cARR was SEK66.7m, corresponding to a 20% growth y/y, up from SEK65.8m in Q1. The q/q increase was a mere SEK0.9m, softer than the SEK6m we expected and last year’s 10.6m. The integration of BrightBid and Speqta has taken management’s focus in recent quarters, which, combined with a softer macroeconomic environment, continued to hurt cARR growth this quarter. While those factors likely have a slight negative impact on the cARR growth in H2 2024, management also points out several initiatives that should accelerate cARR growth in late 2024 and 2025.

EBITDA – CAPEX was SEK -8.9m, somewhat better than the SEK-9.2m we expected. Thus, despite the lower sales than expected, EBITDA-CAPEX was better than expected due to solid cost control. Both Personnel expenses and Other external costs were somewhat below our expectations. The number of employees decreased by 13 q/q, and the average cost per employee decreased as well, causing a substantial decline in personnel expenses relative to the last three quarters. Despite lowering our cARR forecasts, we increase our EBITDA-CAPEX forecast for 2025 by about SEK9m due to the lower OPEX.

We lower our Base Case slightly to SEK8 (9), following the softer cARR growth. However, that is mostly compensated by the sharp decline in OPEX, resulting in a small downward adjustment of our Base Case. SEK8 implies a significant upside potential and a ~3.0x sales 2025e valuation multiple (in line with the median listed Nordic SaaS company). While BrightBid, as mentioned, has done an impressive job in cutting costs, given that the growth rate accelerates in 2025 – in line with our expectations, the current EV/S of 1.2x is arguably very attractive. At the same time, as a rather small and still unprofitable company, there is a notable downside risk if cARR growth does not pick up. However, as our SEK8 Base Case highlights, we believe the risk/reward is attractive.