Otovo shifts to recurring revenue model, targets profitability with new platform

Otovo is strategically evolving its business model to expand its high-margin leasing and service solutions to a broader network of European installer companies, shifting away from an exclusive in-house sales approach. This pivot aims to leverage Otovo's pan-European infrastructure for solar, battery, and EV charger systems, addressing volatile customer demand and marketing risks in the challenging European solar market. The company will maintain direct sales in profitable markets like Italy and Poland, while adopting a commission-only freelance model and partner-driven distribution elsewhere.

The reorganization includes significant cost reductions, with an expected annual payroll cut of NOK 80 million, reducing employee count from 213 to approximately 125 by Q1 2026. Other operational costs are projected to decrease by NOK 30-40 million annually. This leaner structure, combined with the expansion of Otovo LEASING (in partnership with Swiss Life Asset Managers) and the rapidly growing Otovo CARE subscription service (which has already acquired over 3,300 members generating NOK 15 million in combined recurring revenue), positions Otovo for accelerated profitability and enhanced resilience.

The new strategy aims to tap into the local installer market, which accounts for over 80% of PV installations in the EU, by offering standardized contracts, financing, and operational support. Otovo is transitioning into a capital-light platform company focused on long-term financing and servicing, anticipating a shift towards recurring, high-margin revenue streams, with gross margins expected to exceed 50% for leasing and service by 2026.