unerry,Inc. Q1 FY2026 earnings call

• Core Business and Platform: unerry operates the Beacon Bank platform, which collects anonymized behavioral data from 850 million IDs (doubled in 12 months to date), totaling 1.9 trillion annual data points, placing the company in the global top 10 for big data ID volume. The platform combines outdoor GPS tracking and indoor Bluetooth beacon sensors to capture comprehensive user foot traffic and behavior data, which is integrated with other data sources including TV viewing and social media to enable end-to-end data collection, analysis and activation across three core services: Analysis & Visualization, Behavior Modification (advertising), and personalized One to One solutions.
• Key Operational Updates: 1. Began exploring integrated data platform collaboration with NTT Docomo, shifting from a previously perceived competitive relationship to a collaborative partnership. 2. Launched the Beacon Bank Survey in partnership with third-party firms to add contextual 'why' data to complement existing behavioral 'what/where/when' data, enabling location-targeted direct surveys of on-site users. 3. Selected as a development promoter for Tokyo Metropolitan Government's Next-Generation Communication Technology Startup Support Program, partnering with startups to explore NEXT 5G use cases focused on media, mobility, food service, disaster prevention and environment. 4. Completed a pilot project for Be Smart Tokyo at the 40th Chofu Fireworks Festival, providing crowd visibility and awareness initiatives for 32 nearby retail locations to improve visitor experience. 5. Lead the secretariat for the 2025 Location Information Business & Marketing Chaos Map, and is the only company listed across all three stages of data collection, analysis and activation, confirming its position as a leading end-to-end player in the Japanese industry.
• Organizational Restructuring: Reorganized the sales department in July 2025 into three dedicated teams: new business development, cross-selling/upselling for existing customers, and partner sales for agency channels, with a seamless handoff process from new acquisition to account growth. A new DX consulting team was also launched to deliver deep, customized service proposals for large enterprise customers that deploy multiple unerry solutions. The new structure stabilized in Q1 and is expected to drive growth starting in H2.
• Strategic Priorities for Fiscal 2026: 1. AI Product Development: Developing AI to推計 user lifestyles, visit likelihood, churn risk and personalized content preferences to deliver hyper-personalized experiences, with the goal of making this AI a standard core service for unerry. 2. New End-to-End Sales Organization: As noted above, the restructured sales team is focused on growing both new and existing customers to drive average revenue per customer growth. 3. Accelerating Growth via Capital Strength: Actively considering M&A and strategic partnerships to acquire complementary data, products, or entry into new verticals, to shorten go-to-market timelines compared to organic development.

1. Retail DX Business (flagship segment, focused on retail and food service): Grew at a moderate rate in the quarter, with strong new customer acquisition. Temporary stagnation in cross-selling/upselling for long-term recurring customers due to organizational restructuring, with growth expected to resume in the second half of the fiscal year. New customers acquired this quarter will contribute to revenue starting in FY2027 and FY2028. 2. Retail Media Business (focused on consumer goods manufacturers): The fastest growing segment this quarter, with sales growing sharply driven by partner-focused sales team investments including joint webinars, training sessions and co-proposals with advertising agency partners. 3. Smart City Business (focused on real estate, local governments and public agencies): Returned to strong growth after a year of stagnation, driven by solid orders for tourism-focused projects from local governments. Past hiring investments to strengthen the segment's team have begun to pay off this quarter. 4. Global Business (focused on overseas, foreign and cross-border entities): Grew steadily this quarter, with inbound travel services as the key growth driver. Increased cases of overseas enterprise entry to Japan and Japanese enterprise expansion overseas are creating new sales opportunities. Recurring revenue from recurring customers accounts for 90% of total company revenue, with recurring customer count growing 42 year-over-year to 161 companies, maintaining an average annual revenue per customer above 20 million yen.

• Maintains the medium-term target of reaching 10 billion yen in total revenue by the June 2028 fiscal year, with the company noting that the target is achievable and remains a key milestone, with further growth potential beyond this target.
• Expects operating margin to reach 15% to 25% by 2028, driven by falling indirect cost ratios (from successful infrastructure cost control as data scales) and falling SG&A ratios as revenue outgrows fixed cost investments.
• The Q1 revenue progress rate against full-year guidance is 20%, and operating profit progress rate is -1%, which is in line with the company's plan, as unerry expects the majority of full-year profit to be realized in the third quarter due to seasonal customer budget patterns.
• No changes to the full-year marketing budget, as Q1 marketing spend was just a front-loading of the already approved annual budget, with no plans to increase the full-year budget at this time.
• Global business is expected to reach approximately 500 million yen in revenue by June 2028, with further growth expected in subsequent fiscal years, following the growth sequence of Retail DX → Retail Media → Smart City → Global.

• Temporary operating deficit in Q1 due to front-loaded marketing investment and accelerated hiring, which pressured SG&A higher, though the company notes this is a planned temporary impact, with benefits expected to accrue starting in H2.
• Temporary stagnation in cross-selling/upselling for long-term recurring customers during the sales organizational restructuring period.
• Low unerry brand recognition among Japanese enterprises, which is a barrier to faster customer acquisition.
• The company notes that there are still thousands of potential new customers available in existing core verticals, so near-term growth is not limited by market saturation, but competitive pressure for low-precision, easy-to-implement solutions exists in the market.

Q: Where will growth in the Smart City segment come from this year? / A: unerry identifies three core growth engines for Smart City: 1) Urban areas, where dense economic activity and concentration of businesses create opportunities to partner on projects to improve city functionality using unerry's data; 2) Tourism destinations, where over-tourism creates demand for visitor flow analysis to manage crowds, which is a core unerry strength; 3) Mobility projects, where unerry has existing national experience helping with placement of transportation and micro-mobility assets.

Q: What is your expansion strategy for the Global segment? / A: unerry is currently focused on two of its three core services for global: analysis/visualization and behavior modification/advertising, with One to One solutions deprioritized due to resource constraints. The company uses a three-pillar approach adapted to market realities: start with inbound traveler analysis for Japan, then support Japanese companies expanding into overseas markets, then support overseas companies entering the Japanese market. This strategy has worked well and is driving the current steady growth.

Q: What is unerry's unique advantage compared to competing demand forecasting services? / A: unerry's core advantage is its ability to detect in-store visits with extremely high accuracy, via the combination of outdoor GPS and indoor Bluetooth beacons. No other Japanese player provides end-to-end indoor/outdoor tracking at this scale, which enables much more accurate AI forecasting than competitors. Competing services typically focus on easy deployment over accuracy, so unerry attracts customers that prioritize high-precision results over simple implementation.

Q: How much room is there to expand domestic recurring customers? / A: unerry estimates that the domestic market can support around 1,000 recurring customers just within the core retail and food service verticals, as Japan has 2,200 retail/food service chains, leaving more than 1,600 potential new customers in this vertical alone. This is enough to support the 10 billion yen 2028 target, with additional headroom from expansion into local governments, manufacturing, healthcare and finance, meaning there is significant growth potential beyond 10 billion yen.

Q: What types of companies does unerry target for M&A? / A: The primary targets are companies that hold complementary data that can increase value when combined with unerry's existing dataset, as well as underperforming companies that have strong products but lack sufficient data volume or sales reach to scale. unerry also targets companies operating in new verticals such as manufacturing, finance, mobility, healthcare and agriculture to accelerate entry into these new markets, reducing the time to grow organically from zero.