Hi, everyone. Welcome to this earnings call after Vertiseit this morning have released our interim report for the first quarter of 2026. My name is Jonas Lagerqvist. I'm the Deputy CEO and CFO of the Vertiseit Group. With me, I have-
Johan Lind, CEO of Vertiseit
Welcome. We will today guide you through the quarterly report of the first quarter 2026. On today's agenda, we have a walkthrough of the financials. We will present and discuss some of the highlights during the quarter, and we will finish off with a Q&A session. If you have any questions whatsoever during the call, please use either the chat function or the raise hand function if you wish to join the call and speak directly. Let's start, Johan.
Yeah. For those of you who are new to Vertiseit, we are a SaaS company offering an in-store experience management platform for brands and retailers. Our vision is to connect the world of retail, and we really want to be the infrastructure for the in-store communication. Basically, being able to operate, orchestrate all digital touchpoints in store.
Diving straight into the financials for the quarter. Those of you who have been with us for a while, you recognize this slide. We have now added one more bar, proving that we can keep growing our ARR sequentially. We have done so since 2012. This, we believe, is the strongest evidence of the value that our offering creates with our customers and the resilience in our revenues. We close the quarter on an ARR of SEK 341 million. We're on our way towards our long-term target of having SEK 1 billion in ARR. In review, we would like to highlight that we continue to grow driving profitability as we have done for a very long period of time. ARR growth compared to last year amounts to 24%, which is exceeding our financial targets of 20%. Profitability, the increase compared to last year was 27%.
Recapping our financial targets, we say that we are to grow our profit per share by at least 25%, which is then the outcome is also in line or exceeding our financial targets. We are experiencing a strong demand in the market. We have a pipeline of very high-quality opportunities that we are currently working with. We'd like to emphasize this communication that we now have done for some quarters, that there is a strong interest and a strong demand in the market. In this Q report, we also report briefly on the activities that we perform in the M&A market. Also there is a very strong activity. We have quite some opportunities that we are actively exploring.
We are confident that we will be able to deliver on our acquisition plan, where we say that we will perform in the span between 2-4 roll-up acquisitions per year. We closed at an ARR of SEK 341 million, meaning a year-over-year growth of 24%. During the quarter, the growth isolated was 3.3%, meaning that the organic part of the growth annualized is approximately 14%. We have an NRR, which is normally quite close to 50% of the organic growth. This quarter, it was a little bit weaker than 50% of organic growth, meaning that the majority of the growth actually came from new sales and new customers this quarter. We still operate with a good margin above our target of having 100% in NRR. For a Q1, the churn rate was still quite low, even though it was slightly higher than previous quarter.
In Q1, we normally have at least an acceptance for that the churn can be slightly higher than other quarters, depending on that there are many contracts that renews at year-end, meaning that when churn occurs, it is quite likely that it occurs at year-end and is then visible in the Q1 figures. Net revenue decreases slightly. We are at the same time now back on SaaS share of revenue of exceeding 50%, which is long-term where our margin expansion will come from, besides, of course, the general growth in SaaS revenues. The increased SaaS share of revenue is incremental to increase our general profit margins.
Great.
Yes. Some highlights.
Absolutely. Looking into some highlights besides the figures. It was an intense quarter when it came to outbound activities and fairs and so on. We started off the year with all brands being represented in New York at the NRF, the world's largest retail conference. We were at ISE Barcelona. The booth up to the left with Dise is the booth we were represented with in Barcelona. ISE is the biggest pro AV fair in Europe. We headed to EuroShop in Düsseldorf, where both Grassfish and Visual Art were represented. Visual Art with their own booth, and we had Grassfish in Umdasch booth, the video down to the left. We have also been to D-Congress, where the pre-event related to retail media. We have been to Shoptalk in Barcelona. It has been a super intense first quarter when it comes to this type of activities.
Another highlight during the quarter was the big announcement from Visual Art and Bonnier News. They actually established now the first combined retail media network in Sweden, where you combined different in-store networks in a unified offering. It's really exciting to see the interest from both agencies and from retailers has been great and exceeded our expectations. We see a strong momentum in network effect, where we get a lot of inbound interest from especially retailers in Sweden now. We have also designed now a really strong blueprint and business model around this, where network join our Retail Media Hub. They also need to sign up for additional Retail Media Modules and components which add to our ARR. We don't go after rev share, we go after software licenses in relation to retail media. I think we are in a unique position to be able to do this.
It's super hard to replicate as we have the customers in scale. You can see new networks coming in week by week. I think yesterday we announced that Åhléns sign up to this network. It's just great momentum and that we get an inbound effect that we are not used to. We will also continue to focus in this field. We take this blueprint now. We were at D-Congress with Andreas Lind on stage. We had a pre-event sponsored by Samsung in Sweden. Now we take it to OMR, into the German and DACH markets, where we also will have a lot of sessions in retail media. The goal is now to just replicate what we have been able to achieve in Sweden and do that for the other markets. I now hope that you have a lot of questions.
Jonas, do you already have any?
Yes, I have some, but let's welcome Fredrik Nilsson from Redeye. Hi, Fredrik.
Hi, Jonas and Johan. Thank you very much. I want to start with system sales. They can be volatile, but still they are down 20% compared to the same quarter last year. I note that you also mentioned that you, of course, push through a lot of that to your partners instead. Could you perhaps explain a bit what is normal fluctuations versus you pushing systems over to partners?
Yeah. Great question, Fredrik. As you say, long-term, we want more and more of systems revenue to go via partner. Also in consulting, we want them to do more so that the SaaS share of revenue improves. But I should say this was a slower quarter in system sales than our own budgeting. As you say, it fluctuates a lot, and it can be the opposite in some coming quarters. I think we should not pay too much attention to system sales, especially not now, where a lot of the deals are done within the retail media space, and also more and more business are international, where we don't have the systems component.
I see. Great, thanks. On a similar topic, but regarding consulting, it's down by about SEK 1 million compared to last year, despite MDT and MuSe joining, and I believe they should have added about SEK 3 million-SEK 4 million perhaps in consulting. Is that a good assumption, and why has it declined then, and what should we expect going forward for consulting?
Yeah. It's a good question. We have some industries where they have been really tough on consulting expenses during the quarter, and it has affected us as well. Especially, I would say if one category stands out, it's automotive. Usually they come back again after a quarter or two. Yeah, I expect it to be slightly stronger going forward, but I'm not sure that we will go all the way back in the next quarter.
Okay, great. That's clear. Let's move on to the really important stuff and the more positive stuff. You increased ARR growth sequentially a bit, but you mentioned also in last quarter that you see longer sales cycles in Grassfish. Has that changed, or could you give us an update about Grassfish in particular?
Yeah. I would say that the momentum in the market is good. Pipeline is improving step by step, and as Jonas said, I think we all see that it's really, really high-quality opportunities. As you say, we see a small shift where a slightly better organic growth, and it's through the line. It's actually in this quarter within all business brand that have a slight improvement compared to Q4.
Great. Thank you very much. That's all for me.
Thank you so much, Fredrik.
Thank you, Fredrik.
We have more, Rikard.
Oh, sorry. Rikard Engberg from DNB Carnegie. Welcome.
Morning. Can you hear me?
Yes.
Absolutely.
Okay. My first question is related to audio. You said that you started winning deals within audio on existing customers. Do you believe that this will have an effect on the net retention revenue rate going forward during the year, or is it still a quite small share of your revenue coming from audio?
It's a great question. Thank you. I think it's great to see that we're now starting to get signed deals, basically. If we have signed 5-10 contracts in the quarter, but it's still relatively low figures compared to the overall ARR, of course. I don't think that you need to rewrite your forecast or anything based on the in-store audio. It's promising. I think it's great to see that when you add something to your portfolio, the hardest part is to get it from theory to implementation into the sales organization and actually see results. I'm really happy to see traction in the market, but I don't think that it should have any material effect on the SaaS metrics.
Okay. Thank you. A follow-up question on the SaaS metrics. You previously mentioned that due to your acquisition, these SaaS metrics can become somewhat skewed when you compare them year-over-year.
Yeah.
Is this one reason for the somewhat lower NRR in the quarter, or has it been less momentum on existing customers?
Yeah. If you look at the NRR, of course, if you add acquisitions, which we have done, then of course, it's harder to compare. The NRR in particular was slightly below 50% of growth. It's just 1-2 percentage points, right?
Yes.
I don't see a real trend in that, even if it looks like that on the chart. The organic growth has come down a bit from a two-year horizon. If you look at the NRR, it typically trends around 50% of the organic growth.
Other SaaS metrics that you refer to are, of course, affected by the acquisitions. If we just take MDT for one example, we added two really large customers and then quite a number of smaller customers. Of course, that gives the effect that both average revenue per license and average revenue per brand goes down a bit. That's a fluctuation or an event that, of course, will happen, depending on what acquisitions we do perform going forward. That has nothing to do with the organic development in our SaaS customer portfolio.
Thank you. Lastly, you talk about M&A, both during the presentation now and in the CEO letter. What are you looking for specifically? Is it geographical expansion or is it more product-related expansion with new customers?
Yeah. Our strategy is clear. We want to have overlapping businesses so that it's scalable to improve profitability. We're also looking to strengthen our footprint in south of Europe and in North America in particular.
Okay. Thank you. That was all for me.
Thank you.
Thank you, Rikard. We have a lot of questions in the chat, and I will try to answer as many of them as possible. While on the M&A track, there is a question if the recent development within AI has changed what we are looking for in terms of M&A.
Yeah, I would say, not really. I think we are in the forefront in this industry when it comes to AI development, and I don't see any new targets that are ahead of us that we want to acquire. I think our capability of converting existing customers after an acquisition have improved a bit once we have the keys due to AI. If something, I would say that we have the opportunity to look into acquisition opportunities that before maybe we consider them being a bit too complex to migrate. I think that has shifted a bit in our favor.
Great. Thank you. Follow-up question on retail media. Can you elaborate on the actual business model?
Yeah.
What effects does it have on advertising revenue?
Yeah. Typically, if you look at the figures, if a network that only uses their in-store experience management platform for their own in-store experience, and both branding, tactical communication, but also interactive solutions. If they add the component of the retail media, it will improve our revenue from those licenses with about 40%. It's both from licenses that we get from the advertisers and licenses that we get from the retailer for our retail media services and the Retail Media Hub and the Retail Media Module.
Can we say anything about how big is the potential upsell SaaS-wise from the retail media add-ons?
It's 40%.
Okay. Quite a lot of questions regarding NRR and the SaaS KPIs, which from a first look seem to be declining quite a bit. As we said, the NRR, even though it's slightly weaker than last quarter, it's still in the vicinity of 50% of organic revenue. We see there is no trend in our current customer portfolio. We still have an average penetration of around 30%, so the upsell potential is still there. Of course, it can vary a bit quarter by quarter where the growth comes from.
A recommendation there is to look at the organic growth, because if you look some years back, we were trending around 20%, and now we are at 14% in organic growth. I think the NRR, you should look at that number compared to the organic growth pace, and then the pattern look not that bad.
Yes. Also average revenue per customer license. That must also be viewed in the light of that we have done acquisitions that adds a different profile to the total portfolio. Some questions regarding the SaaS revenue, that it is actually slightly lower than last quarter, while ARR is increasing. That can also happen since we do operate on many currencies. Currency effects can, of course, change from quarter to quarter and from year to year. Whenever we talk ARR growth and the SaaS KPIs, we always adjust for FX.
Yeah.
Actual numbers can always differ both to the better and to the worse, but it's always FX adjusted.
Yeah. There can be changes, like if there is a negotiation with a customer, and so it affects the SaaS revenue. The ARR is always the contractual revenue, and it's also based on the last month in the quarter.
There's a question on any one-offs during this quarter. I would say that we have adjusted for some minor one-offs, which is more or less related to the process of evaluating a list change. Other than that, of course, we have invested quite heavily in marketing activities during this quarter, which is significant for Q1. Nothing really out of the ordinary. Next quarter will, of course, then we have to take into account that the yearly salary revision for all employees go into effect. From a total perspective, there are no material one-offs during this quarter. A general question on the AI theme that we discussed more thoroughly on last quarter's earnings call, if we see any trends or development in the competition from AI that significantly affects us or our strategy.
No trends when it comes to competition. We see a number now of requests in tenders, where we need to describe how open the platform is to work to actually have agentic workflows, and work with so that our platform have the MCP support, et cetera, to support agentic workflow from the customer point of view. I think that's maybe what have hit us from the market side. Of course, we believe our competitors will, of course, also use all the tools and the capabilities that this brings to the table, and I think it will, maybe there are a legacy platform that can evolve faster now in this new environment, but the same goes for us. I think we all got the same tool set, and we don't see any newcomers or anything that are unexpected in the market.
Regarding systems margin, they came out in the stronger part of the scale. Normally, we have a systems margin of between 26% and 30%, and this quarter it came out at 31%. It's on the higher end, but it's a normal fluctuation depending on what type of customers were targets for rollout during this quarter.
Typically, when you have higher volumes, and I'm pretty sure we will have those quarters as well during this year. Typically, if you get higher volumes, you do a big rollout for a customer, and then typically the margins are lower. It usually go hand in hand.
For those of you who have looked into the cash flow statement, it was strengthened compared to last quarter. Partly due to that working capital was lightened this quarter. Also as we come out of the process, the efficiency measures that were executed in Q2 last year, they affected cash flow during the second half of this year. Going forward, cash flow could be expected to follow the profitability development going forward. Both profitability and cash flow is, of course, our highest priorities together with continuing to ensure the ARR growth. That can also be the answer on the profitability profiles of the acquisitions that we look into. Of course, the important thing, in parallel to the quality of customers that acquisitions should bring, it should also increase and strengthen both profitability and cash flow.
That's the profile of the acquisitions that we look into.
Yeah. That's also why it's important that the majority of rollout targets, that we actually have a fully overlapping value proposition and the product offering so that you could get more synergies out of the rollout acquisitions.
Thank you. That was it. Thank you for all the questions. If there are some questions that might arise that we didn't answer in this call, please feel free to reach out to us anytime. Send us an email or come visit us at our offices. Have a great day, and see you all again in this forum next quarter. Thank you.
Thanks so much.