This article first appeared on GuruFocus .
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Revenue:Continued weak performance in BTS North America; solid growth in BTS other markets.
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EBITDA:25% decline in fiscal year 2025.
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Profit Decline:Almost half due to non-core factors like currency headwinds and severance related to AI rationalization.
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AI Services Revenue:$19.6 million in bookings last year.
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Severance Costs:SEK8 million in Q2 and Q3, SEK10 million in December 2025.
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Cost Reduction:$5 million reduction from May AI breakthroughs; $2.6 million reduction from phase two AI breakthroughs.
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Release Date: February 20, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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BTS Group AB ( FRA:BX1B ) ended its quarter-over-quarter decline in profit results, marking a turning point in Q4 2025.
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Two out of three business units delivered growth in 2025, with expectations for continued revenue and profit growth in Europe and other markets during 2026.
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The North America unit is expected to return to moderate organic revenue growth and significantly improved EBITA performance in Q1 2026.
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Breakthrough AI innovations have enhanced BTS Group AB's competitive portfolio, improved client AI maturity, and simplified internal operations, leading to productivity gains.
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Bookings in North America increased by approximately 25-26% in Q4 2025 compared to the previous year, indicating strong demand entering 2026.
Negative Points
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BTS North America experienced continued weak revenue performance in Q4 2025, contributing to a poor quarter.
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Almost half of the Q4 profit decline was attributed to non-core factors such as currency headwinds and severance costs related to AI-based rationalization.
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BTS Europe experienced a temporary revenue slowdown in Q4 2025.
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Profit decline in BTS other markets was due to operations in Asia, specifically in Thailand, Korea, and China.
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The fiscal year 2025 was disappointing overall, with no growth and a 25% decline in EBITDA.
Q & A Highlights
Q: In North America, you mentioned recovering to growth in Q1 and profit increases. Is this based on January and February performance or expectations for March? A: Both. We are not relying on a significant uptick in March; the growth is consistent throughout the quarter. - Jessica Skon, President & CEO
Q: For 2026 guidance, is growth driven more by sales or cost reductions? A: It's a 50/50 split. We expect double-digit revenue growth in Europe and other markets, moderate growth in North America, and cost savings will enhance results. - Jessica Skon, President & CEO
Q: How is AI impacting demand from your customers? Is there a decrease due to AI, or are you benefiting from it? A: While AI presents challenges, it also offers new client opportunities, especially with AI hyper-growth companies. Clients are increasingly open to experimenting with AI, which benefits us. - Jessica Skon, President & CEO
Q: Can you specify what "significantly improved" EBITA means for Q1 year-over-year? A: We expect EBITA to be 15% or higher, driven by cost savings and moderate organic growth in North America. - Jessica Skon, President & CEO
Q: How do you see license revenue developing in North America in Q1? A: License revenue is a mixed story. Traditional content licenses are declining, but new AI-related products are growing, which should improve the overall license picture by Q3 2026. - Jessica Skon, President & CEO
Q: Why is the board not considering buybacks despite low valuation and expected growth? A: The board has discussed buybacks but has not reached a conclusion yet. - Jessica Skon, President & CEO
Q: How have unit economics changed with the AI revolution at BTS? A: Not significantly yet. Pricing remains stable, but faster customization and deployment due to AI will benefit us. Higher margins from AI offerings will also contribute positively. - Jessica Skon, President & CEO
Q: What is the outlook for employee growth in 2026? A: We expect a decline in operational staff but an increase in billable consultants across all markets, keeping overall headcount relatively flat. - Jessica Skon, President & CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
