4C Group (4C) Q1 2025 earnings summary

Executive summary

• Net sales reached SEK 91 million in Q1 2025, up 19–20% year-over-year, with an EBIT margin of 10% and major defense contracts signed, including a UK MOD deal potentially worth SEK 295 million over five years.

• Order book stood at SEK 310 million as of March 31, 2025, and annual recurring revenue reached SEK 181 million, both showing positive trends.

• Share issue of SEK 55 million completed in Q1 to enhance financial stability and flexibility amid global uncertainty.

• Leadership strengthened with new CTO and CFO appointments to support growth and operational improvements.

• Expert Services segment delivered record-high average chargeout rate, improved margins, and increased order book.

Financial highlights

• Net sales rose to SEK 91 million in Q1 2025 from SEK 76 million in Q1 2024, with a 10% EBIT margin (up from -21% in Q1 2024).

• Software revenue accounted for 55% of Q1 2025 sales.

• EBITDA reached SEK 18.3 million (margin 20%), and net income improved to SEK -9.4 million.

• Operating expenses were SEK 73 million in Q1, down from SEK 76 million in Q4.

• Negative free cash flow in Q1 was mainly due to higher contract assets and accounts receivable from late-quarter business activity.

Outlook and guidance

• Positive outlook for 2025, expecting continued growth despite global uncertainties and quarterly volatility, with defense market projected to expand rapidly in Europe.

• Management expects improved cash flow and stable liquidity in coming quarters, with sufficient financing secured for the next 12 months.

• Anticipates a slow increase in costs, closely tied to top-line growth, especially in Expert Services.

• Working capital expected to improve as contract assets are invoiced and milestones reached.

• CEO focus on strengthening defense brand, expanding resilience market share, and improving operations.