Proact IT Group (PACT) Q1 2025 earnings summary

Executive summary

• Revenue grew 2.0% year-over-year to SEK 1,215.5 million, led by strong Nordic & Baltics performance and supported by organic growth of 1.5%.

• Magnus Lönn was appointed President and CEO in March 2025, bringing extensive internal experience.

• Acquisition of BlakYaks Ltd, a UK-based cloud consultancy, enhanced UK market position and Azure/cloud transformation capabilities.

• Named NetApp's Enterprise Partner of the Year 2025 for achievements in data storage and cloud integration.

• Cost efficiency measures initiated in UK, West, and Central to address margin pressure and customer churn.

Financial highlights

• Adjusted EBITA/EBITDA was SEK 79.0 million, with a margin of 6.5% (down from 7.9%); Q1 revenue reached SEK 1.2 billion.

• System sales rose 7.8% to SEK 688 million; service revenue fell 4.8%; cloud revenue declined 6.0%.

• Recurring revenue made up 35% of total, but annualized recurring revenue fell 2.8% to SEK 1,717.1 million.

• Net cash position at quarter-end was SEK 101 million, down from SEK 330 million at year-end, mainly due to the BlakYaks acquisition and working capital changes.

• Cash flow from operations was SEK 55.4 million, negatively impacted by working capital and lower profit.

Outlook and guidance

• Management remains cautious about market turbulence and macroeconomic uncertainty, especially outside Nordics.

• Ongoing efficiency initiatives and cost control are expected to support a more sustainable cost base.

• New cloud contracts signed in Q1 will impact revenue in future quarters.

• Focus on strengthening cloud and managed services, especially in Nordic & Baltics.

• The Board proposes a dividend of SEK 2.40 per share for 2024, in line with the 25-35% payout policy.