Here Group Ltd (HERE) (Q4 2026) Earnings Call Highlights: Revenue Surges 94% but Goodwill ...

Release Date: September 22, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Q4 revenue surged 94.1% year-over-year to RMB127.7 million, driven by strong Pop Toy sales.

• IP portfolio expanded to 22 IPs (13 proprietary, 9 licensed), reducing single-IP dependency.

• New IP Senono rapidly scaled to RMB27.3 million in Q4 (21.4% of quarterly revenue) and RMB92.7 million for the full year, proving the 0-to-1 incubation model.

• Long-tail IP revenue grew 661% year-over-year to RMB39.8 million in Q4, diversifying revenue streams.

• Debt-free balance sheet with resilient liquidity provides financial durability and strategic patience.

• Board approved a $20 million ADS repurchase program, demonstrating confidence in long-term value.

Negative Points

• Gross margin declined to 25.8% in Q4 from 34.7% a year ago and 34.5% in Q3, due to higher costs.

• Net loss from continuing operations widened to RMB169.6 million from RMB21.8 million a year ago.

• Goodwill impairment charge of RMB124.1 million recorded for the Size One acquisition due to lower-than-expected performance.

• Channel inventory ran higher than normal operating range, reflecting a structural mismatch between macro cooling and historical operating pace.

• Sales and marketing expenses rose to 43.9% of revenue (non-GAAP) from 29% a year ago, impacting profitability.

• Revenue declined sequentially due to challenging market environment and lower channel sales.

Q & A Highlights

Q: Liping Zhao with CICC asked about the company's plans for the exploration, incubation, and commercialization of new IPs. A: CEO Peng Li (via IR manager Tina Tang) explained that HERE has built a systematic, full-lifecycle IP approach spanning discovery, incubation, and commercialization, each with dedicated teams. The portfolio now includes 22 properties across diverse styles, blending in-house creation with artist collaborations and selective international partnerships that feed experience back into original IPs. On incubation, the company uses real-time sales and user feedback from D2C stores and RoboShops, giving each IP a distinct personality (e.g., Sinono's "imperfect but adorable," Bakugu's "free and brave wild child"). On commercialization, flagship IPs get continuous new products while newer IPs pursue cross-industry collaborations, such as Sinono's partnerships with Genti Forest, the Museum of Fine Arts Boston, IRO Paris, and the 2026 China Open. Management stressed the industry is shifting from single product hits to consistently incubating IPs with real character and stories.

Q: Yukun Zhang with CITICS asked for an update on the offline channel situation and expansion plans given recent industry fluctuations. A: CFO Dong Xie (Tim) said HERE has opened seven D2C brand stores across four core Chinese cities, including a new store at Beijing Daxing International Airport this quarter, marking entry into transportation hub scenarios. Each D2C store is integrated into the self-operated brand system with unified IP expression, serving as both a sales channel and a user interaction space. The company is committed to a "quality over quantity" approach, prioritizing operational quality per store over store count. The RoboShop rollout phase is largely complete, with focus shifted from deployment scale to operational efficiency and consumer insights. Expansion remains disciplined, with strict ROI review and site evaluation before any new store, and replication only after confirming unit economics. The Hong Kong Central Pier IP-themed boat experience, expected to launch early next month, represents another new scenario exploration.

Q: DC with High Tide Securities asked about sell-in and sell-through performance in the most recent season and how the company expects to manage inventory going forward. A: CFO Dong Xie acknowledged that channel inventory ran higher than the normal operating range this quarter, driven by a structural mismatch between a cooling macro environment and the company's historical operating pace. He explained that heavy reliance on the distributor network limited real-time visibility into end-customer demand, creating a temporary gap between selling pace and actual sell-through. He also noted that strategic front-loaded manufacturing and stockpiling are structurally necessary for the Pop Toy industry's packed launch pipeline and new IP incubation. HERE has initiated three measures: leveraging omnichannel synergy (D2C online, premium stores, RoboShops, pop-ups) to accelerate sell-through; intentionally moderating wholesale sell-in to give channels room to clear stock healthily; and running targeted channel clearing programs with bundle offers that preserve brand equity. Management views the inventory pressure as temporary and manageable, expects no rapid market recovery near term, and will not resort to aggressive clearing that undermines brand premium, backed by an interest-bearing debt-free balance sheet.

Q: Analyst question on the company's overall strategic direction and business model transformation. A: CEO Peng Li stated that fiscal year 2026 was the first full year dedicated to the Pop Toy business and provided complete clarity on the company's identity and long-term positioning. He emphasized that an enduring high-premium IP company must anchor itself in distinctive products and constant creativity, not third-party distribution channels alone. HERE is shifting from a wholesale-channel-coupled model to a strategic closed loop integrating proprietary IPs, adaptive product design, and direct-to-customer channels, granting autonomy over go-to-market cadence, product presentation, and customer experience. He stressed that true brand momentum comes from design conviction and artistic leadership, and that long-term IP asset value is intrinsically linked to perceived scarcity. The company deliberately prioritizes long-term IP asset value over short-term wholesale sales volume.

Q: Analyst question regarding the company's bottom line results and the large net loss this quarter. A: CEO Peng Li addressed the bottom line directly, explaining that the financial loss this quarter was heavily impacted by one-time non-operating items driven entirely by market valuation adjustments, which are non-cash in nature and separate from ongoing core operations. Operationally, performance reflects necessary upfront investment in design capability, next-generation product innovation, and targeted brick-and-mortar storefront and pop-up expansions. Revenue scale was affected by lower sales through traditional channels amid a challenging retail environment. Cost and expense optimization is underway across all operational segments, and while revenue and cost trends are not yet fully aligned, the company expects that gap to close over time as revenue stabilizes and cost structures are optimized. The near-term mandate is to drive towards sustainable profitability at an early date.

Q: Analyst question on the performance of flagship IP Bakugu and next-generation IP Sinono. A: CEO Peng Li reported that flagship IP Bakugu generated RMB47.7 million in Q4 fiscal year 2026 and RMB359.3 million for the full year, accounting for 61.9% of annual revenue. The next-generation powerhouse Sinono, launched only in the second half of 2025, generated RMB27.3 million in Q4 alone, rapidly growing to represent 21.4% of total quarterly revenue, and RMB92.7 million for its first full fiscal year, contributing 15.5% to annual top-line. Management highlighted Sinono's rise from zero to near RMB100 million annualized scale in under 12 months as confirmation that HERE can systematically build and scale new proprietary IPs.

Q: Analyst question on the performance of the long-tail IP portfolio and other IP categories. A: CEO Peng Li noted that diversified long-tail flywheel revenue from other IP categories, including emerging preparatory IPs like Xiao, Mamimo, Funini, Fila, and Impopix, surged 661% year over year to RMB39.8 million in Q4, up from just RMB5.2 million in the same period last year. Combined with CULI's solid contribution of RMB12.8 million in Q4, this portfolio of IPs collectively amounted to over 41% of quarterly revenue, demonstrating the ecosystem's structural engineering to mitigate single IP dependency.

Q: Analyst question on the company's capital allocation and share repurchase program. A: CFO Dong Xie stated that the board approved a $20 million ADS repurchase program. As of September 16, 2026, the company had repurchased approximately $0.4 million ADS for approximately $0.7 million under the program. HERE will continue to assess share repurchases and other capital return opportunities alongside investment

For the complete transcript of the earnings call, please refer to the full earnings call transcript .