MultipleStrategy

Category: Technology

  • Analysis Service Now [NOW]

    To summarise [TLDR]

    Service Now operate and lead in segments that are estimated to continuously grow significantly. Their positioning is attractive and management is talented. The company boasts significant moats and competitive advantages. In many ways, the bull thesis is leveraging the Service Now platform and the massive total addressable market in Agentic AI. The current key risk is the integration of recent acquisitions. Price target sits at 27% above current valuation – with Service Now notably trading at a PE 80.

    Analysis

    Service Now [NOW] is a Reddit favourite and commonly proclaimed AI agent winner. 

    Under the leadership of CEO Bill McDermott, ServiceNow boasts a highly regarded, customer-centric management team. McDermott’s prior track record of scaling enterprise software has fostered a strong market position with an impressive 120% net revenue retention. Partly attributed to ServiceNow land and expand model, which implies initial high customer acquisition cost and high lifetime value. Customers stay with ServiceNow and ServiceNow has leverage. Changing the system of action, means shutting down operations, changing workflows and retraining employees. The lifetime value and net retention rate is positively affected by ServiceNow’s cross selling. ServiceNow can cross sell because they have a strong brand equity in which they can leverage the service now brand across several business operations – such as customer service management and operations management. In marketing; they would be classified as a branded house. 

    Rhetorically, McDermott positions ServiceNow as the collapse of the traditional enterprise stack. Note. McDermott comes from a background in sales.

    Service Now Q2: 298M net income consisted of 272M other NON! operating income. Positive adjustments to investments, currency hedges etc. One time effects. The Service Now underlying business barely made a profit in Q2!. Meanwhile the McDermott is bragging of operating at rule of 57 targeting rule of 60. 

    The point is – I would not take the very liked and charismatic CEO at face value. 

    Now’s competitive advantage includes its capabilities/competent customer centric management and its relative positioning to legacy software ecosystems traditionally built for silos and departments. Its MOAT is the stickiness of the ecosystem, the costs of developing software in house and the operational advantages emphasised by the competitive advantages. 

    ServiceNow has a 5 year revenue CAGR at 24.06% and net income CAGR at 71.16%. This can partly be attributed to a net income margin expansion from 3.9% to 13.15%. Now is guiding for accelerating growth. 

    Lately Now has acquired and is implementing Armis [cyber security] among others into their systems, laying the foundation to become the AI control tower. Armis a 7.75 billion usd all cash deal made dec 2025, allows Now to better monetize and act on Agents that functions across and on top of whatever system of record the customer is using. This is great because managers need to trust the AI agents they use to automate their workflows. Note that the Armis acquisition is improving their security operations and that the implementation of Armis made it the fastest growing cyber security firm (out of the 10 biggest), highlighting how Now can scale their organisation.

    When customers trust a brand – they are more likely to use that brand. This is especially true with regard to AI agents. Again, ServiceNow has a massive customer base, which might implement ServiceNow AI agents. 

    The last four quarters Now has spend $9.7 Billion acquiring new companies, significantly above their  2025 net income at 1.75 Billion. Now as of Q2 2026 has 19.15 Billion in liabilities and 31.67 Billion in assets. Assets include 10 billion in goodwill. Excluding goodwill Now trades at an asset/liability ratio of 1.1.

    These massive acquisitions hit the operating income in Q2; driving it down from last quarter from 503M to 162M. 75% of it was driven by higher amortization of intangibles (190 million) and SBC (150 million); more accurately R&D increased about 90M (part of the SBC). Note brackets indicate increase. 

    To emphasise Now’s potential in Agentic AI, Now services an impressive 85% of fortune 500 companies. I won’t dig into total addressable markets, just note the sectors IT service management, cybersecurity and agentic AI are growing significantly.

    With regards to margins and future competitive outlook. I estimate compute costs to continuously decrease. Furthermore, I expect Now to have some leverage against the big llm’s such as OpenAI and Antropic. This is due to 1. Their massive customer base 2. They don’t actually need the fancy models for a lot of their use cases. 3. China’s open source models, pressuring pricing. A headwind is the factum OpenAI and Antropic are unprofitable entities that eventually need to increase prices to become profitable. 

    When the development of Porters Five Forces is favorable, then profitability should increase.  I already estimated Bargaining power of suppliers and Bargaining Power of Buyers: As low. The competitive rivalry is low, not because there isn’t competition but because ServiceNow is dominating. With AI the Threat of New Entrants and Threat of Substitutes are considered more pronounced, but I disagree. Creating a system of action is not cheap and requires years of development and/or marketing. Both costly affairs – especially over time.  

    Applying Porters Five Forces – ServiceNow is likely to improve profitability. Remember, above Porters is a subjective surface level assessment – and that a favorable positioning, doesn’t necessarily translate to a margin increase. 

    Now trades at a premium at an estimated 2026 PE at 80.8, commanding flawless execution. Using the above foundation, I am assuming an approximately fair value of 158 USD . Providing a 27% return from today’s levels. 

    The DCF assumes a 10% discount rate, a 25% revenue CAGR that gradually drops to 10% over 10 years. Exit multiple at PE 25. I assume net income margin gradually grows to 27%, from 11%. Admittedly I believe revenue could expand more due to the value proposition customers might get from agentic ai. Note. In Q2 2026 margins were 4%. I have set 2026 margins at 11%. Cyber security and their existing markets, can command massive profitability. Companies like Adobe and Microsoft operate in 25-35% range, with Salesforce and SAP commanding a profitability on par with Now. 

    In Q2 operating profit dropped about 50%. Gross profit was up slightly, though on a lower margin base. Attributable to higher compute cost. Further, operating expenses increased across the board. The acquisitions [Veza, Moveworks, Mission Control & Armis], the implementation of them (implicit the massive bet on Agentic AI) is the cause. Several complex integrations will affect margins in the mid to short term. These are likely to improve, as the integration progresses and as the company scales. 

    Note: 4. August Armis announced another major milestone as it rapidly surpassed $300 million in annual recurring revenue (ARR), growing from $200m in ARR in less than 12 months. Armis Surpasses $300M ARR as Demand for Exposure Management Security Soars | Armis

    Assuming a 400M ARR at a 7.5 Billion price point – Service Now is paying a “price/ARR” ratio at 18,75 or inverse 5,3%. Not cheap; but assuming they can 3x the business using their existing customer base, drive synergies across portfolio and increase share of wallet then it is starting to look all the more reasonable. In many ways, the bull thesis is leveraging the Service Now platform and the massive total addressable market in Agentic AI. And in many ways, the risk is the integration of businesses into the Service Now platform – and then again; PE 80.

    Service Now Income ProjectionDownload

  • Netflix [NFLX] attractive entry?

    Pros
    – Paramount/WBD merger creates a highly leveraged competitor with questionable management.
    – Strong FCF and balance sheet
    – Best in class brand equity
    – Trading below historical norms ( PE ).
    – Continued tailwinds in Emerging/Frontier markets
    – AI lowering production costs
    – Strong management (pioneering talent density).

    Cons
    – Amazon Prime and their massive scale
    – Younger cohorts increasingly gaming and watching UGC content
    – Saturated developed markets
    – Uncertainty regarding product expansion/changes to product mix
    – Removal of KPI’s such as semi annual watch time

    Summary
    Ad tiers to drive increased adoptions in emerging/frontier markets. Clear path for AI to improve margins. Plausible market share gain in short term, as competition must improve balance sheet. Development of AD monetisation infrastructure to decrease margins in short term. Netflix is cheap based on historical averages – by some margin, attributable to removal of KPI’s, changes to monetisation and fears of market saturation. The market is increasingly viewing Netflix as a mature media conglomerate instead of as a hyper growth story. If Netflix can maintain high single digits growth, then the current valuation is attractive.

    notes:

    I think AD tiers was a very deliberate initiative to increase reach to emerging/frontier markets. One could fear this would impact margins, as the subscription base grows outside developed nations (lower arpu). Though, the low incremental costs of each new customer, properly offsets this.

    Netflix is required by law to have 30% local produced content. This creates a moat for new entrants, but levels the playing field with incumbents. Note. Amazon & HBO/Paramount has wide access to local content, due to their ownership of local studios.

    Quality companies typically trade at a premium.
    And PE 20 is that.

    Netflix has over a 10 year period consistently improved margins and grown revenue – while it is not a indicator for future performance, it is certainly pointing towards excellent management. Also the company exhibits quality indicators such as massive FCF, profitability and a solid balance sheet. Thus Netflix command a premium valuation.

    Profitability:

    Gross margin = 49%.
    Net income margin = 24%.

    Return on assets = 15%.

    Liabilities:

    Liabilities/assets = 52%.
    EBITDA/Interest = 18.5

    2026 PE = 20x.
    2026 EV/FCF = 24x.

    Analyst expectations:

    2026 PE = 20.4x
    2027 PE = 19.2x
    2028 PE = 16x

    2026 guidance is 13-14% revenue growth (12% FX neutral) and a operating margin of 31,5%.

    A 10 year DCF; exit multiple 20, revenue growth 10% and operating margin improving 0,25% yoy.
    > 6% discountrate. Fair value 115 USD.
    > 8% discountrate. Fair value 85 USD.
    > 10% discountrate. Fair value 81 USD.

    Netflix is my second biggest investment at around 15% of portfolio.
    Not financial advice. I can have made mistakes. Always do your own due diligence.

  • HUBS down 22% pre market; Low Visibility & Headwinds [Q2]

    Expected user growth 9000-10000; actual user growth 7000. Slow start to August; with increased budget sensitivity = I.e. customers less price inelastic, potentially providing issues in up selling.

    Issues expected to persist remainder of the year. HubSpot is positioning itself towards Agentic AI, as they believe this to be a much bigger and much more attractive market. Issues partly stem from the whole “seat based pricing”, as the growth in Agentic AI is likely to at least cannibalise some of the HubSpot licenses. This creates tremendous risk; as visibility is significantly reduced.

    When numbers disappoint in a low visibility environment, then the valuation gets absolutely punished. Today HUBS is down 22% premarket. Management guided for headwinds for the remainder of the year; among these are increased budget sensitivity. This would explain why net upgrades is under pressure, net retention down 1% and a significantly lower single to double digit growth. When management says “increased budget sensitivity” it is important to note that their pricing has increased significantly in recent years; and that the upmarket initiatives are alienating some of their smb’s.

    In short, the presentation showed that the agentic AI adoption accelerated – especially, with regards to upmarket customers. Credit usage increased, even as pricing was decreased. Currently, Hubspot has been temporary hit by offering trials in AI agents. This action is expected to accelerate agentic AI adoption, as customers become more confident in their use cases.

    I am quoting Yamini from memory – “customers dont want 10 different agents from 10 different vendors – they dont want them crawling everywhere”. HubSpot (as well as Service Now, Salesforce, Sap etc) are in an attractive positioning, to automate workflows and improve efficiency for their customers – potentially, entering a immature and absolutely massive market.

    Not financial advice. I can have made mistakes.
    I have shares in HubSpot (and Service Now). Always do your own research.

    Webcast: https://hubspot-q2-2026-earnings-call.open-exchange.net/webcast
    10Q: https://ir.hubspot.com/node/15681/html

    There is no doubt AI agents is going to cannibalise subscriptions. BUT!. Why would that destroy bottom line? In Q2 revenue grew 20%, but operating expenses only grew 6%. We are currently not seeing a wipeout of margins – quite the contrary. The market (me) is uncertain about whom is winning agentic ai and the powerdynamics in play – if Hubspot and all the other crm platforms are just using OpenAI and Antropic, it might hurt their profitability due to little leverage. Furthermore, Hubspot might be incentiviced to provide cheap solutions, to accelerate adoption. In short, Hubspot is acting like this is going to be a megatrend – where the companies survival absolutely depends on leveraging this trend – if they fail, they might be gone for good (or we will be diluted to oblivion). Point is – I am not sure agentic AI is going to crush the bottom line, I am unsure how agentic ai is going to affect Hubspots competetive positioning. The valueproposition agentic ai gives the customers (automation of officework) is abselutely massive, and points toward pricing power -> increased profitability. Applying a expected value framework, then the value is heavily affected by the risk of disruption.

    Microsoft and Amazon are developing agents.
    Smaller startups are developing agents.
    OpenAI and Antropic are developing agents.
    SAP, Salesforce and ServiceNow are developing agents.
    Most of the peer group (smaller crm platforms) are developing agents.

    TLDR: HubSpot is preemptively sacrificing potential short-term monetization and accepting gross margin compression to ensure they remain the system of record. Under an expected value framework, the massive value proposition of automating office work is heavily discounted by the reality that HubSpot does not control the foundational AI layer and must compete in a highly saturated, commoditizing market.

    I am unsure about the strategic direction – therefor I am selling.

    Not financial advice. I can have made mistakes.
    I have shares in HubSpot (and Service Now). Always do your own research.

  • Match Group’s New Leadership: A Turnaround for the Dating Conglomerate

    Match Group’s New Leadership: A Turnaround for the Dating Conglomerate

    Ticker: MTCH. Not financial advice.

    Introduction & management

    Match Group “recently” changed their CEO (among other leadership changes), and as he stated during the Q2 earnings call: “Tinder needs a lot of work. It has grown stale because of short term monetization & lack of innovation.” Additionally, there is a general slowdown in the online dating market.

    profitability

    On the other hand, Match Group has a reasonably profitable business, with an net income / non-current assets ratio of 19% and an net income / revenue ratio of 18%. Furthermore, the new CEO has been making the company more agile, partly by laying off 20% of managers and reducing team sizes; and furthermore by increasing focus on product development. Established dating companies like Tinder benefit from strong network effects.

    balance sheet & capital allocation

    Match Group has negative equity, and half of their assets consist of goodwill. Their MAU (Monthly Active Users) has been declining since 2022. Furthermore, Match Group acquired HyperConnect in 2021 at what appears to be an overly optimistic price, leading to massive write-downs.

    But even with Match Group’s negative equity and high proportion of goodwill, they are executing significant share buybacks. This can be explained by a low interest compared to earnings yield 6,5%. This indicates a shareholder-friendly and aggressive capital allocation strategy that also suggests management believes the company is attractively priced (or he is signalling to the shareholders -> no more expensive acquisitions!).

    Note: Match Group has a net income / (liabilities + goodwill) ratio of 8,7%.

    market

    User sentiment across the industry is historically poor, driven by a perception that dating apps profit from keeping users single. The new CEO has signaled a strategic shift toward brand health, stating, “I would take a positive word of mouth over a $15 subscription any day.” This marks a essential pivot from short-term extraction to long-term value.

    Note: Match Group’s declining MAU stems from the Evergreen segment and Tinder, whereas Hinge is experiencing impressive growth.

    Conclusion

    In my opinion the “new” ceo, seems to be doing the right things. The stock is priced for stagnation – and in my optic – that might just be a tad too pessimistic – even with a historic horrible capital allocation and a trash balance sheet.

    Disclaimer

    Not financial advice – always do your own due diligence.
    I can have made mistakes. I have shares in Match Group.

  • Assessing cBrain’s Potential in a Competitive Government Software Market

    Assessing cBrain’s Potential in a Competitive Government Software Market

    Everyone can code now – but not everyone has brand reputation, customer relations or the competencies to navigate the bureaucracy – all these key elements might be overlooked and misunderstood at the current valuation.

    cBrain claims to have a total addressable market of 325 billion DKK in the global government software market.

    But; How much of this market is cBrain likely to capture?

    #1 Competitors

    cBrain is not entering empty territory. In the US, UK, or Germany, local equivalents of EG and Systematic already possess the exact same bureaucratic and relational moats that cBrain enjoys in Denmark. In a low churn sector, does this severely impact TAM.

    #2 New Entrants

    If AI allows any localized startup to build bespoke workflow tools rapidly, the frequency of new entrants is mathematically high. However, the consequence of this threat to cBrain is remarkably low. Central governments do not buy critical infrastructure from startups. They demand ISO certifications, heavily audited sovereign cloud compliance, and a decade of referenced reliability. This bureaucracy acts as a moat against disruptive new entrants.

    #3 Need for product development

    cBrain’s products are essentially:

    – F2 paperless – A highly disciplined, standardized digital filing cabinet and routing system

    – F2 climate – The exact same F2 Core engine, but pre configured to process carbon permits, ESG reporting, and green subsidies

    – F2 customization – ServiceBuilder is the low-code toolkit that allows local consulting firms to configure F2 for local governments.

    These products are by no means representative of the whole 325 billion DKK TAM. For cBrain to ever approach this figure, it would require excessive product development into areas outside their core competencies. Because F2 does not replace ERP systems or heavy infrastructure, a more realistic TAM is closer to 10% of their reported figure. To extend beyond this 10%, cBrain cannot rely on a simple copy-paste of their current product into new markets; they would need extensive R&D and a fundamentally different sales reach.

    So; How are cBrain planning to capture this market?

    #1 With aggressive sales in new markets through external companies.

    cBrain is pivoting hard to an “F2-for-Partners” model, where external consultancies can install and implement cBrains F2 products. They are building tools (F2 ServiceBuilder) that allow external stakeholders to configure and implement the software.

    While this should propel potential customers – it might also be a double-edged sword – Giving sales channels to external partners unavoidably gives away control of own sales channels and execution, potentially damaging cBrain’s reputation and customer relations.

    Can cBrain copy paste its Danish government competencies to other governments?

    Most likely no. Expecting a 1:1 frictionless interaction using “the Danish way” in different cultures with different “ways of doing it” – will undoubtedly provide friction across stakeholders. With that said – cBrain already has customers globally; proving their model can be exported.

    The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are currently being implemented. This is an opportunity for cBrain as their F2 climate can give them “a foot in the door”.

    Also, what about incentives and management?

    Per Tejs Knudsen founded cBrain in 2002, took it public in 2006, and remains CEO of cBrain — that’s over 20 years of continuous founder leadership. He holds shares through his personal holding company, Putega Holding ApS. CTO Thomas Qvist is also a co-owner through Felida Holding ApS and has been with the company since 2003. The two co-founders did sell a combined 4.2% stake in 2021 to bring in institutional investors. Per received total annual compensation of roughly 3.2 million DKK as of 2024, with base salary of about 2.2 million making up the majority. For a company with a market cap around 3 billion DKK, that’s remarkably modest.

    This highlights a long-tenured management – with high insider ownership – resulting in high alignment with shareholders. Finally, the board is diverse and consists of expertise within government, IT and law.

    Also, Per Tejs Knudsen has a Master of Science in Engineering from the Technical University of Denmark (DTU) and HD in Accounting from the Copenhagen Business School.

    So is cBrain a good investment?

    Assuming cBrain can capture 20% of my revised TAM. At a 20% income ratio. Are we looking at a 30 times increase in earnings.

    Math stuff

    Revised TAM (product-relevant market):
    10% of 325B = 32.5B DKK
    Addressable share (realistic market capture):
    20% of 32.5B = 6.5B DKK
    Potential income at 20% margin:
    20% of 6.5B = 1.3B DKK
    Earnings multiple: 1.3B / 43M ≈ 30x current earnings

    cBrain currently (date: 05.04.2026) trades at a TTM PE of 30.

    The hurdle of international expansion is massive. Competing with existing national players is not an easy task – But CSRD and CSDDD regulation might boost adoption of the F2 platform. Another potential boost to sales and market share is the adoption of third party consultants. With external partners the scalability significantly increases – at the cost of customer relationship management. Though the incorporation of external partners partly resolves the issue of difference between cultures and workflows – by allowing for customization.

    A PE in the 30s demands strong execution! And headroom for growth. cBrain has both. But can they capitalise and scale in new markets? A patient investor might wait and see – I assume the current skepticism surrounding software companies is overdone – and am willing to take on that risk. This is not a margin of safety play – but an expected value play (asymmetric risk reward).

    Scenario analysis

    Scenario weight 10% = 30 times increase in earnings; exit multiple PE 25. Potential market cap = 32,250M DKK

    Scenario weight 65% = 2 times increase in earnings; exit multiple PE 20. Potential market cap = 1,720M DKK

    Scenario weight 25% = no increase in earnings; exit multiple PE 15. Potential market cap = 645M DKK

    Current market cap = 1,290M DKK

    Weighted annual return = 4,504 / 1,290 = 3.5x or 13% a year – over a 10 year horizon; assuming no discount rate. This is under my normal margin of safety at 20% – with a large upside pulling up the average return, meaning great risk of failure. So why am I still considering investing? It’s plus EV and I trust the management. But, In this case; for a 30PE company, there are simply too many IF’s. The uncertainty regarding the product and competition – makes this bull thesis too fragile. I am looking for high conviction, high growth and conservative pricing. cBrain as an investment thesis, is simply not there yet.

    Notes & Key Issues

    Two conflicting statements from cBrain annual report:

    Note : “cBrain estimates the global addressable market for the F2 digital platform to exceed 50 billion USD” (page 14, cBrain annual report 2025).

    “Market analysts estimate the global government software market to exceed USD 50 billion, driven by continued digitalization at national, regional, and local government levels” (page 6, cBrain annual report 2025).

    Based on my analysis – these two statements are contradicting. I have left it for now. TAM are notoriously difficult to assess. For this analysis to truly shine it really needs two things:
    1. Using cBrains TAM assessment is questionable – as I truly don’t know what they estimate as “global government software market. A homemade TAM would significantly improve this analysis.
    2. I would need to know more about the product and how satisfied customers are with it.

    Another thing –

    Financial Overview (DKK millions)

    Financial20222023202420252026E
    Revenue188239268251275–290
    Revenue growth—+27%+12%-6%10-15%
    EBT4981865641-58
    EBT margin26%34%32%22%15-20%
    Net income (approx)38636543

    Revenue fell 6% and margins compressed from 32% to 22%. cBrain attributes this to delays in large government projects, and they’re guiding for a recovery in 2026. Short term profitability is being sacrificed for increased revenue growth.

    https://www.cbrain.com/post/cbrain-announces-next-phase-growth-plan-and-short-term-financial-targets-for-2026

    Debt:
    Liabilities/Assets=18%
    Income/Liabilities=61%

    Profitability:
    Income/Revenue=17%
    Income/Assets=11%

    This is a very profitable company – with very low debt. Meaning shareholder dilution is unlikely to fuel growth.

    What do analyst expect?

    2025202620272028
    PE52.1x24.2x15.9x11.8x

    Note 2026 PE is a tad lower than what cBrain themselves guide!. As cBrain is guiding for a real possibility of declining income. These analyst estimates are likely overly optimistic. Market expansion is expensive.

    Gemini 3.0 and Claude 4.6 has been used to improve readability.

  • Trifork’s Pivot: Navigating Tech Disruption and Future Growth

    Trifork’s Pivot: Navigating Tech Disruption and Future Growth

    Note: Not financial advice. I have shares in Trifork AG.

    Macro headwinds

    Trifork is facing massive structural headwinds. Tech layoffs have flooded the market with programmers, and AI now lets anyone produce good enough code – lowering barriers to entry, increasing competition, and compressing margins across the consultancy sector. Vibe coding further commoditizes “easy to make” applications. However, this risk doesn’t fully apply to “must absolutely function” sectors like security, aviation and healthcare.

    The pivot challenge

    The unpredictable nature of a sector in disruption is the biggest risk for Trifork. The second biggest is the pivot from selling hours to products.

    This pivot is fundamentally harder than it looks. Trifork’s organisational DNA is agile consultancy – scrum teams, sprints, client-driven backlogs. A product-first organisation is a completely different animal. It demands roadmap discipline, saying no to custom requests, investing heavily before a single customer pays, and building sales and marketing functions that consultancies typically don’t have. Being agile does not make you a product company – it makes you good at iterating quickly, which is necessary but not sufficient. The question is whether Trifork can rewire its culture and incentives from “deliver what the client asks this sprint” to “build what the market needs this year.”

    The success of Trifork’s future earnings is highly dependent on their ability to make this change – it is still unclear whether Trifork has the competencies needed.

    A few questions remain unanswered – Can Trifork sell big software solutions? Will potential customers pay? And how much?

    2025 Annual Report – Early proof

    Estimating market share and future earnings in such an environment is incredibly difficult. Historic growth cannot be a benchmark in a disruptive environment. The 2025 annual report, is an indication that he pivot is working.

    In million EUR2025 revenueYOY Revenue Growth2025 Adj EBITDA %2025 EBITDA
    Products77.737.6%20.9%16.2
    Services143.1-4.1%13.7%19.6

    The product segment grew 38% year-over-year with significantly higher margins than services. This is what the bull case needs – recurring, high-margin revenue replacing lower-margin billable hours.

    understanding the business

    Triforks organisation is a bit complex – The labs consists of minority owned (less than 50% stake) companies. While Triforks main business also consists of different business units. Both labs and the main business might sell products (SAAS) or hourly rates.

    Finally, this has some implications for the income statement – if Trifork sells a labs company this will affect the income statement – but if they buy a company it wont – also, income from labs does not go to the income statement – but any increase or decrease in book value will.

    trifork labs

    Arkyn Studios (44% ownership) is a “digital enterprise”. They help SAP customers organise maintenance and planning through the APPs: FastWork & FastPlan. Customers include Vestas, Arla, Porsche & Royal Unibrew.

    No data: ROA, Solvency & Income.

    *put formula used*

    AxonIQ (20% ownership) is the most adopted event sourcing framework in the Java ecosystem. Used in banking, retail, insurance, and government systems worldwide. he technology provides total operational control by literally “storing every decision” an IT system makes. While the basic framework is open-source, AxonIQ is the commercial extension that sells the high-margin central management servers required to run it at an enterprise scale.

    No data: ROA, Solvency & Income.

    Dawn Health (27% ownership) – Digital Therapeutics (DTx) and “Software as a Medical Device” (SaMD). Dawn Health’s value is its ISO 13485 certification and its ability to navigate clinical trials for software. They build FDA-approved and CE-marked software that is prescribed alongside traditional drugs (e.g., companion apps for insulin dosing or chronic disease management). Customers include massive players like Novo Nordisk and Novartis.

    ROA -77%. Solvency 80%. Income -52.217.000 DKK

    Solvency = (Equity*100)/Assets

    ROA = (Income*100)/Assets

    Frameo APS (6,1% ownership) – Is a software for those simple tablet looking devices, that can display pictures. Frameo is one of europes fastest growing companies (increased 10 fold over the last two years) – and it is very profitable. Frameo APS is almost the same size as Trifork.

    ROA 60%. Solvency 80%. Income 106.868.000 DKK

    XCI Holding (5% ownership) – Is a cyber intelligence firm – they help government agencies track down cyber criminals – using their extended platform/product. Income has grown steadily since 2021 and has increased five fold since then.

    ROA 50%. Solvency 98%. Income 52.171.000 DKK

    trifork trifork

    Trifork group consists of Trifork and Trifork majority owned companies.

    Ownerships on p147 & p151 annual report.

    Nine AS (ownership 90%) – Almost entirely public sector. Triforks biggest unit – with a Fairly big market share among Danish Government Agencies. The april 9 – Nine won a contract to deliver Danish Digital Wallet for the Danish Agency (Digital Government) worth 29.000.000 DKK. Nine has had a pretty big retraction in ROI which is down from the 40’ties in 2021-2023 – with income only slightly down.

    ROI 27,5%. Solvency 76,5%. 38.112.000 DKK

    Netic (ownership 88%) has developed the platform Contain – a cloud platform designed to develop and run big applications – with Netics own datacentres.

    ROI 11%. Solvency 28%. Income 12.795.000 DKK.

    Erlang Solutions (ownership 100%) – Erlang & Elixir programming language. Designed for zero downtime. Mostly consultancy/ programming services . *no numbers?*

    Trifork products solely under the Trifork brand includes:
    iFly4A – Modular application used by the crew to “duty schedules and flight info to checklists, documents, and peer-to-peer messaging – (…) customizable tools”. Customers includes …
    See more: https://trifork.com/aviation-app/

    Corax AI a workflow ai assistent – summarizes meetings, writes drafts for customer supports and chat bots. See more: https://trifork.com/boost-your-customer-service-with-ai-superpowers/

    Alon is a response to The EU Pay Transparency Directive. Its is an application that contributes with – Automate pay audits, Transparent pay ranges, Custom reporting & Fair pay recommendations.

    Tiris messenger is messaging platform for companies with strict GDPR regulation. It uses encrypted messages with sovereign datacentres.

    Sovereign AI as a service – is a another product being offered by Trifork. It is essentially a combination of Corax AI, Corax Data and Netic datacentres.

    A deeper dive into growth drivers & hinderes

    The pivot away from US tech conglomerates is a potential growth catalyst. In Trifork’s own words – “Danish public authorities are increasingly facing challenges related to dependency on a small number of large foreign technology providers and limited control over data and critical digital infrastructure” (annual report, 2025). It is the segment Netic that is most likely to take advantage of this. Note Netic earnings is about 2 million EUR (about 8% of Trifork earnings).

    While 8% of total earnings is minor – the addressable market for Netic is huge; managing the data within the European public sector. Crucially, the regulatory barrier to entry is valid. Though, resolving the issue surrounding the US CLOUD Act and European GDPR might completely strip away Netic’s potential – as their market disappears.

    Netic’s platform is being levered through most of Trifork Groups products – highlighting Triforks strategy of leveraging capabilities and synergies across business units. In some scale – making Trifork as an investment – a sovereign data play – as a wide range of Triforks products, differentiate on NIS2 and GDPR regulation.

    Valuation

    Traditional valuation methods struggle in a disrupted sector with a changing business model. Historic growth rates are unreliable as a benchmark. Analyst forward estimates are stale and might not account for AI disruption or the uncertainty of a mid-pivot business model – if it matters – they are projecting a PE under 10 by 2028. In short – assigning growth rates to Trifork is incredibly difficult.

    Trifork currently trades at a TTM PE in the low 20s – cheap in historical terms. This suggests the market has already discounted significant disruption risk. Note – this excludes about 10% of Triforks earnings, which is accounted on the balance sheet!.

    The product growth in 2025, is a key – as this is an early indicator that the pivot towards the software as a service is working. Though not conclusive. If the services-to-products pivot continues at anything close to the 2025 pace, earnings could grow substantially within three years – compressing the PE into single digits at today’s price.

    Relative PE & analyst estimates

    2025 -> 2028
    Trifork 22.9x 13.1x 9.89x 8x
    Netcompany 66.1x 20.5x 15.6x 13.4x
    Cbrain 52.1x 23.4x 15.3x 11.3x
    NNIT -51.3x 13x 8.31x 6.52x

    Triforks own guidance indicates severe mispricing – at a 2026 PE around 12,5 and 11. Assumed 50% income to EBITDA ratio. Guidance 35 to 40.000.000 EBITDA.

    Conclusion

    Can Trifork move away from what made it successful – agile, customer-first consultancy – toward a product-first mindset? The 2025 annual report suggests it can – while the market seems to not think so (no trust in that EBITDA guidance!). If the pivot holds, the upside across healthcare, data sovereignty, and aviation is substantial. The Trifork Investment case is essentially a bet on #1 a normalization in software consultancy #2 data sovereignty in EU as a catalyst towards high margin recurring revenue.

    Trifork since ipo

    2021-2022: Zero interest rate policy environment. High valuations, particularly in the LABS segment.

    2022-2023: Rising interest rates drove multiple compression and resulted in write-downs within LABS.

    2023-2024: Oversupply of developers (driven by Big Tech layoffs) and delayed IT investments due to higher interest rates and macroeconomic uncertainty. This triggered a collapse in operating income. When consultants aren’t billing hours, the bottom line takes a severe hit.

    2024-2025: The Service segment continues to face headwinds (declining 4%). A new product-oriented strategy is driving higher margins. Operating income is recovering to 2022 levels.

  • Valuation NetEase

    Valuation NetEase

    NetEase ADR. TICKER: NTES.

    INTRO

    NetEase is a Chinese gaming giant. NetEase has launched a series of games, where bigger publications include: Where Winds Meet & Naraka Bladepoint.

    MARKET

    NetEase’s bull thesis is closely associated with the company’s execution and favorable demographic growth – As Gen Z are spending more time gaming relative to other entertainment forms such as streaming – partly driven by an increase in girl gamers. The bear thesis lies in regulatory measures in Europe, whereof daily logins, loot boxes and microtransactions are increasingly frowned upon – and likely to be regulated. Another risk is the ADR structure and a potential escalation of conflict between USA and China.

    STRATEGY & MARKETING

    While the gaming sector is highly competitive with high capex and – usually a short lifespan for products (though SAS has been popular for a while now). These functions as MOATS – As spending millions and years of development, creates barriers to entry. Furthermore, NetEase big inhouse studio, serves as unique competencies that new entrants would have to compete with.

    Competing for share of wallet, NetEase has great success, using influencer marketing -> Creating substantial word of mouth – and successfully appealing to their target customer group through the appropriate channels (for the western segment: Twitch & YouTube).

    VALUATION & PROFITABILITY

    NetEase is highly profitable and has a quite conservative balance sheet – both in absolute and in relative terms.

    (MarketScreener, 2025) (Sheets, 2026).

    Should note that – few of these are pureplay – kadokawa being a publishing company and Tencent a tech conglomorate (social media etc.). Furthermore, that the long development time of some AAA games, renders companies such as Take Two (GTA) difficult to compare on a ratio basis. Numbers are based on annual and not quarterly figures.

    NetEase TTM PE is at 07-02-2026 trading at a 14,75 PE – likely attributable to their succes with Where Winds Meet (which launched early 2025 in China). Since 2025 Q1 EPS have slumbered a bit, calling for a slight eventual retraction in PE (depending on upcoming product launches). Basis for TTM PE:

    (MarketScreener, 2026) (Sheets, 2026).

    NOTES

    70% of assets is cash & cash equivalents (Sheet 2026). Not updated for quarterly figures.

    CONCLUSION

    NetEase is essentially a quality company trading below PE 15 – likely attributable to major regulatory risk.

    REFERENCES:

    Sheets, 2026:

    NetEase_Download

    MarketScreener 2025 & 2026: https://www.marketscreener.com/quote/stock/NETEASE-INC-111325397/

  • Can Match Group Revive the Online Dating Market?

    Can Match Group Revive the Online Dating Market?

    Updated version: https://multiplestrategy.com/2026/04/22/match-group-update/

    Ticker: MTCH. Not financial advice.

    Match Group has negative equity, and half of their assets consist of goodwill. Their MAU (Monthly Active Users) has been declining since 2022. Furthermore, Match Group acquired HyperConnect in 2021 at what appears to be an overly optimistic price, leading to massive write-downs.

    Match Group recently changed their CEO (among other leadership changes), and as he stated during the Q2 earnings call: “Tinder needs a lot of work. It has grown stale because of short term monetization & lack of innovation.” Additionally, there is a general slowdown in the online dating market, and indications suggest Bumble has captured market share from them – along with other and more niche dating apps.

    On the other hand, Match Group has a reasonably profitable business, with an adjusted income / non-current assets ratio of 19% and an adjusted earnings / revenue margin of 17%. Furthermore, the new CEO intends to focus on making the company more agile, partly by laying off 20% of managers and reducing team sizes; he also plans to increase focus on product development. Established dating companies like Tinder and Bumble benefit from strong network effects.

    Even with Match Group’s negative equity and high proportion of goodwill, they are executing significant share buybacks amounting up to 130% of adjusted earnings. This can be explained by a ( long-term debt / interest expense ) of 2.4% and an adjusted earnings yield of 6.9%—in other words, low interest expenses and a low valuation (earnings per share relative to share price). This indicates a shareholder-friendly and aggressive capital allocation strategy that also suggests management believes the company is attractively priced.

    But – Match Groups debt ratio is simply too high, to justifying big share buybacks. While aggressive capital allocation is appreciated, the overall health of the company should come first. This is especially true since Match Groups refinancing could be coming in at higher interest rates. Furthermore stagnating revenue increases business risk which further increases cost of capital.

    I assume – The online dating market will continue to grow in the long term, following a normalization in MAU after a period of rapid expansion.

    Conclusion

    Match Group represents a high-risk turnaround case. While the company benefits from significant scale, network effects, and valuable user data, it faces major headwinds from elevated leverage, refinancing risks, and uncertainty regarding both execution and market development. Although the current valuation reflects many of these concerns, long-term success depends entirely on management’s ability to restore earnings growth and improve the value perceived by customers.

    Notable mentions:

    – User sentiment across the industry is historically poor, driven by a persistent perception that dating apps profit from keeping users single. The new CEO has signaled a strategic shift toward brand health, stating, “I would take a positive word of mouth over a $15 subscription any day.” This marks a critical potential pivot from short-term extraction to long-term value.

    – Interest expenses decreased in 2025, due to refinancing at a lower but stable interest. Decreasing the overall refinancing risk. Interest expenses should be higher in 2026, as there was a longer period in 2025 between paying off loans and settling new loans (Q3 2025). And liabilities/assets increased.

    – Match Group’s declining MAU stems from the Evergreen segment and Tinder, whereas Hinge is experiencing impressive growth.

    – Match Group has a adjusted earnings / (liabilities + goodwill) ratio of 8%.