Nepa (NEPA) Q1 2025 earnings summary

Executive summary

• Order intake grew year-over-year for the second consecutive quarter, reversing a previous decline.

• Two low-margin ARR contracts were phased out, and cost-saving programs were launched to improve margins.

• Strategic realignment focuses on a refined ideal customer profile and scalable, profitable growth.

• Positive cash flow was maintained, and the company is optimistic about the impact of ongoing initiatives.

Financial highlights

• Net sales declined by 12.7% year-over-year to 59.0 MSEK; subscription revenue fell 13.1% to 36.6 MSEK.

• Adjusted EBITDA - Capex was -6.6 MSEK (margin -11.2%), down from 1.3 MSEK (1.9%) last year.

• Net income was -14.9 MSEK (SEK -1.90 per share) compared to -0.6 MSEK (SEK -0.07) a year ago.

• Gross margin improved to 76.1% from 75.1% year-over-year.

• Net cash flow for the quarter was 3.0 MSEK, with a net financial position of 44.1 MSEK.

Outlook and guidance

• Targeting an Adjusted EBITDA - Capex margin for FY 2025 above last year's 4.3%.

• Continued positive trend in order intake post-quarter, with growth expected as market stabilizes.

• Cost-saving programs in the UK and Sweden to generate annualized savings of 19 MSEK, most effective from Q2.