Fortnox: Raised Long-Term Assumptions Following CMD

Research Update

2024-05-28

06:45

Analyst Q&A

Closed

Fredrik Nilsson answered 2 questions.

While the Capital Market Day, as expected, did not feature any new financial targets, Fortnox was generous in disclosing data regarding the two current targets, ARPC and the number of customers. The data showed substantial differences in ARPC between customer groups, highlighting the opportunity for further ARPC growth. We raise our long-term forecasts and Base Case somewhat.

Fredrik Nilsson

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Number of Customers

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Key financials

SEKm	2023	2024e	2025e	2026e	2027e
Revenues	1,669.0	2,078.9	2,576.7	3,165.0	3,845.7
Revenue Growth	28.6%	24.6%	23.9%	22.8%	21.5%
EBIT	672.0	850.7	1,142.9	1,491.6	1,861.5
EBIT Margin	41.0%	41.5%	44.9%	47.6%	48.8%
EV/Revenue	21.9	19.5	15.5	12.3	9.9
EV/EBIT	53.5	47.0	34.5	25.9	20.3
Net Debt	-514.0	-815.9	-1,409.5	-2,140.7	-3,048.9
ARR	1276	1679	2053	2422	2834
ARR Growth	23%	32%	22%	18%	17%
EBITDA - CAPEX	667	811	1,068	1,340	1,668
EBITDA - CAPEX Margin	40.6%	39.6%	42.0%	42.8%	43.7%
EV/ARR	28.2	23.8	19.2	16.0	13.3
EV/EBITDA - CAPEX	53.9	49.3	36.9	28.9	22.6
NWC/R12mSales	3.8%	5.4%	5.4%	5.4%	5.4%

Number of Customers

Fortnox disclosed several interesting data points regarding its customer structure and the difference in customer mix relative to the 2021 CMD. Fortnox has a target of reaching 700,000 customers by the end of 2025, compared to 556,000 by the end of Q1 2024. Assuming a linear growth in absolute numbers, Fortnox is somewhat behind the target, and we expect 647,000 customers by the end of 2025. While management feels confident in reaching the target, it believes it is an aggressive target. Also, according to the 2020-2025 business plan, Fortnox expects a higher absolute net customer intake during the latter parts of the period, probably partly related to a stronger offering to tiny businesses.

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Contents

Number of Customers

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