Release Date: July 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Exsitec Holding AB (OSTO:EXS, Financial) reported a stable margin of 19.4% and adjusted EBITA over 44 million SEK for Q2 2025, consistent with the previous year.
- The company experienced a strong order intake in Q2, up 40% compared to the same quarter last year, marking the best quarter ever for Exsitec.
- Recurring revenue from software has grown by 28% year-on-year, contributing significantly to the company's earnings.
- Exsitec's training program has been successful, with 40% of employees starting as trainees, and the class of 2024 becoming profitable in Q2 2025.
- The company has a diversified customer base of around 5,500 organizations, with no single customer accounting for more than 1% of revenues, reducing risk.
Negative Points
- Exsitec's total growth in Q2 2025 was primarily driven by acquisitions, with organic growth remaining weak at 2%.
- The company faces challenges with passive existing customers, impacting the professional services segment, which accounts for 80-85% of services.
- Efficiency in Sweden and Norway needs improvement, as indicated by lower margins compared to previous years.
- The company has not yet found suitable M&A opportunities in 2025, which is a key part of its growth strategy.
- There was a 7% negative full-time employee development in Q2 versus Q1, attributed to natural staff turnover and a reduced trainee program.
Q & A Highlights
Q: Recurring revenues from software now account for 25% of your total revenue. How do you see this mix developing in the coming 2 to 3 years, especially with the Business Next cloud migration in mind?
A: Currently, recurring revenue from software is at 24%. We are pleased with its growth, and if the current trend of passive existing customers continues, this share might increase. However, the focus is on the actual growth of recurring revenue numbers. Business Next is crucial, and as customers migrate to cloud solutions, this could increase our revenue share. We anticipate a slight increase in the coming years, but professional services might also see growth.
Q: Could you talk about the strong order intake and how it looks across your three geographic markets?
A: In Q2, Sweden contributed the most to our strong order intake, followed by Norway and other Nordic countries. In Norway and Denmark, Business Next is the top-selling product, while in Sweden, there's a mix of Visma, Microsoft, and e-commerce solutions.
Q: Regarding organic growth this year and next, how much do you expect from existing customers versus new customer wins?
A: We hope for more from existing customers, who remain passive. While 80-85% of our professional services come from them, we aim to improve efficiency. New customer wins are crucial for organic growth, but existing customers still represent the largest share.
Q: There was a 7% negative full-time employee development in Q2 versus Q1. What is driving the lower headcount?
A: The reduction is partly due to a decrease in our training program from early 2024 and a naturally higher staff turnover in Q2. This trend is consistent with previous years and is part of our business model, with new trainees joining in August.
Q: With strong order intake for several quarters, what can we expect for Q3 and Q4 in terms of organic growth?
A: The impact of strong order intake depends on the offerings sold and project timelines. While smaller projects can start quickly, larger ones may take longer. Despite passive existing customers, strong sales could lead to positive organic growth in H2, but we don't provide specific forecasts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
