Welcome to the RugVista Q2 2026 conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key on their telephone keypad. I will hand the conference over to the speakers. CEO Ebba Ljungerud and CFO Joakim Tuvner, please go ahead.
Good morning, everyone, and welcome to our Q2 2026 earnings call. My name is Ebba Ljungerud, and I am CEO of RugVista, and I also have Joakim Tuvner with me, who is our CFO. Before we kick this off, I would like to, as per usual, point out that the images in this presentation come from one of our fall campaigns. This is a sneak peek that you're getting. The campaign is called Urban Reflections, and it has primarily handmade rugs in it. Very beautiful, I think. This one that you see in the image now is one of my favorites. Wool and viscose rug that I hope will be a top seller for us going forward. The structure is as we usually do it.
We start with a bit of a business update. Joakim will go more into the numbers. Of course, we finish with a Q&A. If we pop over to the business update. Very proud of this quarter, I have to say. Double-digit organic growth, and a lot tougher comparables than before. Net revenue was SEK 174 million compared to SEK 150.5 million last year. That is a 15.6% growth. Organic, it was almost the same, 15.8%. If we move over to the orders, they were 77,000 compared to 74,000 really last year. If you look here, you can see that represents 4.1% year-over-year growth. We are facing quite tough comparables. If we look at the year before, it was 26.3% growth.
We're happy with this, but I think it's worth pointing out that we are up against tougher comparables going forward as well when it comes to order growth. Moving over to new customers, almost 56,000 compared to 52,000 last year. That's 11.2% up, which means that new customers in this quarter represented almost 75%. That's quite high. As we have said before, this fluctuates over time. I would say it tends to be around 30%. This is 30% reoccurring customers. This is a little bit higher than the average quarter. AOV, average order value. We came in at SEK 3,115 compared to SEK 2,833 last year. That's a substantial jump, actually on almost 10%. If we look at the development over time, you see that it's been flat for a while. Now we are seeing it going up here.
I think we have talked about this many times, and it does come from several different sources, and it's really not a silver bullet here, which I've said many times before. The start really is all the changes that we've done on site that we started with well over a year ago. We show larger rugs, which means we sell more large rugs, which drives AOV up. Handmade has performed very well in the quarter. We have lower discounts. As you might remember, we did a big sellout last year ahead of the move, so that also affects AOV. As we said as well in the Q1 reports, we have made some price adjustments to mitigate the increases we see from the suppliers during the spring. While those haven't really come through in the COGS, we know that they are coming in the fall.
All in all, if we look at the quarter, the growth came then from almost two-thirds from AOV and around one-third from the order growth. Moving further down the P&L, we have a very strong gross margin this quarter. 67.1%. It was 62.5% last year. I think it's worth remembering that in Q1 it was 64.9%. We have this in spite of the increased freight costs that we have seen, but we are helped by both discount mix and price increases. I think there's also a bit of an exchange rate factor in this as well. Marketing spend. That landed on a more normalized level this quarter than in Q1, 29% flat. Again, this continues to fluctuate, and it's not something that we really look too much on a quarter-by-quarter level, but rather rolling.
Of course, as I've said before, we aim to slowly apply this down over time. In general, both Q2 and Q3 are lower than Q4 and Q1. This just supports that. Sessions on site. That increased by 6%. It's much more like-for-like comparables these days. If you look at last year, it was up 49%, but then you remember that we had a big shift in how we spend our marketing money and what channels we invest in. Now it's much more similar to what we did a year ago. We actually think sessions might go down a bit over time because the AI traffic, at least early indications, is that it tends to be lower, but then with a slightly better conversion. We're not quite there yet, so we need to see how things pan out. That's how we see it going forward.
EBIT was SEK 20.5 million, which is a large increase from last year when it was SEK 7.1 million. That represents a margin of 11.8% versus almost five last year. Many contributing factors here, starting with that we had better sales, which drives the economies of scale. Of course, the mentioned gross margin, we also had a few one-offs from the move last year. If we move over to looking a bit at the markets, the customer, and also commercial development. The market development, as per usual, also remains very mixed across different geographies. We continue to be flexible in how we move money from channels and also countries. I think one example is Germany, for instance, that grew almost 26% this quarter compared to, I think it was 10.5% in Q1. They do fluctuate a lot.
Of course, we continue to have a challenging world situation. Fuel charges, as an example. First they went up a lot, then they went down a lot. Now we see some tendencies to going up again. We really try to mitigate this by being as flexible as we can. Looking at consumer sentiment, it's actually continued quite low. We had almost a very low measurement for Germany, for instance, in the middle of the quarter. All of the countries that we follow are low in the quarter. We do see that every time we see tendencies that things go up, it tends to drop again, unfortunately. On a slightly happier note, we have a stable and high Trustpilot score that we're very proud of. 4.6 in the quarter. As you know, we are actively working with this.
I would like it to be a little bit higher. That's something we are working on. Again, something that is not a quick fix, and it's many different factors that contributes to this. Since we are a small brand in a lot of different markets, we know that this is an important indication that our customers both like what we do and like our products, and they like our delivery. Also that it's a good or almost a necessary thing for people to be able to trust us and make sure that we are a company that delivers on its promises. If we just look quickly at the assortment for the quarter, actually all lines within the assortment performed well. Machine made, handmade, and unique all grew.
We had several new designs also that we have launched during the spring that took off in a very nice way. That for us, of course, then means that they live on for many years, and we add colors, and we add sizes to the products. Last but not least, I think it's worth mentioning that AI, of course, continues to be a very big topic for us. We continue to progress in this area, and just as an example, well over 90% of our development these days is done either completely by AI agents or with the majority of it being done with that help. We are also continuously really working very hard on improving the structure around both product data and all our content, et cetera, so both customers and the AI-driven services both understand and really find what they need on the site.
With that, I hand over to you, Joakim, for the financial deep dive.
Thanks, Ebba. Just one note before I jump in on the numbers. I think many investors or analysts may use an AI tool like ChatGPT or Claude, et cetera, just to run these reports. There are things that are highlighted as errors when you do that, very convincingly so with calculations, et cetera. These things are not errors and can be explained. If you run across that and are still in doubt, you are, of course, more than welcome to contact me. Like Ebba mentioned, we were up against a comparable of 22% organic growth of net revenue last year, and now we had a double-digit growth with 15.8%, excluding a minor currency impact of 0.2. In DACH, we grew by 30.7%, whereas Germany grew by 25.7%, despite that decreasing consumer sentiment that Ebba just showed.
Nordics grew 15.4%, Sweden grew nine, and rest of world grew by 10.5%. We had France to continue to grow very well with 21.9%. Again, quite varying performance within the markets. On to the expense percentages as a share of net revenue. Just a comment here, we have added in the rolling 12 numbers. We think that adds a value to look at this over time. As you know, we have some seasons. For instance, in Q4, we have 35% of sales last year. We actually had 41% of our EBIT last year. Have a look at those numbers more than over-interpreting each individual quarter. Two product expenses then. These were down by 3.8 percentage points. This was mainly due to the price increases and the lower discount levels, but also somewhat to the weaker US dollar versus the euro.
You know that we, in quarter two last year, had a lot of sellout of products just before the move that we were going to do in June. That, of course, impacted last year's margin. Moving on to the other part of the gross margin here, shipping and other selling expenses. This decrease also due to the same reason as the product costs, despite that we had some increased fuel surcharges that impacted negatively, mainly in April and May. This then sums up to a 4.6 percentage points better gross margin. Here we think moving forward, fuel surcharges, it's anybody's guess where those will end.
As we mentioned in the last earnings call, we did increase the prices in April, and this was because of a known product price increases that we will get, that we think will kick in a little bit in quarter three and then in quarter four. Other external expenses. In last year, we had the moving cost through the first three quarters, and we had a SEK 4.2 million moving cost, which is equivalent to 2.8 percentage points in last year. That explains the decrease. Personnel expenses is quite stable, just a bit up in fixed amounts, but then due to the increased revenue, it's down by 1.8 percentage points. Moving into other operating expenses, here we have the effect from the evaluation of the assets and liabilities that we carry in foreign currency. This goes up and down.
It was an income in last year of 1 percentage point that became a cost this year. We do not hedge this, and we try to work naturally with it, meaning that we try not to keep too high balances in foreign currency that we haven't planned to purchase something with. Depreciation and amortization is now stable. You can say this is then an effect from a higher net revenue. Again, in quarter two, we have the fixed amount of our depreciation and amortization is what we expect more or less having going forward. This then sums up to an EBIT margin that is 7.1 percentage points higher than last year, arriving at 11.8%. The main factors contributing to that is, of course, the increase in net revenue and also the increase in gross margin.
The fact that we had SEK 4.2 million non-recurring costs in last year. Moving on to the balance sheet. That's the moving costs. Moving on to inventory. We are up SEK 13 million versus the same quarter last year, which is not strange because we had that sellout. We have SEK 114 million in stock. If we look at the right in the picture, we have this range, 17.5%-22.5%. Some may think we are too low getting into the high season, but bear in mind that we now, since we came into our new warehouse and office building, can actually better receive inbound goods throughout the peak season as well. SEK 140 million, up SEK 13 million. Last but not least, into cash.
Cash flow from operating activities, up to the left top corner here, were similar to last year, although with a higher EBITDA this year and a higher increase in working capital. On the working capital here, we had a positive impact last year from this sellout of inventory that we didn't have this year. We have also decreased the accounts payable pattern, compared to prior year. Cash flow from investing activities at the bottom left here, you see that we had quite large investment for us in equipment to the new warehouse and office building last year. As you can see now, this is more normalized at the lower levels. Cash position to the right. We have decreased cash since year-end with SEK 111 million, which is a dividend that we paid in May to our shareholders, SEK 104 million.
We are SEK 27 million behind our cash balance last year, despite that record dividend. Ebba, with a good cash position, that concludes the financial update, and I'll hand it back to you.
Thank you. All right. Just to summarize and give some Q2 highlights, both the top line and customer KPIs are all very strong. It's our best Q2 ever for top line orders, new customers, and we also think that the average order value is on track, so we are very happy about that. I would also just like to mention that we are facing tougher comparables going forward. This is a business that fluctuates a lot quarter by quarter, but this quarter we are very happy with. If we look at the growth, it comes from both the customer demand and the value per order, and of course also the bottom line is helped by the stable marketing ratio, which still led to growth in sessions. What also makes me very happy is when all of our product lines develop nicely, which was the case in the quarter.
We also really like it when we launch new rugs that sell well and that we see will contribute for a long time. That's been nice, and not only for Q2 actually, but the whole first half of the year. As Joakim mentioned, we had a record dividend payout in May, SEK 5 per share. That was also nice to be able to do in the quarter. With that concludes the presentation. We move over to the Q&A. Before we start, I can just mention that this rug here is a unique rug. We always try to, in every campaign we do, we try to combine our own designs with unique rugs that we find, and this one comes from Morocco, for instance. It's a nice way to make the campaigns very versatile and live.
With that, let's move over to questions.
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. The next question comes from Johan Fred from SEB. Please go ahead.
Good morning, Ebba and Joakim. Can you hear me?
Yes.
Firstly, on the growth, 16% organic growth was very solid and without the excessive marketing spend as compared to Q1. What has changed there sequentially? Is it stronger underlying demand or some tweaking in your strategy or something else? Any color on here would be appreciated.
Yeah, I feel like I say this a lot, but it's not one thing. It's many contributing factors. One thing that is driving the AOV, which of course helped this quarter quite a bit, is that over time, if you look at our site today, the rugs you see are bigger. There is also a trend to buy bigger rugs in general, and that helps the AOV, which then helps the top line. The discount is lower.
Price.
What else did we say? The price increase, of course, helps. If we look at the customer side, it was, I would say, cheaper to acquire customers and acquire traffic this quarter than as we saw in Q1. It's just a lot of contributing factors. I think one thing that we don't talk about so much, but that also helps, is that, in my very subjective but still opinion, we are getting better and better at designing rugs, which also helps to drive the interest for us. You can really see it in how new designs take off and how they grow. Of course, we have this huge advantage that we can build on that over time. Do you want to add anything?
More of your internal actions rather than a sequential improvement in underlying consumer demand. Is that correct?
We don't really see it, to be honest. It also differs a lot from market- to- market. Germany, for instance, performed super well in this quarter for us, and the consumer sentiment isn't really going up in Germany in the numbers that we track, in a way. I've said this before as well, that since we are quite small in any given market, if we manage to do things just a little bit better, then we can also grow, even if the consumer sentiment isn't really there.
Got it. Very clear. A second question on the gross margin, if I may.
It was up close to 5% year-on-year, driven by what I assume is weaker US dollar and lower discount rates and price adjustments, as you said. How much of these improvement is structural rather than transitory, and how should we think about margin going forward given your pricing increases and AOV growth versus a USD/SEK potential headwind?
Yeah. A lot of this is driven by the two main factors: the price increase that we have done. We have actually done a couple of price increases in the last year, and we did one in April. The other one is, not only in quarter two, but generally, we have lower discount levels, particularly then in quarter two, where we, in last year, had this sell-out. How should we think about it going forward? Well, on the fuel surcharges, the freight cost out to the customer, I think it's anybody's guess. Like Ebba mentioned, April and May, we had very high fuel surcharges. That's why we increased the prices quite quickly, and then those came down a lot in June, and then we have some tweets from the president. We don't know where that will go.
On the product expenses, we have some price increases coming up, and it will, of course, first have to be delivered, which they are not yet, the more pricier products. It will take some time before the inventory turnover kicks them into the P&L. That'll be in end of quarter three or more so in quarter four.
Got it. Very clear. Thank you. Those were all my questions for now. Thank you so much for your time.
Thank you.
Thanks, Johan.
The next question comes from Emanuel Jansson from Danske Bank. Please go ahead.
Good morning, Ebba and Joakim. A couple of questions from my side as well here. Regarding demand here and the strong sales figures that we've seen during the quarter, can you elaborate a bit on how you experienced demand throughout the quarter, given that you managed to lower the marketing spend related to sales as per the Q1 report? I assume that the sales demand has been quite stable throughout the quarter.
Yes. It has been quite stable throughout the quarter. Yeah. Maybe a little bit of a slowdown at the end, which is normal. The weather was amazing at the end of June.
The World Cup in football maybe.
The World Cup. Yeah. Maybe a tiny bit slower, but fairly stable over the quarter.
Perfect. Thank you. Very clear. Going forward as well then, you've been growing double digits for six consecutive quarters now, and I believe that the last growing second quarter was quite a tough comparable. What are your view of that you are being able to continue to grow at a high pace going forward? Is it tough or is it very likely that we continue to see this high growth given your new marketing strategy and the additional channel et cetera?
I think it's quite tough, to be honest, to continue to grow this way. We have said that our aim is to grow double digits over time, but it will fluctuate quarter-over-quarter, and I think it's a long-term goal rather than a quarter-by-quarter goal. I don't know. Would you like to add something, Joakim?
No.
No?
No. Perfect. Thank you. As well going forward, given that two-thirds of the growth came from the average order value, is it fair to assume that the average order value will continue to increase going forward given the trend that you mentioned with larger products, et cetera?
I don't know if you who are organizing this can hear, there is some sort of a problem with the sound.
With the feedback.
Emanuel, can you hear us or.
Hello, this is the operator. We are trying to fix the problem. There were some small problems with the sound, and I think I managed to reset it. How about now?
Yeah. Can you hear us well, Emanuel?
The next question comes from Benjamin Wahlstedt from ABGSC. Please go ahead.
You must mute when someone else is talking, or it will echo.
Never mind. Okay, sorry. Shall we just respond to Emanuel's question first, which was if AOV will continue to go up? I think the aim is not to drive it up where it used to be, but we want it to grow at least with inflation over time. It depends a little bit on what we push and if handmade sells better than machine-made, for instance, that will continue. We're not expecting it to grow quarter-over-quarter. Of course, now when we're comparing to low numbers, which we've had for a couple of years, ideally we see that more on a new stable level.
Yes.
Shall we take, was it Benjamin on the line now?
Yes. I am on the line. I think the sound is working a bit better now as well. I'm actually not sure if you've replied to this question already. The gross margin, super strong, obviously. I was wondering if you could split the improvement between lower average discounts, price adjustments, and the weaker US dollar. I.e., how much is structural versus how much is sort of FX dependent going into H2?
Yeah. The main part or the first two of the main parts are the price increase and the lower discounts. It was quite some time ago, where the US dollar got weaker versus the euro. That's not the main part. It's a smaller part than the other two.
All right. I was wondering as well if you could give us some more color on the AOV improvement here. I understand the price increase helps obviously, but is there a mix effect here in the AOV?
Absolutely a mix effect. I think we started already more than a year ago. We started pushing slightly differently on site where we have one image representing all sizes, for instance, of a rug. That image is now larger than what we pushed before, which helps AOV. In this particular quarter, handmade has performed very well, which tends to push AOV. Also, we don't have the discounts we had last year. There is a little bit of FX in there.
Yes.
What else? There was something more.
No. I think many times, like you say, Ebba, there are loads of the smaller changes.
Yeah.
That we've done to our site and the customer journey, where we are better in trying to get the customer to trade up, and we are poorer in making them trade down, fortunately.
Those are many small changes to the customer journey.
Yeah. I think also one last thing is that we are today, we have a lot more designs in bigger sizes, which also drives sales of bigger sizes.
I was wondering if you could say anything about the marketing ratio, which is obviously Q2 quite a bit lower. Is this the new normal or how do you think about this change too?
I think the answer is really the same as it was in Q1, that it does fluctuate over time. We are a little bit opportunistic both in how we move money from one country to another, but also when we see that we actually get traction in pushing a bit more. Our long-term aim is to slowly reduce the marketing percentage slowly. I repeat it one more time to be clear. This is on a more normal level, I would say, than in Q1. It is important to look at this over time rather than just one quarter.
You will also continue to see, we presume that quarter four is going to be the more expensive quarter.
Yeah, absolutely. It fluctuates a lot. Q1 and Q4 tend to be more expensive than Q2 and Q3 in general.
Perfect. Finally, if you could say anything about the strong growth in DACH. 30% growth in what's by all accounts a benchmark in price compared to-
Yeah, we saw very good traction in Germany primarily. We invested more and continued to see good traction with that investment.
Perfect. Back into the queue. Thank you.
Thank you.
There are no more phone questions at this time, I hand the conference back to the speakers for any written questions and closing comments.
Great. Okay, we have one question from Philip. How does your unit economics in the business change when the AOV increases? It's a little bit different depending on what you look at, because things also tend to become more expensive with AOV increases, like freight costs and just the COGS in general. There is, of course, some unit economics further down the P&L, but the gross margin is, I would say, less affected by this.
Yes. There is a minor effect in a more expensive carpet is generally a bigger carpet, a more heavier carpet, and is more expensive to send, even though it's not 100% variable. Like Ebba said, and marketing, it gets a little bit easier to. The customer has almost a fixed cost to get into our site. The higher the AOV, the better for the marketing. We have, of course, economies of scale there. When net revenue goes up, the fixed costs stay pretty fixed.
From Emanuel, one more question on AI and traffic. You mentioned that AI-driven traffic can be lower and that sessions may be under some pressure going forward. Can you say anything about how meaningful AI-driven traffic is for you today? More broadly, how do you think about the risk that visibility in traditional search declines faster than you are able to build visibility in AI-based search and recommendation tools? Okay. If we start with the first question, anything about how meaningful AI-driven traffic is for you today? The traffic is growing quite substantially. Sales from that traffic, however, is still very low, and that's, I think, to a large extent due to the AI search tools, they don't have direct connection to sales in the same way that, for instance, Google does. It's growing, but it's from very low levels.
Of course, we think that this will shift, so it's much more about us making sure that we are searchable and crawlable no matter who is looking really. How do you think about the risk that visibility in traditional search declines faster than you are able to build visibility in AI-based search? Right now, it's very much about building the sites in similar ways, to be honest. The search engines that exist today, they change their algorithms continuously, and there are big shifts and big jumps, and they don't always tell us how they are going to change, how they crawl, et cetera. We have always had to be quite flexible and quite fast in changing how we do those things. We think that this approach is important going forward as well. We also think that it's important to be a little bit open-minded.
We don't know exactly how things will pan out. It's more about keeping our eyes open and being quite flexible in how we build. I think that risk is always there no matter who the search engine is, so to speak. We are confident that we are in a fairly good place here and that we are working with this continuously and all the time, really. Do you want to add anything there?
No, just to add that it is very high up on our priority agenda.
Yeah.
You also commented on this with a paragraph in the CEO words. It is very much on top of our agendas.
All right. I think that's the last question for today. With that, I would like to say thank you to everyone listening in, and I would also like to say a special thank you to you, Joakim, because this is your last quarterly report as CFO.
Thank you.
It's been a pleasure.
Likewise.
Our next quarterly report for Q3 will be on November 4th, I will be joined by our new CFO, Gustaf Arlid, for his first report. Thank you, Joakim.
Thanks.
Everyone. Bye bye