SECTRA (SECT) Q1 24/25 earnings summary

Executive summary

• Achieved a strong first quarter with record sales and operating profit, driven by robust growth in recurring and cloud revenues, despite Q1 typically being a seasonally weak period.

• All operating areas contributed positively, with Imaging IT Solutions and Secure Communications showing strong growth.

• Transition to a cloud-based, as-a-service model is progressing, with significant investments impacting short-term profits but expected to benefit long-term growth and revenue stability.

• Customer satisfaction and loyalty remain high, supported by incentive programs and industry-leading rankings.

Financial highlights

• Net sales increased by 24% year-over-year to SEK 724 million in Q1; recurring revenue up 21.4% to SEK 482.3 million.

• Cloud recurring revenue increased 42% to SEK 122.8 million; recurring revenue accounted for 67% of total revenue.

• Operating profit rose 44% to SEK 100 million, with an operating margin of 13.8%.

• Profit per share grew to SEK 0.42; profit for the period was SEK 80.4 million, up 30.5%.

• Cash flow from operations was negative SEK -57 million, but improved year-on-year; cash balance at period end was SEK 699 million.

Outlook and guidance

• Continued heavy investments in cloud transition and service sales expected to impact short-term profits but support long-term growth.

• Recurring revenue growth will gradually reduce seasonal fluctuations and support long-term stability.

• Major deliveries to healthcare providers are planned over the next few years.