Proact revenue drops for second quarter in a row
The UK was the company’s only profitable region
Proact’s figures continued to decrease in Q3, dragged down by challenging market conditions, despite solid performance in the UK.
Revenues for the Swedish services outfit fell 4.3 per cent to SEK 1.08bn (£86.75m), compared with SEK 1.13bn in Q3 2024.
Adjusted EBITA decreased 3.9 per cent to SEK 76.2m (Q3 FY24: SEK 79.3m).
The Solna-HQ VAR experienced declines across all regions except the UK, which partially offset this quarter’s results.
Proact’s UK arm is its second-largest region outside the Nordics and Baltics and is ranked number 88 on CRN’s Top VARs list.
UK revenues rose 19 per cent to SEK 203m, up from SEK 170.7m the year prior driven by strong performance in systems and services, as well as the acquisition of BlakYaks, which contributed SEK 28.1m.
System sales increased 11 per cent to SEK 86.9m (Q3 FY24: SEK 78.3m), while service turnover climbed 25.7 per cent to SEK 116.1m (Q3 FY24: SEK 92.4m).
“I’m really impressed by the performance of BlakYaks,” said Magnus Lönn, president and CEO of Proact, in an earnings call.
“We’ve also seen performance improvement related to better sales and cost control in the UK.
“If we could repeat that over the next quarters, we’ll be happy.”
On the other hand, the organisation’s Nordic and Baltics unit, which includes Norway, Sweden, Denmark, Finland, Latvia, Estonia, the US, and represents 54 per cent of total earnings, reported a 4.4 per cent dip, from SEK 565.6m to SEK 540.5m, due to a 10.5 per cent fall in system revenue.
This was partly counterbalanced by services, which stood at SEK 211.4m, a 6.9 per cent uptick from SEK 197.7m.
Turnover in the West unit (Netherlands and Belgium), which represents 15 per cent of Proact’s total income, dipped 18.6 per cent from SEK 215.6m to SEK 175.6m.
Revenue in the Central unit (Germany and Czech Republic), which makes up 13 per cent of the firm’s top line, dropped 9.5 per cent to SEK 190.3m, compared to SEK 210.2m the previous year.
“We are not satisfied with the performance of some of our business units, such as Central and West, but we expect better outcomes next quarter,” highlighted Lönn in the earnings call.
Expectations
Moving forward, the CEO said the company has a clear direction and is seeing concrete progress despite operating in a time characterised by geopolitical unrest, regulatory changes, and an increased focus on digital sovereignty.
“Our model - a reliable, independent European partner with a local presence and deep technical expertise - is becoming increasingly relevant,” wrote Lönn in an official statement.
“The need for security, control, and trust in data infrastructure is growing rapidly, and Proact is well positioned.”
He added the performance in the Nordic and Baltics, as well as the positive trend in the UK, combined with the high total contract value (TCV) level in cloud services and the commercial breakthrough for its AI initiative, confirm that the firm’s strategy is on track.
This marks the second consecutive quarter of decline for the company, following a 7.9 per cent fall in Q2.
In February, Lönn took the helm of Proact, replacing Jonas Hasselberg after revenue slow downed in Q4 FY24.
On Tuesday, the VAR also acquired Danish IT company Consular to reinforce its expertise in infrastructure and cloud solutions.