Hello, and welcome to the presentation of Adtraction's First Quarter Results. Today's presenters are Andreas Hagström, CFO, and myself, Simon Gustafson, CEO. If you have any questions, please post them online, and Andreas and I will be happy to answer the questions after today's presentation. Let's look at the short story of the first quarter. We are happy to report that growth continues in the first quarter. Sales grows by close to 12%, so does gross profit. We have both organic and acquired growth, and of course, Affiliate Future helps drive the acquired growth. Both finance and e-commerce are growing, which is, of course, very satisfying. We have said this many times before, when gross profit grows, we expect EBITDA to grow even more thanks to our operating leverage, and this happens again in the first quarter. EBITDA grows by close to 30%.
Cash flow was also reasonably strong for a first quarter. When it comes to cash flow, I think it's important to look at a longer period, and if you do that, it will be very clear that we have done a good job in terms of generating cash at Adtraction. We report something called other, and if you look at that, you may be tempted to think that Bundler is growing by 274%. Actually, Bundler is growing by more, which I will come back to in a minute because there's some other things in that other reporting, which is small and not growing. The important thing here is Bundler.
We don't see the same picture across all markets, so I thought it'd be useful to give sort of a macro view of what's going on in the different market, and I've looked at three different categories here, good growth, and not growth or negative growth. By good growth, we mean that we are reaching our goal or very close to our growth target of 20%. That happens in the established markets of Sweden and Finland, and also that happens in our European markets, Italy, Poland, Germany, and the U.K. We have growth, which means growth in excess of 0% in Denmark, France, the Netherlands, and Norway. Then we have negative growth in Switzerland and Spain. In Spain, it's the same story as before. Markets are changing in the finance vertical, and we are working to adapt to that.
Eventually, we will, but we're still seeing negative growth in the finance vertical. On the other hand, we have very strong momentum in the e-commerce vertical in Spain, so things are looking good there. In Switzerland, we see negative growth and have done that for a couple of months, and the reason here is that a couple of traffic sources are not what they used to be, and our response to that is to broaden our traffic acquisition and try to add more partners. Eventually, we will see a recovery also in Switzerland. The finance markets are very different in different countries. We see positive growth in many markets. In Sweden, Finland, Germany, we see very strong growth, and then we also have growth in Poland, Italy, and the Netherlands. On the other hand, we are not growing. We are seeing negative growth in Denmark, Norway, Spain, and France.
I would say that in Denmark, Norway, and Spain, we have a little bit of headwind in terms of market, and in France, we're still trying to establish our position in that vertical. Let's talk about Bundler. There's a little graph down on the right here indicating that Bundler actually grew by 350% in the quarter. That's pretty good. Obviously, Bundler is still small, but Bundler has a very good momentum. They've made great integrations, and they have attractive merchants and attractive resellers. At Adtraction, we're very excited about Bundler, and we have decided to slightly increase our ownership in Bundler. We can do that because we have an option to acquire shares under the terms of the shareholders agreement. We will present more details about that transaction a little bit later on. Other stuff is happening.
We have a board member called, or had a board member called Arash Hakimi at Adtraction. He's been with us for a year. He's been a much appreciated board member, but at the Annual General Meeting, which we had earlier this week, he declined to be reelected. The reason is that he is joining Bundler and will work with business development. What's happened here is that Arash has been very interested in our business throughout this year, and of course, he's looked at Bundler for a long time and is very excited about the opportunities. At Adtraction, you cannot both have an operating role and be a board member. Arash think it's more important to work at Bundler than it is to be a director. That's that about Bundler. Again, we're very excited about this.
Now you're getting a little bit of sense for the growth rates that we're talking about here. We expect to talk more about Bundler later this year. I will also talk about some other things here that are important to us. We are currently going through some organizational changes at Adtraction. In practice, that means that there are redundancies, and there are good people involved, and I'm not really in a position to talk too much about this at this stage because this is an ongoing process. What I would like to do is refer to the comments in the report, and then we will get back to describe the situation more in detail later on. On a more positive note, the Fair Tracking project is working out as we expected. Obviously, this is good for partners, but it turns out that it's also good for brands.
In quite a few markets, we've actually seen growth as a result of Fair Tracking initiatives. Fair Tracking is contributing to growth, which is what we wanted all along. Because Arash is leaving the board of directors, we need to find one or two new directors. We're not in a hurry to do this. We have a well-functioning board of directors, but we need probably to be more than three people over time. This is another project that we will look at. The shareholders decided to pay the dividend according to the proposal by the board of directors. The first tranche of the dividend will be paid on Monday. That's SEK 1.1 per share, and the share has already traded ex, I think that was on April 21st.
We will have the same set as we did last year, and pay the second part of the dividend in October. I will now say something about AI, and I think the reason that I want to comment here is that there's a lot of things happening, and we see a bigger impact on our organization and the way that we work than we have before. I just wanted to comment a little bit on that. Of course, the people most affected by AI, in general, is the development team. They're really using a lot of these tools, and especially in the last 3- 4 months, an increase in the share of source code that's AI-generated. We're actually talking about 90%-99% for essentially all new code.
This means that each developer can be much more efficient and produce much more code, so we expect to be more productive going forward. The other thing that we're excited about is business intelligence. Maybe a year ago or so, we started working with a MCP service, and we tried to extract data from the platform in order to find useful reports for our account managers. To be honest, that didn't work out so well. We had a lot of hallucinations. Now we're trying a slightly different setup, and we're getting very good results. We see that account managers can really get useful data from our platform using this tool, and they can now pull reports that were simply too difficult to pull a couple of months back. We haven't scaled this yet.
We're still in the testing phase, but we're very excited and encouraged by the results so far. Finally, we're also using agents. I will not dig too deep into this. What I will say is that there are a number of repetitive, well-defined tasks that can easily be performed by agents, and we're actually deploying this. This is not only for the tech team. This is actually that we're doing in our CFO office, and whenever there's a chance to do something like that, we will of course, do it. I don't want to say that this is a big thing at Adtraction, but we are excited about the opportunities, and we're clearly finding these agents useful. Finally, on the AI side, I want to say something about traffic.
There's obviously some uncertainty in our industry and traffic acquisition in general about what will happen with the AI tools. Here's a few observations that I would like to share. First of all, we have not seen a drop in traffic as a result of the emergence of the LLMs, which I think is encouraging. I also think it's very encouraging that there are actually quite a few options if you want to work with an LLM. We have OpenAI, we have Anthropic, we have Google, we have xAI, Meta, and we have a couple of Chinese models. There's a lot of competition going on here. There's no doubt that these tools over time will be an attractive place to buy ads. That's what we think anyway.
I also think that our partners will be very skilled at acquiring traffic from these engines and to our partners. Adtraction is a monetization engine, and we still have an important role to play in that regard. I also think it's very important that brands try to diversify their traffic, and then it's good to have different models to choose from, and it's still great to work with partner marketing in order to diversify your traffic acquisition. I think brands are more and more aware of this, actually. It's a message that we talk about all the time, and I think that most brands believe that it's not been a good situation with the monopolies in search and social media. That's that about AI. Let's go back to sort of our core business here and look at the verticals.
Finance, we had huge years back in 2023, and then we've been struggling a little bit. What we can see now in this quarter is year-on-year growth versus the first quarter 2025, but we can also see sequential growth. For e-commerce, we see year-on-year growth. Sorry, I'm on the wrong picture here. Let's go back here. For e-commerce, we have the best Q1 ever, and obviously, that means that we see year-on-year growth. It's also encouraging to see that we see growth across most markets. Let us take a look at the combined picture, and we get the same impression here, that this is actually our best Q1 ever. To me, this is very encouraging.
To me, it's a testament that our business model is strong and works, and that we provide value to partners and brands, and that there truly is an opportunity to grow here, and that there's an important place for Adtraction and other partner marketing companies in the value chain. All right, that's that. Sorry, one more picture. This is an illustration of our cost base. We like to say that our cost is fairly stable. If you look at this cost base in the last couple of years, I think stable still is a good word to describe it. With that said, costs have increased a little bit in the last few quarters, and of course there's going to be some general cost increases, and there's going to be some more team members, and that's going to impact costs.
That's simply going to happen, but in general, I think it's fair to say that over time it's fairly stable. All right. We like to talk about growth, profitability, and cash flow. For the past eight quarters or so, this graph has been fairly depressing. We want to be a growth company. In fact, we have not grown for many quarters in 2024 and 2025. Finally now in Q4 and Q1, we actually see growth, which is encouraging. Obviously, we're not happy here. We want to keep growing, and we want to keep building gross profit. EBITDA margin, please remember here, I think that most people listening to this know that EBITDA in relation to sales will be low. EBITDA in relation to gross profit, which is the money that belongs to Adtraction, will always look better. But let's stick to the EBITDA to sales margin here.
We can see a slight increase in Q1 versus Q1 2025 and 2024 and 2023. Something good is happening here from our point of view, and I would like to attribute this to some sort of operating leverage here. With that, I will hand over to Andreas, who will do his part.
Thank you. We start by looking at net sales. We have SEK 314.7 million in the quarter. That's a 12% growth. With fixed exchange rates, we would have seen a higher growth of 15%. Looking at gross profit, SEK 60.2 million, also that 12% growth. The same goes for exchange rates here. We also add SEK 3 million in gross profit from the acquisition of Affiliate Future. If we were to break down the quarter, we can see a positive trend as well, and we can see that March is also the strongest month in the quarter. EBITDA, SEK 13.5 million, and that is a 28% increase. Like Simon mentioned, we have a good operating leverage, and we also add SEK 1.5 million to EBITDA from the acquisition. We also mentioned that we can see a slight increase in cost base, and that is more of a general increase.
There's also a one-off expected to be seen in the second quarter that Simon mentioned, that you can read more about in the report. The adjusted net result per share is at 0.66 SEK, and that is a 36% increase. Looking at the verticals and starting with e-commerce, we have 36.6% organic growth. Bear in mind here also that currency exchange rates are working against us and that the underlying growth is actually stronger than this organically. Good to see with the strong ending of the quarter that most markets are now also seeing growth in the e-commerce vertical, and simultaneously, we also have growth on all the important Nordic markets here. As for finance, we have SEK 22.1 million in gross profit. That is a 6% growth. Simon mentioned that there is a split picture between markets.
We grow on six markets, and we have seen a very strong delivery from the Swedish market, three good months, and an exceptionally strong delivery from the Italian and German market of growth rates over 100%. The picture is still negative in Spain and in Norway. Geographies, starting with Nordics, SEK 44.2 million, that's a 10% growth. We grow on all markets. In Europe, SEK 16 million, that's a 19% growth. That is acquired growth as we've added SEK 3 million from Affiliate Future, and the organic growth is affected mainly by the Spanish and the-
-Swiss market here. We can still see a good performance from Italy and Germany, given the great performance in the finance vertical from them. As for operating cash flow of SEK 11.5 million, we have had no investing activities in the quarter, and we have paid a small dividend to minority shareholders in the finance activities of SEK 1.5 million, giving us a total cash flow of SEK 10 million and a very strong net cash position of SEK 133.7 million ending the quarter. I give the computer back to you.
To reiterate our goals a little bit, we are all about growth, profitability, and cash flows. We want to be a European network, and we want to be a leading consolidator. I said in the last call that we expected sort of a slower M&A market. I may be wrong about that. There has popped up some opportunities.
There are actually some processes going on, so we will see what happens to those. We've also said that we want to serve a wider range of clients. We put a lot of work into this, and this is mainly about being able to work with smaller clients and actually bigger clients. We will introduce a new pricing and service model in the second quarter, so stay tuned for that. Finally, I want to say something about what we expect going forward here. One thing that will happen is that the financial regulation in Sweden will be implemented, and again, I think the main thing here is that the Swedish government thinks that everyone who's close to a loan needs to be a bank. That includes brokers. The definition of a bank is that consumers should be able to deposit money there and borrow money.
Brokers are not doing this, but they still need the license, which means that they have to start doing that. This is very, very strange, all of it. I've been clear on that before, but here's my current take on that. A lot of these brokers will get licenses. Others will simply adapt their offering, and I think that the market in general will adapt and will probably continue to grow over time. We see that when there's a supply of credits and a demand for credits, the market has a tendency to fix that. That's the beauty of the market economy, in my opinion, and again, I think that the Swedish government has made a very poor regulatory work here. That doesn't matter.
It is what it is, and we will just accept that, and we will keep going, and I think that over time, we will have a good development for the reasons that I mentioned. All right. Then about the second quarter. What we said in the report and what I will reiterate now is that we've seen growth in line with the Q1 growth up until now, basically, up until today's date. That is some sort of indication of what's going on in the second quarter. That's the presentation, and let's see if we have any questions, and it turns out that we do have some questions, and let's look into that. Here's a very broad question, and that is what type of partners are growing, and what type of partners are shrinking?
I think a general answer here is that what we've seen for a while is that SEO partners are struggling in this AI environment because what is happening here is that Google is stealing their content, and they're presenting that in AI Overviews, and that means that you cannot rely on SEO to get traffic anymore. This is a very big trend, and I think that essentially all partners that have a sort of closer relationship with their users are benefiting from that and are also seeing growth. Having members is a good idea in this environment. I will just read the question here, and I'm not certain that I can answer everything, but I will read the questions and then we'll have a discussion around it. You mentioned no global decline in traffic from legitimate sources.
Can you share the year-on-year change in organic search traffic, especially to your finance vertical partners in Q1, and what share of those partners drive more than 50% of traffic from Google search? This is actually difficult for us to follow. Partners are under no obligation to share their traffic acquisition data with us. We don't expect them to do that, and they do not do that. It's quite clear that Google is by far the most important traffic source for most finance publishers, and that model actually is still working out. As a general comment, if Google is making money, which they are in the finance space, that model will for sure continue to work. We just expect that to continue. Here's a question on Klara Lån and the payment, just how should investors think about that?
Just as a reminder, and it's good that the person who asked this question reminds us because we didn't talk about that for a while. What has happened is that we have divested Klara Lån and the financing of that transaction was through a vendor note. To date, the buyer has only amortized SEK 1 million. We expect another amortization of around SEK 2 million-2.5 million, something like that, fairly soon. That is an ongoing thing. Klara Lån is a profitable company, and they are in a position both to pay interest and to pay amortization. Of course, there's been some uncertainty for Klara Lån with this new regulation, and they are now in a good position and have found a strategy for what we want to do going forward, is my understanding anyway. The important thing for Adtraction is that they will amortize on the vendor note.
How is your influencer project and the Salesforce project working out? When it comes to the influencer project, we are currently testing, and we're going to test slightly broader, actually starting basically now. I'm sure we will find some things that are not working out optimally, then we will fix that. A lot of things will happen in the next couple of months. I think a big thing here is that we want to be up and running properly with this at least before Q4, because Q4 is so important. We have a question about the Salesforce project. I'm happy that someone is asking about that. Here's the thing with Salesforce. Salesforce is a super important tool. Data is very important in order to follow up what activities work and what activities do not work. Salesforce is also important for us when it comes to international cooperation.
Obviously, this is not an easy project to launch. Our COO, Dominika Skretowska, has done an amazing job in launching this, and I think that we have made a lot of progress, and we have a buy-in from all country managers, and everyone is putting a lot of focus on this. We're not done, but we're making massive progress on this. What type of M&A objects are you mainly looking at now? Is it still non-network companies? Yeah. We've looked at a couple of those. We have not really pursued anything. They keep popping up. Some of them are interesting, some of them are less interesting. I think we've seen a few cases this year in the first quarter and the beginning of the second quarter. There are actually some network things going on also. It's actually both.
Here's a question: What measures have you taken in Spain to turn around the financial segment? I think as a broad comment here, what's going on in Spain is that people are working a lot with API connections rather than traditional tracking. I would say that Adtraction has a competitive offer there that we're trying to improve even more, and we expect to improve that this year. We will see if that is enough to turn things around. The Spanish team is working very hard to change things, and I think that they will eventually. Have you seen any new advertiser coming in or doubling up on affiliate marketing to want to increase AI visibility?
I think what's going on here is that the person who's asking this question has noted that it is helpful for brands to have visibility on partner pages in order to be seen in the AI models. I've talked about this before, and I think this still holds true. Whenever someone decides to start working with Adtraction, they do that for many reasons. They like the service levels, they like the fact that our partner portfolio is very broad and qualitative, but they also like the chance of getting some AI visibility. It's difficult to say that we're winning accounts because of the AI visibility thing, but it certainly helps. It certainly helps in the discussion, and it's still true. I don't know that it will be true forever, but it is for the time being.
You have previously mentioned that you are unprofitable in France and Italy. What is the current status on their performance? In France, losses are significantly lower, but we're still making losses. Remember, we've done some changes in France and actually, Julien Tinti who is Country Manager in Italy, has also taken over as Country Manager in France because he's doing such a good job in Italy. In Italy, we are close to profitability, but I don't know exactly. Do you remember that, Andreas?
We are at breakeven, but we're also adding to leverage growth.
Yeah. All right. I hope that was a question. Can you talk a bit about your strategy on securing bigger European customers across several markets? Yeah. This is obviously a super long-term project, and first of all, we think that it's necessary to be locally present in key markets in order to do a good job and have great relationships with partners in the key markets. This is something that we've consistently built for 10 or more years. The next thing is that we need to have a good model for working across markets and make sure that brands get the same service and can have the same expectations in all markets. We've actually recently deployed a new model for the international corporation, and we have a small international team working with that.
We have identified the key customers that we want to reach, and we have started working on that. The strategy is to use local connections to wherever the European market is the strongest. That's currently our strategy. My guess is that we will, over time, also build a European sales team, like an international sales team. There's a lot of work still to be done, but I think that we're making a little bit of progress every year. "Can you please remind us why it makes sense that Bundler is a part of Adtraction and why M&A in non-core business makes sense for us shareholders?" Well, M&A in non-core business in most cases probably does not make sense for shareholders or for Adtraction. When we do something that is non-core, it needs to be related to the core.
We need to somehow make an improvement for either partners or brands, or we will not make the transaction. If we can make life better for our customers and thereby actually support our core business, then it makes sense. It's a little bit difficult to perhaps explain that and understand that without pointing at what we've been looking at, and I guess I cannot really, for confidentiality reasons, talk too much about what we have looked at. I'm with you here, dear questioner, that we should 100% focus on our core business and whatever we do should, in one way or another, strengthen our core business.
I would like also to point out that we've done five M&A transactions, and all of them have been network businesses and all of them have involved the search for network effects, and we've also found network effects and synergies in all of those cases because the business has been moved to our platform. Why does it make sense that Bundler is a part of Adtraction? Well, here's what happened with Bundler. We were approached by the founders of Bundler. They saw a great opportunity to develop the Bundler concept. They saw that Adtraction had something that is relationships to merchants and resellers and technical knowhow. Initially, the idea was actually to have Bundler's business in Adtraction's platform. That was how we started that thing, and then Bundler would have been a little bit closer to our core.
It turned out that was not a good technical solution, so we changed that and developed our own platform because we were so excited about the project. The way that this makes sense for the shareholders and for Adtraction now is that we are still exposed to sort of a similar customer base. Above all, we see a potential to create great value here. "Can we get any color on how commission levels and conversions are trending? Are commission levels lower but conversions are growing, or what is the dynamic?" I'm going to be completely honest here. I didn't do any recent analysis on this. I would say that in general, we have seen a positive development for commissions. We have seen a positive development for commissions in both finance and e-commerce, actually.
My feeling is that we have the same development for conversions, but I'm not entirely sure on that. I would rather refrain from commenting more on that. A final question is about Bundler. How is Bundler helping the network? Well, again, in some cases, we work with the same customers and the same resellers. I would also like to talk about Adtraction Plus. Adtraction Plus is for exit traffic at brands. If you buy something at some brand, you will sometimes get a little pop-up which says, "Thank you for being a great customer, and here's a nice subscription offer for you." We're doing that with Bundler to a great extent. They have a product called Trippel, which I believe is Viaplay, Storytel, and Readly in a good bundle.
You should go there, trippel.se, get your own bundle, and I think that's a good illustration of how we can cooperate. I am not saying that Bundler is core business. I am saying that there are touchpoints in common, and that we see a good value potential, and that we have a very good founder team here. All right. We had very few questions on the financial development here. I guess that has been clear enough, Andreas. I think that we have answered all the questions. Thank you for your interest and see you again next time. Thank you very much.