Karnov Group (KAR) Q3 2025 earnings summary

Executive summary

• Achieved strong margin improvement in Q3 2025, with adjusted EBITA margin rising over 4 percentage points year-over-year to 26.3%, driven by AI-supported services and positive customer feedback.

• Net sales reached SEK 654 million, with organic growth of 4% and continued traction in online and AI-related sales.

• Divested EHS division for EUR 92 million (approx. SEK 1 billion), sharpening focus on core AI-supported legal solutions; closing expected in 2025.

• Cost-efficiency initiatives generated SEK 217 million in annual run-rate synergies by Q3 end.

• Launched new AI-based solutions and began integrating customer legal documents into the AI platform, aiming for a unified workflow suite in 2026.

Financial highlights

• Net sales grew to SEK 654 million, up 1% year-over-year, with organic growth of 3.9% and negative currency effects.

• Adjusted EBITA/EBITDA for Q3 was SEK 172 million, with margin improving to 26.3% from 22.1% last year.

• Leverage reduced to 2.5x EBITDA, below financial targets and down from 3.1x year-over-year.

• Adjusted free cash flow was minus SEK 36 million, reflecting seasonal cash flow patterns.

• Q3 EBIT was SEK 89 million, profit for the period SEK 43 million, and EPS SEK 0.40.

Outlook and guidance

• Preparing to launch a unified AI platform and workflow tools across all markets in the first half of 2026.

• Targeting EUR 20 million in cost efficiencies by end of 2026, with annual run-rate synergies of SEK 217 million already achieved.

• Continued focus on profitable growth, AI-powered workflow tool development, and rationalising unprofitable products.