FormPipe Q3 2025 slides: Margin improvements shine amid strategic divestment

Introduction & Market Context

FormPipe Software AB (OM:FPIP) presented its third quarter 2025 results on November 19, showing significant margin improvements amid a strategic shift to focus on its Lasernet business. Despite missing earnings and revenue forecasts, the company's stock surged 12.39% to SEK 23.4 following the announcement, reflecting investor optimism about the company's divestment plans and future growth prospects.

The presentation highlighted FormPipe's continued margin improvement and ongoing divestment of its Public sector business, with a transaction valued at up to SEK 850 million expected to close on December 1, 2025.

Quarterly Performance Highlights

FormPipe reported net sales of 61 MSEK for its Lasernet business, up from 56 MSEK in the same period last year, with recurring revenue accounting for approximately 91% of total revenue. The company achieved a stable Annual Contract Value (ACV) of 6 MSEK, matching the previous year's performance despite negative currency effects.

Most notably, EBIT improved significantly to 8 MSEK, compared to -0.5 MSEK in Q3 2024, excluding 4 MSEK in one-off costs related to the divestment process.

As shown in the following financial summary:

The quarter saw 17 new deals in the Dynamics ERP segment and 2 new banks adopting FormPipe's Temenos solutions, underscoring the company's growing market presence in these key areas.

Strategic Initiatives

The centerpiece of FormPipe's strategy is the divestment of its Public sector business, which will allow the company to focus exclusively on its Lasernet document and customer communication management software. The transaction details reveal a comprehensive deal structure:

Post-divestment, FormPipe will concentrate on building from its strong position in the Lasernet business, which serves over 1,300 customers worldwide across multiple industries. The company's all-inclusive SaaS solution integrates with key systems including Dynamics 365, Temenos, and various other platforms through REST API connections.

The company's customer base includes prominent global brands across diverse sectors, demonstrating the broad market appeal of its solutions:

Detailed Financial Analysis

FormPipe's financial performance shows significant improvement in profitability metrics. The detailed breakdown reveals strong SaaS revenue growth of 19% year-over-year and an impressive EBITDA margin expansion to 21%, up from 8% in the comparable period.

The following financial table provides a comprehensive view of the company's performance:

Recurring revenue continues to be a key strength for FormPipe, reaching 215 MSEK on a rolling 12-month basis, representing approximately 89% of net sales. This recurring revenue has grown at a 12% year-over-year rate, with a CAGR exceeding 21% over the past decade.

As illustrated in the recurring revenue chart:

Despite negative currency effects of -3 MSEK in Q3, the company achieved a net ACV of +6 MSEK, with SaaS contributing +8 MSEK while Support & Maintenance declined by 2 MSEK. The outgoing Annual Recurring Revenue (ARR) stands at 220 MSEK, representing 7% growth compared to last year despite the adverse FX impact.

The following chart illustrates the ACV and ARR development:

Forward-Looking Statements

FormPipe expects to close the divestment of its Public sector business by December 1, 2025, marking a significant milestone in its strategic evolution. Following this transaction, the company will focus exclusively on Lasernet and building upon its strong market position.

The company remains committed to its 2021-2025 financial targets, which include:

• 10% average annual revenue growth
• 70% share of recurring revenue
• 20% EBIT margin by 2025
• 50% dividend policy of net profit over time

It's worth noting that while FormPipe's presentation highlighted positive developments for its Lasernet business, the company's overall Q3 earnings fell short of market expectations. According to earnings reports, FormPipe missed EPS expectations by 100% and revenue forecasts by 57.5%. However, the strong market reaction suggests investors are focusing on the long-term benefits of the strategic shift rather than short-term performance.

The company's continued margin improvement and growing recurring revenue base provide a solid foundation as FormPipe transitions to a more focused business model centered on its Lasernet product line. With the divestment proceeds, FormPipe will have additional resources to invest in growth initiatives within its core business areas, particularly in the Dynamics ERP ecosystem where it secured 17 new deals during the quarter.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.