Lime Technologies AB (publ)

Hello everyone and welcome to the Q4 update with Lime Technologies. My name is Tomas Davoo. I've been at Lime since 2017 and joined or started as CEO 1st of January this year. And with me I have Anders.

Hello everyone. My name is Anders. I've been at Lime since September 2024 and I'm the CFO.

Fantastic. Feel free to write any questions in the chat. And we will try to answer them in the end of the session. If we look at the agenda, we'll start with an overview of Lime and the sum up of Q4 and 2025. We'll go into the order intake, we'll look at the revenue, we'll go through the profit and we'll finish off with summary. And let's start with an overview of Lime. We have always been running Lime with a long-term perspective, and that has left us with this fantastic footprint. In 25 years now, we have grown on average with 18%. We have had an average EBITDA margin of 25%. And of course, that's something that we are really proud of. And I would say that the biggest reason why we have managed with this year after year is our people and our great corporate culture and we know that in order to win in the competitive environment that we are playing in we need need to be a little bit better in everything we do and we believe in creating a culture that is great at combining high performance with a lot of care and no matter the times good or bad our goal has always been the same to help companies become really, really good at sales and customer care so they can help their customers in a really good way in their customer journey. And as a supplier, we are strongest when we combine our software and our expertise so we can be a true partner to our customers. We have two revenue streams, the software and the licenses. And if you look at the software side, the AOR coming from that, it stands for 68% of our total revenue. And we have done this for many years now, starting in Sweden and scaling our business into several markets. Now growing into Nordics and since 2020 also entered the Netherlands and 2021 in Germany. Now we're present in seven markets, 12 offices, and we have around 500 employees. Across our products, we have more than 7,500 customers and over 1 million users. And let me give you a sum up of Q4 and the full year of 2025. We deliver another quarter with profitable growth in a challenging market. Market conditions have been difficult for a couple of years now, and we entered 2025 believing it would improve during the year. We can conclude that it did not, not in a major way anyway. And in Q4, revenue growth amounted to 5%, EBITDA margin to 25% and our ARR growth to 7%. However, adjusted for currency, the ARR growth was 10%. And if we look at our overall revenue growth, it was held back by the services side. On the services side, we see that the revenues declined 3.9% in the quarter and 2.3% for the full year. But if we zoom in on the software side, that was 10% growth in Q4, 13% for the full year, showing that despite headwinds, we continue to have a competitive offering and grow faster than the market. And despite a modest sales growth, We increased our results per share and our overall financial position allows us to increase dividends. The board of directors proposes a dividend of 4.5 kronor per share, which equals 60 million SEK and 54% of the net profit. If we go into the highlights, one that I want to point out, is that we continue our expansion in Germany and the utility segment. We made another two deals, I will come back to them on the order intake, and we also made a smaller strategic acquisition of a portal solution with an established customer base in the German utility sector. This solution simplifies the process of connecting new customers to various utility networks, and that will further strengthen our position with both new and existing customers. Second bullet, in order to accelerate our execution, we are clarifying mandates and growth agendas for all business units. Each unit is expected to meet the rule of 40, meaning a combined growth and profit margin above 40%. Some will prioritize growth acceleration, others margin expansion, but all should contribute to our overall value creation for customers, and for the Lime Group. I'm also happy to welcome two new business unit directors, Lucas in LimeGov, bringing strong sales expertise, and Hanna in SportAdmin with a deep experience in M&A and international expansion, both critical capabilities for our next phase of growth. And AI. And where many see AI as a threat to establish software solution, We see it as a great opportunity. We have genuine competitive advantages that generic AI cannot replicate. If we take the combination of our software and the expertise, where we have the human touch, we have a vertical experience, we have a lot of compliance and regulations that we need to live up to. We have the data that is owned by the customer and that we can work with, and we have deep integrations. So with AI, we see that we can deliver more value faster, both internally and to our customer. And we are continuously working here to launch new value, new features, and they are met with really, really good interest. In LimeConnect, we released our own AI platform in November, and we've already closed around 40 deals there. We have introduced AI agents in LimeCRM. We have introduced AI-powered sales features in LimeGo. And I believe that 2026 is the year where AI is moving from investment to even more of a revenue driver. So going into the ordered intake, and if we look first of our customer concentration, you can see that that that is really low our top 10 customer customer stands for less than seven percent and our biggest customer stands for less than one percent and we've also done some really nice deals in the quarter and we can start with line crm uh we continue our street in germany utility as i said and the two more customers joining our iconic is our biggest deal of the year And Langenfelt is another Stadsverket, rather close to Cologne, where we have our office. In the real estate segment, we welcome Catena and Heimstaden, who both will use our commercial real estate solution, helping them manage the leasing of commercial properties. A highlight in Langenfelt Connect is that we've also gained some traction in the utility segment. And we have done two nice deals here, Stadsverket Julisch And NPAL. NPAL is actually one of the biggest deals ever done in LimeConnect. One deal to highlight in LimeGo is Vexman. They sell professional workwear. They have a sales team of around 10 persons and a lot of volume in the sales transaction. That is a really great customer profile for us in LimeGo. In Sportsavning, among many others, we welcome Falkenberg and Växjö Vipers. Växjö is a bit of extra fun for me since I've met them a lot of times playing for floorball in younger days. All right, moving on to revenue. So this slide shows revenue stream development since 2019. And starting back in 2015, we have completed several strategic transformations. First, moving new customers from a front sales to subscription, later converting existing customers from service agreements to subscription. And subscription revenue is growing steadily. In Q4, we have 12% growth for that. In the last 12 months, we have 15% growth. Service agreement is going down and now stands for only 2%. In total, the recurring revenue represents 68% of our total revenue and that is up from 65% in Q4 last year, bringing us closer to our target of 70% subscription-based revenue. And as I said, expert services declined and in Q4 we had minus 3.9% and minus 2.3% for the full year. This reflects two factors. One is the softer market condition that we have in professional service that we are seeing. And the other one is our own efficiency improvements. AI is helping us deliver implementations faster, of course, then reducing implementation time, making us more competitive. So services, they remain highly valued by our customers and they They really want us to help with holding their hands with product management and so on. But when we can do technical deliveries faster, it allows us to drive more leverage through our software business. And if we look into 2026, I expect expert services to have a modest growth with services continuing to decline as a share of the total revenue in the long term, consistent with the strategy towards a shift with higher software share. And our revenue, as I've said, 5% in Q4, 8% over the last 12 months. If we break this down by geography, Sweden grew 2% in Q4, 6% the last 12 months. Rest of Europe, 13% in Q4 and 12% last 12 months. As I said before, a modest growth overall, but the strong performance in the rest of Europe is really encouraging. It demonstrates that our vertical strategy and product offering resonates beyond Sweden, which is critical for our long-term growth ambitions.