Modelon (MODEL) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 2025 increased 12% year-over-year to MSEK 20.4, with software revenue up 12% to MSEK 15.1.

• Annual recurring revenue (ARR) grew 13% year-over-year to MSEK 59.9, driven by 38% growth in Modelon Impact ARR, while legacy business declined.

• Adjusted EBIT improved to MSEK -8.3 from MSEK -14.4 year-over-year, reflecting higher software revenues and lower costs from efficiency measures.

• Positive operating cash flow of MSEK 3.0, the first since 2021, supported by lower costs and new contracts.

• Net loss narrowed to MSEK -9.0 from MSEK -14.2 year-over-year; EPS improved to SEK -0.52 from SEK -1.29.

Financial highlights

• Software revenues reached MSEK 15.1, up 12% year-over-year; service revenues rose 10% to MSEK 5.3.

• Operating expenses decreased to MSEK 29.6 from MSEK 33.9, with development costs down 29% to MSEK 10.6.

• Cash balance at quarter-end was MSEK 64.1, up from MSEK 55.0 a year earlier.

• Deferred revenue (pre-paid licenses) at quarter-end was MSEK 39.3.

Outlook and guidance

• Management expects continued customer investment delays to negatively impact ARR growth in Q2 2025.

• Further efficiency measures are ready to be implemented to protect profitability and cash flow if needed.

• Long-term ambitions remain: ARR growth above 20%, positive free cash flow from 2026, and operating profit margin above 20%.