The total ARR (S&M and SaaS) was SEK437m (409m), up from SEK434m in the last quarter. The q/q increase was driven by an organic ACV of SEK6.7m, a negative SEK3.7m due to FX. However, the ACV was hurt by SEK1.2m in churn related to Platina Life Science, which Formpipe has decided to put end-of-life to focus on Lasernet (Business Unit Private will change name to Lasernet). Thus, the adjusted ACV was SEK7.9m, still below our forecast of SEK11.5m. However, Q2 was strong, and there tend to be some fluctuations between quarters, partly depending on the number of large banking deals.

Formpipe has just launched the new packaging, and the feedback Formpipe has received so far, mostly from visiting the Dynamics Community Summit in Texas, has been positive. Formpipe has recently changed from three to four tiers, as it believes four tiers will better suit the market and make Formpipe more likely to provide solid price/value at all market segments. Formpipe concretised its plans to intensify and modernise product development on its platforms in the Public Segment. The three major platforms, Platina, W3D3, and Acadre, will collaborate by sharing R&D and maintenance and leveraging each platform’s strengths. This approach allows for more efficient development and less maintenance spending, enabling increased investments in new functionalities with the same resources and costs.

Despite cutting our 2024 and 2025 EBIT forecasts, we keep our Base Case at SEK31 (31). While the ACV in Q3 was somewhat low, and we lowered our near-term assumptions, we are positive towards the growth initiatives seen in Private and Public, which we assume will positively impact ARR primarily beyond 2025.