Upsales Technology AB (publ) - interim report Q3 2026

July - September 2026 (compared to the same period last year, Upsales group)

• Net sales increased by 10.9% to MSEK 42.3 (38.2)
• EBITDA increased to MSEK 19.5 (13.4)
• EBITDA margin increased to 46.1% (35.1%)
• Annual recurring revenue (ARR) at the end of the quarter was MSEK 154.6, an increase of 4.7% during the last 12 months. ARR increased by MSEK 0.6 during the quarter
• Operating profit (EBIT) increased to MSEK 16.4 (10.9)
• Net income increased to MSEK 13.1 (8.8)
• Cash flow from operating activities increased to MSEK 4.9 (2.1)

January - September 2026 (compared to the same period last year, Upsales group)

• Net sales increased by 11.5% to MSEK 124.5 (111.7)
• EBITDA increased to MSEK 37.5 (28.2)
• EBITDA margin increased to 30.2% (25.3%)
• Operating profit (EBIT) increased to MSEK 27.9 (20.8)
• Net income increased to MSEK 21.4 (16.7)
• Cash flow from operating activities increased to MSEK 23.7 (13.3)

CEO LETTER

Solid earnings and building a foundation for future growth

This is my first CEO letter from Upsales and I want to share some of my impressions from my first quarter being in charge, as well as commenting on the financial results and priorities going forward.

I have spent the first months collecting feedback from customers and prospects, getting to know the product better and assessing the team and the company culture. I have also had the opportunity to touch base with most of our larger investors and all of our major partners. The third quarter is slow due to vacations both internally and at our customers and therefore it has been relatively easy finding the time to interact with the relevant parties.

My general impression is that Upsales has built a team with a lot of autonomy and the organization is well functional for all operational matters. I also want to take the opportunity to thank my predecessor Daniel for his availability and his continued engagement on the board of the company.

The financial results for Q3 2026 are very strong, with an organic revenue growth of 11% year over year and net sales of 42.3 (38.2) MSEK. ARR-growth was 5% year over year. Strong cost control and the Lex ASEA distribution of the subsidiary AIRA in Q2 has created a solid earnings foundation, and we did execute on this with an EBITDA of 19.5 MSEK and a margin of 46%, the highest margin ever in a quarter. EBIT is also high at 16.4 MSEK, a margin of 39%. Going forward my view is that EBITDAC is the most relevant profitability metric for us, so expect us to switch to that as primary earnings metric for 2027. Earnings in the quarter include a non-recurring income from one of our partnerships that improved revenue and cash flow with 1.6 MSEK. We do feel that the business climate is slowly improving but the market is still hesitant, so it is the strong cost discipline in a scalable saas-business model that created the financial improvements.

Margins in Q3 are higher than what should be expected for other quarters, since the vacation period brings down personnel cost compared to other periods. Still, it is very satisfying that the strong discipline on the cost side along with a return to growth is showing up as strong margins and cash flow.

Our long term ambition is to increase ARR-growth, but at the same time Q3 is the slowest business quarter of the year so this is not the quarter where we expected a lot of growth. My view on the limited ARR-growth over the last few years is that it is caused by several factors - a slow business environment in our key segments leading to many “no decisions” and cost saving initiatives, some lack of execution and focus in sales and marketing, and a strong competition. At Upsales we have relied on organic growth and on direct sales as our only sales channel, which is good for margins but of course limits growth.

Over the last year there have been a lot of theories circulating about what AI will do for businesses like ours. My personal view is that AI has not slowed our growth - rather the opposite - our AI powered functionality is a reason for why we win new business and our internal usage of AI is one of the keys to our cost control.

The company is obviously in a very strong position financially, debt free with a high level of recurring and predictable revenue and solid cost discipline. What I really want to do with the team is to build a strong foundation for future growth. We intend to do that in three dimensions.

First, we already have a very competitive offering for our main market - medium and large sized business based in the nordics - and we are doubling down on this. Our Q4 product release is targeted at our core users where we have had one singular focus - make sales work more efficient. The user interface gives the user four times faster load times, and makes the software easier to use, with the functionality right on your fingertips without deep menu systems, pre-loaded with data for customer analysis augmented with AI. Over time an obsession with customer success is what gives us a stable foundation.

Second, In re-engineering our platform we have created the ability for customers to create their own experience and functionality. We use this capacity ourselves to pre-configure five vertical solutions based on where we have our largest customer bases. The five core verticals are Tech/Saas, Industrial Manufacturing, Financial Services, Business Services and Wholesale / Logistics. Having our sales efforts focused around verticals means we can create demo environments and configure the software to both make it easier for us to communicate to the market, and for the customer to understand and thereby shortening the time for onboarding and shortening time to value. These vertical solutions will be released in Q4 and rolled out during 2027.

Third, sales metrics show a strong LTV/CAC-ratio, indicating an opportunity to increase growth by investing in organic sales. As always these metrics do not prove the linear scalability of future investments and my prior experience is that you need to be patient - investments in a mature sales organization can often take 12 to 18 months to recoup. The first prerequisite is to not lower hiring standards and making sure lead generation capacity also grows. We are taking on some additional headcount but in a very focused way, by adding some capacity in direct sales and in marketing, with the ambition to grow ARR in 2027 the old fashioned way - with quality execution in sales and marketing.

In addition to this we are exploring several other growth vectors, including geographic expansion, partner driven sales and selective M&A. This is in a very early stage, and we cannot do everything at once so we will make sure to get the basics right first. Building long term quality growth is not a quick fix, but fortunately with the quality of our earnings time is on our side.

In terms of guiding for the future, we intend to publish new long term financial goals when we release the year-end report for FY 2026. We are very proud to deliver what clearly is the best software tool for the sales professional, and to deliver in a financially disciplined way. I invite everybody that takes sales seriously to try out Upsales!

//Johan