<a id="bm-comp-6e985ba9-c796-444f-9b7e-94eed7e84855" name="bm-comp-6e985ba9-c796-444f-9b7e-94eed7e84855" class="BMCustomAnchor"></a><table><tr><td bm-component-id="6e985ba9-c796-444f-9b7e-94eed7e84855" style="vertical-align: top; width:100.000000%;"><ul><li>Q3 was soft on ad hoc sales decline</li><li>Structurally declining opex base is encouraging</li><li>We lower adj. EBITDA-capex by 11-4% for '26e-'27e</li></ul></td></tr></table><a id="bm-comp-a3ad0b07-f83e-4e24-a2de-c9841b3e7d41" name="bm-comp-a3ad0b07-f83e-4e24-a2de-c9841b3e7d41" class="BMCustomAnchor"></a><table><tr><td bm-component-id="a3ad0b07-f83e-4e24-a2de-c9841b3e7d41" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Subscription growth offset by ad hoc decline</h3><p>Q3 was strong on subscription revenue (up 15% y-o-y), and adj. EBITDA-capex improved to SEK 2.3m (0.4m Q3'25) for a margin of 4.8%. However, ad-hoc revenues were down ~30% y-o-y, which led to an organic net sales decline of 1.7% y-o-y. Churn increased to 1.6% or SEK -2.3m, from 0.2% in Q3'25 and 0.7% Q2'26. ARR growth was -3.6% q-o-q. While earnings were lower than expected, we are encouraged by the structurally lower cost base. Personnel costs is the biggest line item in opex, and was down 7% in the quarter, vs. our expected +1% and marks the twelfth quarter in a row with declining personnel costs. Opex is down 19% YTD vs -6% YTD sales growth.</p><h3 class="bm-h3">Cost base declining, looking for ad hoc revival in Q4</h3><p>During the conference call, management said that it has seen weakness in the market, but that some of the ad-hoc revenue loss in Q3 will come back in the coming quarters. Moreover, it said that more declines in personnel costs can be expected in the near term, leading us to lower Q4e personnel costs by 5%. The company noted that due to greater efficiency, it believes that Nepa can grow sales without increasing FTEs, which would bode well for more margin expansion.</p><h3 class="bm-h3">Trading at 2x '27e EBITDA adj.</h3><p>We lower '26e-'28e sales by ~2% p.a. after the report, with limited changes to organic growth. Adj. EBITA-capex is lowered by 11% for '26e, primarily due to the Q3 miss and partly offset by lower opex assumptions for Q4e. Due to the sales revisions, '27e and '28e adj. EBITDA are down by 4% and 2%, respectively. The share was down ~40% on the report and is now down ~50% YTD. Nepa is currently trading at 8x-2x '26e-'27e EV/EBITDA-capex adj. Finally, we note that CEO Anders Dahl <a data-bm-trackable="false" href="https://storage.mfn.se/afb49b7f-8991-4c8f-9fbc-fb8820fa670f/ceo-anders-dahl-leaves-nepa-search-for-successor-initiated.pdf" target="_blank">is stepping down</a>, leaving the company in Q1'27. No successor has been named, but the search has commenced.</p></td></tr></table>