ARR was SEK53.4m (51.5), corresponding to 3% growth y/y. BrightBid has changed its ARR definition to the more conservative 4x last quarter’s recurring revenue compared to the previous contracted ARR definition. Therefore, our cARR estimate of SEK68.7m is not comparable to the outcome of SEK53.4m in ARR. However, as we expected 12% cARR growth y/y and the ARR grew by 3% y/y, the like-for-like number is likely below our expectations. Although we somewhat cut our 2024 and 2025 ARR forecasts, we retain our expectations of accelerating ARR growth in 2025 and onwards. Our assumptions are supported by the company’s new growth initiatives, including partnerships with agencies, improved automation capabilities, and a strengthened salesforce.

The number of employees increased by seven q/q. According to management, the underlying net recruitment is smaller, as some of the new employees will fill current positions otherwise getting empty in Q4. On the other hand, that still implies some positive actual net recruitment, which, according to management, is focused on sales – and on average, at a somewhat lower cost per employee than previously, resulting in a roughly neutral overall OPEX. Management seems satisfied with the new senior employees with experience from Paypal and Teamtailor, which can be one factor in taking BrightBid back to solid ARR growth in 2025.

We lower our Base Case slightly to SEK6.8 (9.0), following the softer ARR growth. SEK6.8 implies a significant upside potential and a ~3x sales 2025e valuation multiple (in line with the median listed Nordic SaaS company). While BrightBid has done a solid job in cutting costs, given that the growth rate accelerates in 2025 – in line with our expectations, the current EV/S of 1.4x is arguably very attractive. At the same time, as a relatively small and still unprofitable company, there is a notable downside risk if ARR growth does not pick up.