First quarter highlights in figures
- Revenue from the network business increased by 15.5 percent compared to the same period last year and amounted to SEK 104.5 million (90.5).
- Revenue from the security business decreased by 0.2 percent compared to the same period last year and amounted to SEK 89.1 million (89.2).
- Revenue from operating systems remained unchanged compared to the same period last year and amounted to SEK 20.4 million (20.4).
- Adjusted EBITDA amounted to SEK 52.6 million (53.6), corresponding to an adjusted EBITDA margin of 24.6 percent (26.8).
- Profit after tax amounted to SEK -18.7 million (10.6).
- Earnings per share amounted to SEK -0.94 (0.51).
- Cash flow from operating activities amounted to SEK 35.5 million (120.1).
CEO statement
Dear Shareholders,
It is with great honor and pride that I join Enea as the new President and CEO. Communication is a fundamental human need, and the ability to connect globally has never been easier and more accessible as now. However, given the ongoing geopolitical challenges, we cannot take this for granted. Reliable and secure communication should be available to everyone, a goal Enea supports by empowering our customers to deliver exactly that with our solutions.
With over 30 years of experience leading global businesses in IT, technology, and security, I am committed to bringing this expertise to Enea's growth journey. Enea already offers outstanding solutions, and my ambition is to drive an accelerated growth strategy that will focus on expanding our current portfolio, strengthening our security solutions, and identifying new opportunities to enhance our existing offerings. None of this would be possible without the continued support of you, our shareholders, the dedication of our talented employees, and, of course, the ongoing trust of our expanding customer base.
Quarter 1, 2025
Enea had a strong presence at MWC 2025, the largest global event for the telecommunications industry. The event served as a valuable platform to engage with existing customers and, predominantly, new prospects and to showcase our thought leadership, share our strategic product direction, and reinforce our position in key focus areas. It was an excellent opportunity to engage with partners and customers, exchange insights, and highlight how Enea is helping operators strengthen their security posture, including publicly referenced collaborations such as our work with STC, which will be describe further down in this text. Events like MWC continue to play a vital role in elevating Enea's brand and extending our reach in the market.
In the first quarter of 2025, we achieved 6 percent organic growth, with revenues totaling 214 MSEK (200). This performance was primarily driven by strong double-digit growth in our Network business, while revenues in our Security segment remained stable. We are pleased with the 12 percent growth in Networks and remain confident in our business model, with approximately 70 percent of our revenues recurring. These recurring revenues provide a solid foundation and consistency year after year. However, the non-recurring portion, dependent on the timing of individual deal signings, closings, and deliveries, can vary between quarters. That is why we have a full year target for our growth ambitions in our focus areas.
Market turmoil
The first quarter was eventful from a geopolitical and economic perspective. It started off well with emerging signs that we were approaching the end of the slowdown in the telecom market. But in the mid-quarter the sentiment began to change due to increased competition, aggressive promotional activities, and continued challenges in subscriber growth. Also, the new U.S. import duties on networking, server, and storage equipment are straining the telecom supply chain due to ongoing trade tensions. When the turmoil accelerated, the uncertainty about the actual tariffs, its implementation, their effects and on top of that a plummeting stock market, it did not help investment decisions during the second part of the first quarter. While we were not directly impacted, nor are we immune to the general investment sentiment.
Solid Earnings and Cash Flow
We were directly affected by the significant drop in the dollar in early March, resulting in a SEK 9 million negative translation effect. Net financial items were negatively impacted by SEK 20 million, which in all contributed to reducing our earnings per share to SEK -0.94 per share (down from 0.51 first quarter last year). Still, operating cash flow remained solid at SEK 36 million. Adjusted for translation effects and non-recurring items, our EBITDA margin was 25 percent, totaling SEK 53 million (54).
This slight year-over-year decrease was largely attributable to elevated Q4 commission payouts, as opposed to the lower levels seen in Q1 2024. Our cost levels remain stable, and we expect operating expenses to remain in line with last year, following the December-January rightsizing, which reduced total costs by approximately 3 percent, which is equivalent to the projected cost increase during this year.
AI focus
AI is a key growth driver, recognized as both cybersecurity challenge and a vital tool in protecting networks and end-users from threats like fraud and illegal robocalls. In Q1, the US Federal Communications Commission (FCC) expanded call-blocking efforts, to protect consumers from unwanted and fraudulent calls.
We continue to work with regulators, customers, and partners to improve the solutions needed. In Q1, Extreme Networks, a leading US company, integrated our embedded deep packet inspection engine, Enea Qosmos ixEngine, to enable AI embedded functionality, within their Extreme SD-WAN solution. This integration will help Extreme SD-WAN customers to quickly and easily complete SD-WAN deployments and personalize user experience by offering a wider range of applications. In the Middle East, STC achieved full GSMA signaling security compliance using our Adaptive Signaling Firewall and AI-driven security center.
Going forward
With a strong global position, a unique and growing product portfolio within and beyond telecom industry, a committed team, and successful customers, we are well positioned for long-term success. Synergies from eight years of acquisitions are becoming clear, confirming the strength of our strategy and integration capabilities. Combined with our solid earnings, this strengthens our confidence in continued organic growth and future strategic acquisitions. Our long-term ambition remains double-digit growth in focus areas, an EBITDA margin above 35%, and strong cash flow. While broader telecom recovery may be delayed by macroeconomic and trade-related uncertainties, our 2025 guidance remains, and I am feeling optimistic for the future of Enea.
I am truly excited about the journey ahead and deeply committed to making a positive and lasting impact.
Teemu Salmi,
President and CEO
The full quarterly report is attached to this press release and has been published on the Enea website (see references below).
Presentation
Enea invite investors, analysts, and media to a presentation of the first quarterly report of 2025. The presentation will be conducted in English by Teemu Salmi, President and Chief Executive Officer, and Ulf Stigberg, Chief Financial Officer, and will be concluded by a Q&A session. It can be attended through a webcast or teleconference (see details below).
Details
Date: April 24, 2025
Time: 08.30 a.m. CEST
If you wish to participate via webcast, please use the link below. Via the webcast you are able to ask written questions. https://enea.events.inderes.com/q1-report-2025
If you wish to participate via telephone conference, please register via the link below. After registration you will be provided with a phone number and conference ID to access the conference. You can ask questions verbally via the telephone conference. https://conference.inderes.com/teleconference/?id=5007006
References
Webpage for Enea financial reports
https://www.enea.com/investors/financial-reports/
Webpage for Enea financial presentations
https://www.enea.com/investors/presentations/
Contact information
Ulf Stigberg, CFO
Phone: +46 8 507 140 00
ir@enea.com
About Enea
Enea is a global specialist in advanced telecom and cybersecurity software, with a vision to making the world's communications safer and more efficient. Dedicated to innovation and security, our solutions connect, optimize, and protect communications between people, companies, and connected devices worldwide. We serve 160+ communication service providers across more than 90 countries, supporting over 30% of the world's mobile subscriptions, with billions relying on our software every day. Headquartered in Stockholm, Sweden, Enea is publicly listed on NASDAQ Stockholm. To learn more, visit enea.com.
Enea is required to make the information in this press release public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 7:20 a.m. on April 24, 2025.
