Skolon: International growth to weigh on margins - ABG

* Q3'25e organic sales growth of 28% y-o-y* We lower EBITDA on customer mix* FVR of SEK 30-45 reiteratedWhat to expect in Q3'25We expect organic growth of 28% and sales of SEK 68m in the third quarter, and we believe that growth will be driven by both volume and ARPPU. Q3 is seasonally a strong quarter as schools tend to purchase learning tools due to the start of the new school year. We believe Q3'25 will have a slightly different sales mix than usual, as Skolon signed 85k new users in Q2. However, as the announcement of the new large Norwegian contract occurred in late Q2, we believe some of the sales from that contract will land in Q4, as it typically takes a few months for new contracts to materialise into digital tool sales. We expect a 22% increase in paying users and a 7% increase in ARPPU y-o-y. We expect a GM of 24% (21% less capitalised work) and EBITDA of SEK 4m.We lower EBITDA estimates on geographical mixWe lower '25e sales by 3%. Moreover, we lower '25e EBITDA from SEK 7m to 5m, as a large number of recent contracts have been signed outside of Sweden (50k new users in Norway and 35 new schools in Germany), and we assess that new contracts outside of Sweden carry lower margins than recurring and/or Swedish contracts. In H1'25, Sweden had an EBITDA margin of 2% while other markets had an EBITDA margin of -9%. We believe that Skolon will continue to invest in growth in other markets, and that margins will mature over time.Implied valuationBased on our revised estimates, the company is trading at '25e-'27e EV/Sales of 4x-2x, which is 40% lower than the peer group median, while Skolon has ~2.5x higher sales growth. Moreover, Skolon is trading at '25e-'27e EV/Gross profit of 13x-6x, which is above peers. That said, we expect Skolon to grow its gross profit at a rate of ~40% per year, whereas peers are expected to grow by ~12% per year, according to FactSet. We reiterate our fair value range of SEK 30-45.