Earnings call transcript: Checkin.com Group AB sees stock drop after Q2 2025 results

Checkin.com Group AB’s second-quarter earnings call on August 21, 2025, revealed a challenging period for the company, as both revenue and earnings per share (EPS) fell short of expectations. The company reported a revenue of SEK 18.1 million, marking an 11% decline year-over-year, and an EPS miss that led to a significant stock price drop of 20.15% in pre-market trading. According to InvestingPro data, this continues a concerning trend, with revenue declining 21.46% over the last twelve months and the stock down 63.91% over the past year. Despite the revenue miss, Checkin.com Group AB remains optimistic about its long-term growth prospects, citing its innovative product offerings and strategic partnerships.

Key Takeaways

• Revenue for Q2 2025 was SEK 18.1 million, an 11% year-over-year decline.
• The company’s stock price fell by 20.15% following the earnings announcement.
• Checkin.com launched a new "face check-in" software module, enhancing its product lineup.
• Cost-saving measures are expected to fully impact by Q4 2025.
• The company remains focused on expanding its presence in the travel and iGaming sectors.

Company Performance

Checkin.com Group AB faced a tough quarter as it navigated a challenging environment marked by a decline in revenue and earnings. The 11% year-over-year revenue decline was attributed to a combination of market factors and the exclusion of RingCentral from its adjusted revenue, which otherwise showed a growth of 6%. Despite these challenges, the company maintained a strong gross margin of 70% and continued to invest in product innovation.

Financial Highlights

• Revenue: SEK 18.1 million, down 11% year-over-year.
• Gross Margin: 70%.
• EBITDA: SEK 3.1 million, representing a 17% margin.
• Cash Position: SEK 20 million.
• Equity Ratio: 87%.

Earnings vs. Forecast

The company’s EPS forecast was -0.08, but actual results were below expectations, contributing to the negative market reaction. This marks a continuation of the downward revision trend, as the company had one downward EPS revision in the past 90 days.

Market Reaction

Following the earnings announcement, Checkin.com Group AB’s stock experienced a significant drop of 20.15%, closing at SEK 7.94, well below its 52-week high of SEK 25.9. Based on InvestingPro Fair Value analysis, the stock appears undervalued despite recent challenges. The market’s reaction reflects investor concerns over the company’s ability to meet financial targets and achieve growth in the near term, with the stock now trading near its 52-week low and showing a beta of 1.26, indicating higher volatility than the market.

Outlook & Guidance

Looking ahead, Checkin.com Group AB acknowledged it would not meet its 2025 financial ambitions, specifically the "Rule of 40." However, the company remains committed to its long-term goal of achieving an 80% EBITDA margin. It plans to leverage existing enterprise deals, expand customer use cases, and develop reseller partnerships to drive future revenue growth.

Executive Commentary

CEO Christian Carlson expressed optimism about the company’s growth potential, stating, "We are not giving a date when growth will return, but we have all the tools to see growth come back again." CFO Martin Boymel added, "As we turn back to growth, we believe the margin will come up again."

Risks and Challenges

• Market Volatility: The company’s stock is highly sensitive to earnings misses and guidance revisions.
• Competitive Pressure: Intense competition in the iGaming and travel sectors could impact market share.
• Regulatory Changes: New regulations in key markets like Brazil may affect operations.
• Economic Conditions: Macroeconomic factors could influence consumer spending and demand for services.
• Technological Advancements: Rapid changes in technology require continuous innovation and adaptation.

Q&A

During the earnings call, analysts questioned the timing of the company’s return to growth and the impact of its collaboration with Stake on revenue. The management reiterated its commitment to R&D investments and highlighted the potential growth opportunities in the newly regulated Brazilian iGaming market.

Full transcript - Checkin.com Group AB (CHECK) Q2 2025:

Moderator/Host, check-in.com: Hi, and welcome to check-in.com second quarter report 2025. With us to present, we have CEO, Christian Carlson, and CFO, Martin Boymel. With that, I give the word to you, Christian.

Christian Carlson, CEO, check-in.com Group: Thank you, and good morning, and welcome to the to today’s webcast. My name is Christian Carlson, and I’m the CEO, of check-in.com Group. And I have with me our CFO, Martin Boymel. We will walk you through our report for the 2025. I hope you had a chance to review the report this morning before our webcast.

The plan is that I will talk about the company’s general development, followed by Martin who will go through the numbers. And after a brief summary, we will open up for questions. Are starting to see that our cost focus reflected starting to be on the EBITDA margin, while we continue to drive long term growth. We ended the quarter with a revenue of 18,100,000.0 in quarter two that represent a 4% decrease compared to the first quarter of the year. Year over year, we saw a decline of 11%.

If we adjust for the previous revenues from the old customer called RingCentral that was tying up the personal cost at a similar level. The growth was up 6% compared to last year. The cost saving measures we initiated at the beginning of the year, we’re now starting to see in the numbers with an EBITDA margin of 17% in the quarter. With a continued focus on cost and further streamlining the organization going forward, we expect to strengthen the margin even further going forward. The newly regulated iGaming market in Brazil had a very strong start in quarter one.

We saw the numbers coming down a little bit and stabilized in Q2. And we continue to see a rapid technology development in the travel sector, which we have many times previously highlighted, represent significant opportunities opportunities for us moving forward. Over the summer, we also had a very successful launch with the with the Philippine, casino and hotel group Solaire Resorts, where our software is helping to seamlessly connect their physical gaming environment with their digital offering. During the second quarter, we continue to streamline our organization in order to return to positive cash flow. While implemented cost savings, we are also actively working to grow our revenue base.

In Q2, we began to see the initial impact of the cost saving measures introduced earlier in this year. Those affected in q two, but we see that we expect more effects of that in q three to reach the full impact by q four. As mentioned at the beginning of the presentation, we had a really strong start in the newly regulated Brazilian iGaming market during the first quarter, but we see a little bit lower, amount of volumes in the second quarter. We have observed a similar pattern in in many other newly launched markets such as, like, for example, Netherlands and Germany, But we believe that this, the current volumes and the current revenue has stabilized on this level going forward. About the travel vertical, a new software module launched earlier this year is called face check-in.

We we continue to see, like, a strong interest of this particular software, particularly connected to the travel industry. So the solution enables user verification through facial recognition in a microsecond, for example, to log in or verify yourself to any type of services. We see, however, that the industry continued to be by long lead times and large scale procurement processes, which makes from initial contact to potential contract signing timings much longer compared to other industries we are active in. We also see an increased intensity and interest from the industry in rolling out new solutions based on biometrics and facial recognition. We remain confident that our position with companies such as Ryanair and WestJet place us going forward in a very strong position to capture additional market share within the industry.

At present, we are actively engaged in several ongoing procurement processes. Following the end of the quarter, we we carried out, as I call like I call omnichannel lounge with the Philippine casino and hotel group, Solaire Resort. We’re seeing growing interest from companies looking to integrate their physical and digital environments, and this launch serves an excellent example of the that trend. At present, we had at least one additional major operator scheduled to go live during this fall. For those of you who have followed the company for some time, our financial ambition is a variant of this classic SaaS metric, the rule of 40, which measures profitable growth.

Our goal is to maximize growth per share in combination with the EBITDA margin with a long term ambition of maintaining a level of 80%. We can now unfortunately conclude that we will not achieve this target in 2025, even though that our ambition still remains. And with that, I will hand over to our CFO, Martin Boymel, to present the financial part.

Martin Boymel, CFO, check-in.com Group: Thank you, Christian. As always, you have all the numbers and details in the actual quarterly report, but I will try to go through the highlights in this presentation. So net revenues decreased by 11% compared to the same quarter last year and landed at SEK 18,100,000.0. Here, we lost a little bit due to exchange rate changes. And at unchanged exchange rates from last year, the decrease was instead minus 5% compared to last year.

And compared to the 2025, revenues went down by 4%. The gross margin was 70% in the quarter, in line with the level we have been at in the last twelve month period. I will come back to that a little bit later. EBITDA amounted to SEK 3,100,000.0 with a margin of 17%. And cash flow from operating activities was just above SEK 1,500,000.0.

And we ended the quarter with a cash position of SEK 20,000,000 and an equity ratio of 87. So if we go into the net revenue a little bit more in detail, Christian already mentioned this. We are we’re down a little bit compared to the same quarter last year. Revenues in this quarter, quarter two twenty twenty five, was 18,100,000.0 for the quarter. And the decrease was mainly driven by the contract or the termination of the contract with RingCentral that we terminated in the summer last year.

And that customer contributed over SEK 3,000,000 in the quarter last year. So adjusting for that, we are actually up 6% compared to Q2 twenty twenty four. If we go into the gross profit, you can see here in the charted left, gross profit in the quarter decreased slightly to 12,700,000.0, driven mostly by the decrease in revenues. And the margin of 70% is in line where we have been in the last twelve month period. But as you can see in the chart to the right, that’s lower than we have been previously in previous years.

And here, we believe that the margin will go up again as we turn turn to growth again. This is mainly driven by the economies of scale that we have in many of our larger direct costs that are driving the the the the gross margin. And I I think the biggest cost is our servers our servers. They and that is generally relatively variable, but there are some fixed components and startup costs also related to the server costs. We also have some some fixed license fees where we pay annual annual payment for certain capacity, where we also have have some unused capacity at the moment.

So as we as we turn back to growth, we believe that the margin will come up again. Going to the sales and marketing, we have continued to invest in this area, the sales and marketing costs in the quarter amounted to 4,100,000.0 kroner. And that amount that corresponds to 22% of revenues. And as you see in the chart to the right, for the first six months this year, we spent 21% of revenues on sales and marketing activities. Going to EBITDA, we are up a little bit compared to last year, EBITDA with an EBITDA of 3,100,000.0 SEK and a margin of 17%.

And but if you look to the right of the picture, you see that we had higher margins in previous years, and the drop in EBITDA margin is driven by the decrease in revenues and also decreasing gross margin, but we are also working on the operational costs. So the that has partially been offset by the operational costs. And as I mentioned, related to the gross margin, I think it’s the same goes here that we are very well positioned with an optimized cost structure to expand margins when we manage to turn back to growth again. And finally, looking at the cash and equity ratio, we ended the quarter with a cash position of SEK 20,000,000. And if you adjust for our loans, the net cash was around SEK 14,000,000 at the end of the quarter.

And the equity ratio was 87%. And with that, I’ll turn back to Christian for some closing remarks and the Q and A.

Christian Carlson, CEO, check-in.com Group: Thank you, Martin. And to summarize Q2 twenty twenty five, our growth ended at minus 4% compared to the previous quarter. We recorded a year on year revenue decline, but we were 6% up when adjusted for the RingCentral. That will be the the last core quarter comparing this number revenues from last year. We continue to streamline our organization with the goal of being net positive cash flow.

In Brazil, we saw a decline in q two versus q one where where the revenue fall a little bit, but are on a on a on a stable level right now, and we expect to remain at the similar levels going forward. Within the travel sector, we’re observing a shift towards faster technology development aimed at enhancing the the customer experience. We also now allow you with omnichannel customer, Solaire Resort. And with that, I will leave over for the q and a.

Moderator/Host, check-in.com: Thanks for that presentation. Now we’ll go over to the first question here. When do you think growth will return?

Christian Carlson, CEO, check-in.com Group: Yes. Like this, we we have set ourselves in a situation that we have signed many, I would say, enterprise deals with many big companies where the the potential has not been reached yet. Some that’s something we’re working on daily to to reach. So we will not give a date one once that will happen, but the feeling is that we’re having all the all the tools to see the growth come back again. But exactly when, that I can can say.

Moderator/Host, check-in.com: Thanks. What happened with the collaboration with the Swedish fintech company? Any new information?

Christian Carlson, CEO, check-in.com Group: Right now, I don’t have any new information. I don’t expect any any revenue at least this year.

Moderator/Host, check-in.com: Thanks. How is the cooperation with stake going, and when will we see bigger revenues from that client?

Christian Carlson, CEO, check-in.com Group: Stake has had a positive impact in q two now. So probably one of our fastest customers from us in in form of revenue. So at least that has been going in in a positive way. Obviously, that’s a it’s a huge, huge potential. So, yeah, we’re working with them to increase this even more, but at least now we saw in q two, it was going in the right direction.

Moderator/Host, check-in.com: Thanks. In what way do you see the travel industry adopt new technology faster? Is it through your existing customers?

Christian Carlson, CEO, check-in.com Group: Yeah. It it’s it’s both. It’s it’s mainly driven by the discussions that come to us from from both potential new customers and the existing one, And we’re seeing especially a huge interest in facial recognition and the biometrics technology. And we believe it’s it’s just only we are at the first steps right now to to, like, to watch how to tailor the the the travel experience of the future. And but we’re feeling like everyone in this industry has this as a as the top agenda right now.

So, it’s a mix of of both new procurement processes we are in and and and the discussion we have been with with our existing customers.

Moderator/Host, check-in.com: Thanks. EBITDA strengthened slightly compared to q one. What should we expect for the rest of the year?

Christian Carlson, CEO, check-in.com Group: Yes. We we started some more, cost focus project now in q two. And and with that, we’re expecting the full effect coming in coming in full effect in q four. We still have we still believe that we will be able to to to grow, and increase our revenue. So a combination of both of them, we believe that, we should see a higher EBITDA margin going forward.

Moderator/Host, check-in.com: Thanks. How is the collaboration with Croatia going?

Christian Carlson, CEO, check-in.com Group: Yeah. It’s we announced that deal for a year ago, and it’s been taking some some time to get it up and running. But but right now, it feels like it’s really going in the right direction. They started to to offer checking services to their existing customers, but also for new potential customers as as also as a plug in. And we have not really see the the revenue coming in yet, but we we we really believe that this will pick up going forward.

And the feedback from the Croatia team has been really, really good so that we can reach their their huge customer base, in in one integration and without any new contract and so on. We believe, in the future that, this will be a very successful partnership for us.

Moderator/Host, check-in.com: Thanks. Can you tell us something about the strategy to also increase revenue?

Christian Carlson, CEO, check-in.com Group: Yeah. We we talked about that already in the presentation a bit, but it’s it’s a mix, obviously, of many things, both to to reach the full potential with many of the major customers we have signed already that has to enter to get them to use us for for more use cases or more countries and so on. We believe the potential is really, really big, with the existing ones, at the same time to to look into expand to new ones as well, signing more new customers, but also, working with with resellers and so on, that that can help us as well in different regions and different industries and so on. So it’s it’s a mix of ways we believe that the the increase in revenue can happen.

Moderator/Host, check-in.com: Thanks. You have talked, for quite some time about cost focus, but how will it lead to growth in check-in again if, you don’t dare to invest?

Christian Carlson, CEO, check-in.com Group: Yeah. So we have invested, I would say, in in r and d over the years. We believe that we are at a really good stage, like, product wise, software wise. So we believe a combination that we we can find ways to use maybe some of these costs, also put in more in in in, like, per se, revenue target projects. So, it’s a mix of, that that we’re mowing some cost over to to to to other departments and so on.

But at the same time, we believe that, even with with those cost savings we’ve been doing, we we believe that we still can deliver a good good product and that we’re having enough of resources to to also continue to find growth driving initiatives.

Moderator/Host, check-in.com: Thanks. Interesting with the omnichannel customer. Please tell us how your software adds value in omni.

Christian Carlson, CEO, check-in.com Group: Yes. It is it’s mainly based on how we how you connect a physical business with a digital one. For example, our our new launch product, face checking, fits in here really well with a focus on, like, facial recognition. The usage area is is is is huge, in many several industries. For example, in travel where you can combine your digital experience with so called, like, go to travel shops and so on.

Or it’s like, for example, with this recent, Solaire one, like, how how you work with the casino and hotel operations where you can combine what you do digitally or physically. So, it’s more to get a more seamless experience before the physical and the digital part.

Moderator/Host, check-in.com: Thanks. You don’t think you will reach the financial goal for 2025. Is that still your long term goal?

Christian Carlson, CEO, check-in.com Group: Yeah. Like, the financial goals and so on, it is it’s up to the board. But we we have announced today that we we believe we will not reach the the the financial ambition for for ’25, but then then the goal still remains, and and we will see going forward if something will change or not.

Moderator/Host, check-in.com: Thanks. You mentioned that traffic dips are common in the newly regulated iGaming market. How long do they usually last?

Christian Carlson, CEO, check-in.com Group: No. But once new market is getting regulated, we normally see huge traffic spikes the first month, then it comes down a bit. We had a very strong start in q one. We saw that it went down a little bit now in q two, but it stabilized itself at at so at at this level where we are right now, we don’t see that it will go down more. But we have seen the same examples, for example, in Germany and Netherlands before.

So, yeah, it is it’s normally really busy in the beginning, and and then it slows down. And also related to the to the operators maybe spending a little bit less of marketing money after some period as well.

Moderator/Host, check-in.com: Thanks. Now we’ll move on to the last question here. The gross margin is 70% in the quarter, which is significantly lower than a few years ago. What is this due to, and what can we expect in the future?

Martin Boymel, CFO, check-in.com Group: I’ll I’ll jump in. Yeah. I’ll jump in there since it’s on on my on my desk. Yeah. The gross margin, I think I covered a little bit on on the slide.

We the gross margin has been falling in the last last two years, and it’s mainly driven by the fall in revenue and in combination with the fact that many of the costs that we have many of the direct costs that we have that impact the gross margin, there are some economies of scale in those costs. So for example, server capacity is relatively variable, but there are some fixed components in that. We we I mentioned also there are some fixed license fees that we pay a fixed amount every year that where we can grow a lot within those those fees or licenses. There are some some fixed costs also in the direct cost. And and when revenues go down, all the margin also goes down.

So having said that, I think we’re in a good position to increase the margins when we turn back to growth again.

Moderator/Host, check-in.com: Thanks. And thanks for the presentation and Q and A. And I’ll give the closing remarks over to you, Christian.

Christian Carlson, CEO, check-in.com Group: Thanks for everyone listening, also sending questions. It’s really appreciated that we have interest of our company. And with that, I I hope everyone has a wonderful

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