Nepa (NEPA) Q2 2025 earnings summary

Executive summary

• Sales bookings grew 13.3% year-over-year in Q2, marking the third consecutive quarter of growth, primarily driven by new ARR and commercial investments.

• Strategic focus on transitioning to a recurring revenue model and scaling up Marketing Mix Modeling and platform technology transformation.

• Ad hoc project revenues declined due to cautious client behavior and budget constraints, negatively impacting overall revenues and margins.

• Cost-saving initiatives, including personnel reductions and HQ relocation, completed in H1, are expected to yield 22 MSEK in annualized savings from Q3.

• CFO stepped down during the quarter; costs related to the transition included in Q2.

Financial highlights

• Net sales for Q2 2025 were SEK 54.8M, down 21.7% year-over-year, with total revenue at SEK 55.6M, down 22%.

• ARR at quarter-end was SEK 121.1 million, with underlying growth of SEK 1.4 million after accounting for churn and new sales.

• Adjusted EBITDA - Capex was -5.2 MSEK (margin -9.5%), compared to 8.0% last year.

• Subscription revenue declined 17% to SEK 35.5M; ad hoc revenue from subscribers fell 4%, and from other clients dropped 51%.

• SEK 1.23 per share dividend paid in June.

Outlook and guidance

• Margin improvements are expected in H2 2025, supported by cost savings, higher earnings quality, and continued ARR growth.

• Full impact of cost reductions and organizational changes expected in Q3 and Q4.

• Softer ad hoc market and timing of revenue recognition may limit ability to exceed last year's 4.3% Adjusted EBITDA - Capex margin.