Welcome to today's event where we have the pleasure to present Inderes. As you can see here on the front plates, the first nine months results of the Q3, also 2026 result is today's topic. To help us through today's presentation and take questions during the presentation and in the end of the presentation, we are joined by CEO Mikael Rautanen. As always, there is a box down below where you can ask your questions during the presentation or in the end of it. Do feel free to do it.
You can do it in Danish. I will try and translate to the best of my ability. For full disclaimer, we should also say that we have a technology, HC Andersen Capital in Inderes, and you own 20% of HC Andersen Capital. I think we have that disclaimer out of the side here. I will hand the call over to you, Mikael. It seems like pretty good results, but we were early warned, or warned is a wrong question, with your upgrade. Let's dive into what is going well for you this quarter.
Yeah. Thanks, Michael. Good to see you, and welcome everyone online watching the webcast. Yeah, like you said, we did issue a profit warning, but it was a positive one, so we kind of warned that it is going to be more positive than we ourselves at least expected. So, third quarter business review. As a First North-listed company, our Q1 and Q3 reports are these a bit smaller business reviews, but this will give you a good overview on where we are in terms of our performance. So the third quarter numbers, it is on a positive note. Revenue up by 11%. It is pretty much coming also from the recurring revenue, and this was the second consecutive quarter that we were on a double-digit growth. So the accelerated growth, in my papers, is not driven by one-time items. Profitability also up.
Adjusted EBITA and reported EBITA grew by 35%, and EBITA margin to 22.4%. This is a seasonally strong quarter for our profitability always. What is driving the improvement? I would like in the big picture say we have been through a quite aggressive investment phase where we have been investing in building the Software business, renewing the Research business, building the international growth. Now many of those investments are starting to pay off, combined with market conditions that are now continuing to show signs of turnaround. So the headwind that continued for quite many years is now slowly turning into tailwind. We have IPO activity coming back in Finland. Also in Sweden. The Finnish economy, which is a big factor for many of our customers here in Finland, is picking up also, which has a positive indirect impact on us as well.
One should not forget the AI transformation and the investments that we've been doing in AI. I'm happy to say that with AI, we've been able to build better products for our customers. We've been able to get rid of many manual processes internally, which makes the work more meaningful for our people. People are also excited about that. From a shareholder perspective, there's a business case for AI. We're getting more and more efficiencies also from AI. Basically, we've been able to grow without recruiting and increasing the headcount as fast as we earlier planned. That's a positive development as well. Of course, when you look at Q3 only, it should be noted that last year Q3 was relatively weak. We had a really weak quarter for project sales, so of course it's easier to grow from a bit weaker comparison period.
The weakest part or the low light of this report, international revenue. It didn't grow in Q3. It actually slightly declined. January to September, international revenue is still growing. There I would like to highlight that the international revenue has increased within the Software business. International revenue has increased within the Research business. Where the decline is coming from is the Events business that represents the biggest part of the international revenue. I will touch that in more detail in the events part of the presentation. Overall, going in the right direction. Research business, strong performance. The contract portfolio is back on a growth track, up by 10 contracts to 153. Sweden business is growing, and the loss is narrowed. Here, we've been doing a lot of transformation around AI. It's been a big push from the team.
They've been doing great work, and we're getting more and more routine type of task automated, which is being reflected in the operational efficiency. In the previous world, we used to say that one analyst can cover around 10 companies, and we expect that to increase materially going forward. At the same time, of course, one question is will we get that as a margin improvement and fully, or can we protect and maintain our pricing? Here, what we are seeing is that we're actually holding up or even being able to increase our prices given the new feature and increased value for the customers, with also the AI being reflected towards the end user, the investors. For example, our research model is fully open, meaning that when a company comes and becomes a customer of Inderes and we do the research on the company.
Now, if the investor uses any of the AI tools investors usually uses or any investing platforms, it's very likely that they will get access and be exposed to research that Inderes is doing about the company. Really making sure that the company is findable for the investors and there's third-party research and analysis that is trusted available about the company openly in the investing phase. That's going really well. There's a really solid business case for AI with the Research business, I would claim.
At the same time, it should be noted that we will not give up on the really high quality of the research work that we do. We will not increase efficiency and margins at the expense of the quality of the end product. It is a limited number of companies that one analyst can still cover in a way that the analyst really knows in and out the companies that he or she is covering. Well, Michael, you are an analyst yourself, so you know the game here.
Yeah, I know the game, but I also know AI.
Yeah.
I would cover materially more and still know the companies as good as this because what you might say learning is maybe 50% and then doing the tedious work as an analyst, that is maybe 50% right.
Exactly.
It is not about that you cannot do anything, but you can really increase, I think, efficiency.
Yeah. Exactly. One thing with Inderes compared to traditional sell-side research, what our analysts really love and enjoy is that when you come to work at Inderes, your work is 100% research. You do not need to do sales. That is a big difference. Of course, many of the analysts who have come from the sell side traditional research to Inderes, that is one thing they usually love the most about working at Inderes.
I guess that should also indicate that you can get the good names because I guess name recognition must be the name of the game here. Analyst, well-known, well-trusted.
Yeah.
I guess that is the competitive edge in an AI world or am I wrong to think like that?
Yeah. Since the founding of the company, we have been investing in building strong names in the industry, personal brands that are visible in the investor community, visible in the media as well. I would say we have succeeded in that historically, and we are going to continue to grow our people and analysts on that path because I think that is going to be increasing in importance, which information and who is investors going to trust.
Yeah.
Having recognized public faces is one element there definitely. When competing with talent, we're not going to be competing against large banks with money, so that I want to make clear because of course, if you want to work in a big international investment bank, you're going to be making quite a lot of money, most likely. We're in the talent competition. We're using other strengths that we have and not go into the money competition, even though long term, I think we are also good and competitive in that perspective given the equity programs that we have and the salaries. That's just something I need to be clear with when—
Yeah.
talking to investors. Not competing with money, because that game we won't be winning.
No, but I think you mentioned it yourself.
Yeah.
Yes, you love to be an analyst. You hate to be a salesperson, right? But you need to be both in the big banks, right? I guess it's not always money counting.
Yeah, exactly. Moving on to Events business. Here, a bit mixed performance. Finland, really strong, good performance continued. Sweden, a bit more challenging. Sweden, the market is going through a transformation. We are going through a transformation. There's two sides. The first one, this transformation to more software-based delivery model. That's a negative driver for our top line, but it's a positive driver long-term for our margins and the scalability of the business when the transformation is done. Right now, we're pushing through this transition on the remote production product area. That's one area hurting our numbers. Then where we are seeking to grow is the area where we are really good at building high-quality online and hybrid events for the investor relations segment.
This category is growing, is moving in the right direction, but the pace is not at the level which we are targeting. These two things combined were not growing internationally in this business. Added also with some larger event productions that have been postponed to next year, which is affecting the rest of the year outlook. Then going to Software business here. Continued strong performance driven by Videosync platform and the IR software revenue. AGMs is also a part of this business, but Q3 is not the AGM season. Here again, in this business, AI a big topic obviously. We're bringing new AI features to the products very much into the core workflows of investor relations, automating them and reducing the risk of errors. That's what customers ask for.
No IR is like, "No, I would like to have more manual processes that have high risk of errors." This is really resonating in the clients. Combined with our— I always need to mention the exceptional customer service that our team is giving for the customers, in addition to really good products. This combination is working in line with our targets this year. We have reached the market leadership in all of the specific product areas in Finland. Then, together with you, HC Andersen in Denmark, we're growing the number of customers as well, especially in the Release Distribution product. That's moving forward as well. That's also a validation that we are learning the recipe to scale this business internationally, or in new countries through a partner model.
I'm also thinking here, because you mentioned AI, but I also think now because I also operate in the business environment here, that putting something into an AI agent or an LLM model outside of your own IR. There's a big scare what will be published, what can be read somewhere else, because we are in an area where if you want to make it write something, or you want to make it proofread or something like that. Any thoughts about that?
Are you going in a way where you are developing open weight models internally where data stays there? Just a little bit thoughts about that, because I guess you are in an area where you really don't necessarily want to put out your information in the big LLMs. Or if you do it, you know you do it with a risk, and this is sensitive stuff a lot of IR people are working with.
Yeah, exactly. Big topic and really important for the customers. Maybe I'll give some practical examples here, what we're doing, so you get the idea.
Yeah.
For example, with the Release Distribution, when our customer sends out a stock exchange release, we have an AI that proofreads the release and makes sure that there's no discrepancies between the language versions or that there's nothing unusual or exceptional in the release.
Right.
If you have mistakes, it will prompt you, "Hey, you better check this before you press send out stock exchange release." This is built within our IR software. Just a feature that like tens of companies have avoided sending out false stock exchange releases because of this simple feature. It's actually pretty simple. This is one example. Another example that we're just rolling out, when, for example, we send out our calendar for next year as a stock exchange release a few weeks ago. We have an agent that will pick up the information and then prompt the IR in the IR Suite, "Hey, I'm going to update your IR pages with this new information. Do you approve the changes?" Then you just click, "Yes, approve," and then the workflow is done.
Compared with history, where you would need to remember that when you send out a release, you need to pick up the information and then go to your IR website and manually update the information and stuff like that. It is really flowing into the core workflows that the customers have and helping them to automate them.
True.
Maybe one thing to mention as well, in the Videosync platform, we are rolling out an MCP. It means that basically you no longer necessarily need to log in to the actual software. You can use your own LLM to do your task and work through this MCP connection. That is coming out. Maybe we will share some more info about that later on. That is also a big shift in the industry. If we look at the bigger picture, what is going to be the interface that clients are going to be using the software?
Are they going to log in to your software to run the processes or are they going to be using their own LLMs and natural language to run the same task they did in history? I think that is a change that is going through in every software sector, but likely to touch also the IR space where we have our finger on the pulse and we are experimenting a lot of stuff there as well.
True.
Yeah, very good. Quickly on the figures in a bit more detail. January-September revenue up by 9%, recurring revenue up by 9% as well, and project revenue by 10%. Cost level, I would say flat-ish, and that resulted in EBITA improving to EUR 2.2 million from EUR 1.3 million last year. Last year we did have some non-recurring items affecting the first part of the year. Adjusted EBIT margin 4.4% compared with 13.2% year-to-date. As always, I want to remind that we are under the Finnish Accounting Standards, which means that we are doing the amortization of the intangibles from the acquisitions or the goodwill. That is giving accounting cost item of EUR 500,000 for the January-September period, not affecting cash flow in any way. Looking at the Q3 numbers specifically, growth of 11% and margin improving to 22.4% compared with 18.4% last year. Guidance.
On September 28th, we issued an updated guidance. Previously we were expecting revenue to grow and EBITA margin, excluding non-recurring items, to be in the range of 10%-13%. Given the stronger than expected performance and the slight tailwind from the market, we are now expecting EBITA margin, excluding non-recurring items, to be in the range of 12%-14% and revenue to increase 6%-9%. Shortly, a recap on the strategy. This is the journey we're in. Last year, we updated our strategy with more disciplined focus areas, building the Research, Events and Software business run more independently. This strategy is still really valid. It has brought a good clarity and direction to the organization. Especially we're happy with the Software business.
We have the strategic ambition to build it as the third pillar of Inderes, and I think we're making good progress in that area. When I say that we've been doing heavy investments in the declining market, with that I refer to how much we've been actually investing since the IPO. In total it's around EUR 17 million, which covers acquisitions. Part of them have been paid with our own stock. R&D, we don't capitalize to the balance sheet, so that's a cost item. In total, we've been investing in R&D a total of EUR 5 million in this period. Then there's a small part of traditional CapEx. Where have we been investing is, first of all, building the Software business, where I would claim that we're making good progress and these investments are paying off.
This year in the first half, the Software business turned into positive profitability combined with good growth. Then we've done some M&A transactions, the bigger one in Sweden and a small one in Denmark, a minority investment. Here, especially in Sweden, I think we still have a lot to prove that those investments are shareholder value creating. We've been investing a lot in renewing the Research business. Five years ago, we built up the whole research platform, rebuilt it from scratch, and now it's been renewing towards the AI age. Then, of course, the Events business has been undergoing through significant transformations as well the past years. First, given the changes with COVID and then post-COVID changes, like adapting to the quickly changing market conditions. I think we've done a lot of right choices in that business area given the quite turbulent market, I would claim.
The financial targets, combination of 30% revenue growth plus EBITA percentage. This year, if you look at our guidance, we're going to be in the ballpark of 20%. Not reaching the Rule of 30, but Rule of 20, maybe. Given the mix of businesses that we have and the growth prospects that we have, I still think this target there's ambition to it but it's definitely achievable. Finally, on the payout for this year. The whole profit distribution for this year, EUR 1.7 million planned. Basically, this payout program is approximately today, maybe tomorrow, fully completed. The second part of dividend is paid out on Thursday. The buyback program, EUR 900,000, was yesterday 97% completed. That's going to be actually completed a bit ahead of time. That's because the liquidity of Inderes stock has been, I would say, higher than we expected. It is good to have a liquid share.
Yeah.
If you want to invest in us, there it is.
Which means it is a bad thing, I am not really sure.
Liquidity is a big challenge for many companies.
Yeah.
Especially the small-cap companies. I would say the relative liquidity of Inderes stock is actually pretty good compared with our market cap, how quickly the owner base changes. We can be happy with liquidity. What we are not happy with is, of course, the performance that we have had. But on that one, we are every day coming to work to democratize financial information and to make a hell of a good business out of it. That is where we are going. Any questions, Michael?
Yeah. There is one to your guidance, and I guess as an old analyst you know you will get this one. If you go to the low end of the guidance, it is a slowdown compared with the first nine months. A high end looks nice. Is there anything we should look out for? You mentioned Sweden, something has been postponed, but is there some other things you are seeing that makes you caution, or is it still evolving business environment that you take some cautions and that is how we should read your guidance?
Well, the ones you mentioned, some larger event productions being pushed to next year on a one-quarter level that might have quite significant impact actually in our numbers. Then we did have relatively good Q4 last year as well, so it is also the comparison.
Comparison period.
Yeah.
Yeah. But nothing else you are seeing. The Finnish economy is going well. I am also talking about we can see with a little bit jealousy the IPO market actually opening up for you, which is a big part of your business, I know that. But how has the first IPOs fared? Have they been well-received in the market, I guess? That is what makes windows continue in the IPO market. Of course, can be shutdowns for macro reasons, but it is also how they fare the first IPOs. Have they been reasonably well being taken well with the market and hereby—
Yeah.
—is always measured in share price in such a—
Yeah.
—short period.
I would say reasonably well, yes. We have had some companies generating really strong returns and then some companies trading somewhat below their IPO prices. So it is a mix, but overall, if it is a company with solid numbers, if it is preferably a larger company because the really small-cap sector is the sentiment is still very weak.
Yeah.
If it's a company that has some AI or data center exposure, then there's more appetite. So it's a bit depending on the profile of the company. The window is definitely not open for all companies yet.
Okay.
We're still waiting to get the small-cap sector going as well. But there the sentiment unfortunately continues to be quite weak. But I bet that will change over time. Maybe one thing regarding IPOs, last year I was challenged quite a lot because of Inderes not winning the IPO companies as research customers. Today I can say that out of all the IPOs in Finland last year, each one of them is our research customer. So 100% hit rate, I don't know how to improve from there.
It took a little bit of time. Perfect. Then split between M&A and distribution going forward, do the internationalization strategy demand more M&A? As you said, you are maybe not getting the returns you hope for in Sweden. Do you demand more M&A to be stronger, bigger, or is distribution maybe still your preferred Is where you are seeing maybe the capital allocation going here in the midterm? I know I'm not making you make any targets, but just your thoughts. Do you need more M&A for international strategy, or should we look at you also as a solid distribution company going forward?
I would say it's more our own execution that we're now focused on. Of course, we're keeping eye open for potential M&A. But to grow and especially to grow earnings, I think we have the right pieces in place at the moment.
In place. I guess distribution because I guess, and you cannot comment on it because you do not show cash flow in the quarters here—
Yeah.
—but that is the same. Then maybe looking a little bit into 2027 without you guiding. With those pieces in place where you are seeing revenue growth, which is market-driving, outstripping cost base. You control the cost base. Is this a new normal that we should start seeing you actually have a flattish cost development going forward because efficiencies and the prior year's investments will make it that you have a flattish or lower cost than maybe your revenue growth if revenue growth is in the normal—
Yeah.
—in a normal range?
Well, you know how to place your questions as an analyst.
Yes.
It's a tricky one.
That's what I'm up to, guys.
Not to go into the next year guidance that we haven't given.
Of course.
But overall maybe I can refer to our long-term financial targets. I think they are still valid and we are well-positioned to not only grow our top line, but also to grow especially our profitability, profit.
You choose the corporate. That was also what I expected you to do. That was the last question, Mikael. Thank you for taking us through your results and answering questions through the event, and thank you for the audience listening in. May everybody have a nice day.
Thank you.