Good morning, everyone, and welcome to our Q4 presentation, followed by a Q&A session. Ellen and I are today live from our headquarters at Bryn in Oslo, and we are ready to share our Q4 results with you, but also to update about our strategy and priorities going forward based on the carve-out we closed beginning of this month. This is a strategic move we have been working on quite intensively the last quarters, as we wanted to sharpen our focus and invest more in our execution on our core business areas. Q4 marked an important strategic shift for Techstep. We successfully completed the carve-out on time and with a solid financial outcome. This strengthens our balance sheet and sharpens our strategic focus. We now operate with a more streamlined organization, better positioned for profitable growth going forward.
How does the new Techstep then look like? Techstep today stands as a leading European provider of mobile and circular technology solutions. We combine software, managed services, and hardware to deliver best-in-class mobile solutions, secure, scalable, and future-ready. With more than 3 million managed devices, a strong ecosystem of partnerships across Europe, and the highest competency and certified workforce in the industry. W e deliver end-to-end managed mobility services to several customers across Nordics, as well as indirectly through mobile operators and IT providers across Europe. Our ambition is clear: to be the trusted mobile tech partner for our customers and partners, helping organizations and their users to unlock value from their mobile solutions. Let me try to summarize last quarter's key milestones. Q4 was a transitional and extraordinary quarter for Techstep, driven by several large structural initiatives happening at the same time.
The carve-out process required significant operational focus and resources that will not repeat going forward. In parallel, we executed decisive cost base reductions, taking the organization from 260 to 190 FTEs. This is a key step in building a leaner, more focused, and scalable business. We also made strong progress on building our new operational backbone. This includes the implementation of our unified ERP system, where Norway went live in January, and continued the development of the new digital commerce platform, which will improve customers' experience and internal efficiency. In addition, we're transforming our legacy telecom expense solution from proprietary operator-specific to operator-agnostic expense capabilities, closer linked to our technology platform. These projects consumed substantial time and resources in Q4, affecting both cost levels and delivery capacity.
Combined, these extraordinary factors reduced comparability with previous quarters, but the work we completed in Q4 positions Techstep strongly for the future. Clear focus, a lower and more efficient cost base, and a significantly improved operational platform. This sets the foundation for a more scalable, more resilient, and more profitable Techstep in 2026 and beyond. Let me give you a short strategy and business update and inform you about our focus areas and key priorities going forward. Following the carve-out, Techstep is now a more streamlined and focused organization, with clearer priorities and a simplified operating model. We have reduced the cost base significantly and aligned the organization with our most scalable and profitable business areas. The restructuring allows us to direct resources towards our core software platforms, Essentials and Lifecycle, our managed mobility services, and the technology foundation that will support future growth.
We are also strengthening operational efficiency across the company, from ERP consolidation to improved automation and a unified customer-facing commerce platform. Importantly, these changes enhance our financial flexibility and create a stronger platform for improving margins and driving profitable growth in the coming quarters. We now operate with a more focused portfolio, a leaner structure, and a clear commercial strategy, positioning us to execute faster and scale more effectively across our markets. Our commercial strategy is built on two pillars: scaling our indirect channels and strengthening our direct sales business. In the indirect channel, we focus on mobile operators and IT service providers. This is where we scale volume efficiently, using our partners' reach while enabling them to enhance their own B2B offerings with our Essentials and Lifecycle software platforms. These platforms give partners stronger value propositions, improve their stickiness, and open new revenue streams for both parties.
In the direct channel, we target enterprise and public sector customers across the Nordics. This part of the business focuses on increasing the value for our customers from their mobile tech solutions, also resulting in higher profitability and closer, more strategic customer relationships. Here, our priority is to deliver complete managed mobility services, ensuring customers' mobile workforce stays secure, productive, and operational at all time. Together, these two go-to-market motions, high volume indirect sales and high margin direct sales, create a balanced commercial model that supports scalable and profitable growth. Going forward, we will continue to invest in our own software, deepen partner collaborations, and strengthen our direct MMS offering to increase customer value and expand our footprint across Europe. Let me highlight some key achievements and give you a quick update from a commercial perspective.
As shared in our stock exchange release early January, we landed the agreement with Sykehuspartner and Helse Sør-Øst during Q4, and we currently are working together with Sykehuspartner to roll out and manage thousands of clinical role-based mobile devices in the region, enhancing patient care and increasing efficiency. This covers the complete managed health solution, including devices, software, lifecycle management, deployment support, and advisory services. Just before Christmas, we also closed the largest deal of the year for our MDM solution Essentials with the Polish police. We are currently helping manage and secure all kind of users, whether municipal guard, investigators, or traffic police, as all public sector employees need safe and secure mobile devices to do their work.
We are also very proud of the great achievement in Spain with the region of Catalonia, where we, together with Vodafone Spain and our local partner, won a comprehensive proof of concept for MDM and MTD to manage and secure all mobile devices across the region, currently consisting of close to 80,000 devices. Other key highlights worth mentioning from last quarter: we onboarded and went live with our device lifecycle management platform with Fónua as a part of their core offering, enhancing value and user experience for their customers, but also to increase efficiency and automation for their own operations. We implemented and started rolling out a new security offering with Telia, and customers are now being onboard and secure with this Telia Mobilvakt service.
devicenow continues to win and onboard new customers to our Lifecycle platform, and we have won and onboarded new large customers in Sweden, getting a stronger momentum and foothold within the Swedish public sector. mobile technology is a powerful enabler of efficiency, productivity, and better user experiences across industries. When workers have the right devices, applications, and secure access to data, they can operate faster, smarter, and with higher quality, whether in healthcare, logistics, field service, retail, aviation, or hybrid office environments. We see this every day together with our customers. In healthcare, clinicians gain secure access to patient data and critical apps, enabling more time with patients and fewer manual processes. For office and hybrid workers, mobile technology ensures seamless and secure work across locations and applications. In field service, technicians get on-site access to tools, data, and support, improving repair quality and service speed.
In retail, mobile devices and real-time data streamline inventory and improve accuracy. In today's changing and uncertain geopolitical situation, the biggest risk is where data is stored and who has control of it. Customers need to know where their data is, where their data is, who can access it, and prove that they have control. We help them stay in control over their mobile data and endpoints, so they can stay operational and compliant even when conditions continue to change. Across all these sectors, the common denominator is clear: mobile technology creates strong business outcomes when deployed in a controlled, secure, and scalable way. This is exactly where Techstep delivers, providing the tools, platforms, and managed services that help organizations unlock this value safely and efficiently. With that, I'll pass it on to Ellen, who will walk you through the key financials for Q4.
Thank you, Morten. The results for the fourth quarter was, as Morten said, heavily affected by the last project phases of the ERP implementation before go live in January, as well as extensive focus on the carve-out process, affecting both revenues and costs. Total revenues in the quarter was NOK 283 million, versus NOK 313 million in the fourth quarter last year, which is a decline of 10%. Several factors drove this change. First, there were delays in deliveries of the iPhone 17 models, building backlog into 2026. Second, anticipated rollout of thousands of devices to hospitals in the Southeast region was also delayed until next year. T hen lastly, Telenor terminated the agreement for the legacy version of the telecom expense software, affecting revenues and gross profit year-over-year in the quarter with over NOK 5 million.
This aside, the underlying growth in own software was 23%. Net gross profit decreased by 13% year-over-year, as we also experienced lower margins on the device revenues in the quarter. We had some device bulk sales with very low margins, which we accepted based on strategic long-term commercial considerations, and we saw lower device as a service end-of-lease profits in the quarter. These gains will vary from quarter- to- quarter, depending on the type of devices and contract terms of the expired device as a service contracts in the quarter. As mentioned, our operational costs, including personnel cost, increased in the quarter compared to last year with 21% or NOK 15 million. This is primarily caused by our investments in our ERP, Digital Commerce Platform, and Enterprise Architecture.
These are one-off investments we need to do to position the company to scale profitably and with a lower running cost base. EBITDA in the quarter was - NOK 5.4 million versus NOK 21.3 million in the same quarter last year. Net loss in the period was NOK 54 million, after amortization and impairment of Goodwill of NOK 48 million. In relation to the divestment of the BCM business, Goodwill, which originally arose from the previous M&A activities in the group, was allocated to the business sold. The transaction was closed in February 2026, but assessment of impairment at year-end indicated, based on the sales price received, an impairment of about NOK 34 million. The remaining amortization of about NOK 14 million is NOK 5 million less than Q4 last year, as amortization of intangible assets from M&As are nearing completion.
Going forward, amortization should be around NOK 10 million per quarter. The recurring revenue contracts here, are here presented as pro forma, adjusted for the BCM business sold in 2026. At the end of the year, excluding contracts sold, total annualized recurring revenues was NOK 263 million. This consists of both device as a service contracts, own software, and managed services. Less than 20% of the group's total ARR is included in the divested business. The development the last year was very positive up until fourth quarter, where we have a net decline of 6% from the previous quarter, driven by the mentioned termination of the legacy telecom expense solution. However, the system is now made operator agnostic, and we are also continuing to onboard customers directly onto the platform.
We are expecting the ARR to grow in 2026, as we will continuously onboard new devices under the Sykehuspartner agreement, ramp up on both the product partner and operator agreements for the DLM platform, as well as the effects from the agreements for Essentials MDM in Spain. Looking at the pro forma net gross profit, the carved-out Business Critical Mobility has over time contributed about 25%-27% of the group's net gross profit, but with a declining share as the core Techstep contribution has grown, whereas the BCM business has been stable with slight decline over the years. At year-end, the pro forma core Techstep net gross profit was around NOK 250 million.
With the cost base divested in the carve-out, together with the cost reduction initiatives that has been implemented following the carve out, we believe Techstep is well positioned for growing profitably in the coming years. Operating cash flow in the quarter was NOK 38 million versus NOK 71 million in fourth quarter last year, as the results in 2025 were weaker than the previous year. The working capital development was positive by NOK 20 million, an improvement over last year relative to the level of gross profit in the quarter. Capital expenditures in Q4 was NOK 15 million, up from NOK 12 million last year, as the last quarter was affected by both investments in the new Essentials MDM and MTD product launches in Spain, as well as in our own enterprise architecture. Net cash from financing activities was NOK 10 million versus -NOK 2 million last year.
In Q4, we received a transitory loan from investors to fund our working capital needs during the carve-out period through the repayment of all bank loans and until the new bank refinancing is in place. This is currently an ongoing process with several banks to ensure Techstep has sound working capital funding going forward. In the balance sheet at December 31st, we have presented the assets and liabilities related to the Business Critical Mobility as held for sale on separate lines in the balance sheet, according to IFRS 5. The assets held for sale includes Goodwill allocated to this business. Total non-current assets was NOK 779 million, whereof Goodwill related to the remaining business now constitutes NOK 495 million, and purchased technology and customer contracts are NOK 4 million.
These assets have been amortized with about NOK 30 million a year, but from next year they will be fully amortized. Our net interest-bearing debt at the end of the quarter was NOK 155 million, which is at the same level at the end of Q3 in 2025, increased from NOK 108 at the end of 2024. On February 2nd this year, we repaid all bank loans at the closing of BCM sales transaction, and as such, the loans are all classified as short-term at the end of 2025. Then I'll hand over to Morten, who will sum up this presentation.
Thank you, Ellen. This quarter truly marks the beginning of a new chapter for Techstep. Throughout Q4, we completed the heavy lifting required to reshape the company into a leaner, more focused, and more scalable organization. Although the extraordinary nature of the quarter impacted both the revenues and profitability, the structural improvements we have now delivered position us strongly as we enter 2026. First, the successful carve-out was an important milestone. It sharpened our strategic focus, reduced complexity, and strengthened our financial position. With this step behind us, we are now able to fully concentrate our resources on our core software platforms, our managed mobility services, and the customer experience improvements that will drive long-term, profitable growth. Second, we have now taken decisive actions to reduce our cost base and right-size the organization.
Moving from 260 to 190 FTEs means we are now structured and resourced for the business we want to scale going forward. These reductions, combined with the automation and more standardized operating model, will give us far more efficient platform in 2026. Third, we strengthen our operational backbone. The new ERP system in Norway went live in January, and our unified commerce platform will launch this spring. Together with increased automation and a modernized tech stack, these improvements increase speed, reduce manual work, and enable more scalable service delivery. While these efforts required significant time, focus, and resources in Q4, the foundation we have built is strong. We now have a streamlined organization, a clearer strategy, and a more efficient operating model.
With this in place, we are well-positioned to accelerate growth, improve margins, and realize the full potential of our software and services portfolio as we move through 2026 and beyond. Thank you for your attention. We will move directly over to a Q&A session, so please stand by if you have any questions. Let's see if there are any questions posted so far. N ot to forget, you can always submit your your questions by using the investor relation email address or by using the chat function in this presentation.
Okay, there's one question coming in here. It appears that the company's current valuation is low. What is your view on the market's pricing of the company?
Good question, and I will try to answer both as an employee and a shareholder. We acknowledge that the current valuation appears low, but ultimately, the market sets the price. Our focus is on delivering strong operational performance and executing on our strategy. As we continue to show consistent results and progress, we believe the underlying value of the company will be more clearly reflected over time. We stay positive, and we are very optimistic about the future and how we can realize the full potential of this very exciting company. No further questions at this time?
Nope.
No. T hanks again, then we will close the call and wish you all a great Friday.