• Expect Q2 sales growth of 29%, driven by paying users
• Positive gross margin trend is encouraging
• '26e EV/Gross profit of ~5x, fair value range of SEK 25-40

Somewhat lower paying user intake

While Q1 came in somewhat softer than we expected on the top-line, primarily driven by a slower paying user intake, we take comfort in the continued gross margin expansion. We view this as evidence that the company is tilting towards a more favourable mix. Looking into Q2, we expect Skolon to grow the top-line by 29% y-o-y, driven primarily by a growing paying user base from the international markets, which tend to close deals slightly later than Sweden. This gives us comfort in an accelerating top-line growth from here. Moreover, the NE partnership adds a meaningful growth option for Skolon, as we expect revenues from the deal to start contributing within a few quarters.

Adjusting the base of paying users slightly

We cut '26e-'28e sales by 5-3%, as we incorporate a slightly lower base of paying users and a slightly lower ARPPU. It is important to remember that businesses such as Skolon tend to experience lumpy user growth, and the outcome of a single quarter should not be fully extrapolated. That said, Skolon's growth is at times contingent on it winning certain large and medium-sized deals, and when such deals are delayed, the revenue base is reset somewhat. On an R12m basis, however, the trend is meaningfully less lumpy, and that is how this business should be evaluated.

Implied valuation

Based on our revised estimates, the company is trading at '26e-'27e 5-3x EV/Gross profit (GP less capitalised work). Even though the financials may be lumpy from quarter to quarter, the trend is moving in the right direction. The scalability in the business is unchanged, and we believe that the earnings power is significant over a longer time horizon. We revise our fair value range to SEK 25-40 due to our estimate changes.