Karnov Group’s shares surged 12.86% to $81.6 in pre-market trading on Thursday after the company reported a 25% adjusted EBITA margin for Q2 2026, up from 23% a year earlier. The Swedish legal information provider attributed the improvement to the launch of an AI-driven workflow solution in late June, which drove margin expansion across its markets.
Net sales for the quarter reached SEK 619 million, bringing the trailing twelve-month total to SEK 2.525 billion. Online Legal growth accelerated to 7%, up from 6% in the prior period, while organic growth slowed to 2% from 5%. Adjusted EBITA rose to SEK 153 million, with leverage improving to 2.0x adjusted EBITDA from 2.5x. Free cash flow remained negative at SEK 14 million, compared with SEK 3 million in the year-ago quarter.
The company’s cost-saving programs, targeting completion by year-end 2026, contributed to annual run-rate synergies of SEK 219 million (€20.3 million), with Q2 effects totaling SEK 54 million (€4.9 million). Capital expenditures are expected to remain within 6% to 8% of net sales. Share repurchases during the quarter amounted to SEK 159 million.
Regionally, North/Scandinavia posted an adjusted EBITA margin of 50%, up from 44% in Q2 2025, with net sales of SEK 310 million and 5% organic growth at constant currency. Online Legal growth in the region reached 11%. In contrast, Region South reported a 2% Online Legal growth rate and an 11% adjusted EBITA margin. Spain achieved 5% organic growth and an 18% margin, exceeding its medium-term target of 16%, while France saw a 5% decline in organic growth and margins compressed to 2% due to soft legal training demand and weak offline sales.
Karnov serves over 400,000 European users across public sector, practitioner, and corporate segments, which account for 41%, 32%, and 27% of net sales, respectively. Its proprietary content, authored by 7,000+ legal specialists, was cited in approximately 50% of Swedish supreme court cases in 2025. Around 75% of core Legal Information Solutions net sales derive from market-leading positions.
The company highlighted a pricing index uplift from 100 to at least 130 with the addition of its AI layer in Region North, representing a 30% increase in subscription values. With the workflow layer, the index could reach 200 or higher, effectively doubling annual subscription values through an additional 50% uplift. Pontus Bodelsson, President and CEO, noted that growth was driven primarily by AI uplifts across all geographies.
