HERE Delivers 93% Revenue Growth in Q1 FY 2026—Pop Toy Business Drives Strategic Transformation

Strong Revenue Momentum Signals Strategic Refocus on Pop Toys

HERE Group Limited has announced unaudited financial results for the first quarter of fiscal year 2026, showcasing a decisive strategic shift. With the disposal of its previous operations completed in late September 2025, the company is now fully committed to the fast-growing pop toy market. The payoff is immediate: HERE’s revenue jumped to RMB127.1 million (US$17.9 million), a striking 93.3% increase from the previous quarter. This performance marks a clear validation of HERE’s pure-play pop toy strategy.

Margin Expansion and Cost Discipline Boost Operational Profile

One of the highlights this quarter was gross margin expansion, up from 34.7% in the previous quarter to 41.2%. CFO Dong Xie credited the improvement to the company’s renewed pop toy business model, which benefits from both high demand and controlled costs. Adjusted net loss from continuing operations improved to RMB17.1 million (US$2.4 million) compared with RMB19.3 million last quarter—underscoring stronger operating leverage even as investments in R&D and omnichannel marketing accelerated.

Revenue Growth Driven by Proprietary IPs and Market Reach

HERE now counts 17 intellectual properties (IPs) in its portfolio—including 11 proprietary IPs. Revenues from its lead pop toy brands, particularly WAKUKU, surged this quarter. WAKUKU alone contributed RMB89.73 million ($12.60 million) of revenue, with newer launches like SIINONO gaining traction. The company’s focus on IP development and global omnichannel expansion is evident, and leadership believes this sets the foundation for scalable growth.

Balance Sheet Remains Solid—Cash Reserves Top $110 Million

HERE finished the quarter with RMB789.4 million ($110.9 million) in cash, cash equivalents, and short-term investments, providing a strong buffer to fund ongoing growth initiatives and weather volatility. Total shareholders' equity held steady at nearly $125 million. This robust capital position gives HERE room to maneuver as it targets new international markets and supports shareholder returns, evidenced by its $20 million share repurchase program already underway.

Outlook: Full-Year Guidance Highlights Growth Confidence

Management expects revenues from the pop toy business to reach RMB150-160 million for Q2 FY2026, with full fiscal year guidance at RMB750-800 million. These projections reflect ongoing demand, omnichannel reach, and continuous new IP rollouts. While the company is still reporting a net loss, cost improvements and scaling effects could accelerate progress toward breakeven in coming quarters.

Takeaway: HERE’s Reinvention is Taking Hold, but Investors Will Watch for Profitability Milestones

HERE’s transformation into a focused pop toy company is beginning to pay dividends—evident in its strong revenue rebound, margin improvement, and diversified IP base. As HERE looks to the remainder of FY2026, key factors for investors to watch include gross margin sustainability, pace of international growth, and any progress toward sustained profitability. With a clear focus, ample cash, and compelling brands, HERE is well-positioned for the global collectibles wave—but must execute on operating discipline to deliver lasting value.

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