Welcome back, and it's now time for Xplora Technologies. My name is Øystein Elton Løvgaard. I'm the analyst that covers Xplora here at ABG. With me today, I have the founder and CEO of the company, Sten Kirkbak. So with that, Sten, the floor is yours.
All right, excellent. Thank you so much for the invite and the introduction, Øystein. I know it's late in the afternoon in the day for everyone, so I'll do my best to keep it very on point and as exciting as possible for everyone. Probably 15 minutes for the presentation, leaving good room for Q&A at the end. If you move on to the first slide, or actually the second slide, you'll be able to kind of see the summary. Let me give you the elevator pitch, the first, just from a high-level perspective of the company. Xplora is a leading family IoT company. We have specialized in two very exciting niches for mobile devices: kids, which is divided into kids and youth, and on the other end of the spectrum, we have the senior market.
We're selling mobile devices for this category with high margin service revenue as the core business case. I'll come back to the details in a second. But all in all, our trailing 12-month worth of revenue represents roughly NOK 1.8 billion in revenue, of which roughly NOK 360 million is coming from annualized monthly service revenue from our SIM and premium subscription. Of course, I'll come back to details of that again. And that service revenue comes from 443,000 subscriptions. When we reported Q3, we had a year-to-date EBITDA at NOK 140 million and also held a cash balance consisting of NOK 426 million. And one key takeaway from this slide is our current 443,000 subscription is all just coming from the kids portion of all our three categories.
We have recently introduced youth and senior, which is now the significant part of the upside in our business case, which is what we'll emphasize and present today. We have an ambition within the next two to three years to increase to an overall of roughly 1 million subscription, our financial midterm objective. So if we go a little bit into the more details, going to the next page, it's very important for us to make sure that our investor, everyone following the company, is very aligned on our business model and how we monetize on our product and services. High level, we have two ways of monetizing. One is from our physical products, the hardware revenue. And we have a broad portfolio of product, both for kids, youth, and senior. Again, I will come back to even more details a little bit later.
But it's very important for the company, for all our hardware product, all our SIM enablers, what we like to call them, that we should always target to have a minimum of 30% margin. So a range of physical product, mobile devices for kids, youth, and senior, pricing point from EUR 150 approximately, always with a target to have 30% margin. Then, on the other end, under recurring service revenue, our main product in that end is our SIM card. We have nine markets where we have our own MVNO. That means that on those nine markets, we are able to sell our own SIM card. So in all our mobile devices, we are then pre-installing our SIM card with the objective to activate as many SIM cards as possible.
The average price point on those SIM cards, allowing you to have call time and data packages and so forth, the average price is roughly EUR 10 with a targeted margin on as much as 80% on our own SIM card in those nine markets. In addition, we have also introduced some premium services, meaning value-added services that we add on top on the mobile connectivity. Roughly 30% of our current customers are then selecting the premium services, which then increase the price point additional EUR 3 per month. And on our premium services, we are targeting as high as 95% margin. So high level, we monetize on two different revenue streams: the hardware, the physical product, the enablers that allow us to sell our high-margin service revenue. So that's the high-level view on our business model and our monetizing model.
Then I would like to take the next three slides. You can just go to the next one and just walk you through the various value propositions we have for the different markets. Then, starting with the kids, when we introduced Xplora in the market in 2016, we introduced our first product in 2017. It was really to address the huge opportunity for mobile products that were specially designed for young kids in the age lesser than 10. We addressed that as a product that should be the kids' first mobile device, peace of mind for parents.
And the value proposition was really to provide a mobile phone in the form factor of a smartwatch, where we took away, basically removed everything related to access to internet, social media, and so forth, and just allowed parents to set up a simple-to-use mobile phone for kids only with a predefined number from the parent. You could see the locations, send SMS, and so forth. Everything else was blocked. That was our successful initial product proposition for the youngest kids. If we then move on to the next slide, on the recent Q3 and Capital Markets Day, we then introduced to the market that it is very important for us now to extend the lifetime on the product for our kids category.
Now we have only had the mobile devices in the form factor of a smartwatch, meaning that the key reason, in fact, the only reason why we are churning our customer is because the kids are outgrowing our current product. When the kids reach the age nine to 10 years old, they would like to step into their first mobile device or a smartphone, meaning that we have an average lifetime of 30 months. So our kids have our mobile device, the smartwatch, with our connectivity with our SIM, average of 30 months. They are churning because up until now, we have not had any additional product to then upsell to. And in our capital market day, we then introduced these two products. In fact, the smartphone we introduced a couple of months ago, but now we then have two additional products to then upsell.
A specially designed product for kids 9- 12, which is basically a feature phone that looks like a smartphone but cannot connect to app stores and internet, but it looks like a smartphone, but still the same safe value proposition as our kids' watches. In addition, in partnership with HMD Global, we have then also introduced a smartphone that is safe because we have installed our Guardian Control on the operating system level. We have a smartphone for kids 13- 15. When I said we have 443,000 subscriptions already, we are adding additional net 100,000 subscriptions every single year. However, we are actually selling 250,000 subscriptions every year. Due to our high subscription base and our churn, because kids are outgrowing our product, we're actually churning 150,000 subscriptions every single year.
Our two new products would then help us to avoid that churn so we can increase our customer base from kids even more so, so that's the high-level perspective on our kids and youth category. On the next page, we'll then go to the very opposite side of the age spectrum. Back in the early days, we always had a long-term ambition to then start with kids and then continue to grow into new verticals, and roughly two years ago, we started to explore if we should do that organically or if we should accelerate that process with the M&A process. Eventually, we ended up, after a very long and detailed due diligence process, to acquire Doro. Doro is the leading provider for senior mobile devices. They have been in the market for 50 years, a fantastic company with a long and proud legacy and history.
They have averaged revenue annually above a billion NOK, with EBITDA more than 100 million for many, many years in the past. They have sold more than one million mobile devices for seniors as well for many, many years. What we realized was, although they have a very strong business model with high margin and a very steady sale, they had never capitalized on what we believe is the most exciting thing, the service revenue coming from mobile devices or value-added services. So when we acquired Doro, we added more than a billion in revenue, more than 100 million on EBITDA, with a huge opportunity for us to really increase that profitability by pre-installing our own SIM into the Nordic market.
And the overlap with where Doro is selling the product was a perfect match for our mobile connectivity market, the Nordic market where we can offer that service. So on the next page, we demonstrated, on the capital market day we recently had, our rollout plan for us to introduce SIM connectivity into all the Doro product. And remember, this is not about having Doro to sell new product. They are selling the same product they successfully have sold for many, many years. The only change is that we are now pre-installing, bundling our mobile connectivity, now branded as Doro Connect, jointly with those sales. So when we reported Q3, we had already launched Doro Connect online in Norway, Sweden, and Finland. And now, end of year, we'll introduce new market, France and the U.K.
And then going into 2026, we will then continue to roll out both on our e-comm, Amazon, as well into retail. And the numbers so far look very promising. Of the volumes we have sold so far on our own online channels, although the smallest portion of our market, retail and telco, is bigger, but so far already, we see a 25% conversion of everyone buying Doro on the e-comm site in Norway, Finland, and Sweden. 25% already are then acquiring the product and activating our Doro Connect SIM card with that purchase. I'll come back in the next slide why this is a very, very important number. If we compare the company Xplora one year ago versus now, you can see when we reported Q3 in 2024, we had roughly NOK 500 million of revenue in Xplora with the EBITDA of roughly NOK 30 million.
After the acquisition of Doro, now the group, when we reported Q3 recently, we are now representing year-to-date 1.3 billion NOK of revenue with 140 million NOK of EBITDA. I said initially 12-month rolling is 200, but year-to-date in Q3, 140 million NOK worth of EBITDA. When we acquired Doro, we wanted to provide a market with kind of a tangible number understanding on what is the effect if we are able to have success with our pre-installed SIM card in order to sell SIM card also with Doro. As you can see on the graph below and to the right-hand side, every single year, roughly 1 million, like I said, is coming into an Elgiganten or a Power to buy a Doro product. They are buying a Doro product primarily because of sound quality, sensitivity on the screen, and the complexity from having a Samsung or an Apple phone.
It's time to have a Doro phone. That happens one million times every single year. What we're now going to propose, and which we just started online, is that here is the Doro product that you now would like to buy. However, now you can buy this product with a pre-installed or bundled SIM card from Doro using Telenor or Telia infrastructure, so the same quality on the network. But since it's pre-installed or bundled, it's easier to set up. You have only one customer support number to call. You will have additional service you otherwise would not have. We can even be very competitive on pricing from, for example, Doro and Telia. If one out of 10, so 10%, would say, "That seems like a good deal.
“I would like to activate a pre-installed SIM, get my SIM number, and it's very easy to set up.” If 10% say yes to that proposition, that would actually increase our EBITDA NOK 300 million. So 10% represents NOK 300 million additional to our annual EBITDA in the second year, and that's why the market was very excited to understand what is the current trending number when it comes to the conversion rate from the early days on our e-comm, and as we saw on the previous page, that number is currently 25% or north of 25%, so that's kind of the essence of the upside in the business model and some of the key drivers for our acquisition of Doro, then going into the next page, actually, you can flip one more. As I said, we just had Q3 reporting.
The key number from Q3 I just wanted to emphasize is that for the first time in the company history, we passed NOK 500 million in group revenue in a quarter, 100% year on year, and of which that revenue, the recurring services represented NOK 90 million, 20% uplift year on year, which I said initially that comes from a subscription base of 443, which is up 116,000 from last year, which also is aligned with what I said additionally. We are adding just from the kids' smartwatch division roughly 100,000 additional subscriptions every single year. Our gross profit ended at NOK 263 million, which is up 122, with an EBITDA of NOK 72 million, with a healthy cash, as I mentioned initially as well, at NOK 426 million. Good increase from last year at 141%.
I would also like to mention that the acquisition of Doro was 100% financed with roughly NOK 900 million loan from Nordea, a traditional bank loan over four years, which is financed primarily from the cash flow generated by Doro. The last page I wanted to dive into tonight is one of the slides from our capital market day as well, because we wanted to provide an insight to the market related to our long-term ambition. We had a capital market day two years ago. At that time, we had roughly 200,000 subscriptions. We then introduced our five-year plan two years ago with the road to 1 million subscription. Two years later, we have increased to 400,000, 443 from 200 roughly. We now wanted to showcase what is now beyond 1 million and the next five years to come.
The key takeaway is that we really want to increase our product grid to increase from a lot more enablers. So we are able long-term to grow even beyond one million by having even more product to pre-install our SIMs. So I think that really summarized the business model, our current numbers we delivered on Q3, and a glimpse into the future. And with that, we can move into the Q&A.
Thank you very much, Sten, for an insightful presentation. Starting off with Doro and the new subscription that you've launched for Doro, this is, I guess, the most important lever for you, at least in the next couple of years, to drive growth and earnings growth. So you've had initially a very strong conversion rate in your own channels with 25%.
Any kind of reason that you shouldn't be able to maintain that conversion rate in your own channels, or is that?
I don't like to give promises in that regard, but I think it's fair, Sten. You have followed us for quite some time, and I think the key thing is that normally we tend to increase that conversion simply because we learn a lot more on how to convert, and I think it's very important to just emphasize that for us, it's really important to understand what is the right price point, making sure that we, of course, can have as high a price point as possible and still see a high conversion, and really learn what is the wording, what is the proposition, what is the price and bundle to drive that number, but all else equal, that conversion rate should increase.
Great.
And you have announced so far 900 retail stores where you will sell the Doro subscription. Do you think that you'll be able to sell the Doro subscription in all retail stores where a Doro phone is sold eventually, or how should we think about that?
That's a very good question. And unfortunately, I have to say the answer to all is no, simply for the reason that it's very different from market to market. In the Nordics, I would say most likely all. We see some markets such as Germany. Some of the retailers might have even their own MVNOs set up or some particular deals with some telcos, but the majority of the retailer would be the ambition for us to have our own mobile connectivity. But I cannot say everyone, but most of them.
The market split, the channel split for Doro is roughly 10% online, and then the remaining is a split between roughly 50% retail and 40% telco. So most of the retail, yes. Yeah, I see. You also recently launched a youth phone targeting a completely new segment for you. Can you say how has the initial response been from both retailers to sell it, but also consumers, and what do you see there for 2026? I think it's a category we have very high expectation for. It's still very early day, as we mentioned on our capital market day. Our next product will be available in the market from January. The smartphone we have had for a couple of months, I would say it's going quite well, but I think 2026 will really be almost like a game changer for that whole category.
And it's really a lot driven from the political conversation and the demand from the parent. And we always know when it's a lot of media attention, when there comes a lot of political demands. Eventually the retailers, the telco, the buyers would have to have it in their store. So we are now really doing two things in parallel. One is to kind of make sure that we are the one that have the strongest product portfolio in that category. And we are also doing a lot of work to really promote this category. And we believe coming into 2026, there will be an EU regulation in order to avoid having kids under the age of 15 to have access to product with social media and so forth. And there will be a lot of regulation coming into the market.
As far as we know, we by far are the one with the leading products and services in the category.
Very exciting, very exciting. Finally, you've announced that you'll be looking at an uplisting. Can you say, are you exploring all markets? Are you considering both, say, Oslo Børs, but also Stockholm or other places? Can you give some comment on that?
Definitely, I can provide some comment, but the key thing is that we will now, in detail, do a very good assessment, company and the board. It was important for us to state to the market that we will now start that process with a goal to have come to a conclusion within the next 12 months. It's natural for us to explore both uplisting on Oslo in Norway, but also, of course, include Sweden as part of that proposition and even beyond.
But it's all about for us finding the right marketplace to maximize shareholder value, but also to make sure that that gives us the right tools and foundation to continue to grow the company.
I see, I see. And with that, thank you very much for taking the time to present to us today, Sten. And thank you to everyone who listened in.
Thank you.