Lemonsoft (LEMON) Q1 2025 earnings summary

Executive summary

• Net sales grew 10% year-over-year in Q1 2025, driven by acquisitions of Spotilla, Applirent, and Atmotics, as well as moderate organic growth.

• SaaS revenue share increased to 73.9% of net sales, with recurring revenue rising to 84.4% and consulting revenue stable.

• Major Azure cloud migration project nearly completed, expected to enhance efficiency and reduce platform costs by €30,000 per month.

• Organizational restructuring and change negotiations initiated, targeting up to 35 personnel reductions and €2 million in annual savings.

• Profit for the period reached EUR 957 thousand, up 60.3% year-over-year.

Financial highlights

• Net sales for Q1 2025 were EUR 7.6 million, up from EUR 6.9 million year-over-year.

• Adjusted EBIT margin rose to 23.1% from 16.2% year-over-year, aided by delayed salary increases and acquisitions.

• Gross margin improved to 86.9% from 85.5% year-over-year, attributed to price increases and reduced external services.

• EBITDA rose 110.6% year-over-year to EUR 2,944 thousand (38.8% of net sales); adjusted EBITDA was EUR 2,026 thousand (26.7%).

• ARR reached €22.4 million at Q1 end, up from €21.9 million at 2024 year-end.

Outlook and guidance

• Net sales for 2025 expected to increase by 0–10% versus 2024; adjusted EBIT forecast at 18–24% of net sales.

• Effects of ongoing restructuring and cost-saving measures expected to be visible in H2 2025.

• Churn expected to remain elevated in H1 2025, then decline by year-end.

• Cost base expected to decrease further, with efficiency gains from technology transition and organizational changes.

• Salary increases of about 3% anticipated in Q2 2025.