Earnings call transcript: Lemonsoft posts stronger SaaS growth in Q2 2026

Lemonsoft reported Q2 SaaS revenue growth of 12.4% (+2.7% organic) and a 39% YoY jump in adjusted EBIT, alongside a 5.4% rise in net sales. Profitability improved with adjusted EBIT margin up 5.1pp, supported by the March Jakamo acquisition (described as a “positive surprise”) and tighter costs, but customer churn remained elevated at 1.5%. Management guided for slower decline in transaction/consulting revenue in Q3 and a further increase in SaaS mix in H2 (SaaS share nearly 80% of H1 sales), while still expecting churn to stay high through year-end; the stock was largely flat, last $4.14 (-0.24%), near the 52-week low.

Analysis

This is less a clean revenue miss/beat setup than a credibility test on conversion. The market is likely discounting the improving mix because cost cuts can only carry the story so far; the next leg higher needs closed deals, not just a larger pipeline. If management is right, the operating model is moving toward a higher-quality recurring base, which should support a rerating on EV/FCF once growth stabilizes.

Competitive dynamics are better than the headline suggests: narrowing toward manufacturing/wholesale reduces dilution from lower-multiple services revenue and should improve cross-sell density against broader SME software suites. The Jakamo asset looks strategically useful because it gives Lemonsoft a credible wedge into larger industrial customers, but it also raises the bar on execution and talent retention; specialized hires can re-inflate the cost base faster than investors expect. Longer term, the real prize is the ERP replacement cycle, but that only matters if Lemonsoft can win against incumbents that can bundle finance, payroll and implementation.

The near-term risk is that Q3/Q4 still print messy: churn lags by 3-12 months, divestment/accounting noise can obscure underlying trends, and any goodwill impairment could keep the multiple pinned. The catalyst window is 1-3 months into the next earnings update; the stock probably does nothing until there is evidence that pipeline strength is converting into booked ARR. Contrarian view: at this valuation and free-cash-flow yield, the downside may already reflect a lot of bad news, so the stock is more likely a slow-burn rerating candidate than a quick momentum trade—unless churn or deal conversion deteriorates again.

Key Decisions for Investors

• No immediate chase: wait for the Nov. 5 Q3 print before adding exposure. The thesis only becomes actionable if closed-won sales begin to catch the 2-3x pipeline build and organic SaaS growth reaccelerates; otherwise this remains a value-trap risk.
• If you want exposure, prefer a basket long in Nordic vertical SaaS / small-cap software over services-heavy ERP or consulting names. The trade is mix shift + margin leverage vs. revenue drag from lower-quality services revenue over the next 1-3 months.
• Use post-earnings weakness to build a starter long only if the stock holds above the recent low and management confirms churn is flattening. Upside is a rerating toward the reported FCF profile; falsifier is another quarter of elevated churn with no conversion in booked deals.
• Treat AI as optionality, not a standalone catalyst: do not pay up for the narrative until it shows up in retention or pricing. If competitive launches from larger suites neutralize the feature gap, the AI bull case is overdone.