Sansan,Inc. Q2 FY2026 earnings call

Aggregate Financial Performance

• 2026 May fiscal first half (H1) cumulative results: Total revenue grew 26.5% YoY; consolidated ARR reached 45.9 billion yen as of end-November 2025; adjusted operating profit hit a record H1 high, growing substantially despite ongoing targeted investment; Bill One maintained high growth, with quarterly net MRR expansion accelerating continuously after hitting a bottom in Q3 of the prior fiscal year.
• Q2 3-month standalone results: Revenue grew 25.1% YoY; gross margin improved 2.0 percentage points YoY driven by improved data processing operational efficiency at Bill One; adjusted operating profit grew 294.0% YoY driven by revenue growth, improved gross margin, and lower SG&A rate; adjusted operating margin reached 18.7%, an all-time quarterly high; all income line items from operating income down recorded substantial YoY growth.
• Adjusted operating profit drivers: Personnel costs increased 577 million yen YoY, but personnel cost ratio fell 3.3 percentage points YoY; advertising expense ratio fell 1.4 percentage points YoY; rent and relocation-related expenses fell 279 million yen YoY due to the elimination of prior year double rent and one-time head office relocation costs; overall SG&A ratio fell 11.3 percentage points YoY driving the large adjusted operating profit increase.

Structural Competitive Advantage in the Generative AI Era

• Generative AI can only deliver meaningful business value when paired with correctly structured, normalized proprietary primary data that ties to a company's activities; it cannot independently source unique internal primary information that comes directly from business operations, creating a key competitive differentiator for companies that can continuously collect and digitize this primary data.
• Sansan services are built to solve core daily operational problems (sales customer management, invoice processing, contract risk management) rather than just act as data input tools for AI. This means users provide primary data at the very start of business processes as part of normal usage: Sansan captures contact and meeting data (the starting point for sales activity), Bill One captures invoice/receipt transaction data (the foundation for all subsequent accounting work), and Contract One captures contractual agreement information that has long-term business impact. All of this is unique proprietary company data that generative AI cannot obtain from public information, giving Sansan an inherent structure to continuously collect primary data.
• Most primary data handled by Sansan is unstructured analog (non-standard layouts for business cards, invoices, and contracts). Generative AI alone is prone to hallucinations when digitizing this data, which is catastrophic for sales, accounting, and legal use cases that require 100% factual accuracy. Accurate digitization requires pre-generative AI machine learning trained on massive primary data sets combined with rule-based logic checking, and final human quality assurance, a capability Sansan has refined over many years.
• Sansan has already developed its own proprietary generative AI "Viola", which has delivered material data processing cost reduction, and will continue to evolve data capabilities based on its accumulated technical know-how.

Product Evolution

• Sansan: Positioned as a data/knowledge-focused SaaS that captures and stores the full context of business activity, not just contact information. By structuring, normalizing, and enriching this data with over 2.3 million company records, Sansan creates foundational business data that works extremely well with generative AI, enabling new use cases like suggested deal prioritization and proposal drafting based on past experience. Sansan is currently rolling out Sansan MCP Server (connects external generative AI like ChatGPT to Sansan business data for advanced use cases) and Sansan AI Agent (enables easy use of integrated business data with simple prompts to improve sales and marketing organizational productivity), with Proof of Concept underway at large enterprise clients. These AI capabilities are core growth drivers for the generative AI era.
• Bill One: Positioned as a process-focused SaaS that prioritizes accounting workflow efficiency, with its core value being streamlining the end-to-end accounting process. Bill One holds a position at the very top of the accounting workflow, capturing the primary invoice data that all other accounting processes depend on, and has succeeded in digitizing line-item details that were historically difficult to process. Accurate primary data from Bill One enables development of new AI-powered features like AI automatic matching and AI automatic drafting, opening up new areas that were historically hard to automate. Bill One is evolving into an end-to-end platform that automates the full enterprise accounting process from start to finish, with large remaining growth opportunity in the generative AI era.

Long-Term Vision

• Longer term, Sansan plans to deepen integration between Sansan, Bill One, and Contract One, and ultimately become a core business infrastructure supporting all enterprise activity from the initial point of operation through to decision-making, across functional department boundaries.

1. Sansan／Bill One事業: Total revenue grew 25.8% YoY. Within the segment:

• Sansan service: Revenue grew 18.8% YoY, maintaining the same growth rate as Q1. Adjusted operating profit for the service grew 27.5% YoY. Key KPIs: Stock revenue grew 17.4% YoY; contracted customers grew 12.1% YoY with a net increase of 366 contracts in the quarter (accelerated from Q1); monthly stock revenue per paid contract grew 4.5% YoY; 12-month average monthly churn remained below 1% (the slight recent increase was driven by a prior period spike and is not considered problematic). New order value fell 14.2% YoY (following a record high YoY period driven by large mid/enterprise deals) but rose 13.1% quarter-over-quarter, holding at a high level.
• Bill One service: Revenue grew 40.1% YoY, maintaining strong high growth. It recorded a net loss of 298 million yen, an improvement of 1.3 billion yen YoY. Key KPIs: As of November 2025, MRR reached 1.069 billion yen, growing 37.3% YoY; quarterly net MRR increase was 83 million yen, a new high in one year; paid contracts grew 38.9% YoY with a net increase of 347 contracts in the quarter, maintaining growth above 300 contracts per quarter since Q3 last fiscal year; monthly stock revenue per paid contract fell 1.3% YoY due to higher small customer acquisition, but remains at a high level with no material concern; 12-month average monthly churn held at a low 0.35%. Q2 new order value grew 16.9% YoY and 57.8% QoQ, hitting an all-time quarterly high since service launch, driven by strengthened sales and distribution, with both invoice receipt and expense settlement services growing steadily.
• Other (includes Contract One and Nineout): Both services grew steadily. Contract One revenue grew 93.6% YoY, and contracted customers grew 99.0% YoY to 569 contracts. Overall, Sansan／Bill One segment adjusted operating profit grew 287.4% YoY.

1. Eight事業: B2C revenue grew 11.6% YoY; B2B revenue grew 27.7% YoY driven by strong growth in business events and recruitment-related services. With profitability-focused operations, the segment's adjusted operating profit grew 336.9% YoY.

• H1 results are on track for full-year guidance, with adjusted operating profit coming in above initial projections due to strong revenue performance and improved cost efficiency. Some planned H1 investments have shifted to the second half (H2), changing the originally planned H1/H2 profit split.
• There is no change to the full-year fiscal 2026 business outlook; the policy of continuing to invest for future revenue and profit growth remains unchanged, and unspent H1 budget will be deployed in H2.
• There is no change to the medium-term financial policy targets, as performance is tracking as expected.
• Full-year revenue growth is projected to land in the 22% to 25% range, with management currently expecting it to land near the midpoint of the range.
• Full-year adjusted operating margin is projected to land in the 13% to 16% range, with management currently expecting it to land toward the upper end of the range. All planned investments including generative AI R&D will remain within this existing guidance range.
• Planned annual advertising spend remains on track to come in under the initial 6.5 billion yen budget, with investment primarily focused on advertising and personnel costs.

No material new risks or operational failures were discussed in the available transcript.

Q1: Some accountants and tax professionals are low-code developing their own invoice processing tools with Claude Code. Do you see this impacting Sansan's business?

A: We are already very familiar with using generative AI tools like Claude Code for internal efficiency, and automated process improvement using tools like OCR has been an ongoing trend long before generative AI became widespread. While some highly digitally literate small businesses may build their own solutions, we do not see this as a material threat to Bill One, which is positioned to provide a rigorous, reliable end-to-end data processing workflow that customers in our target market actively demand. We are actually integrating tools like Claude Code and ChatGPT into our own services to improve customer efficiency, so this trend works as a tailwind for us.

Q2: Has AI adoption by customers made lead acquisition easier or improved demand for your offerings?

A: We do not see a material direct impact on lead acquisition from broader AI adoption. However, our value proposition of combining digitized primary data with AI to improve workflow efficiency has been very well received by the market, particularly for Bill One, where our core concept of eliminating manual accounting work resonates strongly with customers looking to adopt AI.

Q3: What is your view on the current stage of enterprise AI adoption, focused on your enterprise customer base? When will your new AI features like Sansan MCP Server and Sansan AI Agent scale, and when will they impact average revenue per user? What is your view on cross-sell growth?

A: From what we see through our customer base, more enterprises are understanding that without connecting their own unique primary data, generative AI is just an improved search engine, which has increased demand for our Sansan database offering. We have been integrating AI into Sansan for a long time, and are now actively proposing Sansan AI Agent as an upsell product for existing customers; some customers are already building workflows on the AI agent that pull data from both Sansan and Contract One. We view Sansan MCP Server as a new type of API for the AI era. We already operate an internal AI agent that pulls combined data from Sansan, Bill One, Contract One, and Salesforce to answer business questions, which is already improving internal sales efficiency, and we are now bringing this capability to customers. It is still too early to give a specific timeline for material ARPU expansion, but we have long shared our vision of integrating Sansan, Bill One, and Contract One into a single full-suite offering, and AI development has made this goal much more achievable; we expect to eventually be able to drive material company-wide ARPU growth through this integration.

Q4: What is your outlook for customer acquisition cost (CAC) from H2 through next fiscal year? How will efficiency improvements drive CAC improvement?

A: CAC is best viewed on a smoothed 12-month basis rather than quarter-to-quarter, as it spikes temporarily when we run mass marketing campaigns including TV ads. On a 12-month smoothed basis, CAC has been stable and gradually declining. The most notable recent driver of improving CAC efficiency is AI-enabled productivity gains for sales and front office teams. Even though field sales headcount declined quarter-over-quarter in Q2, we still achieved strong order growth, demonstrating improved efficiency that directly reduces CAC.

Q5: What is the scale and allocation of shifted H1 investment to H2, and what full-year profit range are you targeting? Will generative AI investment exceed the existing guidance range?

A: There is no change from the initial full-year guidance we published at the start of the fiscal year. Revenue growth is still expected to land in the 22-25% range, and we currently expect it to land near the midpoint. The lower-than-planned H1 profit is due to delayed investment spend (including delayed hiring) shifting to H2, but we will deploy all planned investment in H2 and still expect adjusted operating margin to land in the 13-16% range, currently expecting it to land toward the upper end of the range. Investment is primarily focused on advertising and personnel costs, with annual advertising spend expected to stay under the initial 6.5 billion yen budget. Generative AI investment will not require multi-billion yen additional spend, so it will fit entirely within the existing guidance range.

Q6: Why has profit fluctuated quarter-to-quarter over the last several quarters, and do you have plans to stabilize quarterly profit going forward?

A: While stable quarterly profit is desirable, we prioritize maximizing medium and long-term total profit over short-term quarterly stability. We tend to concentrate investment (particularly mass marketing) in specific periods, which will continue to create some quarterly profit volatility for the foreseeable future. We ask investors to focus on full-year profit rather than quarterly fluctuations. We have a pure SaaS business model and profit and loss structure, and we very rarely miss full-year guidance, so a 12-month view is the most appropriate way to evaluate performance.

Q7: What is your timeline for cross-sell of Bill One to existing Sansan customers, and when do you expect ARPU expansion from cross-sell and enterprise acquisition?

A: Bill One is already making good progress penetrating enterprise accounts, and we are closing large enterprise deals today. While these deals do leverage the existing executive relationships that Sansan has with large enterprises, it is not purely a traditional cross-sell of an additional product to existing customers, but rather uses the existing channel to access new opportunities, which is how we have approached the market to date.

Q8: Is there an opportunity to further leverage your business card data through partnerships with other companies?

A: We hold customer data on a custodial basis, so we do not own the data ourselves. We have long offered integrations that allow customers to use their own Sansan data in third-party platforms like Salesforce and other marketing automation tools, and we will continue to expand these types of customer-enabled integrations with external partners going forward.