Upsales Grew 10.9% on the Top Line and 4.7% in ARR — Its New CEO Knows Which Number Matters

A 46% EBITDA margin buys Johan Kallblad time to swap profit maximization for vertical sales, partner channels and buybacks — and to quietly stop giving guidance

UPSALE.ST · Earnings Call · 2026-10-20

The headline and the hinge

Upsales Technology reported its third quarter on 20 October, and on the surface it is the same machine the company has been running for three years: revenue up double digits, margins fat, cash piling up. Net sales came in at SEK 42.3 million for a 10.9% increase — “that is four quarters in a row with growth over 10%” — Kristina Fridheimer, CFO · 2026-10-20 — while EBITDA reached SEK 19.5 million against SEK 13.4 million a year earlier, lifting the margin from roughly 35% to 46.1%. EBIT margin landed at 38.7%, net income at SEK 13.1 million, and net cash rose to SEK 36.4 million from about SEK 20 million twelve months back. But the hinge of this report is one line a few sentences later. “At the end of the quarter, ARR was SEK 154.6 million, and that is up 4.7% from a year ago.” — Kristina Fridheimer, CFO · 2026-10-20 ARR is the forward contract for a subscription business; reported revenue is the rear-view. A company compounding revenue at ~11% while its ARR compounds at under 5% is, by construction, harvesting a backlog rather than filling one. And part of the quarter's revenue was not repeatable at all: a SEK 1.6 million partner revenue-share true-up, invoiced and recognized in the period. Strip it out and the growth rate is closer to 6-7% — which is what the ARR line has been telling you all along. The new CEO, Johan Kallblad, in his first report, did the unusual thing and said so out loud: “It is a fact that ARR growth has not been the strong point of our financials for the last three years or so.” — Johan Kallblad, CEO · 2026-10-20

The strategic pivot: from margin to sales capacity

What makes this quarter a story rather than a print is that management is deliberately changing what the company optimizes for. “The big priority for me in the short to medium term is really not to improve margins, but to make sure that we have a foundation for growth going forward.” — Johan Kallblad, CEO · 2026-10-20 That is a real shift in posture from a founder-led, product-first culture — Kallblad's own predecessor is described as "more of a technologist" — to a commercially-driven one built on unit economics. The CEO was explicit about the arithmetic he uses: if the lifetime value of a customer is five or six times the customer acquisition cost, you should spend into it "without giving it too much thought until that changes." Three pillars were laid out. First, product: a Q4 release with a rewritten interface, fewer clicks, roughly four times faster load times, aimed at being the CRM for Nordic companies that take sales seriously. Second, packaging: the same core platform configured into five vertical solutions — financial services with KYC/AML workflows, tech and SaaS with net revenue retention, wholesale and logistics with deep ERP integration — sold by vertical. Third, distribution: a willingness to invest in sales and marketing, with two to four hires expected over the next quarter. That last pillar is where the growth vectors get interesting. Upsales has always sold direct, which management frames as an earnings-quality virtue: total control over which deals it pursues and how implementation is delivered. The cost of that control is that nobody else is out selling for them. Kallblad's comparison was pointed — HubSpot has 30-40 partner firms in Sweden alone carrying its message, while “We have no one who is building their income statement on our IP, more than our customers and ourselves.” — Johan Kallblad, CEO · 2026-10-20 Partner-led sales, M&A and geography were all named as options, but with the honest caveat that this is a small organization with limited capacity and no urgency.

The quiet retirement of guidance

The most consequential thing said on the call was about what Upsales will stop doing. Asked whether he still believed in the full-year growth guidance, Kallblad affirmed it, then dismantled the practice:

I think a small company like us shouldn't really do guidances because one individual customer or two individual customers may change the revenue, and one individual hire or two individual hires could change the earnings. I have no reason to change the guidance, but I think it's better to work with long-term financial goals, rather than short-term guidances.
Johan Kallblad, CEO · 2026-10-20

That reframing shows up unmistakably in the keyword record: financial goals is the second-highest-weighted theme of the quarter, alongside small company and individual customer — the vocabulary of expectation-resetting. New long-term targets will be published with the year-end report on 17 February 2027, and management signalled they will be a blend of growth and earnings, with an aspiration to outgrow the overall CRM market. The plain reading: a guidance framework that existed to help investors see through the Aira spin-off is being retired before it becomes a liability. When your leading indicator is growing at half the rate of your reported revenue, you would rather discuss a three-year goal than next quarter's number. Note also that Kallblad did not push back on the margin question — he pre-empted it, warning the Q3 vacation effect flatters staff costs and that the coming quarters will not carry a 46% EBITDA margin.

The tape is already punishing exactly this metric

Here is where Upsales stops being a small Swedish story and becomes a data point. The company's ARR growth deceleration is arriving into a market that has spent a year de-rating the entire software category on precisely this axis. Across the 360-day window, annual recurring revenue as a theme is down 37% across seven names including Guidewire, Tyler, FICO and Zscaler, while system of record — the exact category a CRM vendor claims — is down 31% with twenty of twenty-five constituents negative, among them Salesforce, ServiceNow, Workday and HubSpot itself. The market has already decided that seat-based systems of record are worth less per dollar of recurring revenue than they were. A 4.7% ARR print into that tape is not a rounding error; it is the whole argument. It may also explain the capital allocation discussion, which was unusually open. In December, new Swedish rules let Upsales buy back stock, and the CEO's logic was refreshingly unromantic: “If our share is trading cheaper than any M&A options that we have and their pricing, I think it would make sense to repurchase our own shares.” — Johan Kallblad, CEO · 2026-10-20 That is the language of a management team that suspects the public market's valuation may be the cheapest acquisition target available to it. No decision has been taken. The AI question was handled with similar pragmatism. Kallblad addressed head-on whether the AI revolution makes a CRM vendor obsolete — "AI has not slowed our growth," he said, while conceding that "neither uncertainty nor inflated expectations are good for business." AI functionality is woven through the product and used heavily internally to keep cost base flat; it also connects to a live global thread, with open weight models and agentic tooling dominating software earnings conversations this season from BNY to Telia and Lime. There is no price tape available for this name today, which is a shame — a re-rating debate this explicit usually has a chart attached. What we have is a small-cap (market value around SEK 505 million) with a 20-year history, over 1,000 customers, no external capital ever raised, and a new CEO using his first call to tell investors the profit was never the point. The scorecard for the next two quarters is narrow and clear: does ARR growth reaccelerate toward the revenue line, and does the vertical packaging produce anything beyond a re-organized sales pitch? The 46% margin buys patience — but not indefinitely.