Storytel AB (publ)

Welcome to Storytel Q2 Report 2026. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the CFO, Stephan Ward. Please go ahead.

Thank you and good morning and welcome to our earnings call for the second quarter of 2026. Regarding today's call, I will be hosting it on my own as Bodil had an accident at her home this morning and dislocated her shoulder. She's unable to attend and needs to have the shoulder looked at. Aside from that, she's doing fine and she'll be back soon as she's sorted out the problem with the shoulder. We're pleased to report a solid performance for the second quarter with strong revenue growth and continued margin expansion. On the back of this solid organic performance and the acquisition of over Amstel, we are raising our 2026 full-year guidance for adjusted EBITDA to be at least 900 million from earlier 870 million. During the quarter, we also completed our transfer to the Nasdaq stock of main market. Now, let me take you through the highlights. On top line in the quarter, we grew our net sales in constant currencies by 12.7%, of which 10.7% are organic growth. The adjusted EBTA margin came in at 19.2%, up from 16.8% a year ago, and equal to a total growth year-on-year in EBTA of 27%. Our net profit more than doubled to 100 million kronas from 47 million and our earnings per share came in at 1.18 up from 0.54 a year ago. We ended the quarter with a slight net debt of 14 million and a very modest gearing. In terms of subscribers, we grew our base by 7.2% year on year to a total of 2.75 million customers end of period. A highlight here is that this is the first quarter when our subscriber base outside the Nordics is actually bigger than the subscriber base in the Nordics. During the quarter we added 11,000 from Q1 and year-to-date we added 83,000. Growth year-to-date is led by our European segment. Looking at our streaming or publishing business, we grew sales by 32% in constant currencies and we expanded our EBTA margin for publishing to 31.3% up from 27.4% a year ago. We acquired over Amstel during the second quarter and it is consolidated as of June. As mentioned, we raised our full year guidance and we completed our move to the NASDAQ main market. In terms of product innovation, we had significant progress in the quarter with the launch of Storytel Genie and our author platform, Storytel Pulse. Moving on to the next slide, we can see the bar charts for net sales showing solid progress with the growth rate already mentioned, 12.7%. We have a strong development on the gross margin. It's up one percentage point year-on-year to 46.3%, while our adjusted EBITDA came in at 205 million for a margin of 19.2%. Cash flow from operations. Cash conversion is solid, and the cash flow from operations are 170 million before changes in working capital. to move to the next slide. Looking at our annualized development, it highlights our significant margin expansion over the past 10 quarters, moving from 9% EBTA margin in the first quarter of 2024 to 19.8% at the end of Q2 2026. During this period, we have also exceeded the market expectations on the EBTA levels. of the past nine quarters. On a rolling 12-month basis, our EBITDA are currently at 1,823 million for a growth year-on-year of 22%, and the margin is at 19.8%. This means that we are very well on track to realize our 2028 targets, which stipulates an annual sales growth of at least 10%, with the EVTA margin at the end of 2020 of at least or plus 20%, and we are already at 19.8. Moving over to our publishing segment. It's a very strong quarter with strong growth in both net sales and gross profit and EBITDA. External sales increased by 32% in constant currencies driven by higher digital external sales and improved commercial terms and newly acquired publishers such as Overarmstead. Our gross margin is at 35.8% up from 31.2% a year ago. Our EDTA came in for publishing came in at 108 million up from 82 million equal to a growth of 32% year-on-year and a margin of 31.3%. Stronger growth also in operating profit. Oberhamstel was acquired in May and consolidated as of the beginning of June. Next slide. In streaming, our subscriber base grew 7.2% year-on-year to 2.75 million. It's up 185,000 on an annual basis. As we mentioned, 11,000 subs were added in the quarter and a total of 83,000 for the first half. Our performance in our European segment is strong, with 13% growth in subscribers, 18% growth in sales in constant currencies, a stable ARPU and a total of 1.07 million subs. We also deliver solid performance in our Nordic segment, with a 4% growth in subscribers and a 6% growth in reported sales. in constant currencies driven by a slightly higher ARPU level. The run rate for the first half is slightly below where we were a year ago. This is primarily due to campaign planning. As you know, we had a really strong first quarter, and that has some dampening effects on how subscriber growth were in the second quarter. However, for the full year, we target to add at least the same amount of net tax for the year as we did in 2025, suggesting an acceleration in net intake during the second half, and the outlook for the third quarter is promising. On the churn level, we remain at a very modest level. We've seen a continued decline in churn rates for a long time. Regarding the Nordic segment, you can see a tiny pickup in churning in the second quarter compared to the previous quarter. It's relatively undramatic and explained by the development in Finland, where we changed our campaign mix, which had a negative impact on churning in Finland. In the Swedish business, we had a stronger net intake in Q2 this year than we had in Q2 last year. Retention in our core base remains strong. In terms of ARPU, it's essentially flat on the group level. It's offset. We've done price increases in a few markets. Those are a little bit offset by regional mix changes. So the important takeaway here is that in local markets and in local currencies, prices across the board are either stable or improving, while the mix with our non-Nordic part of the business growing at a more rapid pace than our Nordic part, that has a dampening effect on the overall group ARPU, as it should, because of the differences between ARPU levels in the Nordics and outside the Nordics. Nordics ARPU increased by 2% to circa 154 on higher price points. As you know, we did a price increase in Unlimited in Sweden at the end of 2025, and that has, it didn't have that much impact on Q1, but it was a little bit more impact in Q2. Worth highlighting also is our weaker ARPU development in Americas. which is down to 129 kronas in the quarter, down from 138 a year ago. That is primarily due to FX, but also slightly due to mixed changes as we grow partnership customers, and we have also quite good growth in our left-hand business, which are at lower price points than in the U.S., Moving on to the next slide please. Unreported numbers, streaming are growing at a little bit more than 8%. You can see Europe is growing very nicely with 18.2% in sales. America is slattish. Gross margin is expanding to 41.2 up from 40.9. Good growth in EBTA year-on-year and the solid marketing improvement in the EBTA level. So overall, we're satisfied with the performance of our streaming business. Moving on to the cash flow statement. We can see that cash flow from operations came in at 170 million, so we continue to have a really good cash conversion of our operating earnings. We had a slight headwind in working capital, it's nothing dramatic, it's a little bit seasonal impact, headwind of 21 million for a total cash flow from operation of 150. We used the cash flow in our investing activities. It was negative by 237 million, of which the bulk of that is the over-amstel acquisition. And the rest is ordinary investments in content. Cash flow from financing activities was a total of minus 100 million, including our dividend of 140 million. The cash flow for the period was negative 187 million, which brings us to slide, move to the next slide, this balance sheet. You can see there that the net interest rate at the end of the quarter was 14 million. Other than that, we grew our asset base to 3.7 billion, of which 2 billion is equity, so the equity to assets ratio, ratio includes the 54% from earlier, 46. so our financials remain solid and strong. Next slide, please. With that, I can summarize that we had a really solid performance in terms of sales growth, plus 12.7%. EVTA margin expansion continues to improve, up 2.3 percentage points year-on-year to 19.2%. We raised our full-year guidance. We had really strong releases on our user experience in terms of Storytel Genie but we also released our author platform Storytel Pulse these are important product developments where we put a lot of emphasis internally in our business to continue to stand out when it comes to the user experience of our service and we also tailor to the authors that they can really see the benefits of being part of our group and we have got really positive responses both from our end customers but also from our authors regarding these releases. We have strong financials. They support an active M&A agenda. We are very pleased with the Over Amstel acquisition that we finalized in May. Over Amstel is a really impressive company. It has created a platform for us in the Netherlands from which we can actually drive growth in the Benelux region. So we're quite optimistic on that. It's a great team that have joined our group led by Martijn and a really strong portfolio of publishers that have been with the company for most of them have been with Martijn for in the range of 10 to 20 years. So that's a really high quality team that is joining us And this is an important proof for us to broaden our taking our successful Nordic strategy outside of the Nordics and try to drive a similar success in continental Europe. So we're excited about that and we are continuing to look for additional assets to bring to the group. So expect more from us on the M&A front. We're well on track to deliver on our mid-term targets, our 2028 targets, as you can see from the current performance, and we complete the transfer to the main market. And that was a speedy and efficient process, carried out during the spring, which is a good proof that we have all our internal policies and procedures well in place. With that, I think we can head over to the Q&A section.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Joachim Gunnel from DND Carnegie. Please go ahead.