Yubico (YUBICO) Q3 2025 earnings summary

Executive summary

• Net sales declined 7–7.2% year-over-year in Q3 2025, mainly due to delayed large deals and negative currency effects; sales were flat excluding FX impact.

• Order bookings fell 17–17.3% year-over-year, with underlying declines and the rest due to currency headwinds.

• Subscription sales grew 21.8–22% year-over-year, now 15.8–16% of net sales, reinforcing a shift toward recurring revenue.

• Large orders, especially from the U.S. public sector, were delayed, while small and mid-sized orders showed momentum.

• Investments in innovation, new geographies, and expanded retail presence, including a new hub in Singapore and Best Buy partnership, support long-term growth.

Financial highlights

• Net sales for Q3 2025: SEK 547.5–590 million, down 7–7.2% year-over-year; subscription sales reached SEK 86.7 million, now 15.8–16% of net sales.

• Gross profit for Q3: SEK 430.2 million, gross margin 78.6% (down from 81% last year).

• EBIT margin for Q3: 14.5–15% (down from 18.8–19% last year), mainly due to higher personnel and LTIP costs.

• ARR increased 32% year-over-year, driven by new and renewed subscriptions.

• Net cash at period end: SEK 835.7 million; cash and equivalents at period end: SEK 874.7–875 million.

Outlook and guidance

• Management remains optimistic due to strong subscription growth and a robust pipeline, though timing of large orders remains unpredictable.

• Ongoing investments in next-generation firmware, passkey development, and quantum-resilient authentication are expected to drive future growth.

• Transition to a 50/50 mix between perpetual and subscription sales is expected to take several years.