Xplora Technologies: Strong beat, but shouldn't be extrapolated - ABG
* EBITDA 31% above driven by backlog fulfilment in emporia * Negatives: ARPU -4% vs. ABG and higher Opex * Positives: Higher sell-out than sell-in, strong senior SIM attach rate of 20-25%
ANNONS
Adj. EBITDA 31% above cons Revenue was NOK 555m, 7% above FactSet cons of NOK 517m and 3% above ABGSCe of NOK 540m. The gross margin was 50.8%, 1.5pp above cons of 49.3% and 3.4pp above ABGSCe of 47.4%. Adj. opex was NOK 205m, 7% above ABGSCe of NOK 192m and 4% above cons of NOK 196m. This gave an adj. EBITDA of NOK 77m (reported NOK 72m), 31% above cons of NOK 59m and 21% above ABGSCe of NOK 64m. Excl. emporia's revenue contribution of NOK 76m, group revenue fell ~6% y-o-y. Moreover, emporia sold 100k+ phones vs. ABGSCe of 58k, supported by backlog fulfilment, i.e. the strong Q3 deliveries should likely not be fully extrapolated. Hence, this is a somewhat low quality beat.
Excl. emporia, revenue was below Senior device sales of NOK 296m was 11% above ABGSCe, but Doro excl. emporia fell 16% y-o-y to NOK 220m against a strong Q3'25. Kids & Youth device sales of NOK 163m was 6% below ABGSCe, while watch activations rose 10% y-o-y to 191k, above sales of 154k units, with a stable 38% attach rate. This implies that there was a significant reduction in channel inventories in the quarter supporting growth in 2027. In constant FX rates, Kids & Youth revenue would have been NOK 20m higher. Service revenue was NOK 96m (+7% y-o-y), 4% below ABGSCe, driven by a soft Kids & Youth ARPU of NOK 61 (ABGSCe NOK 63).
Senior SIM attach rate of 20-25% Doro Connect is now live in 130 Power stores in Norway with a Sweden pilot. Xplora says the early senior SIM attach of 20-25% supports the 200k senior subscription target for 2029. However, the Power stores cover only ~1% of senior retail volumes (retail is 50%+ of senior units). But Xplora said on the conf. call that it is also working on adding more retail partners. Has also seen the first cross-sales deal coming out of these acquisitions, as it has enabled Xplora to start to sell its Kids smartwatches in the French retail chain FNAC.
Soft consumer sentiment, but also lower channel inventories Reiterates its NOK 50m synergy target. Xplora expects soft consumer sentiment to persist, but says that sell-out was higher than sell-in. Says retailers on average are very cautious right now which means that they are holding less inventory. This means we should likely see stronger Kids & Youth volumes next year as retailers needs to stock up. Xplora sees tough comps for Q4 due to boost from 2G/3G shutdown in Q4 last year. We expect cons to make small negative estimate changes driven by higher opex and lower ARPU, possibly offset by higher 2027 device revenue. Keep in mind that almost approx. 8% of outstanding shares are shorted so the strong beat today could give a short squeeze.
