Yubico (YUBICO) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 2025 bookings in fixed currency, reaching SEK 705m, driven by strong growth in small and mid-size orders and expanding industry diversification, despite FX headwinds and fewer large deals.

• Subscription and ARR growth remained robust, with YubiKey as a Service representing 28% of total bookings and ARR up 21% year-over-year to SEK 391m.

• Product innovation continued with the upcoming sixth-generation YubiKey, YaaS self-service, post-quantum cryptography authentication, and expansion into digital identity services.

• Leadership transition: Jerrod Chong appointed Acting CEO in December 2025, emphasizing execution and continuity.

• Investor Day in November 2025 outlined a long-term strategy focused on security leadership, digital identity expansion, and profitability improvement for 2026.

Financial highlights

• Net sales for Q4 2025 were SEK 548.3m, down 12% year-over-year, with full-year net sales at SEK 2.2bn and a 30% CAGR from 2020–2025.

• Subscription sales in Q4 grew 26.6% to SEK 94.1m, now 17.2% of net sales; subscription bookings rose 36.1% to SEK 198.7m, now 28.2% of total bookings.

• Gross margin for Q4 2025 was 75.5% (down from 84.1%); full-year gross margin was 77.9%.

• EBIT margin dropped to 1% in Q4 2025, impacted by FX, increased overhead, and non-recurring expenses.

• Net cash at year-end was SEK 856m–895m, with positive cash flow supported by inventory reduction and working capital improvements.

Outlook and guidance

• Gross margin for 2026 expected in the 75–80% range, with Q4 2025 likely marking the trough, assuming current USD/SEK trends.

• Continued investment in product innovation, go-to-market strategies, and digital identity expansion, with a focus on execution and profitability.

• Working capital improvements and inventory reductions expected to support cash flow; no dividend proposed for 2025.

• Selective headcount growth, primarily in R&D, with a more cautious approach in 2026.