This article first appeared on GuruFocus .
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Net Sales:SEK654 million in Q3, with organic growth of 4%.
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Adjusted EBITDA Margin:Improved to 26%, a 4% point increase from the previous year.
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Leverage:2.5 times EBITDA, below financial target.
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Divestment:EHS business sold for approximately SEK1 billion.
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Region North Organic Growth:8%, driven by higher subscription-based online sales.
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Region South Organic Growth:Flat, with a decline of 0.3% due to weak offline sales.
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Adjusted EBITDA in Region North:SEK158 million, with a margin of 46.1%.
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Adjusted EBITDA Margin in Region South:Improved to 12%, an increase of over 4% points.
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Adjusted Free Cash Flow:Minus SEK36 million in Q3.
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Release Date: November 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Karnov Group AB ( FRA:3UA ) achieved strong margin improvement in Q3 2025, with an adjusted EBITDA margin of 26%, up 4 percentage points from the previous year.
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Net sales grew to SEK654 million, with organic growth driven by a 4% increase in online sales, including AI uplifts.
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The company successfully divested its EHS business for approximately SEK1 billion, generating a high multiple on invested capital.
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Karnov Group AB is advancing its AI-powered workflow tools, with plans to launch a common AI platform across all markets in the first half of 2026.
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Region North showed exceptional performance with 8% organic growth, driven by higher subscription-based online sales and AI uplifts.
Negative Points
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Currency effects negatively impacted net sales by 2.4%, affecting overall financial performance.
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Region South experienced a decline in net sales by SEK40 million compared to Q3 of the previous year, primarily due to weak transactional offline sales.
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The company faced challenges in its French and Spanish businesses, with declines in book sales and training courses.
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Q3 is typically a weaker cash flow quarter for Karnov Group AB, with an adjusted free cash flow of minus SEK36 million.
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The integration of the Schultz business diluted organic growth in Region North, impacting overall growth figures.
Q & A Highlights
Q: Excluding Schultz, organic growth in Q3 would have been more similar to Q2 in Region North. Could you explain the mechanics of this? Was the organic growth 12% or 13% in Q3, and is this affected by shifts between online and offline products? A: Hi Thomas, you're correct. Excluding the Schultz acquisition, the online growth in Q3 would have been 12%, similar to Q2. We've been focused on integrating Schultz customers into Karnov's databases and solutions, rather than on growth until now. - Magnus Hansson, Chief Financial Officer
Q: Can you provide more detail on your AI monetization strategy? What percentage of your customer base in Region North is using AI solutions, and what is the typical revenue uplift per customer? A: We are seeing growth across all customer segments, including law firms, courts, and municipalities. Customers are not only buying but also increasingly using our AI solutions. We often start by selling to part of a corporation, and they tend to buy more licenses after testing. While we don't disclose specific figures, AI is materially contributing to our growth, and we are still early in the adoption curve. - Pontus Bodelsson, President & Chief Executive Officer
Q: What are the expected impacts of the divestment of the EHS division on Karnov's financials? A: The divestment of the EHS division to InfoPro Digital Group for approximately SEK1 billion is expected to generate a high multiple on invested capital. The allocation of the net proceeds will be determined using our capital allocation framework. - Pontus Bodelsson, President & Chief Executive Officer
Q: How is the integration of the Schultz business progressing, and what impact is it having on financial performance? A: The Schultz business is now part of our organic growth. We have been focusing on onboarding municipal customers, and the financial performance of Schultz is in line with the previous year, which has a diluted effect on organic growth in Region North. - Pontus Bodelsson, President & Chief Executive Officer
Q: Can you elaborate on the cost efficiency initiatives and their progress? A: We have two cost efficiency initiatives running until the end of 2026, aiming to achieve efficiencies of 20 million in total. By the end of Q3, we have achieved annual run rate synergies of almost 20 million, progressing ahead of plan. - Magnus Hansson, Chief Financial Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
