Spir Group Q1 2025 slides: Cash EBITDA triples as revenue grows 20%

Introduction & Market Context

Spir Group ASA (OB:SPIR) presented its first quarter 2025 results on May 13, showcasing strong performance driven by high activity in the Norwegian real estate market. The company, which holds leading positions in both real estate and public administration software sectors, reported significant growth in revenue and profitability metrics across most business segments.

The presentation, delivered by CEO Per Haakon Lomsdalen and CFO Cecilie Brænd Hekneby, highlighted how the company has capitalized on increased demand for secure and efficient IT solutions while maintaining its focus on cost control and debt reduction.

Quarterly Performance Highlights

Spir Group reported total revenue of 316 million Norwegian kroner (MNOK) in Q1 2025, representing a 20% increase compared to the same period last year. This growth was primarily driven by the company’s real estate segment, which grew by 24%.

As shown in the following chart of key financial figures, the company also achieved significant improvements in profitability metrics:

The company’s Annual Recurring Revenue (ARR) reached 439 MNOK, up 10% from March 2024, while gross profit increased by 21% to 194 MNOK. Most notably, Cash EBITDA tripled to 30 MNOK in Q1 2025, up from 10 MNOK in Q1 2024.

The following chart illustrates the company’s performance across key financial metrics:

Despite the strong operational performance, Spir Group reported a net loss of 9 MNOK for the quarter, compared to a loss of 6 MNOK in Q1 2024. This was attributed to increased depreciation and amortization costs (39 MNOK, up from 32 MNOK) and lower finance income.

Detailed Financial Analysis

Revenue growth was unevenly distributed across Spir Group’s business segments, with the real estate division showing the strongest performance. The following chart breaks down revenue development by business area:

Transaction-based revenue was the primary growth driver, increasing by 35% to 165 MNOK, while subscription revenue grew by 14% to 122 MNOK. This breakdown of revenue types demonstrates the company’s increasingly scalable business model:

The company’s Cash EBITDA development shows improved profitability across most business segments:

Business Segment Performance

Ambita AS, the company’s largest real estate segment, delivered exceptional results with revenue up 29% to 140 MNOK, driven by a 32% increase in transaction-based revenue. Adjusted EBITDA increased by 58% with a 15% EBITDA margin.

Boligmappa AS continued its strong growth trajectory with revenue up 24% to 17 MNOK and ARR increasing by 12% year-over-year. The business unit turned profitable with an adjusted EBITDA of 4 MNOK compared to -3 MNOK a year earlier.

Metria AB faced challenges from the implementation of Open Data, resulting in modest revenue growth of 4% to 77 MNOK. While subscription revenue declined by 8%, transaction-based revenue increased by 14%, and the company still achieved 12% growth in gross profit and doubled its Cash EBITDA.

Iverdi AS, a newer addition to the group, contributed 10 MNOK in revenue and 16 MNOK in ARR during Q1 2025. The company’s professional software for valuation engineers saw a 23% increase in reports quarter-over-quarter.

Sikri AS, focused on the public administration sector, delivered steady growth with revenue up 3% to 69 MNOK and subscription revenue increasing by 7%.

Strategic Initiatives & Outlook

Spir Group’s financial strategy includes optimizing investments across the group while focusing on debt reduction. The company decreased its net interest-bearing debt (including lease liabilities) from 708 MNOK at year-end 2024 to 582 MNOK by the end of March 2025.

Free cash flow increased from 130 MNOK in Q1 2024 to 138 MNOK in Q1 2025, supporting the company’s debt reduction strategy. Total (EPA:TTEF) capital expenditure was 21 MNOK in Q1 2025, down 3 MNOK from the same period last year.

The following summary highlights the key financial outcomes for Q1 2025:

Looking ahead, Spir Group maintains a positive outlook, expecting continued growth driven by increasing demand for secure and efficient IT solutions. The company anticipates steady growth in subscription revenue with low churn rates, supported by high win rates and long-term contracts.

Leadership Changes

Spir Group announced that Line Cecilie Stenseth will assume the role of Interim CFO effective May 15, 2025. The company described Stenseth as "a proven talent with demonstrated strategic insight, strong leadership skills, and a consistent track record of delivering results."

Forward-Looking Statements

While Spir Group’s presentation painted an optimistic picture of continued growth and improved profitability, investors should note that the company still reported a net loss for the quarter. The company’s strategy of reducing interest-bearing debt while investing in growth opportunities will be crucial to achieving sustainable profitability in the long term.

The strong performance in transaction-based revenue, particularly in the real estate segment, suggests that Spir Group remains highly sensitive to activity levels in the Norwegian real estate market. Any slowdown in this sector could potentially impact the company’s growth trajectory.

Nevertheless, the significant improvements in Cash EBITDA and gross profit margins across most business segments indicate that the company’s focus on operational efficiency and cost control is yielding positive results.

Full presentation:

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