"Divio Technologies AB publ reports 52% increase in net sales and positive EBITDA"

CEO COMMENT

Quarter
Q3 2025 was a highly productive quarter for Divio. We achieved a 52% increase in net sales, but more importantly, our EBITDA reached break-even, both for the quarter and year-to-date. This is a result of our efforts within sales, but also of our reorganization to accommodate our new Agency strategy. I can safely say that we now have our strongest ever delivery team, allowing us to both optimise our platform for the Agency Strategy and facilitate an increase in sales via partners and agencies.
Our operating cash flow remained negative in the quarter as revenues related to the 2023 customer prepayment were recognised without corresponding cash inflows. It's therefore very good news that this prepayment period comes to an end in December, allowing us a more normalised cash flow going forward. As these customer prepayments distorted our cashflow numbers, we are internally tracking Cash EBITDA (EBITDA adjusted for capitalized development costs) as a measurement for cash neutrality. For Q3, our Cash EBITDA indicated a shortfall of approximately SEK 230,000 per month, representing USD 24,000 MRR equivalent to an 8% gap compared to net revenues. This demonstrates we are getting ever closer to the cash breakeven goal, but still have a bit of work to do.

During the quarter, we have made significant progress in our Agency strategy, as further described below. I am also very pleased to report that we have now signed an expanded work scope with a major healthcare client, adding approximately SEK 700,000 in high-margin revenue in Q4. While we do not consider this part of our MRR. It is yet another strong example of the follow-on sales potential within our existing customer base.

Early in the quarter, we successfully closed an equity and warrant issue, raising SEK 9.6 million to address our cash needs. We are particularly pleased with this achievement, given the current challenging market for small companies seeking capital, and that we were able to avoid a highly dilutive and disruptive rights issue.

I extend my renewed thanks to Fredrik for his invaluable contributions and commitment as CFO over the past few years. We are also very pleased to have Niklas on board as interim CFO. He is currently focused on mapping out and taking over numerous operational support functions. This will allow the rest of the management team, without distractions, to focus more on sales and help us identify the ideal profile for a long-term CFO/administrative staff member.

Agency Strategy
During the quarter, we have worked very hard on our new agency strategy, and I would like to take the opportunity to present our initiatives and progress in this report.

Back in the days, Divio began as a web agency, building and managing client websites. We soon realized the need to automate complex management of infrastructures, especially if you run many different web applications, leading to the creation of the Divio platform. This platform addresses the more intricate aspects of web pages, ensuring 100% uptime while continuously adapting to changes, upgrades, data usage, certification, and security threats. These technical challenges are increasingly complex, often requiring highly specialized third-party tools on top of your own tech. For instance, Divio currently integrates with over 20 external tool providers on its platform. These were significant challenges, especially for organizations with limited access to specialized operational tech teams.

Over time, we have explored various sales strategies — some with clear successes, others less so. Our earlier, broad market approach proved ineffective for a still relatively small player like us. It diluted our focus, made it difficult to build brand awareness, and ultimately resulted in a cumbersome sales process that limited organic growth.

We have therefore now chosen to focus on agencies — a natural step for us. Our platform originated from our own experience as an agency, and we understand the growing complexity of managing digital infrastructures. This is a major challenge for agencies, which often lack the dedicated resources to handle it efficiently.

By leveraging our origins and addressing this increasing pain point for agencies, we are positioning ourselves to fill a clear market gap where few, if any, alternatives exist. An additional benefit of this approach is that agencies not only use our platform internally but also extend it to their own clients, amplifying our reach and value proposition.

We are in the process of rolling out this new strategy, initially focusing on becoming the leading provider in Switzerland, with a view to expanding into the rest of the DACH region and Scandinavian countries. This will involve a gradual sales approach, where agencies typically begin with test projects, then use our platform for internal work, and finally deploy it for external projects.

Given this, Monthly Recurring Revenue (MRR) growth is not the most accurate immediate measure of our success. Instead, we track our progress internally using other Key Performance Indicators (KPIs). For example, the number of active agencies has increased significantly from 12 at the start of this rollout to 44. Notably, two of these agencies are already discussing an upgrade to our Enterprise model, which starts at USD 3,200 in MRR. Another positive is that the number of projects each Agency is running on our platform is starting to increase.

I am very proud of these achievements, especially considering the relatively limited sales effort involved. While these are still early figures, they provide a strong foundation for continuing to implement this strategy and begin converting these gains into substantial MRR. This approach will lead to a much more gradual and stable MRR growth moving forward, which makes me both very excited and optimistic about the future.

Jon Levin
CEO