slide 52: Regional Split in the Number of Companies
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Regional Split in the Number of Companies Japan has number of metro areas other than Tokyo. Our focus is to expand the business not only in Tokyo but also within other metro areas, such as Nagoya, Osaka, Fukuoka, and others. T
Slide 53: Appendix (Others)
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Appendix (Others) 53
Slide 54: Eat unripe fruits, and make mistakes early
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Value Continuously eat unripe fruits and remain as early adopters in order to make “liberation of technology” happen. Through a number of trial and error, we will identify new technology that is useful for our customers, and w
Slide 55: HENNGE WAY
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results HENNGE WAY HENNGE WAY is our code of conduct in order to keep changing with challenges and failures. 01 02 03 Love technology Eat unripe fruits Be a learnaholic テクノロジーを愛し、 挑戦しよう。 好奇⼼あふれる 使おう。 失敗から学ぶために。 学びの中毒者であろう。 04 05 06 Le
Slide 56: Diversity and Inclusion
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Diversity and Inclusion Focusing our efforts on the Global Internship Program (GIP) to not only provide career development opportunities for the most talented candidates from all over the world, but also to be the precedent org
Slide 57: Diversity
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Diversity Diversity is the key driver to keep challenging and changing. We recognize the differences and respect the differences, which then we can create a basis for an ever-changing organization that value challenges. Encourag
Slide 58: Business Investments and New Business Development
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Business Investments and New Business Development We are approaching business fields adjacent to current businesses through both business investment and new business development, along with R&D activities in current businesses.
Slide 59: Three Features of HENNGE One (July 2024 -)
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Three Features of HENNGE One (July 2024 -) Three features were added to HENNGE One in response to the recent increase in corporate security awareness. Under the ever changing circumstance, we will support corporate security me
Slide 60: Past Materials
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Past Materials 60
Slide 61: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Cloud Adoption Rate in Japan Cloud adoption rate in Japan has increased by 4.0pts to 22% from 2021. (Reference: Press release “Average Cloud Computing Adoption Rate in Japan” in June 2021 by Gartner, Inc. URL of the original r
Slide 62: Customers Mail Cloud
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Customers Mail Cloud Cloud e-mail delivery service that enables companies to send e-mails reliably and easily. Send notifications with high delivery rate for immediate notifications of purchases/reservations, bulk notifications,
Slide 63: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Marketing Activities for HENNGE One It requires some time from marketing campaigns to the contribution in expansion of ARR as HENNGE One’s lead time is relatively long. However, the results of the investment in advertising exp
Slide 64: License Lineup for HENNGE One Announced in 2019/5
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results License Lineup for HENNGE One Announced in 2019/5 (June 2019 - September 2021) * New contracts taken into place after October 2021 will apply new license lineup which was announced in August 2021. 64
Slide 65: Service Lineup for HENNGE One Announced in 2021/8
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Service Lineup for HENNGE One Announced in 2021/8 (October 2021 - March 2024) Service lineups were renewed from October 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-f
Slide 66: Renewal of License Lineup for HENNGE One Announced in 2023/8
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Renewal of License Lineup for HENNGE One Announced in 2023/8 (April 2024 -) The several license lineups for HENNGE One will be revised from April 2024. (Updated July 2024) 66
Slide 67: Glossary
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Glossary ARR (Annual Recurring Revenue) refers to revenue, normalized on an annual basis, that a company expects to receive from its customers for providing them with products or services of subscription-based model. ARPU (Ave
Slide 68: Disclaimer
HENNGE K.K. (4475:TSE Growth) Q3 FY09/2024 Consolidated Financial Results Disclaimer This document has been prepared by HENNGE K.K. (the “Company”) solely for information purpose. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solici
Slide 69: HENNGE
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