Techstep (TECH) Q1 2025 earnings summary

Executive summary

• Annualized recurring revenue grew 7% year-over-year to NOK 331 million, led by 11% growth in Own Software and strong partner channel performance.

• Net gross profit margin improved to 35%, up 1 percentage point from Q1 2024, with stable net gross profit year-over-year.

• Adjusted EBITA increased 43% year-over-year to NOK 2.3 million, marking the tenth consecutive positive quarter.

• Positive operating cash flow of NOK 2.2 million, a NOK 16 million improvement year-over-year.

• Strategic focus on transitioning from transactional sales to recurring, end-to-end services, supported by new partnerships and contract wins.

Financial highlights

• Q1 2025 revenue was NOK 248.7 million, down 3% year-over-year, mainly due to exit from low-margin device contracts.

• Net gross profit stable at NOK 86.1 million; net gross margin up to 35% from 34% last year.

• Own Software revenue grew 11% year-over-year to NOK 30.3 million; Advisory & Services declined 2% to NOK 54.6 million.

• Adjusted EBITDA reached NOK 31.0 million (12.5% margin); adjusted EBITA at NOK 2.3 million (0.9% margin).

• Net loss of NOK 16.4 million, impacted by NOK 16.9 million in amortization of intangible assets.

Outlook and guidance

• 2025 guidance targets 15–25% annualized recurring revenue growth, 12–18% net gross profit growth, and adjusted EBITA conversion of 13–18%.

• Strategic partner agreements and scalability initiatives are expected to drive further growth in recurring revenues.

• Anticipates further guidance and outlook for 2026 to be provided in Q2.