"Nepa returned to profitability in Q3 with strong momentum across key metrics. Our refined strategy is delivering results: ARR bookings are growing, retention is stabilizing, the ad hoc business is recovering, and cost reductions are being realized. We have continued during the quarter to build a foundation for sustainable and profitable growth.” - Anders Dahl, CEO
Q3 in summary
- Sales bookings increased by 10.1% year-over-year, including a 245.7% increase in ARR bookings. Q3 marks the fourth consecutive quarter of growth.
- ARR reached 123.8 MSEK at the end of the period, reflecting an underlying* yearly increase of 3.9% (4.7 MSEK). ARR from new clients amounted to 3.0 MSEK. Reported ARR decreased by 22.2%.
- Reported net sales amounted to 48.9 (60.4) MSEK, reflecting a decline of 19.1% (18.6% organically).
- Reported subscription revenue declined by 23.4% to 30.8 (40.2) MSEK, ad hoc revenue from subscribers declined by 17.4% to 8.7 (10.6) MSEK, and ad hoc revenue from other clients declined by 8.9% to 8.9 (9.7) MSEK.
- Adjusted EBITDA-Capex amounted to 0.4 (2.9) MSEK with a margin of 0.8% (4.8%).
9 months in summary
- Sales bookings increased by 8.4% year-over-year, including a 198.5% increase in ARR bookings.
- Reported net sales decreased by 17.8% (17.2% organically), to 162.7 (198.0) MSEK.
- Reported subscription revenue declined by 17.8% to 102.8 (125.1) MSEK, ad hoc revenue from subscribers declined by 12.0% to 32.7 (37.2) MSEK, and ad hoc revenue from other clients declined by 25.2% to 26.6 (35.6) MSEK.
- Adjusted EBITDA-Capex amounted to -11.5 (9.7) MSEK with a margin of -7.0% (4.9%).
Events during and after the quarter ended
- No significant events during or after the quarter ended.
Financial summary
| MSEK if not stated | Q3 2025 | Q3 2024 | Δ | YTD 2025 | YTD 2024 | Δ | LTM | 2024 | Δ |
| ARR bookings | 1.4 | 0.4 | 245.7% | 16.5 | 5.5 | 198.5% | 23.6 | 12.6 | 87.0% |
| ARR | 123.8 | 159.3 | -22.2% | 123.8 | 159.3 | -22.2% | 123.8 | 161.6 | -23.4% |
| Net sales | 48.9 | 60.4 | -19.1% | 162.7 | 198.0 | -17.8% | 233.2 | 268.5 | -13.2% |
| of which subscription revenue | 30.8 | 40.2 | -23.4% | 102.8 | 125.1 | -17.8% | 144.2 | 166.5 | -13.4% |
| Gross margin | 74.2% | 73.7% | 0.5 | 74.4% | 75.3% | -0.9 | 74.3% | 75.0% | -0.7 |
| Adjusted EBITDA-Capex | 0.4 | 2.9 | -2.5 | -11.5 | 9.7 | -21.2 | -9.6 | 11.6 | -21.2 |
| Adjusted EBITDA-Capex margin | 0.8% | 4.8% | -4.0 | -7.0% | 4.9% | -12.0 | -4.1% | 4.3% | -8.4 |
| Net income | -5.3 | -2.2 | -3.2 | -36.2 | -1.5 | -34.7 | -36.5 | -1.7 | -34.7 |
| Profit margin | -10.9% | -3.6% | -7.3 | -22.3% | -0.7% | -21.5 | -15.6% | -0.6% | -15.0 |
| Net cash flow | -2.6 | 4.9 | -7.5 | -18.4 | -8.5 | -9.9 | -7.2 | 2.7 | -9.9 |
| Net financial position | 12.4 | 29.8 | -17.4 | 12.4 | 29.8 | -17.4 | 12.4 | 41.1 | -28.7 |
| Earnings per share, SEK | -0.68 | -0.28 | -0.40 | -4.61 | -0.19 | -4.42 | -4.64 | -0.22 | -4.42 |
| Average shares outstanding | 7,863,186 | 7,863,186 | 0.0% | 7,863,186 | 7,863,186 | 0.0% | 7,863,186 | 7,863,186 | 0.0% |
*The underlying growth figures below exclude the impact of phased-out contracts and the previously disclosed extraordinary churn that occurred in late 2024 and early 2025.
| Q3 | Q3 | YTD | YTD | |
| Growth figures | Reported | Underlying | Reported | Underlying |
| Subscription revenue | -23.4% | 3.6% | -17.8% | -3.6% |
| Ad hoc revenue from subscribers | -17.4% | -11.8% | -12.0% | -8.2% |
| Ad hoc revenue from other clients | -8.9% | -8.9% | -25.2% | -25.2% |
| Net sales | -19.1% | -0.8% | -17.8% | -9.0% |
| Annual Recurring Revenue (ARR) | -22.2% | 3.9% | -23.4% | 1.9% |
Comments by the CEO
Nepa showed strong momentum and returned to profitability in Q3, a seasonally softer period. Sales bookings grew 10.1% year-on-year, marking the fourth consecutive quarter of bookings growth. This progress highlights our refined strategy and the dedication of our teams. Even though the pace of growth in the first nine months was below our initial projections, we are steadfast in our mission to deliver sustainable, long-term value. The underlying trends are encouraging: growing ARR bookings, stabilizing retention, and a recovering ad hoc business. These factors, along with our return to profitability, confirm our strategy is working. Continued investments in people, technology, processes, and market positioning will further strengthen our foundation. As these initiatives take effect, Nepa is well-positioned to capitalize on opportunities and drive continued profitable growth.
In Q3, net sales declined by 18.6% organically, primarily due to phased-out low-margin contracts and previously announced extraordinary churn. The underlying business, however, shows positive developments. Excluding the extraordinary churn, ARR grew by 3.9% during the quarter, driven by new client acquisitions and stabilized retention rates. Our ARR base is now significantly more balanced and diversified, with reduced dependency on a small number of larger clients. Growing sales bookings during the quarter reflect regained momentum in the ad hoc business, highlighting the strength of our commercial initiatives and future growth potential. While the market remains cautious, we observed early indications of recovery in Q3.
Cost-saving measures implemented earlier in the year are yielding results. Combined with operational streamlining, these initiatives enabled us to achieve adjusted EBITDA-Capex of 0.4 MSEK in Q3, representing a margin of 0.8%. By right-sizing the organization and focusing resources on sales and client delivery, we are creating the operational leverage necessary to drive sustainable profitable growth.
This summer we experienced a temporary service disruption that affected our client delivery systems. Thanks to the dedication of our team, robust contingency protocols and swift response, client disruptions were kept limited. Addressing this issue resulted in extraordinary costs of 1.7 MSEK in Q3. We have implemented additional safeguards to prevent similar issues in the future.
Transforming to meet evolving client needs and build for the future
The market for marketing insights is evolving rapidly. Clients need actionable insights that drive strategic decisions, and the insight professional's role is shifting from analyst to trusted advisor. At Nepa, we're positioned to meet this demand through our focus on recurring products that deliver continuous marketing intelligence, ensuring our insights are both relevant and decision-ready. Several key dynamics are currently impacting our financial profile, which we are effectively addressing through our transformation:
Increased strategic focus on recurring sales: Sustainable ARR growth is central to our strategy. Our subscription approach creates deeper client partnerships by delivering continuous marketing intelligence rather than periodic snapshots, providing always-on access to insights that enable faster responses to market shifts and consistent tracking of brand and customer metrics. We're invested in our clients' long-term success. ARR also improves earnings quality, reduces cyclicality, and enhances resilience in uncertain economic conditions. Since early 2025, we have increased our strategic focus on ARR. While this shift has suppresses profitability in the short term, it builds more long-term predictable revenue streams with higher contribution margins. We are gaining momentum and have seen underlying ARR growth throughout the year. We are introducing ARR bookings as a forward-looking metric to provide visibility on our progress.
Phase-out of low-margin contracts: The phase-out of lower-margin contracts was a necessary step earlier this year to free up significant time and resources allocated to maintaining legacy contracts with high degrees of customization. We are working on a more unified service offering across our customer portfolio, enhancing scalability for future growth. We still face the negative revenue impact of these terminated contracts, and will continue disclosing underlying growth figures through Q2 2026, when these terminated contracts no longer impact year-over-year comparisons.
Optimization of cost base: In H1, we completed two cost reduction programs in Sweden and the UK, which from this quarter generate 22 MSEK in gross annualized savings. Additionally, we began transforming our brand tracking platform during H1 to simplify our tech architecture, automate data flows, and reduce the need for project support and custom configurations. This initiative minimizes maintenance requirements and frees up resources to focus on higher-value activities. These initiatives were implemented to improve profitability and drive margin expansion as the business scales.
Tech investments: To increase scalability, we are making strategic technology investments. In the previous quarter, we successfully completed several pilots using our new automated brand tracking architecture. In the coming months, we are scaling up this rollout, enabling a shift toward new product development in 2026, including our next-generation dashboard. Our long-term vision prioritizes generative AI, benchmarking, forecasting, enhanced user experience, and seamless product integration, enabling us to serve more clients efficiently while investing more in outbound sales and product development.
Knowledge transformation: A critical part of our evolution has been a deliberate knowledge transformation. We have brought in experienced employees and data scientists who strengthen both our client offering and technology development capabilities. By streamlining internal processes, we have freed up resources to invest in this highly skilled talent. This shift enhances the quality of our deliverables, improves margins by focusing expertise where it creates the most client value, and accelerates our product innovation.
Outlook
The transformation we are undertaking is both comprehensive and necessary. While we continue to navigate near-term revenue challenges from previous extraordinary churn, the underlying trends are encouraging. Momentum in ARR bookings, stabilizing retention, a recovering ad hoc business, and a return to profitability all indicate that our strategy is gaining traction. However, there always remains room for improvement.
While we achieved positive Adjusted EBITDA-Capex in Q3, the full-year 2025 result is expected to remain negative due to losses incurred in the first half of the year. Nonetheless, the company is now better positioned for sustainable, profitable growth. As our investments in people, technology, processes, and market positioning continue to take effect, we are confident in our ability to capitalize on emerging opportunities in our market.
Anders Dahl
CEO
Published on: 24TH OCT 2025