Tempest Security (TSEC) Q1 2025 earnings summary

Executive summary

• Net sales increased by 13.3% to SEK 131.6 million in Q1 2025 compared to Q1 2024, driven by strong organic growth in the core Swedish security services segment.

• EBITDA fell to SEK 1.6 million (Q1 2024: SEK 4.4 million), with an EBITDA margin of 1.2% (3.8%), reflecting higher costs from rapid expansion and onboarding.

• Operating result was SEK -1.4 million (Q1 2024: SEK 1.3 million); net result was SEK -2.8 million (Q1 2024: SEK 0.8 million).

• Strategic review of Swedish Risk Solutions initiated post-period; CEO remains on parental leave, with Andrew Spry as acting CEO.

Financial highlights

• Adjusted EBITDA (excluding non-recurring items) was SEK 1.6 million (Q1 2024: SEK 4.4 million).

• Cash flow from operations before working capital changes was SEK 1.5 million (Q1 2024: SEK 2.5 million); total cash flow for the period was SEK -2.5 million (Q1 2024: SEK 5.0 million).

• Liquidity at period end was SEK 12.5 million (Q1 2024: SEK 26.7 million), with SEK 3.9 million restricted.

• Interest-bearing debt (excluding leases) was SEK 10.0 million at quarter end, up from SEK 5.8 million a year earlier.

Outlook and guidance

• Management expects margins to gradually recover as onboarding costs normalize and new contracts mature.

• The company sees strong demand for security services in Sweden due to societal and geopolitical tensions.

• Risk Solutions segment in Sweden is under review for potential restructuring and efficiency improvements.