Q4 in summary
- Annual Recurring Revenue (ARR) declined by 1.4% to 161.6 (164.0) MSEK compared to the same period last year. During the quarter, ARR grew by 1.5%.
- Net sales declined by 5.5% or 5.6% organically to 70.5 (74.6) MSEK.
- Subscription revenue declined by 7.5% to 41.4 (44.8) MSEK, and ad hoc revenue from subscribers declined by 19.5% to 13.3 (16.6) MSEK. Ad hoc revenue from other clients declined by 4.8% to 15.8 (16.6) MSEK.
- Gross profit amounted to 52.2 (58.9) MSEK and the gross margin to 74.0% (79.0%).
- Adjusted EBITDA less Capex amounted to 1.9 (3.8) MSEK, or a margin of 2.7% (5.1%).
- Net income amounted to -0.6 (-0.3) MSEK, or -0.08 (-0.04) SEK per share.
- Net cash flow increased by 14.7 MSEK to 11.2 (-3.5) MSEK.
2024 in summary
- Net sales declined by 8.4% or 8.5% organically to 268.5 (293.1) MSEK.
- Subscription revenue declined by 5.9% to 166.5 (177.0) MSEK, and ad hoc revenue from subscribers declined by 27.0% to 50.5 (69.2) MSEK. Ad hoc revenue from other clients increased by 2.4% to 51.4 (50.2) MSEK.
- Gross profit amounted to 201.2 (219.5) MSEK and the gross margin to 75.0% (74.9%).
- Adjusted EBITDA less Capex amounted to 11.6 (-8.6) MSEK, or a margin of 4.3% (-2.9%).
- Net income amounted to -2.1 (-14.4) MSEK, or -0.27 (-1.83) SEK per share.
- Net cash flow increased by 28.1 MSEK to 2.7 (-25.4) MSEK.
- The Board of Directors proposes a dividend of 1.23 (1.23) SEK per share.
Business highlights
DURING THE QUARTER
- Continued focus on profitable growth.
- The new subscription product Continuous Marketing Mix Modeling (cMMM) was launched.
- Jakob Kofoed was appointed as new CTO.
- An extra general meeting elected Ludvig Blomqvist as a new board member.
- Nepa announced that Sonja Thorngren will step down as CFO.
AFTER THE PERIOD ENDED
- Filip Tottie was appointed as new CFO.
- A restructuring effort of the UK business was initiated, estimated to generate approximately 8 MSEK in annual cost savings from Q2 2025.
Key financials
| Figures in MSEK if not stated |
Q4 2024 |
Q4 2023 |
change |
2024 |
2023 |
change |
| Annual Recurring Revenue (ARR) |
161.6 |
164.0 |
-1.4% |
161.6 |
164.0 |
-1.4% |
| Net sales |
70.5 |
74.6 |
-5.5% |
268.5 |
293.1 |
-8.4% |
| Of which subscription revenue |
41.4 |
44.8 |
-7.5% |
166.5 |
177.0 |
-5.9% |
| Gross profit |
52.2 |
58.9 |
-11.4% |
201.2 |
219.5 |
-8.3% |
| Gross margin |
74.0% |
79.0% |
-5.0 |
75.0% |
74.9% |
0.0 |
| Adjusted EBITDA less Capex |
1.9 |
3.8 |
-1.9 |
11.6 |
-8.6 |
20.2 |
| Adjusted EBITDA less Capex, margin |
2.7% |
5.1% |
-2.4 |
4.3% |
-2.9% |
7.3 |
| Net income |
-0.6 |
-0.3 |
-0.3 |
-2.1 |
-14.4 |
12.3 |
| Profit margin |
-0.9% |
-0.4% |
-0.5 |
-0.8% |
-4.9% |
4.1 |
| Net cash flow |
11.2 |
-3.5 |
14.7 |
2.7 |
-25.4 |
28.1 |
| Net financial position |
41.1 |
38.4 |
2.7 |
41.1 |
38.4 |
2.7 |
| Earnings per share, SEK |
-0.08 |
-0.04 |
-0.04 |
-0.27 |
-1.83 |
1.56 |
| Avg. number of shares outstanding |
7,863,186 |
7,863,186 |
0.0% |
7,863,186 |
7,863,186 |
0.0% |
Comments by the CEO
Nepa demonstrated strong resilience by significantly improving profitability and cash flow, despite a challenging market environment in 2024. While revenue declined by 24.6 MSEK over the fiscal year, our strong focus on efficiency and profitability led to a 20.2 MSEK improvement in Adjusted EBITDA less Capex, resulting in a full-year margin of 4.3%. Additionally, net cash flow improved by 28.1 MSEK. These results show our sustained commitment to transforming the business for long-term profitable growth.
REVIEW OF THE FOURTH QUARTER
In Q4, organic growth was -5.6%, attributed to continued cautious client spending and extended sales cycles. Subscription revenue was below the same period last year due to limited retention and new sales in prior quarters, and ad hoc revenue declined primarily due to the absence of a single large ad hoc project that was delivered in the same period last year.
Despite this, the underlying demand for continuous data-driven consumer insights remains strong, and our investments in commercial capabilities are yielding tangible results. During the year, we strengthened our marketing leadership and refined our strategic vision. In Q4, we increased our outbound efforts aligning with the new vision, enhancing brand positioning, lead generation, and targeted campaigns. Key initiatives included optimizing our digital presence, reinforcing thought leadership, and expanding market-specific outreach to drive engagement and long-term growth.
As part of our outbound efforts, our new business team delivered strong results, securing more new clients in the fourth quarter than usual. This success highlights the effectiveness of our enhanced sales and marketing strategy, as well as the strength of our product capabilities. Net revenue retention (NRR) reached 101.2%, marking a return above 100% after a couple of quarters of net churn, and Annual recurring revenue (ARR) increased by 1.5% sequentially from Q3. Downgrades were minimal, and no client churn took effect during the quarter.
Throughout 2024, Nepa remained proactive in cost and project management, with a focus on enhancing data quality, optimizing supplier strategy, workforce efficiency improvements, and reducing fixed operating costs. These efforts resulted in an Adjusted EBITDA less Capex of 1.9 MSEK for Q4, with a 2.7% margin.
While we are pleased with the progress, we recognize that current growth and margin levels are not where we aspire to be in the medium and longer term. We see significant opportunities to strengthen both growth and margins and will continue executing on our strategy to unlock further value. With a strong leadership team now in place, I look forward to driving the business forward.
Nepa is well-positioned at the intersection of advanced analytics, deep industry expertise, and data-driven consumer insights. Our ability to deliver dynamic, real-time decision-making solutions demonstrates a commitment to continuously evolving in response to clients’ changing needs. During the quarter, we launched Continuous Marketing Mix Modeling—a new subscription-based solution that provides businesses with deeper visibility into their marketing investments. This launch marks a significant step towards offering recurring, high-value, scalable insights that empower long-term client success and revenue stability.
OUTLOOK
Entering 2025, the focus remains on driving profitable growth through refining the client portfolio, managing anticipated downgrades of lower-margin contracts, optimizing service delivery, and leveraging global resources more effectively. While we expect a reduction in revenue compared to last year, we are proactively aligning our processes to drive underlying growth and further improve margins.
At the beginning of Q1 2025, we initiated a restructuring effort in our UK business to realign operations with market realities and strengthen long-term profitability. This initiative will create a more agile, efficient organization while ensuring continued service excellence for key clients. The resulting efficiencies are expected to generate approximately 8 MSEK in annual cost savings starting in Q2. We have also introduced new operational frameworks across client-facing teams to increase accountability and drive greater client centricity.
With a clear strategy in place, disciplined cost management, and a relentless focus on high-value, long-term client relationships, Nepa is well-positioned to capitalize on growth opportunities while ensuring sustainable, profitable growth.
Anders Dahl
CEO
