Summary of interim period, April–June 2025

• Net sales SEK 916 million (882), an increase of 4%
• Recurring revenues SEK 813 million (775), an increase of 5%
• EBITA SEK 236 million (264), a decrease of 11%
• EBITA margin 26% (30)
• Operating profit SEK 176 million (196), a decrease of 10%
• Operating margin 19% (22)
• Earnings per share before dilution SEK 2.64 (3.17), a decrease of 17%
• Cash flow from operating activities SEK 85 million (89).

Summary of interim period, January–June 2025

• Net sales SEK 1,796 million (1,598), an increase of 12%
• Recurring revenues SEK 1,600 million (1,391), an increase of 15%
• EBITA SEK 456 million (484), a decrease of 6%
• EBITA margin 25% (30)
• Operating profit SEK 330 million (349), a decrease of 6%
• Operating margin 18% (22)
• Earnings per share before dilution SEK 4.73 (5.44), a decrease of 13%
• Cash flow from operating activities SEK 843 million (783)
• Acquisition of Intergrip.

Focus on the strategy in a wait-and-see market

The second quarter of 2025 has continued with the uncertain global situation that has affected many decisions among customers, partners, and company sellers. We do not experience any significant deterioration compared to the first quarter, but neither any improvement. The market climate has continued to negatively affect the smaller part of our revenues that consists of transaction-based revenues, licenses, and services. However, the majority of our revenues consist of prepaid subscriptions for our proprietary software. These revenues hold up well and continue to increase steadily through a combination of innovation, upselling, and price increases.

One of our 46 business units with a high proportion of transaction-based revenues is the Dutch Vitec Enova, which offers software for energy management and grid optimization. We offer our customers the opportunity to contribute to the balance market through us, thereby creating added value for customers and contributing to a more stable energy grid. The prices and volumes of the balance market are and have been volatile and are determined daily on an open market. The second quarter of 2024 has retrospectively proven to be an exceptional quarter with both large volumes and high prices. The second quarter of this year is a good quarter over the past 12-month period, but nevertheless, the service contributed approximately SEK 80 million lower revenue this year. This results in approximately SEK 30 million lower gross profit, which was only partially compensated for by increased profits from other business units. Operating profit decreased to SEK 176 million compared to SEK 196 million the previous year, corresponding to an operating margin of 19%. The performance measure we use internally, cash EBIT, which is an operating profit excluding capitalizations and amortizations of intangible assets such as product development, decreased slightly less to SEK 199 million compared to SEK 210 million the year before. Our long-term profit target is that the operating profit should amount to at least 20% and gradually increase over time, which is highly relevant and something we work towards every day.

Cash flow from operating activities for the first six months of the year increased to SEK 843 million compared to SEK 783 million the previous year. This, together with the space in our existing credit lines, means that the readiness for future acquisitions is good.

Also in the acquisition market, the situation is cautious with many opportunities to evaluate, but few closures. Vitec has a well-developed and proven acquisition strategy that we adhere to, and we do not get carried away when price becomes the only deciding factor. Our offer to sellers of fine vertical software companies is strong, and we continue to work according to the strategy.

In our business units, a well-developed and methodical use of AI has been ongoing for a long time, in more and more processes and in customer applications. As a software group, it has been natural for all our developers to use the most effective tools internally and to gradually implement new functionality in our customer offering.

We have worked a lot with best practice sharing between the business units in our collaboration forums. It is clear how powerful these spread when you see concrete benefits presented by a colleague. More and more functionalities are also offered to our customers, ranging from more efficient customer service functionality, text generation based on data or images for brokers, reports for quality assurance in health care to advanced calculations and comparisons of data for energy forecasts. Our customers should always feel that we work according to our brand promise, To rely on – today and tomorrow.

Have a nice summer,

Olle Backman, CEO and President
Vitec Software Group