ARR growth remains accelerated somewhat q/q to a strong FX-adjusted 21% both y/y and in annualised q/q numbers – compared to an annualised q/q growth of 19% in Q1 and 24% in Q4. Thus, Vertiseit continues to achieve organic ARR growth around the 20% level, which is matched or exceeded by a few profitable listed Nordic SaaS companies. Growth was especially strong outside of the traditional core market, the Nordics and DACH – namely North America, the UK and the Middle East. Management sees a stable market at a solid level and expects those market conditions to persist.

EBITDA – CAPEX (Cash EBITDA) was SEK13.3m (1.0), corresponding to an EBITDA – CAPEX margin of 15.4% (1.1). Our forecast was SEK10.9m, and the deviation was due to a somewhat higher gross profit. Free cash flow was strong at SEK13.3m, which, combined with the share issue, bringing in SEK83m after transaction costs, turned Vertiseit net cash positive at SEK1.3m.

We increase our Base Case to SEK 53 (50) following increased forecasts and one more quarter of solid profitability and ARR growth. Trading at 19x and 16x EBITDA – CAPEX for 2024e and 2025e, respectively, we believe Vertiseit remains an interesting case – although the upside potential in valuation multiple expansion is not as great as it was and despite the share price increasing by ~110% YTD – combining a large global market, ~18% organic ARR growth, and a strong profitability trend.