TagMaster (TAGM) Q1 2025 earnings summary

Executive summary

• Net sales rose 1.1% to 100.0 MSEK compared to the same quarter last year, but organic and currency-adjusted growth was -20.5%.

• Adjusted EBITDA fell to -2.1 MSEK from 9.1 MSEK, with an adjusted EBITDA margin of -2.1% (9.2%).

• Operating profit declined to -11.2 MSEK from -1.8 MSEK, and net loss widened to -7.6 MSEK from -3.1 MSEK.

• Cash flow from operating activities was strong at 14.2 MSEK, though down from 25.9 MSEK last year.

• The Quercus acquisition contributed positively, with 20.0 MSEK in revenue and 0.7 MSEK in operating profit.

Financial highlights

• Gross margin improved to 68.4% from 66.2% year-over-year.

• Adjusted EBITDA margin dropped to -2.1% from 9.2% year-over-year.

• Earnings per share were -0.52 SEK, down from -0.21 SEK.

• Equity ratio stood at 51.2% (60.6% last year).

• Net debt/EBITDA (R12M) increased to 2.6 from 2.4.

Outlook and guidance

• Management expects the downturn to be temporary and is implementing cost-saving and efficiency measures, targeting annual savings of ~10 MSEK from H2 2025.

• The company remains optimistic about long-term prospects, focusing on organic and acquisition-driven growth, and sees strong potential in data-driven solutions for Smart Cities.