Significant profitability growth and strong working capital improvement

Crayon Group Holding ASA today reported its third-quarter results,
delivering significant profitability growth. The adjusted EBITDA was up 66
percent, and the working capital improved by 748 million NOK. The gross profit
increased by 14 percent.

“I am pleased to present a quarter characterized by strong, profitable growth,
higher margins and significant improvement in working capital, despite a more
cautious market than expected. With our differentiated and scalable business
model, we are well positioned to take full advantage of the growth opportunities
ahead,” said Crayon Group CEO Melissa Mulholland.

Gross Profit increased by 14%, primarily driven by strong growth in the Nordics
and Europe. Demand for Software and Cloud remains strong across multiple
vendors.

Adjusted EBITDA ended at NOK 238m, reflecting a margin of 16.6%. This is an
increase of NOK 95m compared to the same quarter the previous year. The increase
is a result of the company’s clear priority to improve profitability in the
consulting business as well as scaling the international markets.

Net working capital was NOK 157m, an improvement of NOK 748m compared to the
same quarter previous year.

Financial highlights:

Gross Profit NOK 1 435m Up 14%
Adjusted EBITDA NOK 235m Up 95m
Net Profit NOK 82m Up 95m
Net working capitalNOK 157m Up 748m

Significant growth opportunities

“Even if we experience strong demand and are ramping up to take advantage of new
opportunities, the overall market has been more cautious than expected.
Consequently, we are making minor adjustments to our guiding. However, we still
see strong growth opportunities, increased profitability and improved working
capital, driven by our service-first business model focused on customer value
and careful cost-control”. said Mulholland.

Updated guiding:

Gross profit growth: 15% to 17% (prev.18-20%)
Adjusted EBITDA: 19% to 20% (prev. 18-20%)
Net working capital: -10% to -15% (prev. - 5 to -12.5%)

Microsoft Incentives

In reference to the announced shift in Microsoft incentives that has received
recent attention, it is important to underline that these types of shifts have
always been a part of Microsoft’s partner model.

“As Microsoft Partner of the Year and fifth largest global partner, we believe
that the evolution of incentives will continue to support our profitable growth
in line with market demand, the way they always have,” said Mulholland.

Microsoft stresses that the incentives will continue to benefit its partners and
increase over time.

“The incentives and earning opportunities as a percentage of partner revenue
have increased over time as the company and partner network evolves. We’re now
shifting more partner funding into different strategic areas and investing more
than ever in our partners to drive growth in key areas like Copilot, Data & AI,
Security, and migrations. This move is all about helping our partners innovate
and grow in these crucial areas,” said Jeffrey York, Vice President of Global
Partner Investments, Global Partner Solutions Microsoft.