Lemonsoft (LEMON) Q3 2025 earnings summary

Executive summary

• Net sales declined by 3.4% year-over-year in Q3 2025 to EUR 7.065 million, mainly due to lower transaction and consulting income, while SaaS revenue grew by 2.3%.

• Share of recurring revenue increased to 87.3%, reflecting a resilient subscription base despite overall sales weakness.

• Profitability improved as planned, with Q3 adjusted EBIT margin rising to 35.1% from 33.9% a year earlier, driven by cost reductions from personnel cuts.

• Organizational restructuring and key recruitments, including a new Chief Sales Officer and Business Director for a subsidiary, were completed.

• For the first nine months of 2025, net sales increased by 3.8% to EUR 22.0 million, with growth mainly from acquisitions.

Financial highlights

• Q3 2025 EBITDA was EUR 2.9 million (41.1% of net sales), up 12.8% year-over-year.

• Adjusted EBITDA for Q3 was EUR 2.7 million (38.7% of net sales), nearly flat year-over-year.

• Q3 profit was EUR 1.87 million, up 6.8% year-over-year.

• Gross margin decreased to 83.1% from 87.4% due to higher platform costs post-Azure transition and lower consulting revenue.

• Cash flow from operating activities was EUR 969 thousand in Q3 and EUR 5.4 million for Jan–Sep 2025, both up year-over-year.

Outlook and guidance

• Net sales for 2025 are expected to increase by 0–10% compared to 2024.

• Adjusted EBIT for 2025 is forecasted to be 18–24% of net sales.

• Investments in sales initiatives began at the end of Q3, but have not yet resulted in increased new sales.

• Focus remains on developing the organization, sales, and cloud ERP product for SMEs.