Equity research Zinzino Q4 2025: Healthy scalability

Read the full update below:

EBITDA margins expanded more than expected in Q4 2025 to 16.9% (10.2%), reflecting a stronger gross margin and increased operational leverage. We assume slower organic growth in 2026 but see continued positive impact from the successful integration of acquisitions. We slightly raise our margin and earnings forecasts.

Earnings beat from gross margin surprise and OPEX efficiency

In line with the preliminary sales pre-announcement in January, Zinzino reported a 45 per cent growth in total revenues in Q4 of 2025, marginally below the previous quarter’s growth rate. The FX headwind was notable as reflected in the 52 per cent increase in local currencies. The main regional drivers in absolute terms were Central Europe and North America. EBITDA shot up by 141 per cent to SEK 175m (73), corresponding to a margin of 16.9% (10.2). Our estimate was SEK 127m, corresponding to a 12.2% margin. The deviation is explained by a 5.2%-points increase in gross margin to 35.8% (30.6%). The uptick was well above our forecast. Zinzino cites a weaker USD, a positive geographic mix, and normalised remuneration levels for distributors during the quarter as factors driving the margin higher.

New targets and raised dividend are positive signals

In the Q4 2025 report, the board updated the financial targets for 2026–2028. They set an EBITDA margin target above 11% (previously >10%) and an average sales growth rate of at least 20% (same as previously). We expected an upgrade to the margin target due to improved scalability. The gross margin has also strengthened slightly during 2024 despite strong growth and some tariff concerns, underpinned by the weak dollar and lower raw material costs. Given the 2025 outcome, even the raised target appears somewhat conservative at first glance. The 50% hike in the proposed dividend to SEK 6 per share was sharper than expected, reflecting strong cash flow conversion from, e.g., subscription revenue.

Slightly higher margin expectations underpin valuation upside

We have become slightly more cautious on near-term growth following slower-than-anticipated January sales of about 20 per cent and FX headwinds. We assume some ten per cent organic growth for 2026 vs an estimated >30 per cent in 2025. At the same time, the margin momentum supports a more positive view on profitability, and as a result, we raise our earnings estimates slightly.  Solid growth prospects, supported by a high subscription revenue share, continue to justify a premium valuation relative to peers, in our view.

Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, conducts business with regard to Corporate Finance and Equity Research in which areas it, among other things, publishes information about companies including analyses. The information has been compiled from sources that Carlsquare considers to be 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 the like. Opinions and conclusions expressed in the analysis are intended only for the recipient.

The content may not be copied, reproduced or distributed to another person without the written approval of Carlsquare. Carlsquare shall not be held responsible for any direct or indirect damage caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments provide opportunities for value increases and profits. All such investments are also subject to risks. Risks vary between different types of financial instruments and combinations of these. Historical returns should not be considered as an indication of future returns.

The analysis is not directed to US persons (as defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Company Act 1940) nor may it be disseminated to such persons. The analysis is also not directed to such natural and legal persons where the distribution of the analysis to such persons would result in or entail a risk of a violation of Swedish or foreign law or constitution.

The analysis is a so-called Commissioned Research Report where 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 a usual fixed remuneration.

Carlsquare may or may not have a financial interest in the subject 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 Niklas Elmhammer and Markus Augustsson do not own and are not allowed to own shares in the company analysed.