<a id="bm-comp-36599d9a-8e21-4345-a45b-371bd1106eae" name="bm-comp-36599d9a-8e21-4345-a45b-371bd1106eae" class="BMCustomAnchor"></a><table><tr><td bm-component-id="36599d9a-8e21-4345-a45b-371bd1106eae" style="vertical-align: top; width:100.000000%;"><ul><li><font color="#000000">Volumes likely soft in Q1</font></li><li><font color="#000000">Management changes to weigh on earnings</font></li><li><font color="#000000">EV/EBIT of 10-9x on '26e-'27e, ~60% below its CPaaS peers</font></li></ul></td></tr></table><a id="bm-comp-54c2f210-b2a7-487c-b6a1-4682c029c6e7" name="bm-comp-54c2f210-b2a7-487c-b6a1-4682c029c6e7" class="BMCustomAnchor"></a><table><tr><td bm-component-id="54c2f210-b2a7-487c-b6a1-4682c029c6e7" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Likely at the bottom of the cycle</h3><p>The market continues to be weighed by pricing pressure and customers holding back on spending, which we have seen hurting volumes and sales growth across peers. For Generic, we expect Q1'26 sales of SEK 46m, representing 3% y-o-y growth, with SMS volumes being the main factor holding back the top line. What we like about Generic is its growing tilt towards non-cyclical segments, such as e-health, alongside with the continued expansion of its SaaS products (e.g. DOCS) with higher penetration in the Swedish municipalities. We expect this shift to broaden over time, lifting both recurring revenue and gross margins. For now, however, we think we are at the bottom of the cycle and estimate a gross margin of 44% in Q1 and adj. EBIT of SEK 10m, for an EBIT margin of 21% (23% Q1'25), likely held back by management changes.</p><h3 class="bm-h3">Management changes to weigh on earnings</h3><p>Generic has gone through some management changes in recent months, and we think this will weigh on margins in the near term, and we therefore cut our '26e EBIT by 7%. Looking at H2'26e, the company will have easier comps, and we estimate sales growth of 7% in '26e, an EBIT margin of 21% (21% '25).</p><h3 class="bm-h3">Trading at an EV/EBIT of 10-9x '26e-'27e</h3><p>We think over time that Generic will reach more customer groups. The company owns its own data centres, and can secure its customers' data, and offers solutions such as DOCS and SenderID. What we like about the company is that it has over time been a quality company, with margins over peers, and a ~95% cash conversion over the last five years. The company is trading at 10x EV/EBIT, ~60% below average CPaaS peers, and ~1.5x better EBIT margins for '26e-'27e.</p></td></tr></table>