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Introduction & Market Context
Swedish software company Enea AB (STO:ENEA) presented its Q2 2025 results on July 16, showing mixed performance across its business segments. The company’s stock rose 4.99% to 71.5 SEK following the presentation, recovering some ground after falling significantly post-Q1 results.
CEO Teemu Salmi and CFO Ulf Stigberg outlined how Enea navigated a challenging quarter marked by macroeconomic turmoil and geopolitical tensions, while highlighting the company’s strategic focus on network intelligence and cybersecurity solutions.
The presentation revealed continued growth in Enea’s Networks business, which partially offset declines in the Security segment. Despite these challenges, the company maintained its full-year outlook while acknowledging ongoing market headwinds.
Quarterly Performance Highlights
Enea reported Q2 2025 net sales of 224 MSEK, representing a 5% year-over-year decline from 236 MSEK in Q2 2024. However, when adjusted for currency effects, sales were flat compared to the previous year.
The company’s EBITDA margin excluding non-recurring items stood at 33% for Q2, down from 35% in the same period last year. Earnings per share remained in negative territory at -0.43 SEK, though this marked an improvement from the -0.94 SEK reported in Q1 2025.
As shown in the following chart of key financial metrics for Q2 2025:
Breaking down performance by product area, Networks emerged as the growth driver with sales of 123 MSEK, up 4% year-over-year. The Security segment, however, declined 6% to 93 MSEK, while the smaller Operating Systems business grew 5% to 19 MSEK.
The following chart illustrates the sales breakdown by product area:
Detailed Financial Analysis
Enea’s year-to-date performance showed flat revenue growth at 438 MSEK compared to 436 MSEK in the first half of 2024. When adjusted for currency effects, this represented a modest 3% increase.
The EBITDA margin for the first half of 2025 stood at 29%, below the company’s target range of 30-35% for the full year. Operating cash flow for Q2 was 5 MSEK, significantly lower than the 36 MSEK reported in Q1 2025.
Net debt increased to 187 MSEK, up from 145 MSEK reported after Q1, partly due to the company’s share buyback program which repurchased 191,519 shares for 13.8 MSEK during the quarter.
The following chart shows the net sales trend over recent quarters:
Profitability metrics showed some pressure, with EBITDA margin declining year-over-year:
The EBIT margin also showed similar trends, with operating profit declining:
Currency fluctuations had a significant negative impact of -37 MSEK in Q2, including -22 MSEK from bank balance revaluations and -11 MSEK from intercompany loans. This currency impact continues to be a challenge for Enea, which derives approximately 60% of its income but less than 20% of its costs in USD.
Strategic Initiatives
Despite financial challenges, Enea highlighted several strategic wins during the quarter. The company secured seven new customers across various applications including Deep Packet Inspection, Traffic Management, and Messaging Firewall solutions in markets spanning the US, UK, South Korea, Latin America, and North Africa.
A significant development was an extended contract with a US-based SD-WAN vendor valued at USD 2.5 million for 2026-2027, integrating Enea’s Qosmos ixEngine for deep packet inspection capabilities.
The company also announced a new partnership with Akamai (NASDAQ:AKAM), combining Enea’s DPI-based network traffic visibility with Akamai’s Fingerbank device identification solution:
Enea is positioning itself in high-growth areas, particularly focusing on two key market developments:
Forward-Looking Statements
Enea maintained its 2025 outlook, projecting continued growth in focus areas, an EBITDA margin in the range of 30-35%, and strong cash flow generation. The company’s long-term financial ambition remains to generate double-digit growth in focus areas with an EBITDA margin exceeding 35%.
Management outlined a three-pronged approach for the short term, focusing on strategy updates, commercial excellence, and operational efficiency to improve performance in the coming quarters.
The presentation comes at a critical time for Enea, which has seen its stock trade between a 52-week high of 109.4 SEK and a low of 62.1 SEK. The current price of 71.5 SEK suggests investors remain cautious but are responding positively to signs of stabilization in the business.
While the Networks segment shows promising growth, the company faces ongoing challenges in its Security business and must navigate significant currency headwinds to achieve its full-year targets. The continued negative EPS will likely remain a concern for investors despite the slight improvement from Q1 2025.
Full presentation:
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