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HERE
Earnings call · Jun 2026 (Q4 FY26)

Here Group Q4 FY26 earnings call HERE

Sep 22, 2026 Source

Executive summary

Here Group Q4 FY26 — Strong IP Growth Amidst Strategic Business Model Shift

Here Group reported robust Q4 FY26 revenue growth driven by strong IP performance, particularly from WAKUKU and the rapidly scaling SIINONO. The company is strategically shifting its business model towards a D2C closed loop, prioritizing long-term IP asset value and unit economics over short-term wholesale volume, despite facing a challenging market and increased inventory levels. This transition, coupled with a significant goodwill impairment, led to increased net losses, but management remains committed to achieving sustainable profitability through operational optimization and disciplined capital allocation.

Highlights

5

  • Total revenue grew 94.1% YoY to RMB 927.7 million in Q4 FY26.

  • Flagship IP WAKUKU generated RMB 47.7 million in Q4 and RMB 359.3 million for the full year, accounting for 51.9% of annual revenue.

  • Next-generation IP SIINONO rapidly grew to RMB 27.3 million in Q4, representing 21.4% of total quarterly revenue, and RMB 92.7 million for its first full fiscal year.

  • Revenue from other IP categories surged 651% YoY to RMB 39.8 million in Q4, up from RMB 5.2 million a year ago.

  • The company successfully inaugurated a new D2C store at Beijing Daxing International Airport, marking strategic entry into high-traffic transit hubs.

Concerns

5

  • Gross margin declined to 25.8% in Q4 FY26 from 34.7% a year ago and 34.5% in Q3 FY26.

  • Net loss from continuing operations was RMB 169.6 million in Q4, compared to RMB 21.8 million a year ago and RMB 34.1 million in Q3.

  • Adjusted net loss from continuing operations increased to RMB 37.7 million in Q4, up from RMB 19.3 million a year ago and RMB 22.9 million in Q3.

  • A goodwill impairment charge of RMB 524.1 million was recorded, mainly due to lower-than-expected financial performance amid macro headwinds.

  • Channel inventory was higher than the normal operating range, reflecting a structural mismatch with the macro environment and historical operating pace.

Guidance & targets

CategoryTargetConfidence
Hong Kong Central Project Launch
Madden voyage on October 1
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
WAKUKU IP
Flagship IP, strong performance.
Annual Revenue: RMB 359.3 millionContribution to Annual Revenue: 51.9%
RMB 47.7 million———
SIINONO IP
Next-generation powerhouse, meteoric rise from 0 to near RMB 100 million annualized scale in under 12 months.
Contribution to Quarterly Revenue: 21.4%First Full Fiscal Year Revenue: RMB 92.7 millionContribution to Annual Revenue: 15.5%
RMB 27.3 million———
Other IP Category
Includes emerging proprietary starts, showing extraordinary growth.
Prior Year Q4 Revenue: RMB 5.2 million
RMB 39.8 million651%——
Licensed IP
Solid contribution.
RMB 12.8 million———
Combined Other & Licensed IP
Collectively amounts to over 41% of quarterly revenue.
Contribution to Quarterly Revenue: over 41%
————

HERE operating KPIs by quarter

HERE operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q3 FY26This call Jun 2026 Q4 FY26Change vs prior quarter
IPs in portfolio
20 As of March 31, 2026, our IP portfolio includes 20 total IP. Source transcript
22 As of June 30, 2026, our total portfolio expanded to 22 IPs, compromising compromising 13 proprietary [indiscernible] Under exclusively licensed states. Source transcript
+10%

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
SIINONO co-brand sparkling water with Genki Forestlaunch
SIINONO x IRO Paris Collectionlaunch
WAKUKU x Museum of Fine Arts, Bostonlaunch
SIINONO as headline IP for 2026 China Openlaunch
Unit Noble IPlaunch
Hong Kong Central Projectlaunch

Deals & partnerships

Genki Forest Co-branding for sparkling water

SIINONO launched limited edition co-brand sparkling water.

IRO Paris Fashion collection collaboration

Partnered with French fashion house on exclusive collection.

Museum of Fine Arts, Boston Co-development of artistic works

Exclusive partnership to co-develop premium artistic works across 3 core IPs.

2026 China Open Headline IP sponsorship

SIINONO formalized partnership as a headline IP for the event.

Case Band Phone case brand collaboration

New IP [indiscernible] teamed up with phone case brand Case Band.

Risks & headwinds

Challenging market environment Near term

Lower channel sales

Mitigation:Proactively optimized business model, cost and expense optimization, balancing capital stability with traditional momentum.

Higher channel inventory Temporary, will take time to work down

Higher than normal operating range

Mitigation:Leveraging omnichannel synergy, international selling moderation for scarcity control, targeted channel clearing programs, improved demand forecasting.

Structural mismatch between macro environment and historical operating pace Ongoing

Lower sales through traditional channels

Mitigation:Transitioning to self-operated closed loop, minimizing channel reliance, strengthening self-operated capabilities.

Goodwill impairment Q4 FY26 (one-time)

RMB 524.1 million charge

Mitigation:Non-cash item, separated from ongoing core operations.

What to watch in Q1 FY27

Hong Kong Central Project Launch

Q1 FY27
Current Undergoing final declaration, ticket sales launched Sep 21
Target Madden voyage on October 1

Why it matters

This project represents a new scenario exploration and a significant D2C initiative, expected to capture peak tourist flows.

Finally, in Hong Kong, our landmark [indiscernible] Project as a central peer is undergoing final declaration. We have transformed the ship into a multi-layered vertical expiring show space, Victoria Harbor. Ticket sales officially launched on Ctrip September 21, ahead of the Madden voyage on October 1.

Q&A highlights

How does Here Group approach the full lifecycle of new IP development and monetization?

Management detailed a systematic approach for IP discovery (in-house creation, artist collaborations, 22 properties), incubation (data-driven design, emotional appeal, user feedback from D2C), and commercialization (new product rollouts for flagship IPs, cross-industry collaborations for newer IPs like SIINONO). They emphasized building IPs with real characters and stories, taking time and discipline.

“We have developed a systematic approach that takes our IPs from 0 to 1 with, as we mentioned, 22 properties. We build our capabilities around the full life cycle of IPs from discovery to incubation to commercialization.”

asked by Liping Zhao · answered by Peng Li / Dong Xie

2 min read 6 chapters

Detailed narrative

Strategic Business Model Shift

Here Group is transitioning to a D2C closed-loop model, integrating adaptive product design and direct-to-customer channels. This shift aims to gain autonomy over go-to-market cadence, product presentation, and customer experience, prioritizing long-term IP asset value over short-term wholesale sales volume. The company believes this approach fosters user loyalty and brand health, moving away from reliance on third-party distribution.

IP Portfolio Diversification and Monetization

The company's total IP portfolio expanded to 22 IPs as of June 30, 2026, comprising 13 proprietary and exclusively licensed assets. WAKUKU remains the flagship IP, generating RMB 47.7 million in Q4 and RMB 359.3 million for the full year. SIINONO, a next-generation IP, showed phenomenal growth, contributing RMB 27.3 million in Q4 and RMB 92.7 million for its first full fiscal year, demonstrating the scalability of the IP incubation model.

Product Expansion and Lifestyle Integration

Here Group aggressively expanded its IPs into premium daily consumer scenarios through co-branding and partnerships. Examples include SIINONO with Genki Forest for sparkling water, IRO Paris for a fashion collection, and the Museum of Fine Arts, Boston, for artistic works. SIINONO will also be the headline IP for the 2026 China Open. New IPs like "unit Noble IP" and "Yuan" are also being introduced and gaining strong engagement.

D2C Network Expansion and Optimization

The company operates 7 D2C stores across 4 core metropolitan areas, with a new store opened at Beijing Daxing International Airport. The strategy prioritizes high ROI unit economics and qualitative location premium over sheer store count. Automated retail network expanded to 25 robot shops across 6 cities, with focus shifting to maximizing machine efficiency and data extraction rather than aggressive deployment.

Operational Refinements and Data Integration

Supply chain optimization efforts include strengthening bargaining leverage with manufacturers and suppliers to shorten response times and boost resilience. The company is building an omnichannel data infrastructure by consolidating data from physical stores, robo shops, and online commerce to track customer behavior, optimize inventory, and inform product assortment. Channel partner relationships are transitioning from transactional to strategic alliances.

Financial Performance and Capital Allocation

The company reported a net loss of RMB 169.6 million and an adjusted net loss of RMB 37.7 million in Q4, heavily impacted by a RMB 524.1 million goodwill impairment charge. Operationally, performance reflects upfront investments in design capability, product innovation, and D2C expansion. The Board approved a USD 20 million ADS repurchase program, with USD 0.7 million repurchased as of September 16, 2026.

AI-generated summary of the company's earnings call. Not investment advice.