HERE — Here Group Limited

HERE Q3 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Total Revenue: RMB 164.7 million, exceeding guidance and reflecting a decrease from RMB 177.3 million in the previous quarter.
• Gross Profit: RMB 56.9 million, with a gross margin of 34.5%, up from 31% in the prior quarter.
• Net Loss: RMB 34.1 million, compared to RMB 25.4 million in Q2 2026; adjusted net loss was RMB 22.9 million.
• Earnings Per Share: Basic and diluted net loss per share were RMB 0.21 and RMB 0.14, respectively.
• Operating Expenses: Totaled RMB 100.8 million, with sales and marketing expenses at RMB 57.7 million, reflecting increased investment in brand building.

2. Strategic Updates and Business Highlights:

• IP Performance: WAKUKU generated RMB 102 million (62.2% of total revenue), while SIINONO grew 73.1% quarter-over-quarter, contributing 20.2% of revenue.
• New Product Launches: Successful launches included the Handicraft World of WAKUKU Series and the Mood On Series from SIINONO, with strong market responses.
• Expansion of D2C Stores: Opened 7 D2C stores and 15 roboshops, enhancing brand reach and user engagement.
• Focus on Emotional Consumption: Emphasized the importance of emotional connections in consumer purchases, adapting product offerings accordingly.

3. Forward Guidance and Outlook:

• Q4 Revenue Expectation: Projected revenue between RMB 130 million to RMB 140 million.
• Fiscal Year 2026 Revenue Guidance: Revised to RMB 600 million to RMB 610 million, reflecting current market conditions and strategic adjustments.

4. Bad News, Challenges, or Points of Concern:

• Revenue Decline: Notable decrease in revenue quarter-over-quarter attributed to seasonal effects and supply chain constraints during the Chinese New Year.
• Increased Net Loss: Rising losses indicate ongoing challenges in achieving profitability amidst a competitive landscape.
• Market Cooling: A slowdown in the pop toy market was noted, with increased competition and a shift in consumer demand towards emotional satisfaction rather than scarcity.

5. Notable Q&A Insights:

• Consumer Demand Changes: Management highlighted a shift towards emotional and collectible values in consumer motivations, with a cooling market due to oversupply.
• IP Momentum Maintenance: Emphasis on consistent product and experience delivery to sustain IP strength, focusing on core IPs and user engagement.
• Category Expansion Strategy: Plans to expand into lifestyle products and tech-related IPs, but with a disciplined approach to avoid overextension.

Overall, HERE demonstrated resilience in a challenging market, with strategic initiatives aimed at long-term growth through IP development and consumer engagement, despite facing headwinds in revenue and profitability.