Formpipe: Encouraging Pick-Up in ACV, Deliveries DK Still Soft
Research Update
2024-07-15
06:45
Redeye reduces its Base Case slightly despite cutting its 2024-2025 EBIT forecasts following a mixed Q2 report. While the issues in Public Deliveries persisted, hurting sales and EBIT in the quarter, the most important metric, the ACV, had an encouraging rebound to solid levels. In summary, it is a soft quarter with robust forward-looking numbers – which is the most important.
Fredrik Nilsson
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Review of Q2 2024
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The total ARR (S&M and SaaS) was SEK434m (406m), up from SEK426m in the last quarter. The q/q increase was driven by a solid organic ACV of SEK12m, SEK2m from M&A (Dictymatec), and a negative SEK6m due to FX. Compared to the rather soft SEK6.4m organic ACV in Q1, with SEK12m in this quarter, Formpipe is back at solid organic ARR growth. Our forecast was SEK9.5m. Both Private and Public delivered solid numbers with SEK8.7m and SEK3.6m, respectively.
Total sales came at our forecast of SEK134m and amounted to SEK133m (138), corresponding to -3% growth y/y. Recurring revenue, S&M and SaaS grew by 13% y/y, largely matching our expectations. Deliveries in Public came in lower than we expected for the second consecutive quarter due to the new deal with Landburgsstyrelsen – which impact we likely underestimated once again – and temporary peaks in R&D in TAS having an impact in Q2 as well. EBIT was SEK7.9m (12.9), corresponding to an adjusted EBIT margin of 6.0% (9.4). Our forecast was SEK12.6m and 9.4%.
Despite making a rather substantial cut to our 2024 and 2025 EBIT forecasts, we only lower our Base Case slightly to SEK31 (32). While the issues in Public Deliveries seem to be more prolonged than we previously thought, the solid ACV is promising and the most important metric for the long term.
| SEKm | 2023 | 2024e | 2025e | 2026e | 2027e |
| Revenues | 525.2 | 529.0 | 584.7 | 650.3 | 704.6 |
| Revenue Growth | 8.3% | 0.7% | 10.5% | 11.2% | 8.4% |
| EBIT | 48.8 | 43.2 | 82.6 | 120.2 | 145.4 |
| EBIT Margin | 9.3% | 8.2% | 14.1% | 18.5% | 20.6% |
| EV/Revenue | 2.7 | 2.6 | 2.2 | 1.8 | 1.5 |
| EV/EBIT | 29.5 | 31.7 | 15.7 | 10.0 | 7.5 |
| ARR | 425 | 458 | 512 | 563 | 608 |
| ARR Growth | 15.0% | 7.8% | 11.8% | 10.0% | 8.0% |
| EBITDA - CAPEX | 55.6 | 52.3 | 92.5 | 121.9 | 145.6 |
| EBITDA - CAPEX Margin | 10.6% | 9.9% | 15.8% | 18.7% | 20.7% |
| EV/ARR | 3.4 | 3.0 | 2.5 | 2.1 | 1.8 |
| EV/EBITDA - CAPEX | 25.95 | 26.13 | 14.01 | 9.83 | 7.46 |
| Net Debt | -27.2 | -31.1 | -103.5 | -200.1 | -312.4 |
| NWC/R12mSales | -27.5% | -25.0% | -25.0% | -25.0% | -25.0% |
Disclosures and disclaimers
Contents
Review of Q2 2024
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