Lemonsoft Oyj | Company Release | April 25, 2025 at 10:00:00 EEST
JANUARY – MARCH 2025, IFRS
- Net sales increased 10.0% and were EUR 7,585 thousand (6,897)
- EBITDA was EUR 2,944 thousand (1,398), 38.8% (20.3) of net sales
- Adjusted EBITDA was EUR 2,026 thousand (1,400), 26.7% (20.3) of net sales
- EBIT was EUR 2,421 thousand (942), 31.9% (13.7) of net sales
- Adjusted EBIT was EUR 1,750 thousand (1,120), 23.1% (16.2) of net sales
- Profit of the review period was EUR 957 thousand (597), 12.6% (8.7) of net sales
Key Figures, IFRS
| EUR 1,000 | 1-3/2025 | 1-3/2024 | Change | 1-12/2024 |
| Net sales | 7,585 | 6,897 | 10.0 % | 28,911 |
| SaaS | 5,607 | 4,955 | 13.2 % | 20,774 |
| Transaction | 793 | 768 | 3.3 % | 3,299 |
| Consulting and other | 1,185 | 1,174 | 0.9 % | 4,838 |
| Gross margin* | 6,595 | 5,897 | 11.8 % | 24,973 |
| Gross margin, % of net sales | 86.9 % | 85.5 % | 86.4 % | |
| EBITDA | 2,944 | 1,398 | 110.6 % | 7,329 |
| EBITDA, % of net sales | 38.8 % | 20.3 % | 25.3 % | |
| Adjusted EBITDA | 2,026 | 1,400 | 44.7 % | 7,522 |
| Adjusted EBITDA, % of net sales | 26.7 % | 20.3 % | 26.0 % | |
| EBIT | 2,421 | 942 | 156.8 % | 5,404 |
| EBIT, % of net sales | 31.9 % | 13.7 % | 18.7 % | |
| Adjusted EBIT | 1,750 | 1,120 | 56.3 % | 6,444 |
| Adjusted EBIT, % of net sales | 23.1 % | 16.2 % | 22.3 % | |
| Profit (Loss) of the period | 957 | 597 | 60.3 % | 4,031 |
| Profit (Loss) of the period, % of net sales | 12.6 % | 8.7 % | 13.9 % | |
| Equity ratio, % | 63.0 % | 64.6 % | 60.4 % | |
| Net debt | 2,466 | 495 | 398.4 % | 2,755 |
| Gearing, % | 7.6 % | 1.6 % | 8.5 % | |
| Earnings per share (EPS) | 0.05 | 0.04 | 50.7 % | 0.22 |
| Return on invested capital, % (ROIC) | 5.8 % | 2.5 % | 13.0 % | |
| Return on equity, % (ROE) | 2.9 % | 1.9 % | 12.8 % | |
| Number of employees at the end of the period | 230 | 220 | 4.5 % | 228 |
| Outstanding shares at the end of the period | 18,514,153 | 18,562,005 | 18,656,702 | |
| Average outstanding shares during the period | 18,580,528 | 18,562,005 | 18,604,133 |
*The calculation of key figures has been changed for other operating income and the comparison periods have been changed accordingly.
CEO Alpo Luostarinen
The first quarter proceeded with cautious development, yet during the first months of the year we took several important steps to advance our strategic objectives. Our revenue amounted to 7.6 million euros, with revenue growth of 10.0%. Adjusted EBIT stood at 1.8 million euros, and the adjusted operating profit margin was 23.1%.
The underlying market recovery in our key customer verticals, which began in the latter part of last year, has manifested as a cautious uptick in demand, though it is difficult to identify a clear trend going forward. The market situation remains significantly uncertain, and assessing the impact of international trade policy on our business is still challenging at this stage. We have noted an increase in our customers’ payment delays and credit loss risks in the early part of the year, which has prompted us to take measures to manage these risks.
Sales to new customers developed moderately in the first quarter, and the total value of new deals for ERP solutions continued its slight growth. A clear majority of these new sales involved wholesale and manufacturing ERP solutions, which we focus on more clearly in the future. Churn was slightly elevated at the beginning of the year due to significant ongoing changes. On the other hand, our existing customers have expanded their use of our software since the start of the year, leading to clearly positive NRR development.
Implementation of the Azure cloud platform transition was nearly completed by the turn of March and April. The majority of Lemonsoft ERP customer environments were migrated to the Azure platform during the early part of the year, enabling better performance and scalability in the long term. The transition has posed temporary challenges for some of our customers, and we have endeavored to address these issues as quickly as possible, in close cooperation with them. We have also carried out several product development measures aimed at significantly improving performance in the new environment.
During the beginning of the year, we have continued to develop our organization to ensure competitiveness and long-term profitability. In April, we initiated reorganization negotiations with the aim of significantly streamlining our operations and securing profitable growth in the coming years. Through these actions, we seek to achieve cost savings of approximately 2 million euros by the end of 2026 compared to 2024. These negotiations are part of our long-term efforts to build an efficient, flexible, and customer-centric organization.
Our clear objective is to improve the competitiveness of both our products and our organization, and to continuously introduce more advanced solutions to manage our customers’ business operations. Although uncertainty remains in the market environment, we see clear indications that we are on the right track. We believe that the ongoing technology and organizational changes, along with a sharper focus across all functions on our key customer segments, will help us better and more efficiently meet our customers’ needs.
Group Financial Development
Group financial result and profitability
January – March 2025
Net sales for the review period were EUR 7,585 thousand (6,897). Net sales increased by EUR 687 thousand, 10.0%. Organic growth of the review period was 3.1% and organic growth of the recurring revenue was 4.6%. Net sales increased mainly due to the acquisition of Atmotics Oy (2024) and Applirent Oy (2024), whose net sales were not included in the comparison period.
The share of SaaS income was 73.9% (71.8), the share of transaction income 10.5% (11.1), and consulting and other income 15.6% (17.0).
EBITDA was EUR 2,944 thousand (1,398), 38.8% (20.3) of net sales. Adjusted EBITDA (adjustments specified in the Alternative performance measures section) was EUR 2,026 thousand (1,400), 26.7% (20.3) of net sales. The most significant adjustment item is the recognition of additional purchase price as revenue.
EBIT was EUR 2,421 thousand (942), 31.9% (13.7) of net sales. Adjusted EBIT (adjustments specified in the Alternative performance measures section) was EUR 1,750 thousand (1,120), 23.1% (16.2) of net sales. The most significant adjustment item is the recognition of additional purchase price as revenue.
Profit for the review period was EUR 957 thousand (597), 12.6 % (8.7) of net sales.
Cash flow from operating activities was EUR 1,857 thousand (1,465).
Balance sheet, financing and investments
The balance sheet total at the end of the review period was EUR 52,088 thousand (53,862 at the end of the year 2024). The provision for credit losses on trade receivables and financial receivables has been reassessed and the provision at the end of the reporting period is EUR 1,109 thousand (126 at the end of the year 2024).
The Group has capitalized development expenses of EUR 223 thousand during the year 2025 (206 during the comparison period 2024). At the end of the review period, the Group's balance sheet included capitalized development expenses totaling EUR 2,821 thousand (2,734 at the end of the year 2024).
Total equity was EUR 32,654 thousand (32,526 at the end of the year 2024), equity increased EUR 128 thousand.
Equity ratio was 63.0% (60.4 at the end of the year 2024) and interest-bearing debt was EUR 9,605 thousand (10,405 at the end of the year 2024).
Cash and cash equivalents at the end of the review period were EUR 7,139 thousand (7,650 at the end of the year 2024).
Personnel
The Group’s number of employees was 230 (220) on 31 March 2025. We reported our Group personnel as follows:
- R&D 110 employees
- Customer functions 104 employees
- Other functions, a total of 16 employees
Share-based incentive plan
The Board of Directors of Lemonsoft Oyj has established a new share-based incentive plan for the key employees of the company in March 2024. The aim of the new plan is to align the objectives of the shareholders and the key employees in order to increase the value of the company in the long-term, to encourage the management to personally invest in the company’s shares, to retain the target group at the company, and to offer them a competitive incentive plan in which the participants may earn shares as a reward for performance and their personal investment.
The new Performance Matching Share Plan 2024 – 2028 includes three performance periods, covering financial years 2024 – 2026, 2025 – 2027 and 2026 – 2028. The Board will decide annually on the commencement and details of a performance period. The prerequisite for participation in the plan and receiving the reward is that the person allocates freely transferable Lemonsoft Oyj shares held by him or her to the plan or acquires the company’s shares in a number determined by the Board.
The rewards from the plan will be paid partly in the company’s shares and partly in cash. The rewards will be paid by the end of May in the year following the end of the performance period. The cash proportion is intended for covering taxes and tax-related costs arising from the reward to the participant. In general, no reward will be paid if a participant’s employment or service in the group ends before the reward payment.
The performance criterion in the first performance period 2024 – 2026 is the Total Shareholder Return of the company’s share (TSR). The achievement of the required TSR levels will determine the proportion out of the maximum reward that will be paid to a participant. The target group of the plan consisted of 4 persons (the CEO and three members of the Management Team). The gross rewards from the first performance period 2024 – 2026 correspond to the value of an approximate maximum total of 77,000 Lemonsoft Oyj shares, including the proportion to be paid in cash. The final number of shares depends on the number of shares acquired by participants and the achievement of the TSR levels. The reward to be paid on the basis of the plan will be capped if the limits set by the Board for the payable reward from the performance period 2024 – 2026 are exceeded. The number of key employees changed during the performance period and consisted 2 persons at the end of the reporting period.
The performance criterion in the second performance period 2025–2027 is the Total Shareholder Return of the company’s share (TSR). The achievement of the required TSR levels will determine the proportion out of the maximum reward that will be paid to a participant. The target group of the plan for this period consists of 4 persons (including the CEO and three members of the Management Team). The gross rewards for this second period correspond to a maximum total of 102,675 Lemonsoft Oyj shares (including the cash portion). The final number of shares depends on the participant’s share acquisition and achievement of the TSR levels. The reward to be paid on the basis of the plan will be capped if the limits set by the Board for the payable reward from the performance period 2025 – 2027 are exceeded.
Shares and shareholders
Share capital and number of shares
The company has one series of shares, and all shares have equal rights. At the end of the review period, Lemonsoft Oyj’s share capital consisted of 18,514,153 (18,562,005) shares. The average number of outstanding shares during the review period January-March was 18,580,528 (18,562,005). At the end of the review period, Lemonsoft Oyj held 157,479 shares.
On 4 October 2024, the Board of Directors of Lemonsoft Oyj decided to launch a buyback programme of the company’s own shares based on the authorisation granted by the Annual General Meeting held on 9 April 2024. The programme commenced on 7 October 2024 and ended on 9 April 2025. During the buyback programme, Lemonsoft Oyj acquired a total of 168,401 of its own shares at an aggregate value of EUR 993,712.83. The company paid an average of EUR 5.9009 per share. The shares were acquired on Nasdaq First North Growth Market Finland in public trading at the market price prevailing at the time of purchase. Lemonsoft Oyj held 157,479 of its own shares at the end of the reporting period.
The company's share is traded on the First North Growth Market Finland marketplace maintained by Nasdaq Helsinki Oy. During the review period January-March, the highest share price was EUR 6.75 and the lowest EUR 5.50. The closing price on 31 March 2025 was EUR 5.50. The market value of the company at the closing price of the review period was approximately EUR 102,7 million. Average daily trading volume during the review period was 10,371 shares (EUR 61,264).
On 31 March 2025, the company had a total of 2,242 shareholders. The company's largest shareholders can be found on the company's investor website at https://investors.lemonsoft.fi/osakkeenomistajat/.
Authorizations of the Board of Directors
Lemonsoft Oyj has decided in its Annual General Meeting on 9 April 2025 to authorize the Board of Directors to decide on the repurchase of the company’s own shares on the following terms and conditions:
- By virtue of the authorization, the Board of Directors is authorized to decide on the repurchase of a maximum of 1,800,000 of the company’s own shares. The proposed maximum number of shares to be repurchased corresponds to approximately 9.6% of the company’s shares. The authorization includes the right to accept the company’s own shares as a pledge.
- The company’s own shares can be repurchased otherwise than in proportion to the existing shareholdings of the company’s shareholders (directed repurchase).
- The company’s own shares can be repurchased at the Nasdaq First North Growth Market Finland marketplace or outside of the marketplace.
- Own shares can be repurchased at a price formed on First North Growth Market Finland on the date of the repurchase or at a price otherwise determined by the markets.
- The shares shall be repurchased using the company’s unrestricted equity.
- The shares shall be repurchased for the purpose of financing or carrying out acquisitions or other arrangements, to implement the company’s incentive schemes, to develop the company’s capital structure, or for other purposes as decided by the Board of Directors.
- The Board of Directors shall decide on the other conditions related to the repurchase of the company’s own shares.
The authorization is valid until the 2026 Annual General Meeting, but not beyond 30 June 2026. The authorization shall replace the authorization granted to the Board of Directors by the Annual General Meeting of 9 April 2024 regarding the repurchase of a maximum of 1,800,000 of the company’s own shares.
The Annual General Meeting authorized the Board to decide on an ordinary or bonus issue of shares and the granting of special rights (as defined in Section 1, Chapter 10 of the Limited Liability Companies Act) in one or more instalments:
- This issue may total a maximum of 1,800,000 shares corresponding to a maximum of approximately 9.6% of all shares of the company. The authorization applies to both new shares and treasury shares held by the company. The authorization may be used to fund or complete acquisitions or other business transactions, for offering share-based incentive schemes, to develop the company’s capital structure, or for other purposes decided by the Board of Directors.
- The authorization entitles the Board of Directors to resolve on all conditions of the issuance of shares and special rights entitling to shares, including the right to deviate from the shareholders’ pre-emptive right.
The authorization is in force until the next Annual General Meeting; however, no longer than until 30 June 2026, and it replaces the previous authorizations.
Significant short-term risks and uncertainties
The deterioration of the economic situation and geopolitical changes may have direct and indirect effects on Lemonsoft's business. These may be reflected in the business operations of Lemonsoft's customer companies, for example, in reduced investments by industrial manufacturing companies and decreased needs of subcontracting chains, as well as business and bankruptcy risks. In turn, customers' business challenges may affect Lemonsoft's new customer acquisition, upsells from existing customers, and customer retention.
In the longer term, the biggest challenge for our industry is the availability of skilled personnel. Success of the Group and opportunities for growth depend largely on how well we can recruit, motivate, and engage more skilled personnel and develop our expertise.
In Lemonsoft's cost structure, the single most significant factor is personnel costs, and an increase in the general price level may increase the pressure to increase personnel costs. Lemonsoft constantly monitors the development of the situation from a risk management perspective and strives to ensure the continuation of profitable growth by optimizing its cost structure and pricing.
The ERP market is generally a highly competitive market, and the industry is fragmented. Smaller players are primarily focused in a specific sector of SMEs and larger players do not compete directly for customers in the same market. However, competition in Lemonsoft's operating markets may intensify due to existing competitors or agile new entrants.
Risks related to information security and the IT systems of service providers are a significant factor affecting the security and continuity of the Group's business. Lemonsoft constantly invests in high reliability and high security systems and strives to ensure the high quality of the services it purchases by selecting leading players in the industry as its key partners. European data protection regulations may also bring unexpected risks to Lemonsoft's operating environment.
Success in acquisitions and related integration work is a key factor for Lemonsoft's growth. The company has made several acquisitions in recent years and aims to continue to grow through acquisitions. There may be unexpected risks associated with target companies and their integration into Lemonsoft.
Dividends paid
The Annual General Meeting decided on 9 April 2025 that a dividend of EUR 0.14 per share will be paid according to the confirmed balance sheet for the accounting period ending on 31 December 2024. About total of EUR 2.6 million was paid in dividends after the review period, 23 April 2025.
Events after the review period
Lemonsoft Oyj has decided on April 7, 2025, to initiate change negotiations in the Lemonsoft Group in accordance with the Cooperation Act.
Lemonsoft Oyj announced April 23, 2025, that Tuomas Koivisto will leave his position in Lemonsoft’s management team as well as his roles as Lemonsoft Oyj’s Chief Commercial Officer (CCO) and as CEO of Finvoicer Group Oy.
Profit forecast for 2025 (unchanged)
Lemonsoft estimates that the net sales for the financial year 2025 will increase by 0-10 percent compared to the financial year 2024, and that adjusted EBIT will be 18-24 percent of net sales in 2025.
Financial information
Lemonsoft Oyj will publish the following financial information in 2025:
- Half-year Report January – June 2025 on Thursday, 14 August 2025
- Interim Report January – September 2024 on Friday, 31 October 2025
Webcast for investors and media
Lemonsoft will host a live webcast for investors and the media in English on April 25, 2025 at 1:00pm EET. The webcast can be followed online live via this link: https://player.videosync.fi/lemonsoft/2025-q1-results
A recording of the event and the presentation material will be available after the event at https://investors.lemonsoft.fi/.
Lemonsoft Oyj
Board of Directors