Nepa (NEPA) Q4 2025 earnings summary

Executive summary

• Achieved 20.7% year-over-year growth in Q4 sales bookings, with strong underlying ARR momentum and commercial transformation initiatives driving improved operational efficiency and profitability.

• Underlying ARR grew 8.1% year-over-year in Q4, with subscription revenue growth offsetting legacy churn and contract phaseouts.

• Transformation strategy, including cost base right-sizing and revised go-to-market approach, resulted in the highest adjusted EBITDA - Capex margin since Q4 2021.

• No dividend proposed for 2025 as focus remains on reinvestment and sustainable growth, with potential reinstatement in 2026 if profitability continues.

• New brand tracking platform and product suite enhancements position the business for scalable delivery and profitable growth in 2026.

Financial highlights

• Q4 reported net sales declined 15% year-over-year to 59.9 MSEK, mainly due to extraordinary churn and phaseout of low-margin contracts; underlying net sales were nearly flat.

• Underlying subscription revenues increased by 4.5% year-over-year in Q4, while reported subscription revenues declined by 21%.

• Add-on/ad hoc revenue from existing subscription clients grew 10.6–10.5% reported and 12.5% underlying; add-on revenue from other clients declined by 20.6%.

• Gross margin improved by 3.5 percentage points year-over-year, reaching 77.5% in Q4; personnel costs down 23% and other external costs down 16%.

• Net cash position improved to SEK 14.5 million at year-end, despite negative working capital development.

Outlook and guidance

• Positive ARR trend and scalable advisory offerings expected to continue in 2026, with a focus on product innovation and cost discipline.

• Extraordinary churn from late 2024/early 2025 now fully reflected; churn normalized.

• Macro uncertainty acknowledged; strict cost control and value-added growth prioritized.

• Board anticipates reinstating dividends if profitability is achieved in 2026.