AI trends in the startup/SaaS

Research evidence excerpt

AI trends in the startup/SaaS

19 May 2026

Mizuho Securities Equity Research Cross-sector Research / Investment Strategy

Industry Overview

SmartHR evolves into an AI-native comprehensive IT services company

In this report, we summarize the latest developments regarding SmartHR, oneSenior Analyst:

of Japan’s leading startups with a valuation of around ¥180b, based on recentTomoki Akiyama

news and regular research.+81 3 6202 8048

tomoki.akiyama@mizuho-sc.com Aiming to be a new strong force not only among the winners of

Analyst: the SaaS consolidation era but within the overall IT service market

Mitsuki Nakata We have long viewed SmartHR as an example of a domestic SaaS company

+81 3 6202 8379 that combines strong technical capabilities with a powerful sales organizationmitsuki.nakata@mizuho-sc.com and can compete effectively in the enterprise market. On top of this, the

company has now entered AI-native consulting, system development, and

BPO, completing its evolution into a comprehensive IT services company for

the AI era. Our research indicates that SmartHR has earned the trust of CTOs

at enterprise companies known for their exacting standards. SmartHR says it

aims to maintain its strong growth prospects (more on this later) while having

a strong presence as a new force not only among the winners of the SaaS

consolidation era but also within the IT service market overall.

Transitioning to FCF generation phase with high growth;

enterprise market penetration through delivering on promises

Annual recurring revenue (ARR) has grown at approximately 40% and

surpassed ¥25b. The company achieved positive free cash flow (FCF) in

FY12/25 and aims to maintain growth under the Rule of 40 benchmark (ARR

growth rate + FCF margin equaling 40% or more), targeting ¥100b in sales by