Solteq Plc’s Financial Statements Bulletin January 1 – December 31, 2025

Solteq reported Q4 comparable revenue of EUR 12.1m (up 1.1% y/y) but statutory Q4 revenue fell 3.2% to EUR 12.1m; full-year comparable revenue was EUR 46.7m (-4.3%) and statutory revenue EUR 46.7m (-8.1%). Profitability weakened: Q4 comparable EBITDA EUR 0.8m (6.5%) vs comparable EBITDA EUR 0.7m a year earlier, but statutory EBITDA fell to EUR 0.6m from EUR 2.2m; full-year comparable operating result was EUR 0.8m and EPS was EUR -0.07. Management issued a December profit warning, flagged underperformance in Retail & Commerce despite Utilities growth, initiated change negotiations to cut costs with estimated annual savings of ~EUR 2.1m, and guided that comparable revenue should remain stable while comparable operating result should improve in 2026.

Analysis

Market structure: Solteq’s print shows a bifurcation — Utilities-focused software wins (last quarter utilities revenue +€0.5m) while Retail & Commerce weakens (comparable revenue down €0.3m in Q4). Group comparable revenue fell 4.3% Y/Y to €46.7m and comparable EBITDA margin compressed to 4.6%, signalling diminished pricing power in discretionary retail projects and more resilient, regulation-driven demand in utilities. Cross-asset note: negative operating cash flow (‑€1.7m) and sub‑30% equity ratio (29.5%) increase small‑cap equity beta; expect widening of credit spreads for similar Nordic small-cap IT credits and higher implied equity vol near announcements.

Risk assessment: Tail risks include cascading project cancellations, a failed product rollout, or a larger-than-communicated working‑capital hit that could push equity down >30% and force deeper cost cuts. Near-term (days–weeks) risk is sentiment-driven; medium term (1–3 quarters) hinges on realization of announced €2.1m annual savings and product rollouts; long term (≥4 quarters) depends on ability to shift revenue mix toward recurring utility contracts. Hidden dependencies: customer concentration, timing of new deals, and delivery KPIs — any delay delays margin recovery and cash flow.

Trade implications: Tactical asymmetric trades are preferable to outright directional risk. If price dislocation occurs, buy limited-risk upside (calls or call spreads) sized small (0.5–3% portfolio) and prefer relative-long vs retail‑exposed peers; avoid levering a straight long until cash flow turns positive. Timing: increase conviction only after one quarter that shows ≥€1m QoQ improvement in operating cash flow or evidence of the €2.1m annualized savings materializing (target window 3 months).

Contrarian angle: The market may underprice the improvement trajectory — comparable operating result doubled Y/Y to €0.8m for the year, and utilities regulation-driven demand can convert to sticky recurring revenue. If management delivers the €2.1m run‑rate savings and the phased product launches start contributing in H2 2026, equity could re-rate materially; position sizing must however protect against continued negative cash flow and further execution risk.

Key Decisions for Investors

• If Solteq Plc (Nasdaq Helsinki) share price falls >15% within 30 days post-release, establish a 2–3% long position sized to portfolio (target 30–50% upside if cost savings and product rollouts validate); set hard stop-loss at 12% and cut if next quarter OCF remains negative or guidance is withdrawn.
• Allocate 0.5–1.0% of portfolio to a 6‑month call spread (buy ATM, sell 25% OTM) on Solteq to capture asymmetric upside while capping premium; if options unavailable, buy 6‑9 month OTM calls (small position) as a lottery ticket on H2 2026 product commercialization.
• Execute a pair trade: go long 4% net exposure to Nordic utility‑software/regulated‑IT names (prioritize companies with >50% recurring revenue) and short 4% equal dollar exposure to Nordic retail‑IT services peers for 3–6 months; rebalance after Q2 results or upon a 10% relative move.
• Reduce/underweight pure Retail & Commerce tech exposure by 5–10% versus benchmark for the next 3–6 months; reinstate only after customer decision pipelines show a ≥10% QoQ increase in new order backlog or a material pick‑up in deal closings.
• Watch two concrete signals in the next 60 days before adding size: (A) operating cash flow improves by ≥€1.0m QoQ OR (B) management evidences ~€2.1m annualized cost savings (written guidance or P&L run‑rate); add incremental exposure within 7 days of either signal.