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Fortnox AB, with a market capitalization of $5.45 billion, reported a robust first quarter for 2025, showcasing significant growth in key financial metrics. The company’s earnings call highlighted a 25% organic growth and a 33% increase in EBIT, with net sales reaching SEK 563 million. The EBIT margin stood at an impressive 44%. Despite these positive results, Fortnox’s stock showed a modest increase of 0.07% in early trading, reflecting investor caution amid broader market conditions. According to InvestingPro, the company maintains strong financial health with an overall score of 3.4 (GREAT), supported by robust profitability metrics.
Key Takeaways
- Fortnox achieved 25% organic growth and a 33% increase in EBIT.
- The company reported net sales of SEK 563 million.
- Revenue per customer exceeded SEK 300, meeting company targets.
- The stock price saw a slight increase of 0.07% post-earnings.
Company Performance
Fortnox demonstrated strong performance in Q1 2025, with significant growth across its business segments. The company achieved a 25% organic growth rate, bolstered by a 33% increase in EBIT. The revenue per customer exceeded the SEK 300 target, indicating effective customer engagement strategies. However, the addition of 14,000 new customers was lower than the previous year, suggesting potential challenges in customer acquisition.
Financial Highlights
- Revenue: SEK 563 million
- EBIT: SEK 246 million
- EBIT margin: 44%
- Revenue per customer: Exceeded SEK 300
- New customers: 14,000
Earnings vs. Forecast
The company’s performance metrics aligned closely with market expectations. Although specific EPS and revenue forecasts were not disclosed, the robust growth figures suggest Fortnox met or slightly exceeded market expectations for Q1 2025.
Market Reaction
Fortnox’s stock price experienced a slight increase of 0.07% following the earnings announcement. The stock is trading near its 52-week high of $9.19, indicating steady investor confidence. InvestingPro analysis suggests the stock is currently overvalued, with a P/E ratio of 74.6x and trading at high EBIT and EBITDA multiples. This modest market reaction reflects a cautious optimism among investors, likely influenced by broader economic conditions and sector trends. Subscribers to InvestingPro have access to 20+ additional exclusive insights about Fortnox’s valuation and growth prospects.
Outlook & Guidance
Looking ahead, Fortnox aims to continue expanding its customer base and increasing average revenue per customer. The company is focusing on integrating payments and financing into its core workflows, with potential plans for international expansion. With a strong revenue CAGR of 31% over the past five years and current revenue growth of 24.48%, the company maintains impressive momentum. Future revenue forecasts project steady growth, with expected figures of USD 253.04 million for FY2025 and USD 311.95 million for FY2026. For detailed analysis of Fortnox’s growth trajectory and comprehensive valuation metrics, investors can access the full Pro Research Report available exclusively on InvestingPro.
Executive Commentary
Acting CEO Roge Hattelios emphasized the company’s sustainable business model, stating, "We think that it proves a sustainable business model." He also highlighted the importance of seamless workflow integration, stating, "We believe that to get those workflows seamless, we can add much more value."
Risks and Challenges
- Customer Acquisition: Slower growth in new customers could impact future revenue.
- Market Conditions: Economic uncertainties may affect consumer spending and investment.
- Competitive Landscape: Increasing competition in the financial services sector could pressure margins.
Q&A
During the earnings call, analysts inquired about the implications of a potential take-private move, the performance of the new business card, and strategies for managing employee costs. The management addressed these concerns, highlighting ongoing growth and expansion efforts.
Fortnox’s strong Q1 performance underscores its resilience and strategic focus, positioning the company for continued success amidst a challenging economic environment.
Full transcript - Fortnox AB (FNOX) Q1 2025:
Minen Odlander, Head of Investor Relations, Fort Knox: Good morning, everyone, and very welcome to Fort Knox Q1 Twenty Twenty Five report presentation. My name is Minen Odlander, and I’m Head of Investor Relations. With me here in the studio today in Vekoe, I have our acting CEO, Roge Hattelios. The agenda for today is that we will start a hearing Roge presenting the Q1 numbers, followed by some business highlights, and then we will have time for questions. You can either call them in to us here in the studio by dialing 46855931337 or you can send them to us here in the chat.
Once again, very welcome and over to you, Roge.
Roge Hattelios, Acting CEO, Fort Knox: Hi there, and thank you, Mia. So first, a short summary of the first quarter. So Q1 showed 25% organic growth and 33% EBIT growth. The RBC target of SEK 300 was surpassed, and we reached SEK $3.00 4. And our focus on strategic changes aligned with the new direction continues.
So looking into the numbers. We saw customer growth with 14,000 customers in line with Q4 previous year, but yes, and a little bit lower than previous year. And in Q1 last year, we acquired Board Aesir, which added 3,000 customers. We had a growth in RPC with SEK 6, and that made us surpass our target of SEK 300 per month. The revenue growth was 21%.
And adjusted for acquisitions and divestment, the organic growth reached 25%. We had an EBIT margin of 44%. And looking at Roor of Odnox, growth and margin combined, we hit 64%. So a stable and strong first quarter in twenty twenty five. And looking at customers and average revenue per customer, we have seen a stable development towards our target that we set up in 2020, where we said that we should double the number of customers and double the average revenue per customer and now reaching the average revenue per customer and but we are slightly below on the numbers of customers.
The combination, though, is of usage, which we measure in average revenue per customer and the number of customer are, as said previously, still a focus and also crucial for our revenue growth. And as a result of the new direction, we focus more on increased usage, and we see significant growth opportunities to getting more usage among our existing customers. But I would like to remind you that the combination of the two targets, the number of customers and the average revenue per customers remains in place, which is based on the business plan established in 2020. And looking at the development over the last four years and closing Q1 with net sales of SEK $563,000,000 and organic growth by SEK 25 and EBIT of SEK $246,000,000 and EBIT growth of 33%, we think that it proves a sustainable business model. And looking at rule of FNOx, which is an important metric for us to balance growth with margin, we hit 64%, and that gives us 16 consecutive quarters above 60%.
Some net sales highlights then. Net sales increased by 21% and organic net sales by 25 And the major growth drivers are still existing customers, but also new customers and price adjustment. The divestment we did last year impacted subscription negatively by 7%, and the organic growth in subscription was 23%. In Business Platform, which is responsible for our core SaaS offering, we had a growth of 18%. And within Financial Services, which is responsible for our payments and financial offer, we had a growth of 34%.
On the right, you see the product per revenue type, our largest product per revenue type. And our product invoicing, that stands for just above 20% of our subscription revenue, had a growth by 30%. And the second largest product within subscription is bookkeeping. Invoice service, where we help our customer to send invoice, send out reminders and also collect money, stands for almost 30% of the transaction based revenues. We had the growth of 29%.
And the second largest there is capturing supplier invoices. Within lending based, our factoring product stands for over 75% of the revenue, and the growth there was 43%. And the other product there is corporate loans. So on the income statement, I’ve highlighted some nonrecurring items. The warrants received in Mint, which are expected to be converted into shares now in the second quarter, were revaluated and led to a positive impact of €17,000,000 whereof 5,000,000 impacted the other income and the other SEK 12,000,000 impacted the financial income.
We also had some costs for advisory service related to the public offer on the same level, 5,000,000. In taken together, we have a positive effect of SEK 12,000,000 on profit before tax. But on operating profit and on EBIT margin, we had no effect on the one off items. On the balance sheet, I’ve highlighted the growth in factoring, and we now have one row for the factoring, as previously reported as purchase receivables and receivables factoring. And on the cash flow, highlighted also there that factoring continues to grow, but also highlighted the free cash flow adjusted for lending and acquisition, which grew by 57% in the first quarter.
So looking at some business highlights. These two numbers represent our focusing on offering financing and payments as a part of our of the core flows in the platform. So looking at the first number, in March, we surpassed 500,000,000 of monthly value through our factoring product. And as you saw, the Financial Service is currently the fastest growing business area within Photonics. And on the right, we have more than 100,000,000 in spending that was carried out using our business card in March.
And during Q1, we had more than 8,000 customers using our business card. And here’s another number that more reflects our focus on usage and users, where ID now has more than 800,000 users. And to describe it briefly, Photnox ID is a personal single sign on solution for all products and all the companies or organizations within Photnox and linked to the same user. And it offers a smoother experience and higher security for the user. But it also contributes to a seamless experience when you are inside the Fort Knox ecosystem or the Fort Knox platform.
So the user perceives our offering as more than one yes, more as a one Fotnox and workflows instead of different isolated products. So to summarize the first quarter. Given the macro environment, we once again proven our sustainable business model with 25% organic growth. In 2020, we set two kind of aggressive targets, and now we reach one of them by doubling the average revenue per customer, reaching $3.00 4. And we continue our focus on the strategic changes aligned with the new direction.
And we continue to work towards improved user friendliness, increased usage and for OneFootNOx with seamless workflows and including them payments and financing as a natural part of those workflows. Thank you.
Minen Odlander, Head of Investor Relations, Fort Knox: So thank you so much, Roger. It’s time for questions. And as I mentioned, you can dial into us by using 405037 or send them to us here in the chat. So do we have any questions? I think it’s just I don’t have any in my computer here.
Maybe this will be the fastest quarterly presentation in our history. Give them a few more minutes. But maybe yes, we have here actually, Joachim Gunnell. Good morning. Can you hear us?
Good morning.
Mark, Analyst, Morgan Stanley: Good morning. I can hear
Joachim Gunnell, Analyst: you now. Hope you can me Great.
Minen Odlander, Head of Investor Relations, Fort Knox: Great
Roge Hattelios, Acting CEO, Fort Knox: to hear
Joachim Gunnell, Analyst: Likewise. So congratulations on reaching this five year target ahead of time. But I mean, it’s impressive to see grow at this scale and in this recessionary backdrop, right? But in all honesty, that target didn’t include price hikes nor M and A at the start, right?
Roge Hattelios, Acting CEO, Fort Knox: We haven’t we didn’t set up the goal in that detail. So we had a goal of the two in combinations. Of course, the number of customers and the revenue per customer is important for the growth. So it wasn’t in that detail.
Joachim Gunnell, Analyst: All right. Anyway, that wasn’t really what I wanted to ask about. I just wanted to hear your just thoughts, Duonger, with regards to what extent you envision being a private company will allow Fort Knox to really accelerate and take the next step, whether that is through, say, international expansion or to invest more to grow even faster, which perhaps a public setting is not that forgiving to?
Roge Hattelios, Acting CEO, Fort Knox: So we are here running our business plan as for now, and we So we haven’t discussed that or thought about that so much. So we are we think that we have been able to do what we wanted to in this context. So yes, let’s see. So no, I won’t comment.
I haven’t we haven’t discussed it or
Minen Odlander, Head of Investor Relations, Fort Knox: And of course, we continue to work in making Fort Knox and our customers even more successful and, of course, creating great companies out there. So the work continues, right?
Joachim Gunnell, Analyst: Yes. Great. And then just one more question from my end. From a product perspective, you highlight here in your CEO letter the strategic importance of payments and financing, and we are seeing this coming through into numbers. But can you just highlight where your attention will primarily be over the, say, coming year to really realize the opportunities, especially within payments?
Roge Hattelios, Acting CEO, Fort Knox: Yes. So we think that it is a natural part of the workflows where our customers are. So for example, in the supplier, when you receive a supplier invoice, we have great solutions for that. We make the capturing of data automatically. We do the bookkeeping automatically.
We have an improvement flow that is easy to use. But we haven’t done that much on the payments. That is the next step in that flow. So we believe that to get those workflows seamless, we can add much more value, and we have then the transactions and the data in real time with which we can use then to bring back value to our customers. So in more than one flow, the payments is a natural part.
So that is what we are trying to aim for.
Joachim Gunnell, Analyst: Understood. And if this is the last waltz as a private company, I wish you the best of luck on your future endeavors. Thank you.
Minen Odlander, Head of Investor Relations, Fort Knox: Thank you. Next on the line, we have Mark from Morgan Stanley. Good morning, Mark. How are you?
Mark, Analyst, Morgan Stanley: Good morning, Mia. Good morning, Roger.
Roge Hattelios, Acting CEO, Fort Knox: Can you
Mark, Analyst, Morgan Stanley: hear me okay? Yes. Perfect. Well, thanks for having me on and congrats on a good first quarter. I’ve got a few questions, if that’s okay.
The first one, just on the EBIT margin result, which was I think quite a bit stronger than expected for the first quarter versus consensus. It looks to me like that was mainly driven by lower employee costs. Look, on my math, to be up about 11% year on year. That’s quite low growth versus history on that cost line. So could you just give us a few more details on what was driving this?
Is there any one off factors to be aware of in the first quarter? And how should we think about employee costs for the remainder of the year, please? That’s the first one we’re to call after that.
Roge Hattelios, Acting CEO, Fort Knox: Yes. We have a smaller growth in number of employees, but it’s nothing that we have been driven. So we are still employing. We’re still growing. Maybe some effects since we did the reorganization last year.
So to some extent, that have been a yes, fewer employments during that period. But otherwise, we are growing as we have done before.
Mark, Analyst, Morgan Stanley: Okay. That makes sense. And I appreciate the disclosure on the Fort Knox card, very impressive numbers. I think if I remember correctly, in the past, you’ve said you make about 1% on card volumes. So at DKK one hundred million per month, that would imply kind of annualized run rate of about DKK 12,000,000 per year.
Firstly, is that the right way to think about the magnitude of revenue contribution? And could you just tell us how fast those volumes are growing either on a year on year basis or a month on month basis? Just to kind of help us gauge how fast that’s growing.
Roge Hattelios, Acting CEO, Fort Knox: So yes, you’re right with the calculation on the revenue side. And we have been yes, we have had, I think, for one year or a little bit more, but it was first in October that we had the full solutions. So the accounting firm also could use it with their full improvement flow and so on. So we have had a stable growth, and we believe that it’s still great potential in that product.
Minen Odlander, Head of Investor Relations, Fort Knox: Yes. And we’re focusing on teaching our customers the benefits of this card. And of course, that takes time, but we feel secure that this will be very successful. And again, that’s why we wanted to show this number, how it’s growing from a steady base.
Mark, Analyst, Morgan Stanley: Perfect. And then just finally, kind of on the take private offer in the press release, there’s a few mentions of international expansion, something that, I guess, hasn’t been discussed that widely in the past. Has there been any change in strategy here? Is this something that you’re exploring in the next business plan period? Any details would be helpful in terms of how you think about that going forward.
Roge Hattelios, Acting CEO, Fort Knox: No. Of course, no details. We are in the middle of creating the new business plan. But of course, it’s been we’re looking at different opportunities. And we yes, and we have been looking at M and As as well during this business period.
But as said, during this period, we have seen greater potential within Sweden. And for the next period, let’s see.
Mark, Analyst, Morgan Stanley: Perfect. Well, I appreciate the color. Congrats on the quarter and thanks very much.
Roge Hattelios, Acting CEO, Fort Knox: Thank you.
Minen Odlander, Head of Investor Relations, Fort Knox: Thank you. I have a question here from the chat. Rui, can you give an update on the offer from EQT and the next steps? And do we anticipate any delays regarding regulatory approvals required?
Roge Hattelios, Acting CEO, Fort Knox: So no, can’t comment on that offer. That’s up to the yes, the consortium. So no information, no comments.
Minen Odlander, Head of Investor Relations, Fort Knox: Yes. And just to remind everyone, if you have questions regarding the offer, there is a website, omegahoffer.com. You can find that address on the website as well. So yes, please talk to them regarding this. Let’s go to next question.
Have you said anything, how many cards have been issued to your customers since the launch? I don’t think that’s an information we have given, right?
Roge Hattelios, Acting CEO, Fort Knox: No. So we’ve given more than 8,000 customers using the card in Q1. Yes.
Minen Odlander, Head of Investor Relations, Fort Knox: Thank you. It looks like that was it for today. Thank you, everyone, for listening in to us here this morning. As always, if you have more questions, feel free to reach out to me and IR departments. I hope you will have a very good day, and thank you very much.
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