Welcome to the Enea Q4 presentation for 2025. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the CEO, Teemu Salmi, and CFO, Ulf Stigberg. Please go ahead.
Thank you, and good morning to everyone. This is Teemu Salmi, CEO of Enea speaking, here today to take us through the Q4 result in the next coming 30-45 minutes. Our agenda will be very much similar to the previous reports that we have made. We will have a short introduction of some highlights in quarter four, and then we will dive deeper into our financial results, and we will also end up with a way forward, an outlook for the year and the years to come. Let's get going with a bit of market and business development highlights from the quarter.
Of course, I think we all see what's happening on the geopolitical scene, and that the tensions and the development there are driving the demand for secure and controlled national communication solutions. And we see also a more nationalistic approach in sovereignty and when it comes to handling data, which is actually playing us well into our hands in Enea. Our solutions is definitely supporting nations, state, states, and other governmental institutes, as well as telco operators to up their security posture. We have had a tough year in 2025 with the FX. Swedish krona has strengthened almost 20% towards the US dollar in the last 12 months. And it's 15 years since that happened last time in 2010, so it's nothing that happens every day.
Obviously, having a majority of our net sales in U.S. dollars, it impacts our reported results, which we will come back to later on in the presentation today. However, our underlying market development remains positive, and we actually have also good pipeline for the future in building. If we look at the business side, like I said, our underlying business development remains positive across both our focus areas, security and networks, and in constant currency, both of them are actually growing in the quarter.
And our core offerings continue to develop very well, in particular, traffic management and our deep packet inspection, where we've had almost 20% growth in the deep packet inspection and over 30% growth in traffic management, which is positioning us super well for the future and to the continued growth that we anticipate accelerating now moving ahead. Another thing that we really see taking off now is that our government customer base is increasing. We have announced 3 deals only in the end of the previous year, in 2025, and we also have good momentum there.
We have other opportunities in the pipe, as well in that segment, which is very good for us because it's gonna diversify our customer base for Enea, that today is quite heavily depending on, on, CSP, environment. So this is really, good for us. Last but not least, I also want to mention a couple of words about cyber. You know, we mentioned that cyber is something that is growing in the world, and unfortunately, we were also a victim in, quarter four for this, criminal, activity. However, we were able to contain and execute and handle, that cyber incident in a very good way, I should say. And today, it's handed over to authorities, for... and there's an ongoing criminal investigation, so I will not comment on that any further.
We have had no financial impact, and there's been no impact to our customers either from this incident. In the quarter, we have reported or signed 10 new customers, 5 in EMEA, 3 in North America, and 2 in Asia Pacific. You can also see here in the text box which solutions it's all about. It's about our growth products, traffic management, our ixEngine, our DPI solution, and our firewalls. So that's good. Great development for us, and that momentum will accelerate in 2026. Moving on to key numbers for quarter four, we report net sales of SEK 239 million, which is a reported decrease of 5% from Q4 last year, but it's a growth of 1% in constant currency.
So the FX is still hitting us bad, and quarter one will still be, comparability-wise, a very tough quarter for us because quarter one in 2025 was still a quite strong quarter for the US dollar, and we see that the US dollar is continuing to weaken against the Swedish krona now in the beginning of this year. Something that we are very proud of, and I am proud of, is how we are working with our profitability. We are reporting the highest quarter four profitability in 4 years, with an adjusted EBITDA margin of 40%. Obviously, that is good and paying us in favor when it comes to future investments now when we're gonna accelerate, and put our new strategy into motion. And I will come back to that on...
already in the next slide and talk about what we have done and what we anticipate to do in order to accelerate our growth in 2026. Earnings per share SEK 2.21 in the quarter, and operating cash flow SEK 45 million. And of course, we continue to invest in R&D, and R&D for us is the key and critical engine to make sure that we continue to stay as relevant as we are today for our customers and for our future customers as well. On the full year, we report net sales of SEK 889 million, which represents a 2% drop in reported numbers, but a 2% growth in constant currency. Our margin is on the same level as last year.
Our adjusted margin ends up at 33%, and operating cash flow of SEK 107 million. We're gonna dive deeper into these numbers in the section with Ulf a little bit later on as well. Also, a couple of comments on the margin maybe there. In the quarter, we had a good business mix. We had proportionally sold more licenses in quarter four. And also a bit of tailwind from the FX as well, because we have a lot of our cost in EUR, so helping us to achieve that good profitability. And of course, that higher license sell that we had in Q4 will eventually also turn into support and maintenance, and professional services revenues in the coming years as well. Right, let's take a couple of words about our strategy.
We launched our strategy in Q4 as well, which is basically built on three pillars: a market acceleration, vertical expansion, and offering evolution. In short, we can say that market acceleration is about investing in our sales and ensuring that we penetrate the markets where we think that we have a good potential to win and to accelerate our growth. We have decided to invest in Latin America in selling our telco portfolio there. We have already good presence in Latin America with parts of our portfolio with our firewalls portfolio, and we need to leverage that also to sell the rest of our portfolio. So do some cross-selling in Latin America.
North America is one of our strongest regions, and there's still more to do in North America, so we're gonna double down on North America, invest there as well. And then in Asia Pacific, we have good momentum, both with our telco portfolio and our embedded security portfolio, and also the government sector is developing nicely there. So we want to invest in order to grow faster in Asia Pacific as well. In the vertical expansion, it's more like broadening our customer base. How can we take our existing offerings and solutions and sell that more wider? So obviously mentioned already several times, but one vertical that is super relevant, given also this time of the world with all the geopolitical development and tensions, the government sector is investing heavily.
National security is pouring money into building up and maintaining sovereignty around the world, and we will, of course, want to be part of that journey with the good solutions and offerings we have in that sector. So, we are investing in both our selling our traffic management and our embedded security solutions into the government sector. And I'm gonna come back just shortly to talk a little bit about some of the recent wins we've had in Q4, showing that we are already doing this and that we are already building on this relevance for the future. Last but not least, there is also a Tier 2 or a mobile virtual network operator segment that is very important for us.
So, we will also make sure that we target that customer segment with our solutions, and we are developing our offerings, for more SaaS-ready, business model, addressing that customer base as well. And then in the offering evolution, finally, it's all about securing that we stay ahead of the curve and that we stay leading in the world like we are today. So that's more about building and developing our current offering and also looking at what potentially could be complementing our current portfolio, looking outside of Enea as well. So what have we done so far? In the market acceleration, we are building our sales organization that is much more customer-centric than a product-centric organization. I have recruited already a Chief Commercial Officer that will start now in quarter one.
Unfortunately, I can't name that individual yet because of confidentiality, but that will be communicated shortly, I hope. This will accelerate our investments in sales and making sure that we push the needle in bringing our offerings to the market. And then also strengthening the sales organization by simply employing more salespeople in those dimensions that I showed on the previous slide as well. We will do this in a controlled manner, of course. We will now start investing where we already see traction in order to make sure that we also secure that growing business that lies ahead of us. In the vertical expansion, like I said, already in quarter four, we have communicated some wins.
We have communicated two government wins, one in Asia Pacific and one in Africa, during fourth quarter, where we have sold our DPI solution to one government and our telecom and security offering, including also DPI, to an African government. Basically, this helps and ensures these governments and nations and countries to stay on top of the security posture by getting full transparency of the network communication going in and out of the country. And there we can help. We have world-leading solutions for doing that, and this is a proof point of that, that journey that we're starting into growing into the government sector is real, it's happening, and I see in front of me that that will accelerate as we move ahead. Good. On the offering evolution, there's nothing new there yet.
I mean, we launched a strategy in the fourth quarter. There's many things that we're planning to do. We have, we're investing quite a lot in AI, and I'm gonna come back to that, a bit later on to tell you a little bit what we've done in AI. We are also repackaging, some of our, offerings, like our traffic management and our firewalls, to become a as-a-service solution, so we can target Tier 2 operators that necessarily don't need as much of configuration when deploying our solutions as the Tier 1, CSPs needs. So we are also repackaging our offerings to, to fit another, tier, another customer base, which I think is good for also accelerating the growth of our, our predominantly our firewall business and our traffic management business. More to come here later on in the year.
Some highlights I've already mentioned, some of these, so I will not repeat them. Excuse me. Maybe a couple of additions. We have in North America during the quarter also secured a customer, TextNow, which is an operator, a CSP in North America that predominantly competes with free texting and is now also going into the space of free calling. They have chosen our firewall solution to actually deploy that in their operations, and we're very proud to make sure that we continue to show in North America as well as globally, that our firewall products are super relevant for the future. We communicated late in December a prolonged partnership with a European Tier 1 operator for a cloud-native access control solution.
This partnership is securing our cooperation for the next coming seven years, and we come from a long partnership already, shows just the relevance of what we're doing together and prolonging this for the next seven years to come. Coming back to what I spoke about AI a couple of minutes ago, what we actually are doing, we are not talking about AI as a hype. We actually have AI as part of our solutions today, and we are continuing to deploy AI, AI-based software in our offerings. Here are a couple of examples that I would like to highlight for you. Starting from the left with our messaging firewall. For our CPaaS customers, when they are sending messages, of course, messages have different priority. One example being, of course, multi-factor authentication.
Passwords needs to be delivered immediately in order for end users and consumers to be able to sign in whatever they are signing into. While maybe commercials can be sent, you know, throughout a certain time span. And of course, the price for sending these kind of messages is different, and we can help our customers optimize their revenue base and their cost base by with our AI solution, defining when and how these messages should be sent based on the price pattern that is available. For the traffic management solution, we are working with a mobile operator in Europe, where we are looking at, with the help of AI, how we can predict traffic congestion in the network. And also, well, of course, secure that our customer get the best- delivers the best quality of service to the end users.
Part of this solution, we also have an AI solution that optimize video content, so you always have the best end-user quality of service when streaming video through the mobile networks. Last but not least, our Qosmos ixEngine DPI solution, together with a mobile operator in South Africa, we are classifying the traffic. We are also able, with AI now, to classify encrypted traffic, which makes our solution future-proof to a certain extent. We are not yet able to classify 100% of encrypted traffic, but a relatively high percentage point of traffic can already now be classified, even though it's encrypted.
So this, we are testing with a mobile operator in South Africa right now, and we are hoping to be able to scale this very shortly as well. Let's see here now what happened here. Okay, then we continue to my last and final slide before I will hand over to Ulf. Of course, we continue to drive the thought leaderships across our ecosystems. We are very visible. We are invited to speak in different conferences, and we go. But this quarter, I wanted to highlight some of the recognition our products has been getting out in the world. Excuse me. If we start from the left, we have the Kaleido Intelligence award that we won.
Kaleido Intelligence is a respected independent research and advisory firm specializing in telecoms, roaming, and digital infrastructure. Enea, we were recognized as champion vendor, which is the highest vendor category, in this award for our signaling and security firewall capabilities, and we are super proud of that. We were acknowledged for our leadership in delivering intelligence-driven signaling security in all spectrums of mobile networks. Super good, very nice, and just showing how relevant our firewalls actually are. The second prize in the middle is from Juniper Research, where we've been winning the platinum category, which is the highest category.
This category highlights solutions that use advanced analytics and AI for image detection, and our messaging firewall solution was recognized for our restricted image detection, which uses AI to detect images that violate industry guidelines and best practices. So basically, we are able to review and understand what kind of image is a part of a message before it's sent, and then block it if it contains content that is, you know, abusive or violating whatever rules that have been set up. Last but not least, we have the Fast Mode award, where we, in the category of video experience, we have been winning with our solution Traffic Management. Fast Mode is a leading industry platform that analyzes and recognizes innovation and performance across telco, cloud, and digital infrastructure.
And we were recognized as the video experience leader for traffic management, as I said, and it focuses on that our solution, how we enhance our video quality by intelligently managing network traffic to ensure consistent, high quality user experience. We are very proud and happy for these wins, and it just shows once again that our solutions are very relevant, good, and future-proof, building the way for future growth for Enea. With that, I would like to hand over to Ulf to take us through some of the financials. Ulf, please.
Thank you, Teemu. Let's see here. Let's see here. So we are reporting a 5% decline in the quarter, but in fixed currency, we report a 1% growth. You can see the seasonal variations between the quarters during the year. This is typical that we have a strong quarter four, but this year we didn't reach the quarter four for previous year in reported figures. For the full year, a decline of 2%, but in fixed currency, 2% growth. In the quarter, we are proud to present a report, the 40% adjusted EBITDA margin, which is highest in many years.
We can see also that compared to the previous quarter last year, or quarter four last year, we report a SEK 7 million increase in absolute figures. Reaching this EBITDA level is, of course, a combination of sales and cost, but on the cost side, we have stable cost development and also we have had some impact from FX development on the positive side for the result. We also proudly report a 21% EBIT margin for the quarter, and reaching SEK 48.9 million in Q4, compared to SEK 45 million in quarter four last year.
This translates down to earnings per share in 2.21 for the quarter, compared to 4.7 quarter four for 2024. Looking into the revenue split within the different product areas, in security solutions, we can see a strong sales of license for the quarter. Professional services and support and maintenance are quite stable, but the main increase has been related to more license deals in the end of the year. Similar pattern actually within network solutions, Q4 this or 2025 was higher than Q4 2024 in license sales and professional services and support maintenance are quite stable.
Although we had a step down in support maintenance with some contract terminations in 2024, which leaves us on a little bit lower level in 2025 going forward. However, based on that, we are now also signing new license deals. We will expect a good development of support maintenance contracts going forward. Looking at the product areas, the development between the years, we can see a decline in security and also in networks. But in fixed currency, we report a +2% growth for security area and +1% within networks areas. Operating systems are declining at 3%, but this was actually a lower decline than expected, so we're happy to report that. And overall, a +1% growth in fixed currency.
The same analysis over the year, we'll see a 4% decline in security areas, but a flat development in fixed currency. With the networks, we see a flat development in reported net sales, but an increase or a growth of 5% for the networks area in fixed currency. One item that has been on the board this year is the development of the financial net, and for this quarter, we can report less exposure in financial net. The figure for quarter four 2025 is the currency net of SEK -2.6. In the graph to the right, you can see the development of the US dollar compared to the Swedish krona.
In quarter four last year, we had a quite big increase of the dollar rate, which left us with a quite positive currency net for that quarter. Now we have worked with our balance sheet and reduced our exposure, so these swings will be less or limited in the future. In the cash flow analysis, we can also see the effects here on the financial net. In quarter four this year, we have SEK -6, and quarter four last year, we had SEK +41. That gives quite a big impact on the cash flow. However, we want to reduce these swings, and that's what we have done now.
Compared to quarter four last year, we had amortization of our term loan of EUR 50 million, so that figure is higher than normal. But for quarter four, 2025, we report a total net cash flow of SEK +10 million. Our net debt is SEK 208 million, and our balance sheet is strong in terms of capitalization. We have a headroom for leverage going forward, based on the stable capital situation. Finally, in the quarter, we bought back 166,000 shares to a value of SEK 11.8 million. This program continues until the annual general meeting in May 2026.
Good. Thank you, Ulf. Before questions, we will round off a little bit with the key takeaways and guidelines. Some key takeaways from the fourth quarter. Like I said, we have a very strong profitability, building for the future, best quarter four in 4 years, and EBITDA margin of 40%. In constant currency, growth continues in networks and security, 1% respectively 2% in constant currency, and we intend to accelerate this growth in the year. We have good momentum in our government business. Like I said, two strategic customers signed in quarter four, and I hope more to come in the coming periods. And of course, on the negative side, our headwind in FX continues, which has been putting pressure on our reporting numbers in 2025.
Like I said in the beginning of the call as well, I think first quarter of 2026 will still be comparability-wise quite a tough quarter, given where the US dollar was standing in the first quarter in 2025. Then we should see, starting quarter 2, we should see improved comparability numbers year-over-year, unless, of course, the US dollar continues to drop compared to the Swedish krona now in the beginning of 2026. On the short-term outlook, market remains stable to positive. I think our pipeline is fairly good, and we have a relevant, highly relevant portfolio for the markets and segments we're serving.
The diversification that is now starting for our customer base is great and building for the long-term development of Enea, and of course, gives us also access to new and bigger revenue pools as well. So this is good for continued business development for us. And one of those pools is the government sector, which is growing well, and we will continue to focus on that heavily in 2026 and the years to come. And then, of course, the FX headwind, like I said, in quarter one will put pressure on us comparability-wise still. So that's just a fact that we know, given where the US dollar stands now and where the US dollar was in quarter one in 2025.
So our guidance for 2026 is a single-digit growth and an adjusted EBITDA over 30%. We will make some investments in 2026. That is then, of course, the starting of the acceleration of our growth, to be able to then meet our long-term financial ambition, which we presented during fourth quarter last year. And that is to have an average growth over 10% on an annual base, throughout the full period of 2026 to 2028. And you can already now see that it's not gonna be a linear growth, because we are saying that our short-term outlook is single-digit growth for this year. But we stay firm, and we believe strongly that this is something we can make in the next three years to come.
We're also saying that our profitability at the end of the period, when we exit 2028, we will have an EBITDA over and above 35%. This is our long-term guidance that we keep from our strategy that we communicated in quarter four. With that, 30 minutes, as promised, or 31 minutes, I will then actually open up for questions and answers. Operator?
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.
Right. We have some written questions here. Let's take them in order. We have a question from Mathias: Why did the order bonanza in quarter four not translate into higher growth? Well, I mean, the business mix that we're having. I think that we have our normal business, and we had some good wins at the end of the quarter, right? I think that it's paving the way for the future, but I mean it is the total business mix that gives us the result where we're standing today. We have another question: How come there is no growth in Q4 despite the large announced contracts? So, that's the same question as we had before. Can you comment on the decline in operating cash flow before changes in working capital? Ulf?
Yeah, partly, that was explained by the financial... The big, big swings in financial net. We reported a positive SEK 41 million in financial net in quarter four 2024, and now in 2025, we have SEK -6 million. And that relates both to our balance sheet composition, but also to the development of the US dollar. But during the year, we have reduced the exposure, so these swings will be less. But just quarter by quarter, we see a big swing here.
Thank you, Ulf. And then we have a couple of questions here from Rasmus. Growth constraints: What is the number one restraining factor in your growth today? Is it driven by market dynamics or the current market cycle? Well, I think that there's a couple of things that the... We are now restructuring and reorganizing a little bit how we do our sales, like I said in the beginning. We'll be much more customer-centric, and we will also be selling a broader portfolio to our customers, which we haven't maybe done in the past. And we are also now getting a more focused setup on our sales. I think that there's a lot we can do within our sales.
We have a great sales force, but we just need to focus it in a bit of a different way. The market dynamics actually are positive, so I think that, you know, and the development, even though it comes late in the year and in 2025, I think the momentum we have to diversify our business is good, right? So, that's also answering the second question, and how confident are we that we can grow in 2026? Well, we are fairly confident, given where we stand and what we see in the dialogue with our existing customers and with our new customers, and we look at our pipe. So, the investments we are doing, they're not gonna pay off immediately.
We have quite long sales cycles, but we will eventually also see good results from the investments that we are making, both in sales and product development. Ulf, the last question is for you. Working capital relative to sales seems to have been growing for several years. Is there any specific within this that is causing the increase?
Our business mix and, you know, the deal mix, customer base mix is, we have increased development in areas in the world with a little bit lower or longer payment patterns. And, I think that's one explanation why we now see a slight increase in the working capital.
Mm-hmm.
But that's something we are working on, and take the challenge and solve the problems with the customers, of course.
I think one comment to that, if we look at Q4 isolated, actually, our working capital is declining year-over-year, quarter four.
Mm-hmm.
Right? So we are on top of it. We are not happy with it, and we, of course, are actively working with getting it down. You mentioned good pipeline and better billing going forward. Can you elaborate on the better billing? What do you mean, better billing? Sorry, I cannot recall I said better billing, but the good pipeline I can comment. I mean, we have a solid pipeline in both customer segment, or both, in all customer segments, I should say, where we are working. We've had some push outs of some deals that we've been working on, and not necessarily saying that we are losing them or we have lost them, but our customers are taking a bit longer time to decide.
We are positively looking at materializing these deals in the coming quarter. Adding to that, fairly stable and good pipeline gives me confidence that we will be able to turn this around into growth numbers. Also, hopefully in reported numbers. Obviously, FX is nothing we can do anything about, but that is definitely our ambition, yes. Then the question in Swedish, I will translate it into English. "What can one expect when it comes to growth within security in 2026 and up till 2029?" We are not guiding on the segments or focus area, security and networks in our guidance. It's the business mix in totality that will deliver the growth that we are seeing.
But of course, personally, I see good momentum both in networks and security, and, and we also seen that in the recent quarters, that even though we've had a, a different business mix in quarter four, that they have been growing steadily previously, and, and that's what I perceive going forward as well. "Your SG&A is down quite a lot. Is that really sustainable? Given US dollar weakness, will you be able to increase prices over time?" Ulf, do you wanna comment on SG&A?
Well, this increased prices over time, I think. It's a development and our product mix and product capabilities and features going forward. We see a possibility to price have a good price development with the customer.
Yeah, and it's a competitive market, right? I mean, we also are market pricing. We are unfortunately not alone, so, so of course, competitive pricing. But we, of course, like to stay ahead of that when it comes to feature development, our investments in AI, and all of that is gonna make our product stand out and be better than competition, where we also are able to price that. So of course, we're investing quite a lot in R&D, as you can see, and that in itself is gonna make sure that we have, a headroom and a, and headwind when it comes to... Sorry, tailwind when it comes to how to price our, products, compared to competition. Where are we there? "Does your growth guidance for 2026 include FX, or if it, if..." No, it includes FX. It includes FX.
So our guidance is in reported numbers-
Mm
... if I put it like that, so, it includes FX. "Are you hearing that customers are shying away from U.S. and Israeli competitors, i.e., are you benefiting as a Swedish company from..." Huh, very good question. And, even though it's bit on early days to say that, but at least the dialogues I have with our customers, I definitely see this. Yes, we are very, we are well positioned to be a Swedish company in this geopolitical turmoil that is seen. Sweden, as a nation, as a country, still seen, I wouldn't say as neutral, but at least as a trusted partner, someone you can trust in and have a long-term engagement with. So yes, I hear this discussion more and more.
Another topic I hear, especially in Europe, is about data sovereignty and how can we rely. I mean, a lot of European companies, of course, are relying on U.S.-based cloud providers for ensuring their operation works. And of course, that question is sparking also now a lot of dialogue about how can we trust our current allies or our previous allies for the future, in order to secure that there are no problems or issues with services that are being delivered today. So I don't know if it's good or bad, but the nationalistic view and world getting smaller again is a fact, and we of course have to navigate that and play our cards well there. And I think that we are super well-positioned in that dialogue as a company.
Those were the questions written. Do we have any more? If not, then I'd like to thank you all for listening, and I will hand over the call back to the operator. Thank you for now, and have a good day ahead.
Thank you.