Equity research CDON, Q4 2025: Macro tailwinds and initiatives support outlook

Read the full research update here:

Gross Merchandise Value on the CDON marketplace impressed us with a 22 per cent growth in Q4 2025. Marketing costs is anticipated to continue to hamper profitability in 2026. However, good growth prospects, underpinned by the launch of internal initiatives to drive growth and margins, support the view of increased operating leverage in the medium term. This is illustrated by the new 2027 target of SEK 100m in EBITDA (>3x the 2025 level).  

Marketing and improved macro help drive better-than-expected growth

CDON posted double-digit growth in both Gross Merchandise Value (GMV) and net sales in Q4 2025, at 15% and 10%, respectively, exceeding our expectations. The CDON segment was the main driver, with a 22% increase in GMV, driven by higher orders and order value, e.g., in the home electronics category. The accelerating growth bodes well for 2026, when CDON will implement new growth initiatives across advertising revenue, marketing, and technology, and onboard major European vendors to further strengthen supply. Also, the macro backdrop is expected to be favourable, e.g., for household consumption in Sweden in 2026.  However, marketing costs as a share of GMV are also rising, reaching 8.4% in FY2025 (7.6%), reflecting continued dependence on paid traffic and hampering margins. EBITDA increased 73% to SEK 18m (12), roughly in line with our updated estimate.

Accelerating growth initiatives in 2026

As previously reported, CDON raised SEK 45m in the autumn to help drive growth initiatives. The company now states that “combined with continued growth in our underlying business, this EBITDA from growth initiatives should result in total EBITDA approaching SEK 100m for 2027”. This was higher than our previous forecast of SEK 77m. The four highlighted areas include increased expansion/penetration in the Nordics outside Sweden, introducing AI-enabled internal site search, marketing of the group’s brand, and improving the currently very modest ad revenue through retail media. An increased focus on advertising service revenue is a natural focus in our view and has the potential to deliver quick payoffs through improved take rate. There is also potential positive impact on growth and earnings from increased marketing and onboarding of new merchants, the latter of which was delayed from 2025 to early 2026.

Margin increase in the medium run looks feasible despite short-term costs

We believe the return to growth in 2025, macro trends, and the potential for gradual positive effects from the above-mentioned growth initiatives support our expectation of double-digit growth in 2026 and 2027. However, increased marketing and technology development will weigh on margins this year. For 2027, we expect solid operating leverage, and margin increases from GMV expansion and higher take rates. Hence, we modify the assumed earnings trajectory somewhat and include costs for the initiatives of some SEK 25m but bump up 2027-2028 estimates around 11%.

Disclaimer

Carlsquare AB. www.carlsquare.se, hereafter referred to as Carlsquare, conducts operations in Corporate Finance and Equity Research and thereby publishes information about companies, including analyses. The information has been compiled from sources that Carlsquare considers reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be regarded as a recommendation or invitation to invest in any financial instrument, option or similar. 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 any direct or indirect damage caused by decisions made based on information contained in this analysis. Investments in financial instruments provide opportunities for capital appreciation and profits. All such investments are also associated with risks. The risks vary between different types of financial instruments and combinations thereof. Historical returns should not be considered as an indication of future returns.

The research is not directed at U.S. Persons (as that term is defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Companies Act 1940) and may not be distributed to such persons. Nor is the analysis aimed at such 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 law or regulations.

The analysis is a so-called commissioned analysis where the analysed company has signed an agreement with Carlsquare for analysis coverage. The analyses are published continuously during the contract period and against customary fixed remuneration.

Carlsquare may or may not have a financial interest in the subject of this analysis. Carlsquare values ensuring objectivity and independence and has therefore established procedures for managing conflicts of interest.

The analysts Niklas Elmhammer and Markus Augustsson do not and may not own shares in the analysed company.