Earnings call transcript: StrongPoint’s Q3 2025 shows growth in revenue, EBITDA

StrongPoint ASA reported a solid performance for the third quarter of 2025, with key financial metrics showing growth and stability. The company achieved a revenue of NOK 320 million, marking a 2% increase year-over-year, while EBITDA rose to NOK 14 million from NOK 12 million in the same period last year. According to InvestingPro analysis, the stock is currently undervalued, with a market capitalization of $98.34 million. Despite the positive financial results, the company’s stock experienced a slight decline, with a 0.81% drop in its share price in the latest trading session, though InvestingPro data shows the stock generally trades with low price volatility.

Key Takeaways

• Revenue for Q3 2025 increased by 2% year-over-year to NOK 320 million.
• EBITDA improved to NOK 14 million, reflecting operational efficiency.
• StrongPoint’s cash position strengthened significantly, increasing by NOK 30 million.
• The company expanded its operations in key European markets.
• Strategic partnerships and product innovations are driving growth.

Company Performance

StrongPoint’s performance in the third quarter of 2025 highlights its robust standing in the grocery retail technology sector. The 2% revenue growth and 12% increase in recurring revenue underscore the company’s successful strategies in enhancing its product offerings and expanding its market reach. The positive cash flow from operations, along with a stronger equity ratio, indicates financial health and operational efficiency.

Financial Highlights

• Revenue: NOK 320 million, up 2% year-over-year.
• EBITDA: NOK 14 million, up from NOK 12 million in Q3 2024.
• Cash flow from operations: Positive at NOK 23 million.
• Cash position: Increased from NOK 82 million to NOK 112 million.
• Equity ratio: Improved from 46% to 48%.

Outlook & Guidance

StrongPoint refrained from providing short-term guidance but expressed confidence in achieving healthy revenue growth and targeting an EBITDA margin of over 10%. The company is focusing on increasing its recurring revenue and exploring SaaS opportunities, which are expected to sustain its growth momentum. InvestingPro analysis indicates the company is trading at a low revenue valuation multiple, though it currently suffers from weak gross profit margins. For detailed valuation metrics and comprehensive analysis, investors can access the Pro Research Report, which provides deep-dive analysis of StrongPoint among 1,400+ US equities.

Executive Commentary

Jacob, CEO of StrongPoint, emphasized the company’s mission to enhance efficiency and sustainability for grocery retailers, stating, "StrongPoint’s purpose is to make grocers more efficient and sustainable." CFO Marius highlighted the company’s strategic focus on the UK market, noting, "We are very pleased with the positive development in the UK, as this is a key growth market."

Risks and Challenges

• Potential decline in license revenue from previous partnerships.
• Market saturation in core regions could limit growth opportunities.
• Macroeconomic pressures, such as inflation, may impact consumer spending.
• Dependence on technological advancements to maintain competitive edge.
• Regulatory changes in key markets could affect operations.

StrongPoint’s Q3 2025 earnings report underscores its resilience and strategic focus in the competitive grocery retail technology market. The company’s emphasis on innovation and strategic partnerships positions it well for future growth, despite the challenges it faces in an evolving industry landscape.

Full transcript - Strongpoint ASA (STRO) Q3 2025:

Jacob, CEO, StrongPoint: To NOK 320 million. Behind these figures is a very exciting growth in the UK that Marius will talk more about. Our recurring revenue is up 12%, primarily driven by our order picking solution. Our EBITDA is up NOK 2 million from last quarter, same quarter last year, to NOK 14 million, providing an EBITDA margin of 4.3%. Lastly, in terms of cash flow from operations, we had a plus NOK 23 million in this quarter. With regards to customer highlights, which I will go in more detail about, we wanted to single out three points. One is Sonae MC, the largest grocery retailer in Portugal, who decided to go with our order picking solution. Secondly, we have two new VentSafe anti-theft solutions in proof of concepts with leading UK grocery retailers. Lastly, we had yet another out-of-store sale to a do-it-yourself and retailer in the UK.

I wanted to share a little bit more about StrongPoint for our new listeners before dwelling more into the Q3 results as such. In that respect, StrongPoint is a technology company focused on serving grocery retailers with efficiency-saving software and products. We have an annual revenue of about NOK 1.4 billion, and around one third of that is recurring. More than 80% of our revenue comes from grocery retailers. We have 500 employees across Europe, and our software solutions are developed in-house by our own development team. In short, StrongPoint’s purpose is to make grocers more efficient and sustainable. What about our technology solutions more concretely then? We tackle five opportunities and challenges grocery retailers face. Firstly, e-commerce. We have an end-to-end e-commerce platform that is truly world-class. We provide everything a grocery retailer needs for e-commerce, from software to pick, pack, and process online orders to last-mile solutions.

We are particularly proud, I should say, about our proprietary order picking solution, the world’s most efficient in-store picking solution that is getting traction with some of the world’s most esteemed grocers. Additionally, we provide other solutions for picking and last-mile, aimed at ensuring the highest possible levels of efficiency and profitability for grocers in a sustainable manner. Secondly, theft and shrink. We at StrongPoint have multiple anti-theft solutions, many of which are AI-powered. This includes our VentSafe select and collect, our AI-powered scales, and AI-powered theft detection in-store and at checkout. Thirdly, store efficiency. We provide our proprietary self-checkout units, ShopFlow Logistics, our proprietary SaaS-based inventory order and task management solution, AI-powered age verification, and AI-powered shelf monitoring solutions with our new partner, Vusion Group. Fourthly, pricing and promotion.

We provide digital solutions for pricing and promotions as a proud partner of Vusion Group, which is the world’s leader in store digitization and the largest producer of electronic shelf labels. Fifthly, handling cash. Still, even with a low single-digit % of cash usage in Norway and Sweden, the sheer volume of transactions in grocery stores means that cash needs to be efficiently handled. We are doing this through our CashGuard solution. Furthermore, we are developing CashGuard Connect, a unique closed-loop cash automation solution, making cash handling as easy as handling card payments. That was our technology solutions solving the grocers’ opportunities and challenges. Where do we operate? We have nine core markets which we focus on. This is the Nordics, the Baltics, Spain, the UK, and Ireland.

These are countries where we have our own teams on the ground managing the entire value chain, from sales to installation to service and to support. Why do we do that? We do that so that we can build a deeper customer relationship and seize a larger revenue share of our customers’ technology spend. Customer intimacy is very important at StrongPoint. It is through deepening these relationships with grocery retailers that, over time, allow us to become trusted partners. In addition, we are not only limited to these nine countries. We serve grocery retailers in over 20 countries with support from our partner network, and specifically with our award-winning order picking solution, we are now showcasing our ability to serve customers well beyond our nine focus countries.

This is a very important part of our strategy forward, namely building an ever more recurring revenue base with our order picking solution across the world. OK, now, coming back to this quarter, starting off with customer success. I wanted to start off with this first one, Sonae MC, Portugal’s largest grocery retailer. Interestingly, Sonae MC is a customer of ours now on order picking, and that was highly, highly appreciated, as this is a customer that had been considering developing their own solution and, in the end, decided to switch to a StrongPoint solution from a different vendor. It helps having extremely satisfied and vocal customers like Carrefour Belgium that we announced in Q2, for which we are both proud and appreciative. I think this is yet another example of how our e-commerce platform is internationally scalable and how we can win major contracts with world-leading brands.

I truly believe we have the opportunity to create a genuine platform for our order picking solution, a platform with the best efficiency performance, with all the necessary features, functionality, and support needed for grocery operations, and with a scale that creates an unrivaled cost to serve. Very proud, of course, about getting the honorable work to work with Sonae MC. Secondly, in this quarter, we announced two new VentSafe anti-theft proof of concepts in the UK. These are with leading grocery retailers. Both proof of concepts will be using the updated VentSafe with in-aisle product advertising and dispenser screens with the potential to generate retail media revenue. With these two additional proof of concepts, or POCs, we have a total number of five POCs for our anti-theft VentSafe solution in the UK.

We look very much forward to updating you on these proof of concepts and how they evolve going forward into more scalable rollouts. Thirdly, we were pleased to announce yet another out-of-store sale in the UK, this time for a UK-based retailer and distributor of household products in the UK. The solution is expected to be delivered and completed this year. With a second out-of-store sale in the UK this year, we are excited about what this breakthrough will mean for the future as we continue to build a name and reputation in this market for automation. Now, I wanted to provide an update on some of our strategic projects. Firstly, the partnership with Vusion Group. In December last year, we took the initiative to end our long-standing partnership with Pricer AB and, at the same time, announce our strategic partnership with Vusion Group.

The partnership with Vusion is a combination of two things. Firstly, acting as a value-added reseller, a VAR, of Vusion Group’s solutions in our nine core countries. Secondly, acting as an independent software vendor, an ISV, where Vusion Group and StrongPoint will co-sell our joint solutions. For StrongPoint, this means getting an additional high-quality channel to promote our order picking solution specifically, as it integrates perfectly with Vusion Group’s electronic shelf labels and other solutions. The partnership came into full effect in July 2026, so Q3 is really our first quarter as a strategic partner with Vusion Group. I am pleased to see that we have a number of projects that we are discussing in our core markets, bearing in mind that the lead time for large-scale electronic shelf label rollouts and other store digitization initiatives takes time.

Further to that, I’m pleased that our Vusion Group and StrongPoint UK businesses are already working closely together, allowing for StrongPoint to leverage its service personnel to install and quality assure recently won Vusion projects. This has actually been an important source of growth for the UK this quarter. We should, however, bear in mind that recurring revenue will be impacted as license revenue from our previous ESL provider, Pricer AB, mostly after this year. This is a recurring base that it’ll take time to replace with Vusion Group. However, with a continued strong partnership as a value-added reseller and installation partner of Vusion Group, we are hopeful to cushion this shortfall of license revenue from previous ESL provider. Secondly, onto our CashGuard Connect solution development, our unique closed-loop cash automation solution. The in-store pilot, earlier communicated, has ended on StrongPoint’s initiative.

We did not agree with our potential customer on the commitment needed from their end to continue our engagement. However, we have several grocery retailers inside and outside of Spain which have inquired about launching in-store pilots for CashGuard Connect. In parallel, we are in the process of validating our solution to ensure both manufacturability and durability. In short, we are working to commercialize our unique closed-loop cash management solution. Now, I’ll hand over to Marius, our CFO, to share more details on our financial performance. Marius.

Marius, CFO, StrongPoint: Thank you, Jacob. I will now go through the key financials for the third quarter this year. Starting with revenue, the Q3 revenue this year was NOK 320 million, an increase of 2% compared to last year. Year to date, revenue has increased by 5%. In this quarter, we had solid growth in our UK and Ireland operations with a revenue increase of 127%. This was driven by increases in shop fitting, the electronic shelf label installations that Jacob just talked about, and the first out-of-store project in the UK. Year to date, the growth was 60%. We are very pleased with the positive development in the UK, as this is a key growth market going forward. In the other markets, we had revenue declines offsetting this increase, mainly due to large rollouts of self-checkout units in the Baltics and electronic shelf label projects in Norway and Sweden last year.

Moving on to recurring revenue 12 months rolling, this increased by 12% compared to Q3 last year. This growth is fueled by a 27% increase in license revenue, mainly from our order picking solution on the back of the Sainsbury’s contract that started last year and self-checkout solutions. If you move on to the EBITDA, this improved from NOK 12 million in Q3 last year to NOK 14 million this year. Year to date, the EBITDA is NOK 31 million, and for the last 12 months, the EBITDA is NOK 36 million. Overall, we are pleased to see that the profitability is moving in the right direction. As for the third quarter, the biggest improvement in profitability was the UK and Ireland operations, as well as continued profits delivered by Norway, Sweden, and the Baltics.

In the third quarter, we capitalized NOK 7 million in development costs, mainly for the CashGuard Connect project in Spain and also on our TreeCommerce POS solution in the Baltics. These were the main P&L items. Now, let’s look at the cash flow movements so far this year. We started the year with NOK 82 million in cash and ended Q3 with NOK 112 million. So far this year, we’ve had positive contributions from the operating result of NOK 31 million and changes in working capital of NOK 28 million. During the year, we have also increased the interest-bearing debt by NOK 20 million. On cash outflows, we have spent NOK 33 million so far this year on CapEx relating to the development of the CashGuard Connect project in Spain and the POS solution developed in the Baltics.

Now, let’s move further into the key components of the working capital development. Overall, working capital has decreased by NOK 18 million since the start of the year. This is mainly due to a reduction in inventory with electronic shelf label deliveries and self-checkout rollouts during the year. It also includes a reduction of grocery lockers in Sweden. This reduction was offset by increases in accruals and other short-term liabilities, mainly deferred income. To conclude, let’s look at the development in the net interest-bearing debt. During the quarter, the net interest-bearing debt decreased from NOK 74 million to NOK 45 million. In the third quarter, we closed the sale of our shares in 1X, the Norwegian robotics company, contributing with NOK 27 million in cash. Disposable funds ended at NOK 112 million as compared to NOK 85 million as per Q2.

Finally, the equity ratio increased from 46% to 48% for the third quarter. This is well above our equity covenant of 30%. With this, I will hand it back to Jacob for some final remarks.

Jacob, CEO, StrongPoint: Thank you, Marius. As for outlook, I should start out by restating that we do not provide short-term guidance and further that we are still, to a large extent, a project-driven business, although we are still seeking to get more and more recurring revenue. That means that there will be variations in our scale of operations and sometimes large variations between quarters and months. As earlier stated today, we also know that there will be a wind-down of recurring license revenue from our former electronic shelf label partner, in particular at the end of the year. That said, for the longer term, we believe core fundamentals in our market are getting stronger. We’re seeing this across our markets, and that includes the momentum we are experiencing with our global SaaS e-commerce opportunities. Finally, we are again repeating our ambition for a healthy revenue growth and more than 10% EBITDA margin.

With that, I’d like to thank you for your attention.

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