STORY-B.STSTORY-B.STSTO
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Bodil Torp: Good morning, and welcome, everyone. I'm Bodil Eriksson Torp, the CEO of Storytel Group. And together with me here today is, of course, our Group CFO, Stefan Ward. We are happy to deliver record strong Q4 and full year for Storytel with good financial and operational performances across both our streaming and publishing segments. We conclude 2025 with record high profitability and a strong cash flow generation. And we can say that we are in a good shape to continue our progress in 2026. So here comes some of our strong highlights for 2025 and Q4. Our Q4 highlights includes continued strong top line growth with improved profitability and a strong cash flow generation. Our streaming business delivered subscriber growth of 9%, reaching 2.7 million paying subscribers at the end of 2025. Our subscriber growth was strong across all our core markets in Q4 and also for the full year 2025. And the churn continued lower throughout the whole year, while ARPU levels in local markets remained stable. And this is, of course, a good indicator of the value that we bring to our book lovers. Our publishing business continued to deliver very good performance as well with external revenue growth of 18% in constant currency, also with high expanding profitability. In Publishing, we had a strong list of new releases also in Q4, such as, for example, the August price winner and the best-selling title Viton with Bea Uusma. And we have also today announced that we, during Q4, started the process to transfer our listing to NASDAQ Stockholm market -- main market, and it's expected to be complete in 2026. So now over to our financial performance in the quarter. We delivered sales growth of 12% in constant currencies and EBITDA growth of 15% in the quarter. Our gross margin was at a new all-time high level, while our EBITDA margin was at the 20% level for a second quarter in a row. So our net profit of SEK 300 million was boosted also by a one-off positive tax impact of SEK 195 million, and Stefan will come back and talk a little bit more about that as well. Cash flow was solid, and we ended the year with a net cash position. So we are very satisfied with the performance in Q4. We continue to see improved internal efficiencies while at the same time, our product development has been intensified during the year. So this is also more that will come, I would say. We crossed SEK 4 billion in sales for the full year 2025. Our full year EBITDA grew by an impressive 26% in 2025 over 2024. Our EBITDA margin for the year reached 18.8% -- this is keeping us well on track to meet our midterm 2028 targets as we announced last year at CMB in May. So over to you, Stefan, and the numbers of our 2 business segments.
Stefan Wård: Thank you, Bodil. We had another solid quarter in our streaming business, adding close to 50,000 new paying subscribers during the quarter and over -- well over 200,000 for the full year. In the Nordics, we added 16,000 in Q4 and 57,000 in 2025. So a relatively strong intake in the Nordics where we have a good or high market share position. In Sweden, we had positive intake both in Q4 and for the full year. Outside the Nordics, we added 32,000 subs during the quarter and 152,000 during 2025. Our strongest market in terms of net intake was Poland with a total increase of over 50,000 for the full year. Other markets with strong subscriber growth included Bulgaria, the Netherlands, Turkey and Germany. At the end of Q4, our Nordic and non-Nordic subscriber bases were roughly evenly split at 1.34 million each. As a consequence, we continue to see a decline in the average ARPU as our Nordic ARPU is typically higher than ARPU levels outside the Nordics. This trend will continue. However, it is important to note that the ARPU levels in local markets remain stable to positive in constant currencies. Over the past few years, we have seen a significant decrease in churn levels and churn continues to move lower also in 2025, ending the year at a new all-time low level. Looking at streaming financial, we delivered sales growth of 10% in constant currencies and 5% in reported. Streaming gross margin was 43.6%, while the EBITDA margin was 15.3% for a total EBITDA growth of 8% year-on-year. Our EBIT in streaming improved by 21%. We're on track to cross SEK 1 billion in quarterly revenues from streaming during the second half of 2026. In our Publishing segment, we delivered another strong quarter with 11% year-on-year revenue growth and external publishing revenue growth of 21%. Publishing EBITDA margin expanded to 32.2%, enabling EBITDA growth of 19% year-on-year, while our EBIT grew by 20%. Storyside is our in-house publisher that has been fundamental for us to build and develop the audiobook market, both in the Nordics and throughout most of our non-Nordic footprint. It remains the biggest profit engine of our publishers and had a very good year. Other publishers that delivered strong results during the year are Lind & Co, Norstedts and Bokfabriken. Bokfabriken was acquired early in 2025, and has rapidly improved to become one of the key profit contributors in our publishing business. It has exceeded our expectations for 2025 and prospects are promising also for next year. In terms of cash flow, it remained strong, both in Q4 and for the full year. Cash flow from operations before changes in working capital was -- in Q4 was SEK 217 million, up 10% on a comparable basis. That means adjusting for the Copyswede amount of SEK 34 million that was included in Q4 last year. Cash flow from operations for the full year amounted to SEK 647 million, up 26% year-on-year. We had some tailwind from working capital in the quarter, but it was less than anticipated. The reason for this is that we have tied up a little bit of unnecessary working capital during the year and had a negative impact from working capital of SEK 75 million. These are due to some unfortunate internal issues that has been resolved. So our best estimate for working capital development in 2026 is to have a neutral impact for the full year. Cash flow from investing activities was SEK 55 million in the quarter and SEK 252 million for the full year, of which SEK 160 million relates to CapEx. Cash flow from financing was minus SEK 12 million in the quarter and minus SEK 235 million for the full year, including debt repayments of SEK 100 million and last year's dividend of SEK 1 per share of close to SEK 100 million. On the next slide, we can see the balance sheet. And in here, you can have a look -- both have a look at the cash and equivalents position of SEK 686 million that we had at the end of the year. You can also see that we have recognized a deferred tax asset of SEK 195 million relating to previously unrecognized tax losses carried forward. This is now deemed as highly probable to be able to utilize and therefore, moved on the balance sheet included in the noncurrent financial assets. We concluded our refinance agreement in January, where for our interest-bearing debt of SEK 550 million was -- by year-end, it was moved from noncurrent liabilities to current. But as we have concluded the refinancing early this year, it will be moved back to noncurrent in the Q1 results. Our equity to assets ratio continues to improve and is currently at 53%. On the next slide, we can see our net debt position was SEK 136 million at the end of the year. The strengthening of our balance sheet reflected the new terms of our financing -- it provides us with plenty of flexibility to pursue both organic and M&A growth strategies going forward. In addition to strong operating profitability, we also expect to see lower cost of financing and for the tax rate to remain low for the next several years. With that, I hand back to Bodil.
Bodil Torp: Thank you, Stefan. And to deliver strong financial performance, we need to also deliver strong customer value. And I just would like to take some minutes to highlight what's going on during 2025, where we have increased our efforts for increased customer experience. We have a market-leading position across most of the markets in our footprint, and we are proud of that. And our strategy to defend that is the position that we have built for our 2 pillars, a world-class user experience and the strongest content catalog. We cater our book level segment where reading books is a natural part of daily lives. So since I joined in October 2024, reigniting our industry-leading product expertise has been moved up to the top of our strategic agenda during last year, and it will stay there. We will be in the front of the evolution of book consumption across all formats. And over the past year -- last year, we launched several strong new features, and I will also highlight that there is more to come here. We will continue to intensify our investments in the local relevant content, but also, of course, in the user experience that is extremely important for us. So that will continue to improve both engagement and satisfaction for our book lovers of today and tomorrow that is building our resilience. So one of the most common specific feature that has been requested from our customer is actually listening and reading. This is enabling our users to read along as they are listening or just jump between read and listening. And that's a fantastic feature that many of our customer loves. Sync listening is currently enabled on almost 50,000 books in our catalog, and this is expanding as we speak. Another feature is Story Art recently launched that shows art features connected to a specific time line in the book. Story Art with all the visuals now becomes a natural part of the listening experience optimized in the player. This adds a new immersive layer to the story, driving engagement again and connection with the story. So pilots are launched with Pottermore, Harry Potter in Netherlands, and we have also launched it together with the Bea Uusma's title Viton that also was the Swedish August prize winner last year. So this is very exciting. And here, we will soon see many more titles coming up also in the children's segment, I would say, where we see -- where we have some demand. The Sleep Timer is also very -- yes, it's a function that really many of our users use every night. It's used by 300,000 users every night. And we recently launched Sleep Timer recaps where we use generative AI to enrich the rewind options and to enable a better recap and understanding of the story. Also when you fell asleep -- fall asleep and you don't really know where did you lost the story. So it's easier for you to actually find where you were sleeping in the story. So it's easier to recap and follow up where you start to listen again. This is some of our new features. And with this, I would -- it's important for us to highlight that we have more exciting features to come in pipeline, and this is a strategic important objective for us to increase our customer experience in the payer. And over to the last slide here to recap our messages for Q4. We have delivered on our 2025 targets with record profitability and strong cash flow generation, making this a successful year. Our streaming subscribers hit 2.67 million with churn rates consistently moving lower, while ARPU levels remain stable in local currencies. Our Publishing segment delivered record external revenue growth. Cash flow generation continues to increase, and we closed the year with a net cash position. We remain on track to reach our 2028 midterm targets. Our firm targets for this year, 2026 is to deliver at least SEK 870 million in EBITDA. We also proposed a dividend of SEK 1.50, up from SEK 1 last year. We see room for -- we see room to increase our dividend by a similar amount also in 2027 and 2028. We are ready to take our business to the next level and one step is also to change listening to the main market in 2026. So with this, I would say stay tuned. And now we are ready to take your answers -- no to take your questions, so we can answer your questions. So please go ahead.
Operator: [Operator Instructions] The next question comes from Joachim Gunell from DNB Carnegie.
Joachim Gunell: So the new market listing here should provide some more capital allocation flexibility. And I noted here that you already had some one-off charges related to this list change in Q4. So can you comment a bit on when you expect this to be completed? And if you think that buybacks is one tool for shareholder remuneration already in 2026?
Stefan Wård: Well, we aim to move the -- or what we have communicated is that it will take place during 2026. We will try to keep it a speedy process. And hopefully, we will be done by mid-2026, but that is not a firm promise at this stage. It allows us to have a broader set of tools for shareholder strategies, absolutely, but I can't comment any further than that.
Joachim Gunell: Great. And in light of yet again strong cash flows and the strong balance sheet that you now have, can you provide just some reflections on your appetite for non-Nordic content acquisitions for 2026 and the pipeline you envision there?
Bodil Torp: Yes, we have communicated that before that we have an active M&A agenda and the appetite is high, I would say, and we have a high activity ongoing on different markets. So that is what we can say for the moment. And we have also communicated that we are into both streaming and publishing, preferably publishing to roll out our model -- business model that has been proven in the Nordics to more markets. So we are on track on having a lot of meetings for the moment. That's what we can say.
Stefan Wård: High activity on the M&A agenda, and we look to broaden our publishing base in our core markets outside the Nordics.
Joachim Gunell: That sounds encouraging. And you comment here with regards to -- we see strong ARPU development on an organic basis. Gross margin is strong here and the churn trends continue to be supportive, I think, contrary to some competitive woes out in the market. So can you comment just a bit on whether you've seen any sort of impact from heightened competitive activity in Sweden?
Stefan Wård: Well, in Sweden, we added -- we grew our subscriber base in Q4, and we grew it for the full year. So we have net additions in 2025 and the competitive environment is challenging, but it's not more challenging in Q4 than it was in Q3 really. So -- but there's a new entrant. And I mean, it's some uncertainty on what to expect going forward. But so far, it has been business as usual from our side.
Joachim Gunell: Perfect. Maybe just squeeze in one question -- perfect, just one question since Bodil, you commented a bit about the user experience enhancements that we have seen in this year, but also that you now provide some a la carte titles in English through the Penguin Random House partnership here. So just help us here since strong local content slate is a key competitive advantage, whereas -- I mean, should we interpret this partnership with Penguin Random House -- you're seeing some shift in how your customers consume content? I mean, is the younger consumer cohorts increasingly preferring English language titles? And is this some sort of trend that you see?
Bodil Torp: No, I wouldn't say that we change the focus. I mean the local knowledge and the local content is still extremely important for us. We know that over 85% of the consumption in the audio books and e-books are in local language. So that is -- we won't leave that focus. That is super important. But I mean, paper book and also the English catalog, it's, of course, one way of adding value to our customers that also want to have those titles and also the English content. So it's more like expanding our value to the customer. It's not about changing focus. The local perspective is super important still. And regarding the features and then customer experience in the app, it's also a high priority for us now to actually increase the customer experience and the customer value to actually also be the front runner when it comes to listening and reading books regardless format, I would say. But it's -- I think the company has been in a very intense years for a turnaround, and we didn't see that many feature launched a couple or 3 years ago. So I think this is super important to build our resilience to increase the engagement and loyalty as it comes to our customers. So we need to be the best payer when it comes to audiobooks and e-books. So this is -- I'm really proud of our product and tech team that also launched. We had like 7 features during end autumn last year, and we are on a good pace now. So you will see more to come when it comes to that. That's also important for the resilience and to be the front runner, so to say.
Operator: The next question comes from Georg Attling from Pareto Securities.
Georg Attling: I have a couple of questions, starting with the impact from Spotify. So I mean, it's quite clear in your Nordic numbers here in Q4 that they aren't much affected. But I saw comments from your competitor, BookBeat, who said that the churn to Spotify has eased in early 2026. So I'm just wondering if that's something you see as well that the churn to Spotify is easing off a bit here in early '26.
Stefan Wård: Yes. We haven't seen any increase in our churn in neither of the markets where Spotify has launched in the Nordics. We assume that consumption is growing for them, but it looks to be rather from new sort of nonexisting audiobook consumers. So new people in the market would be our best guess.
Georg Attling: Yes. That's clear. Then second question on the guidance here for '26. So I'm just wondering, one, how much margin expansion you baked into this? And second, how much of that SEK 870 million that is licensing revenue from Spotify?
Stefan Wård: We can definitely not comment on what is licensing revenue from Spotify in that guidance. But the guidance is based on our existing model. It's pure organic. It's based on our subscriber growth estimates and our best view of what we can get from the publishing business. Yes.
Georg Attling: Yes. But it sounds like if you're going to reach SEK 1 billion in quarterly streaming sales in second half of '26, it's quite a lot of growth in that top line as well. It's not solely margin expansion, so to say.
Stefan Wård: No, certainly not. The guidance gives us a firm commitment for you, the external viewers of the company, a firm commitment to what to expect from us. But it also leaves us some flexibility to prioritize if we see that we can drive growth, then we can do that without being limited by a margin range, so to speak, and vice versa. If we don't see those opportunities or get good returns on our marketing spend, then we will reach that number through other strategies. But I would say that expect us to try to grow top line as much as possible while protecting our satisfactory profitability at current level, but we're not seeking sort of to maximize the margins in 2026. It's a combination.
Georg Attling: Yes. Just a final question here on the ARPU in non-Nordic core, quite strong here in Q4 if you compare it to quarters -- 5 quarters in the year. So I'm just wondering what's driving this? Is it a mix shift in countries? Or is it any price changes in those markets?
Stefan Wård: Well, it's a little bit of both, but we're growing in markets where we have relatively good ARPU levels, and we try to increase prices where we feel that, that is motivated.
Operator: The next question comes from Martin Wahlstrom from SB1 Markets.
Martin Wahlstrom: Starting off, I noted a while back that Spotify introduced a new feature where you could kind of shift between physical and e-books, the Page Match feature and also that they introduced kind of reselling of physical books on their page. Kind of are you surprised by their ambition in this space and kind of the turn that they are going into?
Bodil Torp: Yes. I would say we have high ambitions regarding not only what Spotify is doing, but it's more about our own agenda to actually increase and enhance the value to the customer. And I think we have delivered on that in a good way during the 6 months when it comes to the features. So we are on a really good track here, and there will be more to come. That is what I can say for the moment. But it's on a high -- it's on the top of our strategic agenda, of course.
Martin Wahlstrom: Sorry, my question might have been a bit vague, but I'm looking for -- looking at Spotify's ambition, kind of the features they seem to be introducing and rolling out and evolving their offering, kind of -- is this level of ambition in line with what you could expect from them? Or are you surprised in any way?
Bodil Torp: I think, I mean, they are good and we know that they are good in driving innovation and features when it comes to the music industry. So that's maybe...
Stefan Wård: We're not really surprised. I mean it was fairly anticipated that they were entering the market and that they will have a competitive offering is also expected. So I wouldn't say that we're surprised by any of the features that they've launched or any parts of their offering really. When it comes to physical book sales, it's in market that are not outside of the Nordics and for English-speaking titles. So that is not hugely important for us at this stage when it relates to physical book sales.
Martin Wahlstrom: Okay. Great. And then I was just wondering if we could get any comments on the impact from the Klarna partnership that was announced during the fall.
Bodil Torp: Yes, we are -- I mean, it's a big partnership and still a bit early to comment on that. We are in collaboration in 14 markets with Klarna and increasing also our efforts in that partnership. So I have nothing really now to comment on that partnership. It's in line with our expectations for the moment.
Martin Wahlstrom: Yes. Great. And then kind of looking at your churn trends, they're, of course, very encouraging as they're trending lower. But kind of how do you balance with kind of new customer intake and driving down churn? I mean, are you a bit too cautious on new customer intake? Or kind of how should we view that?
Stefan Wård: I wouldn't say that we are too cautious, but we're mindful of getting good returns on our marketing investments. Churn trends is more explained by that we -- our subscriber base as it grows, it also becomes -- a larger part of our base has been customers for a very long time, and they basically don't churn, and that helps us move the churn trend lower. Then when we go into new markets, we still have high churn rates in the beginning and a lot of churn for new customers in the early months, that is nothing that has changed. But the portion of loyal long-time customers is steadily increasing in the base, and that helps bringing churn down over time.
Martin Wahlstrom: Great. And then just one final question here on the gross margin, which was up now again year-over-year. Kind of how should we view this going forward? Should flatten out here? Or it seems it's continuously drifting a bit upwards?
Stefan Wård: Yes. In the streaming, we are growing our business outside -- we're growing in the core markets outside the Nordics. And in those markets, we typically have a higher gross margin than streaming in general, especially compared with the Nordics. And that trend is expected to continue. So we will have some support for improving gross margins in the streaming mix. On Publishing, it's more an effect -- we had a very strong year in Publishing 2025 and especially a very strong finish also with the Nobel Prize winner and this August Prize winning titles, and that helps to boost the gross margins in Publishing. That is a little bit less certain how gross margin in Publishing will evolve going forward. But I think what you should expect from us is to have a gross margin above 45%. I don't think it's reasonable to expect it to expand from 47%. That is a range, 45% to 47% is -- it's a range where we are quite satisfied. I understand that there's some surprises between quarters, but it's the nature of our business, especially when looking at the publishing side of it.
Operator: [Operator Instructions] The next question comes from Derek Laliberte from ABG Sundal Collier.
Derek Laliberte: I wanted to ask about -- and apologies if this has been covered somewhere, but I just noted that operating expenses were up by quite a bit in Q4, both sequentially and year-on-year. And you mentioned the marketing spend here to drive growth. But what else is it that sort of results in the higher OpEx?
Stefan Wård: No, it's mainly an increase in marketing, and we also flagged that in the Q3 call that we -- in Q3, it was a little bit too low. So we saw that increase in Q4. Other than that, there's no real significant explanations. It's relating to us growing top line basically. So I don't have any better answer than that Derek.
Derek Laliberte: I'm happy with that. And on the marketing spend there, I mean, can you give any comment about where you've increased spend the most and also when you expect to see sort of an effect on the subscriber base from that?
Stefan Wård: Well, the biggest part of our marketing budget is still the Nordics, but we don't increase that. The increase in marketing spend is more related to growth outside the Nordics, which is also visible in how the subscriber intake is divided. That's the best answer I can give you.
Derek Laliberte: Perfect. That's great. And then -- sorry if you covered this as well. But you talked -- you got a question there about the ARPU in the non-Nordic segment, which looks really good there up sequentially. Did you say where have you made price adjustments, if any?
Stefan Wård: We don't comment on the local markets. You can look at the different websites for granularity, but we are trying to work with price where we find it motivated. And then we're growing more in markets where we have a good or higher ARPU levels that helps also. So it's both a mix change and a price effect.
Operator: There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
Stefan Wård: Okay. So we have a few written questions. First one is churn level in the non-Nordics core is not as good as the other markets. What is the reason for that divergence? So churn in non-Nordics core is lower than in the Nordics, and that has to do with a little bit of a maturity profile that will drive a stronger subscriber intake in these non-Nordic core markets. And that is also -- when we grow fast, that also increases the churn somewhat. So it was the same when we were more aggressive in the Nordics back in the days when we sort of built the Nordic market. We had a strong subscriber intake and the churn levels were at a higher level. So that's the most or the best answer I can give to that question. Then Bodil, we have a question about the Storytel Reader. Any news about Reader?
Bodil Torp: Yes. Any news about that? Yes. I know that I have said that we are into also relaunch the Reader, and there's a lot of customers waiting for that. So I will say that we are quite nearby to launching and test it in some of the markets, not all of the markets, but some markets that we think that we have the most -- the best fit into where we see the demand from the customers. So I will come back to that quite soon again. We will also do it in a cost-efficient way. That's super important. That's why it takes some time.
Stefan Wård: Yes. Then we have a question relating to any thoughts on the impact for Storytel on Spotify entering the Nordic markets. And what we have said there is that so far, we are satisfied with the churn rates in those markets where Spotify has launched. So in this very short period where they have been in the market, we haven't really seen any negative impact on our side. We don't expect that to be forever. I mean we view them as a serious competitor, but we hope that they help develop the markets in those markets where we coexist and that they will -- yes, they will help us build the audiobook market, and that could be something that both consumers and providers benefit from. Then I have a question regarding the unfortunate internal working capital impacts referred to in Q4. Please expand what these were and what should normal working capital performance looks like? Okay. So the headwind or the unfortunate impact of working capital relates to the full year. We actually had a tailwind of SEK 14 million from working capital in Q4. What we can say there is that we have shortened the period, the number of days that we pay our payables a little bit too much, unnecessary too much, and we have altered that back. So that should reverse. I would estimate that impact to be around SEK 35 million. And then normal working capital is the guidance that we mentioned earlier in the call that we expect a neutral impact on working capital for 2026. And then we have a final question relating to our dividend policy for the upcoming years. And what we have communicated there is that we increased the dividend this year. I know that it wasn't formulated as an ordinary dividend last year. But from -- going forward, it should be viewed as we started with SEK 1. We raised it to SEK 1.50. What we have said is that we expect to be able to increase it by a similar amount also for '27 and '28. And that fits into our midterm targets and provide some visibility on what to expect. So far, we see that we generate so much cash flow that we are able to pursue our growth strategies while also rewarding shareholders through other strategies. and we expect this to continue over the midterm. If there will be any changes to that, it should be in our sort of when we update the midterm targets. But it looks promising. So hopefully, that clears the picture. Okay. Do we have any final questions? Nothing more. Okay. Then we conclude the call, and thank you for your interest in our company. Looking forward to see you at our next quarterly update.
Bodil Torp: Thank you very much for all the good questions and participation today, and we are really looking forward to next quarter. Thank you.