Welcome to Storytel Q3 Report 2026. 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, Bodil Eriksson Torp. Please go ahead.
Good morning and welcome to Storytel Group's earnings call for the third quarter 2026. I am Bodil Eriksson Torp, CEO, and with me today is our CFO, Stefan Wård. I will start with the highlights for the quarter. Stefan will take you through the financials and we will then open up for your questions. We are pleased to report a strong quarter. Net sales grew 16.5% in constant currency, of which 11.7% was organic, and we added 80,000 paying subscribers. This is actually our highest net additions in a quarter since the third quarter of 2023. Adjusted EBITDA increased 16% to SEK 268 million, excluding LTIP costs, which are driven by our share price. Adjusted EBITDA increased 25%. With nine strong months behind us, we confirm our full year 2026 guidance of adjusted EBITDA of SEK 900 million. Let us take a look on the highlights.
Net sales grew 16.4% to SEK 1,179 million as reported and 16.5% in constant currency. Adjusted EBITDA increased 16% to SEK 268 million with a margin of 22.7%. Excluding LTIP cost, adjusted EBITDA was up 25% to SEK 279 million, which equals a margin of 23.7% compared to 22.1% year-on-year. Net profit SEK 151 million up from SEK 138 million and earnings per share after dilution were 1.83. In the quarter, we added 80,000 paying subscribers up from 64,000 a year ago and reached 2.83 million paying subscribers. This is up 7.6% year-on-year. In Europe, we added 39,000 subscribers and in the Nordics, 33,000. Publishing continued a strong development with external net sales up almost 54% in constant currency, of which close to 27% was organic and adjusted EBITDA margin expanded to 36.2%. Overamstel was a part of the group for the first full quarter.
We confirm our full year 2026 guidance of adjusted EBITDA of SEK 900 million. The board decided in August on a share buyback program up to SEK 300 million to secure the delivery of shares under our long-term incentive programs. We reacquired shares for SEK 91 million during the quarter. After the quarter, we launched storytelbooks.com, our new online bookstore for physical books in Sweden. This makes it seamless for our readers to move between formats, offering subscribers an exclusive discount on physical books while helping authors to reach their audience across all formats. Net sales grew 16.5% in constant currency, of which 11.7% was organic growth. Streaming up 7.8% and publishing external sales up 53.8%, both in constant currency. The gross margin was broadly unchanged at 45.3%. Adjusted EBITDA increased 15.7% to SEK 268 million, with a margin of 22.7%.
The increase was driven by publishing, partly offset by higher marketing investments in streaming and higher share-based compensation following the share price development. Excluding LTIP impact, the adjusted EBITDA grew almost 25% to SEK 279 million. This is a margin of 23.7% compared to 22.1% last year. Our pre-tax profit grew by 19% to SEK 172 million, driven by the higher operating profit and also improved net financial result. Cash flow from operations before working capital increased 21% to SEK 246 million. Let's take a look at the rolling 12. Our rolling 12-month development shows continued margin expansion over the past 10 quarters. On our rolling 12-month basis, net sales reached SEK 4.3 billion and adjusted EBITDA, SEK 860 million. This is up 20% year-on-year. The rolling 12 adjusted EBITDA margin was 20.9%, up from 18.2% a year ago, and from 11% in the second quarter of 2024.
We remain well on track to deliver on 2028 targets. Average annual net sales grow above 10% in constant currency, the growth, and adjusted EBITDA margin above 20%. Let's take a look on each segment. Over to you, Stefan.
Thank you, Bodil. In publishing, we delivered another strong quarter. Our net sales grew by 31% in constant currencies to SEK 423 million. Our external net sales grew 54% to SEK 280 million, of which 27% is organic. Growth is driven by the acquisition of Overamstel, which is consolidated for the full quarter for the first time. We acquired Overamstel late in May last quarter. It is also driven by higher external digital sales and growth in our existing publishers. The gross margin improved to 36.6% versus 35.5% a year ago, supported by the higher external digital sales and improved profitability. Adjusted EBITDA increased by 42% to SEK 153 million, with a margin expansion to 36.2%, up from 33.4% a year ago. As we said, Overamstel is included for the first time this quarter and contributed around SEK 49 million to net sales in constant currencies.
In the streaming segment, we added 80,000 net new subscribers during the quarter, compared to 64,000 in the same quarter last year. This is our highest net add level since Q3 2023. In percentage terms, the subscriber growth year-on-year was 7.6%, and the total base at the end of the period was 2.83 million. Year to date, we have added 163,000 customers, and on a rolling 12-month basis, the level is 200,000. Europe continues to lead this strong growth, adding 39,000 subs during the quarter for a growth of 12.7%, and net sales growing by 18.6% in constant currencies. In the Nordics, we added 33,000 subs in the quarter versus 29,000 in Q3 last year for a net sales growth of 5.6%. Subs growth is the primary driver, but we also had some help from ARPU in the quarter, which rose by 3.4% year-on-year.
Churn remains stable across our base at a low level. It is lower in the Nordics than in other areas, but the profile is similar with very low churn in the cohorts that have been with us for more than 12 months, while the churn is higher in the most recent intake. Price increases primarily in Nordics and Europe, partially offset by regional mix in some other areas. In Americas, the ARPU is coming down. It was SEK 131 in the quarter, down 5.7% year-on-year due to primarily geographical mix and a higher share of partnership subs. We continue to target full-year net addition in line with 2025, which will require a solid performance in the fourth quarter. Streaming P&L, net sales growth of 8.4% reported and 7.8% in constant currencies to SEK 1 billion flat, driven by the subs intake but also helped by a rising ARPU.
Europe reported sales growth of 18.6% and the Nordics of 5.6%, while APAC growth 3.7%, and we had a slight decline in the Americas. Gross margin improved to 40.5%, up from 39.9%, with higher margins in Nordics and Americas, partially offset by Europe and APAC. The adjusted EBITDA was SEK 153 million for a margin of 15.3%. The decrease reflects the increased marketing investment, but it is also to get a bit higher personnel and IT-related costs. Operating profit was SEK 119 million. Moving over to our cash flow statement. We delivered a strong cash flow from operations before working capital of SEK 246 million, up 21% year-on-year. We had a positive impact from working capital of SEK 40 million in the quarter compared to a headwind in the same quarter last year of SEK 45 million.
This enabled a really strong growth in the Cash flow from operating activities after working capital of 81% to SEK 285 million. The cash flow year to date is SEK 570 million, an increase of SEK 228 million compared to the same period last year. Cash flow from investment activities was minus SEK 44 million, mainly explained by investments in intangible assets of SEK 48 million. Cash flow from financing activities negative with SEK 102 million, of which buybacks accounts for SEK 91 million. Cash flow for the period was SEK 140 million. We have added a new slide to the deck showing our free cash flow development over several quarters, starting in Q1 2023. On a rolling 12-month basis, our free cash flow, that is cash flow from operations after CapEx, both tangibles and intangibles, is at a level of SEK 587 million.
This is an increase of 57% year-on-year from SEK 373 million annualized free cash flow in Q3 2025. It is up 245% from Q3 2024. So it has been a very strong improvement in the cash flow generation. Looking over the past eight quarters, the average annualized free cash flow is around SEK 419 million, and over the past four quarters, it is SEK 474 million. This equals a free cash flow per share of SEK 5.4 and SEK 6 per share, respectively, over these periods. The dramatic improvement in free cash flow generation provides us with a lot of flexibility to further drive value creation for our shareholders, primarily from investing in growth opportunities, but also in the form of distributions. Moving over to the balance sheet, we see that we have total assets of SEK 3.9 billion.
Equity increased to 2.1 with an equity to assets ratio of 53.5% up from 49.7% a year ago. We ended Q3 with a net cash position of SEK 132 million versus a net debt of SEK 23 million in the same quarter last year. During Q3, as we have mentioned, we did buybacks of SEK 91 million. In Q2, we distributed SEK 140 million to shareholders in the form of dividends, and we acquired Overamstel for SEK 175 million. Together with our unused credit facility, we have a total liquidity on our books of SEK 1.2 billion. Our gearing is - 0.15 versus our max target of 1.5, which provides even more room for growth initiatives. We are well prepared to continue develop our solid offering and our business model. And with that, I will hand it back to you, Bodil.
Thank you, Stefan. Before summarizing, we also would like to highlight our strength of bringing out the best user experience and the best author experience across our entire Storytel universe. Storytel Genie combines our most exciting features to date and marks the beginning for a new intelligent layer across the user experience. The app list for Genie is strong and bring the best discovery to our listeners. Genie is like having a book-loving best friend in your pocket who knows your taste perfectly and at the same time have knowledge of all the world's books. Our recently launched Storytel Pulse for authors empowers authors with real-time data insights about their audience. Together, these innovations deepen engagement, strength, and loyalty and ensure that Storytel remains the premier universe where all book lovers and creators want to stay for a lifetime. And we will continue to elevate our services in all dimensions.
To sum up this is a strong third quarter with 16.5% growth in constant currency, our highest net additions in a quarter since 2023, and continued strong development in publishing. We continue to develop our offering. After the quarter, we launched Storytel Books, our online bookstore for physical books in Sweden, which make it easier for book lovers to move between different formats with an exclusive discount for Storytel users. Our strong financial position supports an active M&A agenda going forward, and we continue to strengthen our capabilities for both acquisitions and integration. We confirm our full year 2026 guidance of adjusted EBITDA of SEK 900 million, and we will remain well on track for our 2028 midterm targets. With that, over to your 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 Joachim Gunell from DNB Carnegie. Please go ahead.
Thank you very much. I have three quick questions. On the balance of growth versus margins here, the incremental margins adjusting for LTIP remains quite impressive despite the growth initiatives here. Just how do you think about keeping that incremental margin to 20%?
Yeah, we think that there is scope for further margin improvement, but the rate of the improvement will slow down. What we have communicated is that we are going to be above 20% in 2028. We are close to that level already, so it is fair to assume that we will reach that target and deliver continued margin improvement.
Okay. On the gross margin side in publishing, it is continuously a significant improvement year-over-year. You commented that there is higher external digital sales within the margins that this key strengthening factor here. Can you just perhaps talk a bit about what is driving this, if it is the Spotify licensing agreement or just mix royalty terms or scale?
The agreements that we have signed or have on the books, they have been improving the gross margin for a few quarters now. It is the same answers as in the previous quarters. We have signed new deals that have helped us expand the gross margin. Other than that, there is no really material changes in the offering for this segment. That is the primary reason.
Okay, and just finally, of course, perhaps a bit too early to speculate, but some high-level reflections on this would be interesting to hear from you. There has been this trend of consumer inertia fading with the takeoff of, call it agentic AI and assistants, and I know it is still early days. But if we look at your CMD material from 2025, you said that roughly 40% of your paying subscribers are active daily users. Do you think this could move the needle structurally for the attrition profile in the business?
I do not understand the question, really. Can you formulate it again, please?
Yeah. If only 40% of paying subscribers are active daily users, do you see a risk that the 60% that perhaps not use the service on a daily basis would opt out, or if it were easier to cancel the service with the takeoff of AI assistants such as Meta AI, et cetera?
Not really. What we see is that we get an increasing share of our base that stays with us longer and longer, and the engagement from these people are very solid and improving. We do not have any signals of the scenario that you describe here.
No, and we have 70% that actually are in and listening in our streaming every week.
We would describe that as high engagement.
Yeah, exactly.
Understood. Thank you. That's all from me.
Thanks.
The next question comes from Derek Laliberté from ABG Sundal Collier. Please go ahead.
Thank you, and good morning. I also have three questions. First one, you mentioned here Q3 delivering the strongest subs intake since 2023. About the 80K net adds you saw here, would you describe that as structurally longer or underlying intake, a stronger one versus seasonality campaigns or tried versions, conversions, basically where the main part of the subs intake came from? Thank you.
It's a combination. It's normal grind to get the subs in. Parts of it are campaigns and part are normal inflow.
Partnerships as well.
Yeah.
Okay, that's very clear. On the Nordics specifically improved quite meaningfully the 33,000 net adds here in the quarter and a solid revenue growth as well. What would you say has changed here versus the first half of the year? Also wondering how broad based the improvement was across the Nordic markets here, Sweden, Finland, Denmark, and Norway.
Yeah, we had a strong start to the year in Nordics, then a soft second quarter, and now again, a strong third quarter. So what we can say is that for our Nordic segment, the development year to date is solid. We're happy with that development, is a good net intake. We have some challenges in the Finnish market. We're positively surprised of the resilience in our Swedish customer base and the way that we are able to expand our business in Sweden. Also, Denmark and Norway are stable to positive. But I would highlight, now it's a year since Spotify entered the Nordics and the Swedish market, and we are very satisfied with how we have performed during that period.
Perfect. Just a follow-up there on the overall subs intake. I believe you mentioned before that you have an ambition to have your 2026 net adds to be at least in line with 2025. So what gives you confidence here that Q4 can remain strong enough to meet that ambition?
Yeah. Well, the momentum we had in Q3 is encouraging. Our marketing campaigns are successful, and the demand is there. On an annualized level, we are at the 200,000 intake over the past 12 months, so we need to have a slightly stronger Q4 than we had last year. It's not a given, but we feel like we have a good probability to deliver on that.
Certainly encouraging. Finally, on Europe here, the main growth engine within streaming right now, can you say something here about which of these markets are doing the heavy lifting today or here in Q3, and where you see the best incremental growth opportunity into next year?
Well, it is moving in the right direction across the European footprint, we would say.
Yeah.
Poland is the most important market for us. We crossed the 300,000 mark there during the quarter, which is encouraging, and it continues to develop well in Poland. Turkey is another market that can contribute with a lot of customers for us. I would say the biggest surprise for us this year is how well we are performing in the German market. It has been a pleasant surprise. While our performance in the Netherlands is solid, it is not a standout. It is solid. So overall, we are happy with our performance in Europe. It moves in the right direction across the footprint. There is some color on the performance.
Okay, great. Appreciate the color there. That was all for me.
Thanks.
The next question comes from Georg Attling from Pareto Securities. Please go ahead.
Good morning, Bodil, Stefan. Just a couple of questions. On the step up here in sales and marketing and streaming, can you just give some more color on where you have allocated this incremental cost increase, in which markets? Also how you view that trend here in Q4 and into next year. Will it remain at this growth level, sales and marketing investments?
Yeah. We do have very high KPIs for our marketing investments, and we could see that we also had really good momentum in Q3, where we also pushed a little bit more into the European markets, as Stefan described, in the different markets where Poland, of course, is heavily important for us. So we kind of monitor and reallocate daily, on a daily basis, where we see we have a good opportunity for growth and also return on investment. That is the core thing.
Okay, and just a follow-up on that. The obviously quite good subs intake here in this quarter, and that happened with the step change in sales and marketing. Do you think you will have a spillover effect in Q4 also benefiting from the Q3 sales and marketing investments when it comes to new subs?
Yeah, we are confident that we will reach our goals. As I said earlier, it is not a given, but we believe that we are well prepared and a strong intake during the quarter. We will have to wait and see, but it looks promising.
Okay. On the gross margin in the smaller streaming markets, Americas and APAC, quite large swings, +3 percentage points to Americas, down equal as much in APAC. Could you just give some more color on what is driving these gross margin changes?
Yeah. We have a very, very high gross margin in the Audiobooks.com part of the business, and it is solid, but not as high in other LATAM markets. They are growing as well, so that has an impact on the performance. So I would describe it as a mix change. The gross margin is not weaker in the U.S. It is more that we get a bigger share from other parts of that segment.
Okay.
In APAC, it is so small, so we do not really have any-
Yeah, that is fair enough. Just a final question on the adjusted EBITDA in publishing. How much did Overamstel contribute here in Q3, and how much larger seasonally is Q4 for them on adjusted EBITDA level?
We do not break out exactly how much they contributed, but it is heavily back-end tilted, so a lot of Overamstel earnings will come in the fourth quarter rather than Q3. That is the normal pattern for if in Overamstel, 20% of sales roughly is digital. A lot of it is traditional publishing, and that is more Q4 tilted.
Okay. That is all for me. Thank you very much.
Thanks.
The next question comes from Jonathan Sjöberg from Danske Bank. Please go ahead.
Hi, it's Jonathan from Danske. Some questions from my end, please. I think we can start off on publishing here. I think it's interesting with Spotify's entry into over 100 markets with audiobooks. I think it gives you an ability to monetize your audiobook catalog of languages such as Hindi and Russian, where you have had previously difficulties to fully monetize. Is this something you can tell us more about, or your ambitions here or any plans?
We can't give any details, but we have an extensive catalog in over 55 languages. Similar situation as in the Nordics. If we find good agreements, we are willing to have that catalog on other platforms, so to speak. More than that, we can't really say. Your view is correct, that there's opportunities for us to do content deals in other markets with other players.
Okay. That's interesting. I think continuing on publishing, obviously very, very strong here in Q3 and on expectations heading into Q4 here. As you're already saying, Q4 tends to be the strong point where profit naturally somewhat concentrates, and especially now given Overamstel. You have entered new contracts with Spotify. You've renegotiated some other contracts. Is there any change in the seasonality dynamic or anything we should think of heading into Q4 here on publishing?
Not really. I think you can look on former seasonality to get a good grasp of it. Then, of course, you have to add on if we have done M&A, as we have this year, then that will obviously come on top of the normal seasonality. The Spotify contract was made last year.
Okay. Hopping onto streaming, I think yesterday BookBeat reported some earnings, and they alluded some weakness in the Nordics due to higher competition from Globus. From what I can see, Spotify has been more active in advertising when it comes to its Audiobooks+ offerings, particularly here in Sweden during the latter end of Q3 and also now starting here in the Q4. Have you noticed any sort of impact here from Spotify or their more active agenda?
No. As we tried to describe earlier, our view is that competition has been intense for a long time in this market and across our footprint. What we can see, there is competition there, but it is not tougher for us today than it was a year ago or w e are performing well, we think. Yeah.
Okay. Last question from my end, and it's on Storytel Books. It's interesting, but it's very early days. Could you tell us any early insights or any early data points that you can share here or any more color?
Yeah. We can't really share the data points yet. Like you said, it's early days, but it's very interesting, and we can see that we have an uplift. You could be in the app and then just turn in to buy a book as well in a very easy way. So there's a universe of book lovers that actually are jumping also between different formats, and now we're taking 360 degrees around the customer's literature world. The e-commerce bookstore is launched in Sweden, and we will monitor and evaluate and come back with more information as long as we go and see how we proceed that business.
It's also important to say that there is an extra discount if you are a Storytel customer, and we can also see that this is also one way for us by the website also to actually have some intake on new customers to the streaming. So it goes on both ways.
Okay. Perfect. That's all from me. Thank you.
Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Martin Wahlström from SB1 Markets. Please go ahead.
Yes. Good morning. Thank you for taking my question. Just diving a little bit deeper into the Storytel Books initiative, could you just add some color on kind of the structure and what cost it incurs for you and what is taken by the partner and what is the setup like financially?
No, we really don't want to go into it. It is so fresh for us, so we will wait a quarter or two before we give you any more details on it. It depends a little bit on how this offering takes off and how we choose to explore this opportunity further.
Yeah. We launched it in October, so it is purely fresh.
Yep. That is fair. Is it live now in the app also, or is it just on the website for now?
Yes.
Yep. Great. Then just another question, perhaps not related to Q3 per se, but when you decide to push marketing a bit more, any typical incremental channels, or is it more of the same to what you usually do?
I would say that we are on top of it to actually use different channels in different markets. We evaluate every channel and also our partnerships agreements. There is a lot of opportunities, and it is always about reinvent yourself, how you meet the new customers, and where do you meet them. We have a fantastic marketing, I would say, machine, or almost MarTech machine, and we have also the local footprint in every market. There is a good combination of this. There is definitely incremental, but there is different opportunities in different markets, and we monitor that and evaluate daily our efforts.
Yep. That is fair. Then finally from me, I read somewhere, I think in industry press, that Cappelen Damm's content was not on Spotify in conjunction with their Norwegian launch. Do you have any comments on that, or is that for Cappelen Damm, so to speak, to comment on?
Not really. We choose not to have any comments on their behalf.
No.
Yep. Got it. That was all I had. Thank you.
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.
So we have a written question from the audience, and it relates to potentially higher marketing spend in Q4 as well. What we can say there is we see opportunities for subscriber growth, and we need to have a high intake, so we will not slow down or become more cautious on marketing spend. However, if you compare with Q4 last year, marketing spend was high in Q4 last year as well because of the relatively low level in Q3 last year. So that is some color on what you can expect for this year. On the second written question, it relates to what has the reception been for Storytel Books so far?
Yeah. As we said before, it is very early days. We opened the store in October and just recently in the app. As we mentioned earlier, it is still too early to evaluate, but the reception as we speak has been very positive. This is about all formats. Many listeners also want to own their book in print, we know that since before, and now they can buy it directly in the app, and Storytel users will get an exclusive discount. That is what we have launched just some weeks ago. It is very early days, and we think the reception has been positive and good.
Then we have a question relating to churn. It appears churn has edged up in the Nordics over the recent quarters. To what extent is this related to competition from Spotify versus recent price increases? We would not characterize churn as having increased, really. We would describe it as that it has stabilized at around the all-time low level. To add some color to this, we do not see any pickup in churn in Sweden, Denmark, or Norway. We have had some movement, some challenges in our Finnish business. In Sweden, it is not picking up. In Denmark, it is not picking up, and neither in Norway. So we cannot really say that there has been any impact from any competitors on our base over year to date. Okay. That is all for today. If you have any additional questions, you can email us at investorrelations@storytel.com.
With that, we thank you for your-
Thank you so much for joining, and we are looking forward to the next call. That is quite soon again. Thank you.
Thank you.