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Introduction & Market Context
Techstep ASA (OB:TECH), a European mobile and circular technology company, presented its Q1 2025 financial results on May 16, 2025. The company’s stock closed at NOK 11.4 on the previous trading day, up 1.33%. The presentation highlighted Techstep’s continued transformation toward a recurring revenue business model while improving profitability despite a slight decline in overall revenue.
Techstep positions itself as a leading provider of managed mobility services (MMS) in Europe, with operations in Norway, Sweden, Denmark, and Poland, serving over 2,100 customers and managing more than 3 million mobile devices. The company is capitalizing on increased investments in mobile solutions and security across Europe, driven by the current geopolitical situation and regulations like NIS2 and DORA.
As shown in the following company overview, Techstep combines software, devices, and expertise to create value for customers:
Quarterly Performance Highlights
Techstep reported total revenue of NOK 248.7 million in Q1 2025, representing a 3% year-over-year decline. However, the company achieved a net gross profit margin of 35%, up 1 percentage point from the same quarter last year. EBITA adjusted increased by 43% year-over-year to NOK 2.3 million, marking the tenth consecutive quarter of positive adjusted EBITA.
The company’s recurring revenue annualized increased by 7% year-over-year to NOK 331 million, primarily driven by 11% growth in Own Software (ETR:SOWGn). Techstep also reported positive cash flow from operations of NOK 2.2 million, a significant improvement of NOK 16 million compared to Q1 2024.
The following slide illustrates the key financial highlights for Q1 2025:
A more detailed breakdown of the financial results shows that while Mobile Devices & other revenue declined by 5% year-over-year, Own Software revenue grew by 11%. The net loss for the period was NOK 16.4 million, which the company noted consists primarily of non-cash items such as amortization.
Techstep’s profitability has been steadily improving on a last-twelve-months (LTM) basis, with EBITA adjusted reaching NOK 40 million in Q1 2025, representing 47% growth year-over-year. The company attributes this improvement to continuous optimization of its cost base and the ongoing conversion to a recurring revenue business model.
Strategic Initiatives & New Agreements
During the quarter, Techstep entered into an extensive agreement with LKAB, a Swedish mining company, to manage their entire mobile estate. The three-year agreement represents a significant win for Techstep’s managed mobility services offering.
The company also prolonged its exclusive agreement with Sykehusinnkjøp for two additional years and signed Letters of Intent (LOIs) with a new IT vendor partner covering the UK and Ireland, as well as with a Nordic telecom operator. These strategic partnerships are central to Techstep’s European expansion strategy.
Techstep is focusing on scaling its business through product and sales partners in new market segments, increasing customer stickiness with best practice mobile technology solutions, and growing recurring revenue. The company has set ambitious targets for recurring revenue growth, as illustrated in the following chart:
A key component of Techstep’s growth strategy is its Essentials MDM (Mobile Device Management) platform, which is already used by over 3,000 B2B customers across Europe with more than 330,000 active users. The company is leveraging this platform to upsell additional services such as Mobile Threat Defense (MTD) and fully managed services.
Regional Performance
Techstep’s performance varied across its operating regions in Q1 2025. Revenue in Norway declined by 7% year-over-year to NOK 149 million, while Sweden/Denmark saw a 2% increase to NOK 94 million. Poland showed the strongest growth with a 17% year-over-year increase to NOK 11 million.
The company’s transformation to recurring revenue streams is progressing across all regions, with Own Software (ARR) showing steady 11% growth year-over-year, Advisory & Services growing 8%, and Device-as-a-Service increasing by 2%.
Forward-Looking Statements
Looking ahead, Techstep provided guidance for 2025, targeting recurring revenue annualized growth of 15-25% year-over-year, net gross profit growth of 12-18%, and an EBITA adjusted conversion target of 13-18%. The company emphasized that its business is positioned for scalability, with strategic partner agreements progressing according to plan and additional agreements anticipated during the year.
Techstep is capitalizing on emerging market trends in Europe, including increased investments in mobile solutions and security, the digitalization opportunity presented by the deskless workforce (which represents 80% of the global workforce), and growing investments in frontline mobility. The company’s managed services offering for Mobile Device Management and Mobile Threat Defense is designed to deliver secure, scalable, and compliant mobile operations for enterprise customers—addressing critical needs in today’s hybrid and mobile-first workplace.
With its focus on recurring revenue growth, margin improvement, and strategic partnerships, Techstep appears well-positioned to continue its transformation journey despite the slight revenue decline in Q1 2025. Investors will be watching closely to see if the company can achieve its ambitious growth targets for the remainder of the year.
Full presentation:
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