Earnings call transcript: Smartcraft ASA Q3 2025 sees stock dip post-earnings

Smartcraft ASA reported its third-quarter earnings on November 4, 2025, revealing mixed financial results that led to a nearly 5% drop in its stock price. The company reported an earnings per share (EPS) forecast of $0.18, but the actual results fell short, contributing to a market reaction that saw shares decrease by 4.84% to close at $24.8. Despite strong operational performance metrics, including a significant increase in annual recurring revenue, the market responded negatively to the earnings miss.

Key Takeaways

• Stock price fell by 4.84% following the earnings announcement.
• Annual recurring revenue grew by 6.4% year-over-year.
• Operating cash flow increased by 4.8% to NOK 36 million.
• Smartcraft launched new products aimed at HVAC, plumbing, and electrical professionals.
• The company is undergoing organizational restructuring to enhance operational efficiency.

Company Performance

Smartcraft ASA demonstrated solid operational performance in the third quarter, with annual recurring revenue growing by 6.4% year-over-year and a recurring revenue share of 97%. The company made strategic advancements by launching new products like SmartCraft Flow and SmartCraft Spark, aimed at specific professional sectors such as HVAC, plumbing, and electrical services. The organizational shift to a business area-driven structure aims to streamline operations and capitalize on a significant total addressable market across the Nordics and the UK.

Financial Highlights

• Revenue: $139.23 million (forecast)
• Annual Recurring Revenue (ARR): Increased by 6.4% YoY
• Operating Cash Flow: NOK 36 million, up 4.8% from the previous year
• Adjusted EBITDA minus CapEx Margin: 28.2%, up 2.9 percentage points
• Customer Churn: Declined to 9.6%

Earnings vs. Forecast

Smartcraft ASA’s EPS forecast was set at $0.18, but the company did not meet these expectations, contributing to the negative market sentiment. The earnings miss represents a deviation from the company’s historical trend of meeting or exceeding market expectations, which may have influenced the stock’s decline.

Market Reaction

Following the earnings announcement, Smartcraft’s stock price fell by 4.84% to $24.8, nearing its 52-week low of $21.9. This decline indicates investor concerns over the earnings miss, despite positive operational metrics. The market’s reaction is in contrast to broader industry trends, where similar companies have shown resilience in stock performance post-earnings.

Outlook & Guidance

Looking ahead, Smartcraft ASA is focused on achieving medium-term organic revenue growth of 15-20%. The company plans to continue investing in innovation and sales, with an emphasis on leveraging AI-powered solutions. The upcoming transition in leadership, with Jeremiah Jansen taking over as CEO in January, is expected to steer the company towards further market recovery and potential mergers and acquisitions, especially in the UK market.

Executive Commentary

Interim CEO Hannah Kornin emphasized the company’s mission, stating, "At SmartCloud, we’re on a mission to digitize construction for the benefit of people, profit, and the planet." CFO Chartand Ber highlighted the company’s financial health, noting, "Our financial position is still strong and we have a strong cash flow."

Risks and Challenges

• Earnings Miss: The failure to meet EPS forecasts could affect investor confidence.
• Market Adoption: Slow adoption of digital solutions in key markets remains a challenge.
• Organizational Restructuring: The impact of restructuring on sales and operations is yet to be fully realized.
• Competitive Pressure: Maintaining market share amidst growing competition in the Nordics and UK.
• Economic Environment: Macroeconomic factors in key regions could impact future growth.

Q&A

During the earnings call, analysts inquired about the potential impact of organizational restructuring on sales, with management assuring that no negative effects are anticipated. Questions also focused on the company’s AI developments and the expected normalization of growth in Finland, with management expressing optimism about future prospects in these areas.

Full transcript - Smartcraft ASA (SMCRT) Q3 2025:

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: Good morning, everyone, and thank you for joining us today. My name is Hannah Kornin, and I’m here as the Interim CEO of SmartGround. I have been part of this journey for the past seven years, starting as CEO of Biglet and since 2022, responsible for the Swedish market. Presenting with me today is our CFO, Chartand Ber, who many of you know well. So let’s dive into our Q3 results, highlight key initiatives and share why we’re confident about the road ahead.

Here is what’s on the menu today, a Q3 overview, a deep dive into the numbers with Sharpton, a summary and your questions. We’re putting the spotlight on growth, margins and the strategic moves that keep SmartCraft ahead of the curve. Before we get into the numbers, let’s remind ourselves what makes SmartCraft tick? Who are we? And why do we do what we do?

At SmartCloud, we’re on a mission to digitize construction for the benefit of people, profit and the planet. This is our passion. We build software that empowers companies to work smarter, not harder. Our tools help them to boost profits, create better workplaces and deliver more sustainable results. We’re focused on SME, giving them the digital edge to win in a tough market.

And with our scalable recurring revenue model, we’re growing. Let’s talk scale. Today’s SmartCraft serves over 14,100 customers and more than 185,000 users across Norway, Sweden, Finland and The UK. Our two seventy strong team is all in on customer success. This demonstrates that our solutions are aligned with customer needs and that our growth strategy is delivering as intended.

Construction market is tough. Tight margins, complex workflows, high risk. But that’s where we shine. Our products give customers the insight of control they need to manage people, materials and documentation smarter, faster and better. We cut admin, streamline scheduling and give teams one source of truth.

The result, fewer disputes, safer projects and stronger profits. We’re not just a software company, we’re a growth partner. The opportunity is huge. Our total addressable market is billion across The Nordics and The UK. And only 10% to 15% of companies have adopted mission critical digital solutions.

The UK alone is over 60% of our TAM. We’re perfectly positioned to scale, deepen our market presence and lead the digital revolution in construction. And we’re not waiting, we’re accelerating product development and sales to seize the moment. Let’s move into the highlights from the third quarter. Some of these figures were released already yesterday, but let’s look at it now from Q3.

Our annual recurring revenue held steady at million reflecting a 6.4% year over year increase. We actually crossed the NOK500 million milestone already in Q2 and I’m proud to say, we have maintained that level, despite the challenging market. Remember also that Q3 is a very short quarter with regards to sales and marketing activities, so we always have a limited sequential growth from Q2 to Q3. Adjusted EBITDA minus CapEx margin climbed to 28.2%, up 2.9 percentage points year on year, showing our continued focus on profitability and operational efficiency. Operating cash flow was strong at NOK36 million, up 4.8% from last year.

And importantly, churn declined to 9.6%, a positive signal that our retention initiatives are working. Despite ongoing market headwinds and some elevated churn and downgrades, our SaaS model continues to deliver resilient growth and robust margins. We’re seeing early signs of optimism in the construction industry and our fundamentals remain strong as we prepare for the next phase of growth. So let’s talk about our commercial momentum. In Q3, we saw a 16% increase in a new customer contract year over year.

That’s a strong signal of continued demand, even stronger than we saw in Q2, which was 8%. But what’s even more encouraging is what’s happening earlier in the funnel. Sales leads are up 37% year over year and the number of leads in our pipeline has grown by 15%. We also saw an increase in web traffic, which tells us that interest in Smart Card Solution is rising. It’s fair to say that this level of activity gives us confidence.

It suggests that our visibility in the market is strong and that we’re well positioned to convert interest into growth going forward. We’ve built a scalable marketing and sales engine and it’s working. The lead generation we saw in Q3 is a result of targeted campaigns, improved messaging and strong execution across the teams. So let’s talk about one of the most exciting changes at SmartCart, our shift from a country based organization to a business area driven structure. First, let’s acknowledge what’s brought us here.

Our country based model has been fantastic engine for growth. It’s allowed us to build strong local brands, stay close to our customers and adapt quickly to market needs in Norway, Sweden, Finland and The UK. This local focus has been a real competitive advantage, helping us win trust and deliver solution that truly fits each market. But as SmartCraft has grown, both in scale and ambition, the world around us has changed. Our customers are becoming more specialized and the needs are increasingly defined by their business area, not just the geography.

We’re seeing more cross border opportunities and our product innovation is moving faster than ever. So why makes this shift now? Because we want to build on our strength and take SmartCraft to the next level. And this is by organizing around business areas, electro, HVAC and plumbing, SME construction and enterprise. We can go even deeper into each customer segment this way.

This means more tailored solutions, faster innovation and greater expertise. Each business area are now on its own its product go to market and profitability. That means quicker decisions, clearer priorities and stronger accountability, so we can move at the speed our customers expect us to. This structure lets us leverage our best practice across countries, scale successfully solutions faster and unlock new opportunities for international expansion. With shared playbooks and unified platforms, we can collaborate more effectively across borders, while still nurturing our local brands and relationship.

This isn’t about fixing something that is broken. It’s about evolving from a position of strength. We’re keeping what’s made us successful and adding a new layer of focus and agility to accelerate our growth journey. In short, we’re setting SmartCraft up to deliver even more value to our customers, drive innovation and scale efficiently, while staying true to the principle that have guided our success so far. From Q4, we’re reporting on business areas and will provide historical figures.

Let’s take a moment to clarify how Enterprise Business Area stands apart from the other three and why that matters for our customers and for SmartGrowth strategy. The three synergy driven business areas, Electro HVAC and Plumbing and SME Construction approach is focused on scale and synergy. We’re building tailored ecosystems around our customers and users in each trade, like SmartCraft Spark for electrician and SmartCraft Flow for HVAC and plumbing. At the same time, we’re aligning product roadmaps within each business area, so that our engineering teams can deliver more impact with the same effort. Solutions like Biglet, Elvis, Cordell, Faltier’s Control already have a strong local position and a large loyal customer base.

Building on that foundation, our new solutions like SmartCraft Spark and SmartCraft Flow are built on the SmartCraft core platform, which a global mindset from the start. This allows us to reuse more of our technology and roll out across different segments and markets with minor adjustments. Even with this global approach, we stay close to each local market to understand what tradesmen truly need, making sure every product is made for them. Across these three business area, we emphasize collaboration and shared technology and repeatability processes. The result is faster innovation, more efficiency development and a consistent high quality user experience for our customers, no matter which trade they are in.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: And

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: Enterprise, a portfolio approach Enterprise is intentionally different. Instead of focusing on one unified product ecosystem, we take a portfolio approach. Our enterprise customers are large organization with complex operations that often span multiple regions or business lines. Instead of

Moderator/Q&A Facilitator, SmartGround/SmartCraft: a single unified product, the enterprise area brings together a suite of specialized solutions, each designed to address specific requirements, integrations or workflows. The focus is on flexibility and breadth. We offer a portfolio of tools that combined, customized and integrated to fit the unique needs of each enterprise customer. This approach allow us to serve a wide variety of large clients from those needing advanced analytics and compliance modules to those requiring deep integrations with their existing systems.

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: Why this structure then? For Electro HVAC and Plumbing and SME Construction, the synergy model lets us move quickly, scale efficiently and deliver innovation that benefits a broad base of customer. For enterprise, the portfolio model gives us the ability to meet highly specialized demands, offer tailored solution and build long term partnerships with some of the industry’s biggest players. In summary, while the three synergy driven areas are all about building and scaling unified solutions, Enterprise is about offering a flexible, comprehensive toolbox, making sure we can support both the specialists and the giants of the construction world. This dual approach is a key part of what makes SmartCraft unique and position us for the growth across the entire market.

As a part of our structural evolution, we’re also advancing our brand architecture. We’re moving towards a unified SmartCraft master brand, supported by strong sub brands like SmartCraft Spark and Flow. This shift simplifies our story, strengthen recognition across markets and improve marketing efficiency. At the same time, we remain mindful of the value in our local brands and will preserve that equity where it supports customer trust and market position. This balanced approach ensures consistency, while allowing flexibility where it matters the most.

This slide visualized our evolving brand architecture in practice. On the left, you see the SmartCraft Masterbrand, our central platform and identity. In the middle, SmartCraft Spark tailored for electricians and on the right, SmartCraft Flow, our newest solution for HVAC and plumbing professionals. Together, these sites reflect a unified brand experience with distinct value propositions, each designed with their own personality to meet the needs of our target groups, while reinforcing trust, clarity and consistency across markets. Speaking a little bit about innovation, Q3 was a really exciting quarter for us.

We soft launched SmartCart Flow, our new solutions for HVAC and plumbing professionals. Flow is built on our SmartCart core platform, which means it’s fast, scalable and ready for AI. It’s the second product on this platform after SmartCar Spark, which we launched earlier this year for electricians. Spark is already off to a great start with more than 300 customers and really strong feedback. At the first trial, we show just happy customers, which is super encouraging for us of course.

Together, Spark and Flow shows our focus on vertical innovation. We offer two modern AI powered solutions built for different trades, but on the same strong platform. It really proves that we can move fast, scale across trades and build global from day one. And now in Q4, our focus is simple. We will keep the momentum going and scale adoption in both products.

And now I will let Chatham in.

Chartand Ber, CFO, SmartGround/SmartCraft: Thank you, Hama and good morning. So let’s jump straight to our recurring revenue. So ARR grew 6.4 percentage points year over year and this is in a continued challenging market and a seasonally slow quarter. So the markets in general are improving in both Sweden, UK and Finland, although Finland recurring revenue growth is hampered by the large customer downgrade that we have mentioned before. Our recurring revenue share is now 97%.

We are increasing our profitability. Adjusted EBITDA minus CapEx is now almost three percentage points higher quarter over quarter. Our EBITDA margin is slightly down, but this is relating to a lower level of CapEx in the quarter.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: So

Chartand Ber, CFO, SmartGround/SmartCraft: CapEx declined due to project life cycle, but all in all development spending is the same. Looking at the current segments we have, Sweden has a high level of activity. So we see a good sales pipeline, we see declining level of churn and downgrades and we see an increase in both growth and profitability. Norway is a bit lower than before, the most challenging market for us currently and we see also a negative short term effect by the relocation of a sales office. The sales office is now up and running in full at the end of Q3, so this should be improving going forward.

Profitability in Norway is good. We increased EBITDA margin quarter over quarter by four percentage points. In the Finnish market, there are several positive signals. We have more contract starts in the new build sector and we have higher user activity. But the downgrade from the customer flows through both in organic revenue growth and in profitability.

In UK, we see a resilient performance. We have improved markets in general, but it’s still quite challenging. There’s a high churn, although the churn is expected to go out of the comps in Q4 twenty twenty five. We see several good and positive signals including interest rate reductions. And let’s see how the timing is of these effects.

Our financial position is still strong and we have a strong cash flow as we have always had, now growing at roughly 5%. As we have focused on distributing invoicing throughout the year, we see a more similar picture across the past five quarters and we expect so going forward as well. All in all, we are in a good position to go forward and we expect good results in both cash flow and in the P and L. So, Helmut.

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: Thank you, Shantan. Let’s summarize this. Strong recurring revenue and margin SmartCraft continues to demonstrate the power of its SaaS model, with recurring revenue reaching 97% of total revenue in Q3. Annual recurring revenue grew to million with six percent organic growth year over year, even in a seasonal weak quarter. The company adjusted EBITDACAPES margins increased to 28%, up three percentage points from last year and operational cash flow was robust at million.

This highlights SmartCraft’s ability to deliver profitable growth and strong cash generation regardless of market condition. Proven scalability and operational resiliency. The company’s scalable platform strategy is delivering tangible results. SmartCraft successfully launched new solutions such as SmartCraft Flow and continued to build momentum with SmartCraft Spark. Despite mixed macroeconomic condition, SmartCraft achieved growth in Sweden and The UK, saw improving figures in Finland and maintained resilience in Norway through high cost discipline.

The recent shift to a business area based structure enables faster scaling, sharper customer focus and more efficient decision making across geographies. Well positioned for future growth through innovation and market opportunity, SmartCraft is investing in product innovation, including AI enabled modules to drive future growth and customer value. The addressable market remains massive and unpenetrated, especially among SME, providing significant runway for continued expansion. SmartCraft’s clear strategy is combined organic growth, up sell cross selling and new customers, while selective acquisitions to strengthen its market leadership. Our financial foundation is strong.

We’re cash positive, well capitalized and ready to invest. That means we can keep building great products, improve efficiency and be fully prepared when the market turns. And we also continue to build our M and A pipeline. With a strong balance sheet and a proven integration model, we’re ready to act when the right opportunities arise. Going forward, we remain confident in our strategic and medium target of 15% to 20 organic revenue growth and margin expansion.

This is based on the large unpenetrated market, SmartCraft’s proven ability to deliver strong growth in normalized conditions and our scalable SaaS platform. While current growth is affected by challenging market conditions, we see signs of improvement and have continued to invest in innovation and sales. As the market recovers, we are well positioned to quickly return to our medium term targets. And other information, we are very much looking forward to welcoming our new CEO, Jeremiah Jansen, who will arrive on January 5. I’m excited and really looking forward to working with him in the role as Deputy CEO from the same day.

Shantan will be stepping down as CFO in the January after seven years and we’re grateful for his long term contribution to success of SmartGraft. Kildne Kraven Ossen, our Group Chief Accountant will serve as Interim CFO. She has a strong financial background and worked for many years alongside with Sharpton. The evolution of change in listing venue is in the latter stage in the evaluation process and we will provide information due time. So let’s open up for Q and A and questions.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Absolutely. We have lots of questions coming in from the webcast and please keep them coming through the webcast player. First question, what is the effect of downgrades on organic ARR growth?

Chartand Ber, CFO, SmartGround/SmartCraft: Yes. Downgrades have actually decreased a bit in the quarter. So we’re now at roughly 12% of downgrades.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: And adjusted for the last downgrade in Finland, would the organic growth in Finland be in line with the other geographies, I. E. Mid single digits?

Chartand Ber, CFO, SmartGround/SmartCraft: Yes. All in all, if we adjust for the large customer downgrades, Finland would be increasing from Q2 and now be mid single or yes.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: And I think you touched upon the chart on, but in which quarter would the large Finland downgrade be out of the comps?

Chartand Ber, CFO, SmartGround/SmartCraft: The downgrade started early in 2025, but the major part of the downgrade came now in Q3. So Q3 ’twenty six were out of the comps.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Thank you. Sales lead generation seems to have slowed down in Q3 and might be negative in September compared to last year. Can you comment on this and what is the reason for that? Has churn in your sales team increased following the recent CEO departure?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: We will always have seasonal changes in the leads generation. And Q3 is we have the summer month in there. So I would say no, it’s not dependent on the CEO change.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: And also there’s a question on the customer growth has seems to accelerated from 8% in Q2 to 16% in Q3. What regions or segments are the drivers behind this?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: I would say that we have a really effective sales process and all the marketing and sales process is really effective. So this can also change, but we definitely always make improvements when it comes to marketing efforts, campaigns and so on, always try to keep up the flow.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Thank you. And then a few questions on AI. Are you working on any AI features in your products? And what is the time line of these projects, if so?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: Yes, we are, and we are actually releasing at least one of them in Q4.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Thank you. Then there’s a couple of questions on the new business structure or the group structure. How will this affect cross selling opportunities between products?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: We will always look at the possibility to cross sell. That hasn’t changed that much, but of course much more focused now. That’s why we’re doing this business area organization, because the country organization was not bad at all, but we’re growing and this is the next step for us to keep much more focus on that.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: There’s a few other questions here. When was this organizational structure planned? The timing may seem a bit odd since we are now waiting for the new CEO. Or does it reflect the renewed product portfolio basically?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: I would say both ways, but we will all we are always moving forward, always being more try to sharpen the organization and that will keep on going even if we change in management, I would say.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: How will the short term effects of the process of reorganization be? Will you will it might it affect short term sales, either incremental positive results in this challenging market environment or are you or do you fear the opposite in connection with the potential friction internally with the reorg?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: I would say it will be better. That’s why we’re doing it. We’re much more focused on sales. So we’re not expecting the sales to go down because of this reorganization the other way, I will say.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Okay. One question. What is the reason for the relocation of sales office in Norway?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: We wanted to I think that we mentioned that in Q2, it was because we wanted to have a central team that work together that meet up and have one leadership, so we can focus on the sales process.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Thank you. On the product side, will there be a solution similar to Spark and Flow based on Biglet or targeting the wider SME segment down the road?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: We will come back to that in Q4.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: I think you touched upon it, but could you elaborate a bit on the synergies between your segments or the new segment structure?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: I would say that the three where we look more of the synergies is the product, the new products that we do will be based on the SmartCraft core platform and that’s where we will find the synergies.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Good. And then there’s one question on the unified brand. How are you working to overcome any issues of friction for customers as you move away from each of these individual brands? And also a follow-up question, why is now the right time for this change?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: There’s always time for change, but I will say that we haven’t done this. We will do this journey really carefully. And as I said in the presentation, we will do it when we have something best to offer and we will always, always look out for the customer needs.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Thank you. Please continue to submit questions in the webcast player. We have a couple of more lined up. A couple of questions on the M and A strategy Could you give some flavor on the M and A environment?

How is the pricing evolving and which geographies do you see most attractive for the time being?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: For us, The UK market is definitely the most exciting one. And that’s also as we mentioned in the report is, we’re really glad to see that Lokka that is a Swedish brand, I would say, has entered into Finland now and we got our first customer in Finland. But we are definitely focused on The UK market going forward.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: And has the change in leadership, both CEO and also going forward as CFO affected the execution of your M and A strategy?

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: No, it definitely not.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Final question for now. If you want to submit some more, please do that, now. But this quarter, you faced easier comps with regards to downgrades. Churn came down, but still ARR growth declined. How does this mean that new sales growth has come down significantly?

Chartand Ber, CFO, SmartGround/SmartCraft: New sales and up sales are in a more seasonal slow quarter. And yes, we do see macro challenges as well. So both churn and downgrades are down and so is also new sales in the quarter.

Moderator/Q&A Facilitator, SmartGround/SmartCraft: Thank you for that. There are no more questions from the webcast. So I’m handing them back. Okay.

Hannah Kornin, Interim CEO, SmartGround/SmartCraft: So then it’s for us to say thank you for listening for all of you who have listened in and given us some real great questions. So I wish you a great day.

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