Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fortnox AB (FRA:9E80, Financial) reported a stable quarter with all main KPIs in line with or better than the same period last year.
- The company achieved a customer growth of 13,000, marking the highest increase for the third quarter.
- Average revenue per customer increased by SEK8, indicating a positive trend in revenue generation.
- Net sales grew by 26%, with the highest growth observed in the lending segment, which increased by 43%.
- Fortnox AB's platform enhancements, such as the ability for accountants to submit reports and the automation of transactions, have led to significant efficiency gains for customers.
Negative Points
- The company faces challenges in reaching its 2025 target of 700,000 customers, indicating potential difficulties in customer acquisition.
- There were non-recurring costs related to changes in the executive management team, impacting the operating margin.
- The macroeconomic environment is holding back growth, affecting both customer activity and transaction-based revenues.
- The deconsolidation of Offerta is expected to result in lower revenue in the next quarter, though the P&L impact is minimal.
- Organic growth is trending softer, attributed to the ongoing recession and macroeconomic headwinds.
Q & A Highlights
Q: From an ARR perspective, this was the first quarter where it was sequentially down since 2018. Is this a hiccup or a trend?
A: Roger Hartelius, Deputy CEO and CFO, explained that the ARR development aligns with subscription increases, and there is no significant deviation. Tommy Eklund, CEO, noted that comparing ARR is challenging due to growth in transaction-based revenue and changes in business models, such as payroll.
Q: Can you comment on the increased product adoption driving high single-digit growth in Q3?
A: Roger Hartelius stated that increased product usage is a major focus, driven by efforts in product development and marketing, but there is no specific factor responsible for the growth.
Q: What is the rationale behind increased marketing activities, such as ads in the Stockholm subway?
A: Roger Hartelius clarified that the marketing campaign aims to promote Fortnox as a platform rather than individual products. The campaign is more visible in Stockholm due to a targeted effort, but overall marketing spend remains consistent.
Q: Of the 25% growth in Q3, how much is attributed to pricing?
A: Roger Hartelius mentioned that pricing contributed approximately 4% to net sales growth from January to September and 7% in Q3.
Q: How is the financing asset growth expected to trend in Q4?
A: Roger Hartelius indicated that lower activity in Q3 is expected to increase in Q4.
Q: What are the implications of Offerta's deconsolidation on organic growth next quarter?
A: Roger Hartelius explained that Offerta's net sales will not be reported as net sales but as financials, with a stable net sales history. The P&L effect will be minimal.
Q: How does Fortnox plan to attract larger companies, and are there any products needed for this?
A: Roger Hartelius stated that Fortnox is already accelerating efforts toward larger companies and believes they have the necessary offerings, supported by integration partners for specific needs.
Q: How is the CEO search progressing?
A: Roger Hartelius mentioned that the Board is actively working on the process, but no specific timing updates are available.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
