Hello, and welcome to today's webcast where Albert Group will present its financial results for the third quarter of 2026. Joining us today are CEO Fredrik Bengtsson and CFO Erik Bergelin. At the end of the call, we will have a Q&A, so you are welcome to submit questions using the form located to the right of the webcast. With that said, I will hand it over to you, Fredrik and Erik. Please go ahead.
Thank you, and welcome to our financial presentation for the third quarter and first nine months of 2026. As usual, I am joined by our CFO, Erik Bergelin. I see our presentation. Okay, I will proceed. A year ago, we were cutting. This year, we have moved to investing, and the core is responding. If you remember one thing from today, make it this: our recurring revenue grew by SEK 8.4 million in one quarter to SEK 134 million. Part of that is the season, the summer campaign, and the start of the school year. But comparing like for like continuing operations, we are now only 2% below last year. Revenue is growing again, led by Albert Junior winning more families in more markets. We have chosen to invest. Investment means marketing costs up front, then a free trial, and then later revenue recognized month by month.
That shows in this year's EBITDA, and it is deliberate. I will show you where the money goes. We do it on our own cash with no debt. Every child can be good at maths. That belief founded Albert 11 years ago, and it is again our mission. In September, PISA showed how far the world is from it. One in three 15-year-olds does not reach the basic level in mathematical understanding, the lowest average ever measured. This is not just a Swedish problem, it is everywhere. Mathematics is the foundation for technological advance, developing AI, space engineering, and everything future. It is a competitive skill needed for any nation and any society. Governments will not spend less on this, but they will demand proof that what they buy actually works. This is where we stand apart, and where our position matters going forward.
Sumdog more than doubled the share of pupils with special needs reaching the expected standard that is independently verified. Albert Junior leads three Nordic markets in the school preparation home segment. AI makes content cheaper. What it cannot do is buy evidence, years of learning data, and the trust of schools and families. We have this, and we know how to engage people, especially children, in the learning process. No engagement, no learning. These are our moats, and AI makes them more valuable. Last year, we cut our cost base hard. Now, part of that goes back to work in three places, each one chosen because the payback is short, the risk is limited, but the upside is rewarding. Albert Junior, we know what new family is worth. We scale the marketing market by market only where the cohorts prove themselves. More families are joining, and they pay more.
Sumdog in Wales, we launched in Welsh in September. Going through the local authorities makes selling faster and cheaper. Five local authorities have signed framework agreements, and the first schools are now live. Our new AI venture, built on data we already own, and first sold to customers we already have. That is the fastest and the cheapest growth there is. We hold back on spend ahead of evidence, and we invest from our own cash. Two things happen at the same time. We get stronger where we already lead, and we open a door to something new. At home, Albert Junior leads the Nordics, and Sumdog is growing across the U.K. Swedish Film had a stable quarter, and the strategic review continues. The new venture is for children aged 7-12. It sees how a child thinks, not only what it answers.
A general AI provides the answer, but that is not how we learn. Instead, we use Socratic AI to ask the next question, learning by reasoning step by step. We have one engine that powers two channels. Families who outgrow Albert Junior can stay with us longer. We give teachers the superpower to see where the class is stuck, and the ability to send AI assistants to help every pupil with their individual challenges. It opens Nordic schools to us, where today we only sell to homes. It broadens the Sumdog offer to new schools, and it provides a new offer for the U.K. home segment. This is what we mean by a better way to learn. Not more screen time, better practice, one child at a time, improving learning outcomes. Why own Albert? Because we are now focused.
One subject, the one most children struggle with, and established brands that lead their markets. Because we pay for ourselves. Growth comes from our own cash, not from borrowing or raising new capital. Because we can prove that what we do works at the moment where buyers start demanding exactly that. This provides a pass through the gate of justifiable screen time in both schools and at home.
We have now moved into Q4, which is seasonally our strongest quarter, and we feel that we are building a strong and a viable foundation to journey into the future of maths learning. A year ago, we secured a company. Now we have swung from using cash to cover deficits in different parts of our group to instead put it to work in a stable growth initiative. Our CFO will now take you through the numbers, after which we will open up for questions.
Thank you, Fredrik. I will now go through our net revenue, EBITDA margin, as well as our cash flow and cash balance. Let's start with net revenue. As you can see, we present both total group and continuing operations to ensure clean comparability after divesting Strawbees and the liquidation of Holy Owly. For continuing operations, our core ongoing business net revenue reached SEK 36.7 million . That is up 1% year on year and our second consecutive quarter of sequential growth, up 5% from Q2. Total group revenue also landed at SEK 37.7 million as there were no discontinued operations during this quarter. What is especially encouraging is the underlying commercial traction. Invoice sales for continuing operations grew 3% year on year to SEK 34.6 million . This is our leading indicator. Annual recurring revenue or ARR grew SEK 8.4 million during the quarter to SEK 134 million .
That narrows the year on year ARR gap from -10% in Q2 to -2% today. These are clear signs that the top line has stabilized and is turning as we enter our strongest quarter. Turning to EBITDA. Continuing EBITDA was SEK +0.1 million . That is our second consecutive quarter of improvement from SEK -24.2 million in Q1 and SEK -1.6 million in Q2. Compared with SEK 3.8 million in Q3 last year, the difference is a deliberate balance between profitability and reinvestments. We scaled marketing for Albert Junior, where cohorts showed attractive returns. At the same time, we absorbed the commercial launch cost of Sumdog in Wales and the first investments in our new AI venture. The significantly lower cost base this year lets us fund these growth initiatives and still reach break even. If we then look at the corresponding margin development.
For continuing operations, the EBITDA margin improved from -13% in Q1 to -5% in Q2 and reached break even in Q3. Two things support this development. Gross margin remains stable at 73% in the quarter and 74% year to date. That reflects a strategic move to our recurring digital subscription profile. With a stable cost base, our current and future incremental revenue will heavily lift our EBITDA. Q4 is seasonal our strongest quarter, and the goal of positive group EBITDA for the full year still remains unchanged. Finally, turning to liquidity and cash. Operating cash flow for the third quarter was essentially zero, which brings our nine-month operating cash flow to SEK +8.1 million . We closed the quarter with SEK 48 million in cash and cash equivalents compared to SEK 49 million at the end of Q2. Two key takeaways. No bank debt.
We have no loans to credit institutions. Two, self-funded. Our development, including the new AI venture, is funded from our own balance sheet. To summarize, commercial momentum is improving with net revenue up year-on-year and ARR growing by SEK 8.4 million in the quarter. Our continuing operations reach break even while we funded our market expansion and product development. With SEK 48 million in cash, no bank debt, and a positive nine-month operating cash flow, our financial goal of positive EBITDA and cash flow for 2026 remains unchanged. Thank you for listening. Over to you, Fredrik.
Thank you. With that, we will open up for questions.
Thank you for that presentation. We will now open up for the Q&A session. As stated before, you are welcome to submit questions using the form located to the right of the webcast. The first question is Swedish Film review has been running four months. Do you have an update? If you have sold, would you consider returning capital to shareholders?
Well, the strategic review is ongoing. Swedish Film is a strong cash engine, so it is a very good holding for us. If any MAR development occurs, it will of course, be communicated accordingly. As for the rest, it is purely speculative and up to the board if and when and whatever happens. So I will probably not go into that. But the strategic review is currently ongoing, and we expect it to be, well, for another few months at least.
Yes. Q3 personnel costs were flat. How many people are on the AI team today, and what is the expected quarterly cost run rate through 2027?
We have not communicated any specifics on that project, besides from the fact that it is being funded with our own means, so it is visible and will continue to be visible in the numbers as a total. The costs are limited. We are very cautious with the cash we have and how we use it. It is limited so far, and it is budgeted for 2027. We expect revenues to come quite early as well as we approach our existing customer base. We have not communicated any detailed numbers, but it is a very cost-efficient investment for us.
Moving on. How much of the Q3 ARR growth came from Welsh framework agreements versus organic Albert Junior? When does business-to-business ARR turn positive year-over-year?
Right. Looking at Q3, the growth we had in ARR comes solely from the business-to-consumer segment. It is Albert Junior growth. In the business-to-business segment, we have still changes that are being done. We have markets that we are slowly exiting as the cost of having the required service level in those markets is quite high. Looking at Welsh specifics, we had the first. The launch was in September. We have not been in the market for very long, so of course, those numbers are extremely limited in what we can see at the moment. But we expect a positive return in 2027 on that. Given that it is B2B, those revenues are expected to be durable over time as well.
Yes. Do you still expect to deliver positive EBITDA and operating cash flow for the full year 2026, both at the group level and for continuing operations?
We have not changed our guidance, so it remains.
Business to business, Sumdog development in Scotland, is it mature or growing at this stage?
I don't have the insights into the specific markets in that level, but Sumdog is our stronghold. It is where we have been the longest, where we have the highest penetration. It is what we're trying to replicate in Wales with that launch. It is also a market where we have had a very positive proof from an independent study that we have followed up on the previous English one. So we expect the Scottish market to be fairly stable going forward as well. Competition in the U.K. is quite steep, but we feel that we have a very good position and very good possibility to gain momentum in the U.K. home market as a whole. That being said, we defend our positions where we have them, and we try to increase positions where we feel that our saturation level has more to give.
Yes. Finally, you plan to launch a new AI-powered learning platform in 2027. What level of investment will be required, and when do you expect the platform to make a meaningful contribution to revenue?
I think I was kind of answering that question partially before. Looking at the revenue, I think that is. If we decide to separate the revenue in the new AI venture and produce that as a standalone, I am not sure. We have not come to that yet. But we expect it to produce or contribute to results very fast. We see a very short ROI since we have the customer base in Albert Junior, which kind of ends at the age where this new AI venture starts. So we can move customers from Albert to the new venture, and those customers that we already paid for in marketing, that we can have more revenues from. Also in the Sumdog or U.K. market, we have a sales force operational throughout the U.K., and we give them more tools to sell, more platforms to help children.
That also benefits the schools as we have the Fluency platform today. We now expand that with the diagnostics and tutoring and the other things that is included in this platform on the same existing sales force. The student base there is much more aligned in age. So we expect to have upsell possibilities based on an existing cost base, which gives us a very fast return on investment.
Okay, that was the final question for today, so we will now conclude today's conference call. I would like to extend my sincere thanks to Fredrik and Erik for the presentation, as well as to everyone who submitted questions and joined today's webcast. I wish you all a pleasant day.
Thank you, Philip.