Generic: Gross margins up but costs weigh in Q4 - ABG
* Sales -1% and adj. EBITA -5% vs ABGSCe * Gross profit of SEK 21.5m, up 5% y-o-y, and GM of 44% * SaaS continues to grow, DOCS adoption >26% of municipalities
ANNONS
Q4'25 details
Generic reports Q4'25 sales of SEK 49.2m (-1% vs ABGSCe 49.7m), broadly in line with expectations. Gross profit came in at SEK 21.5m, up 5% y-o-y, with a gross margin of 44%. This was in line with expectations and confirms continued improvement in the underlying margin profile. Adj. EBITA came in at SEK 10.5m, reflecting higher operating expenses related to organisational changes. While this was expected, costs were slightly higher than we had anticipated. Reported adj. EBIT came in at SEK 10.4m, down 4% y-o-y, representing a margin of 21%.
Reaching gross margins of 43.6% (42.9% in Q4'24)
The continued expansion in gross margin to 43.6% is important, as Generic is steadily improving its mix, with SaaS products such as DOCS and SenderID contributing. DOCS continues to grow, with penetration of >26% municipalities, and we see continued room for expansion. While costs were somewhat higher than we estimated, we consider these investments necessary to build a more robust and scalable organisation.
Valuation
Generic is trading at 11-10x on '26e-'27e EV/EBITA on our unrevised estimates. SMS continues to face pricing sensitivity in the market, however, we expect volume to stabilise as the market normalise, penetration within niche customer segments increases, and RCS adoption in the Nordics gains traction. In our view, the key value driver is the SaaS products, and if execution remains solid and penetration continues to expand, we see potential for structurally higher margins over time.
