Modelon (MODEL) Q3 2025 earnings summary

Executive summary

• Net revenue for Q3 2025 was MSEK 16.3, down 21% year-over-year, mainly due to reduced legacy service demand and adverse currency effects.

• Annual recurring revenue (ARR) was MSEK 53.6, up 1% year-over-year, with growth in Modelon Impact offset by declines in legacy products.

• Operating loss improved significantly to MSEK -4.0 from MSEK -19.1 in Q3 2024, reflecting cost reduction and efficiency programs.

• Net profit for Q3 was MSEK -3.9, a substantial improvement from MSEK -18.8 in the prior year.

• Equity strengthened by a MSEK 20 capital raise from Briarwood Capital Partners at a significant premium.

Financial highlights

• ARR for Q3 2025 was MSEK 53.6, up 1% year-over-year but down 2% sequentially.

• Net revenue for Q3 2025 was MSEK 16.3, down 21% year-over-year; software revenue was MSEK 13.5, down 7%.

• Service revenues declined 54% to MSEK 2.8 in Q3.

• Adjusted EBIT for Q3 was MSEK -4.0, a marked improvement from MSEK -12.0 in Q3 2024.

• Cash balance at quarter-end was MSEK 51.8, down 30% year-over-year.

Outlook and guidance

• Cost run-rate expected to remain below previous years due to ongoing efficiency measures.

• Focus remains on growing recurring license revenues from Modelon Impact and expanding through partners.

• Ambition to achieve consistent ARR growth above 20% and positive free cash flow from 2026.

• Profitability and cash flow expected to improve through revenue growth and disciplined cost management.