Equity research Teneo AI: Volumes and margins growing faster than expected

Today, 6 May 2025, Teneo AI released its interim report for Q1 2025. Below is a comparison of the income statement results against our estimates:

Overall, net sales were marginally lower than that of our estimate, coming in ~10% off SEK 28m at SEK 25m. On the other hand, profitability, in terms of adjusted EBITDA, was better than expected, coming in at negative SEK 1.4m compared to our estimate of negative SEK 5.4m. Furthermore, the quarterly average SaaS API calls grew by 155% YoY. Cash flow from operating activities came in at negative SEK 13.9m, this compares to our estimate of negative SEK 9.6m. Compared to the Q4 report of last year, the sales pipeline has more than doubled. Given the recent strong performance in the share, we expect a small, marginally negative initial reaction from the stock market.

• In Q1 2025, net sales reached SEK 25.3m, reflecting a 48% growth YoY when compared to the corresponding figure in Q1 2024 of SEK 17.1m. This compares to our estimate of SEK 28m. As anticipated, growth was in large part driven by increased volumes from existing customers, with renewals of agreements with Medtronic and a global American tech company that is yet to be named. Quarterly average SaaS API calls grew by an impressive 155% YoY, but SaaS recurring revenue from API calls did not grow sequentially from Q4 2024.
• NRR was reported at a solid 142% as compared to 141% in Q1 2024.
• Gross margin (after commissions) beat both Q1 of last year as well as our estimate, improving YoY by 7%-points to 86% from 79% in Q1 2024. Our estimate was 80%.
• The adjusted EBITDA result landed on negative SEK 1.4m, as compared to negative SEK 8.5m in Q1 2024. Our estimate was negative SEK 5.4m.
• The EPS came in at negative SEK 0.07. That can be compared to our estimate of negative SEK 0.03.

We intend to publish an updated equity research report shortly.

Please see our latest research update on Teneo AI here

Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, is engaged in corporate finance and equity research, publishing information on companies and including analyses. The information has been compiled from sources that Carlsquare deems reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be considered a recommendation or solicitation to invest in any financial instrument, option, or the like. Opinions and conclusions expressed in the analysis are intended solely for the recipient.

The content may not be copied, reproduced, or distributed to any other person without the written consent of Carlsquare. Carlsquare shall not be liable for either direct or indirect damages caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments offer the potential for appreciation and gains. All such investments are also subject to risks. The risks vary between different types of financial instruments and combinations thereof. Past performance should not be taken as an indication of future returns.

The analysis is not directed at U.S. Persons (as that term is defined in Regulation S under the United States Securities Act and interpreted in the United States Investment Companies Act of 1940), nor may it be disseminated to such persons. The analysis is not directed at natural or legal persons where the distribution of the analysis to such persons would involve or entail a risk of violation of Swedish or foreign laws or regulations.

The analysis is a so-called Assignment Analysis for which the analysed company has signed an agreement with Carlsquare for analysis coverage. The analyses are published on an ongoing basis during the contract period and for the usually fixed fee.

Carlsquare may or may not have a financial interest with respect to the subject matter of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.

The analysts Markus Augustsson and Herman Kuntscher do not own and may not own shares in the analysed company.