Company Announcement no. 08/2025
cBrain® advances global growth strategy, maintaining long-term focus
Copenhagen, August 21, 2025
We are now entering the final half year of our 2023–2025 growth plan. We see standard software for government evolving into a large industry, challenging the dominance of traditional suppliers. With more than 15 years of experience, a strong product position, and solid customer references, we look confidently toward the next decade.
We aim to take a leadership position within the commercial off-the-shelf (COTS) software for government industry, and we have refined our strategy accordingly. Our dual go-to-market approach balances depth with focus: we continue to build our core business around large account customers (“super accounts”), while in parallel pursuing global leadership in selected niches where F2 becomes a category-defining standard.
With F2, we are shaping the future of COTS for government. Our product roadmap is driven by a unique technology position: a complete and fully integrated platform, standard software purpose-built for government, while offering easy configuration to meet customer requirements without any modification to the core software.
We maintain our full year guidance
Revenue for the first half of 2025 amounts to DKK 132 million, this is down 5% from DKK 139 million in the same period of 2024. Earnings before tax (EBT) total DKK 31 million, corresponding to an EBT margin of 24%.
Software revenue for the first half of 2025 amounted to DKK 100 million, a decrease of 10% compared to DKK 111 million in the same period last year, primarily due to lower international license sales. Revenue from one-time software licenses declined by 58%, making up 14% of total revenue. Services revenue increased by 15% to DKK 32 million, representing 24% of total revenue. Recurring revenue (subscriptions) grew by 24% and represent 61% of total revenue, up from approximately 47% last year.
While revenue for the first half of the year was lower due to a decline in one-time software license sales, we are encouraged by the solid performance of recurring revenue streams. The first half demonstrates a strong underlying business, with subscriptions growing 24% and services revenue increasing 15%. In addition, the solid EBT margin of 24% generated a strong positive operating cash flow of DKK 40 million.
The one-time software license decline, reflects timing-related factors and market-specific delays. Given the short delivery cycles for one-time licenses, revenue is directly impacted by fluctuations in procurement schedules.
In the second quarter, some Danish government organizations postponed procurements due to internal planning processes and resort changes, affecting the timing of recognized revenue. Similar to Denmark, delays in international projects have impacted results, representing a key driver of lower one-time license revenue.
We maintain our full-year guidance, growing revenue 10-15% with an EBT margin of 18-23%. For the second half, we forecast continued growth in recurring licenses, and expect one-time licenses to reach a level that secures the same total volume of one-time licenses in 2025 as in 2024. In Denmark, we expect postponed procurements to be completed. Internationally, we anticipate projects across the USA, Germany, the UAE, and Africa to drive growth in one-time license revenue.
Focused on long-term growth through strategic investments
During the spring, cBrain (NASDAQ:CBRAIN) has taken internal steps to strengthen its organization with the aim of taking a leadership position in the fast-emerging global market for Commercial-Off-The-Shelf (COTS) software for governments. This includes developing go-to-market strategies and establishing dedicated teams to build and lead global niches such as paperless ministry and environmental permitting.
During the first half year, cBrain has been able to report progress in both verticals, with the Kenyan ministry of ICT running a pilot project and supporting the new U.S. government standard for environmental permitting.
We believe the global COTS for government opportunity is significant. We have therefore also adopted a long-term perspective, even if this may affect short-term performance. cBrain has the financial strength to execute on this strategy. These changes have influenced the first half results, as we are reallocating project resources.
In the beginning of the year, we allocated extra costs of 30 million DKK to support the organizational development and market investments. Until now we have allocated a smaller part of these investments, and we continue to evaluate opportunities.
Thriving toward global leadership in the Paperless Ministry market
The setup and configuration of cBrain F2® for ministries, used by Danish ministries as their digital platform, is referred to as the Paperless Ministry solution. A key pillar of the expanded growth strategy is to replicate the Danish success, and with Denmark ranked number one in the United Nations E-Government Survey for the past eight years, cBrain holds a strong reference position when exporting the Paperless Ministry solution.
By establishing beachheads in new international markets, based on a vertical go-to-market approach centered around the Paperless Ministry offering, the goal is to achieve global niche leadership and secure a strong foundation for future growth. To support this, cBrain is building an internal team, dedicated to export the F2 Paperless Ministry solution globally.
During the first half year, cBrain has taken a number of important steps in the market.
In Kenya, cBrain has successfully configured F2 for the Kenyan ICT Ministry, ready-to-go live within only 10 weeks. This was achieved by copying and adapting the F2 configuration used by the Danish ministries.
In June, the Kenyan ICT Ministry revealed plans to roll out the F2 digital platform across all government departments, thereby transitioning into paperless working environments. The Kenyan project stands out as a strong reference for cBrain when engaging with potential ministerial customers in other parts of the world.
Working in close collaboration with the Danish Ministry of Foreign Affairs and UNDP, cBrain plans to market the African version of the F2 Paperless Ministry across Africa.
Many African government organizations focus on digitization as a key driver of GDP growth and as a foundation for building accountable and sustainable …