Release Date: July 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Qliro AB (OSTO:QLIRO, Financial) achieved its sixth consecutive quarter of profitability.
- The company has significantly increased its sales capacity, leading to a robust merchant base growth of over 100%.
- Qliro AB (OSTO:QLIRO) is divesting its digital banking services to focus on its core payment solutions, which have been the key driver of profitability.
- The company has launched a composable payment product strategy, enhancing scalability and flexibility.
- Qliro AB (OSTO:QLIRO) is expanding its market by opening a sales office in Norway, increasing its addressable market by over 50%.
Negative Points
- The divestment of digital banking services will lead to a transitional period in Q3, potentially causing short-term operational disruptions.
- The cost base remained flat at SEK82 million, indicating no significant cost reductions despite increased profitability.
- Credit losses have increased by SEK2 million compared to the same period last year.
- The company faces seasonality challenges, particularly in Q3 and Q4, which may affect merchant onboarding and volume growth.
- There is no official guidance provided for 2025, leaving future growth expectations uncertain.
Q & A Highlights
Qliro AB (OSTO:QLIRO) Q2 2024 Earnings Call Highlights
Q: The lending in relation to the payment volume has taken quite a step up during H1. Is that a sustainable level? Or how should we think about the lending book development in the segment in relation to how your payment volumes are scaling from here?
A: (Christoffer Rutgersson, CEO) With the business dynamics that we have, all volume that we're taking on Pay Later, especially on the part payment volume and the invoice volume that is converting into part payments over time, is building up a loan book over time. Typically, the average length of loans is up to three to four months, but it takes up to 36 months to get the full value or full loan book of new volumes. (Robert Stambro, CFO) No additional comments.
Q: Have you seen that part payments in general have become longer, with consumers part paying for a longer time?
A: (Christoffer Rutgersson, CEO) Yes, given that we're seeing a decline in the invoice volume, which is typically shorter duration of 14 to 30 days, while we see still growth in the BNPL volumes. The main dynamic behind that is our launch and push for more Pay Now payment methods like Swish, Vipps, Mobile Pay, and so on, which also give a small kick in consumer experience across the Nordic market.
Q: You had an extraordinarily strong intake or onboarding of merchants during Q2. Was there any specific push during Q2 in terms of onboarding? Or is this a pace we should expect in absolute figures also in coming quarters?
A: (Christoffer Rutgersson, CEO) It's mostly related to that we have significantly increased our sales capacity and both the time it takes to get the new people onboard and up to speed as well as the typical length of sales cycles. We see quite a stable momentum over the last few months of onboarding more than one merchant per day. We have done a lot of work to open up the internal floodgates of making processes smooth, increasing automation, and so on.
Q: If we look quarter on quarter, how many merchants you added in Q2, do you expect that will be even higher deltas in the coming quarters?
A: (Christoffer Rutgersson, CEO) Definitely, if you look over the next 12 months. Of course, Q3 is a bit of a vacation quarter, and Q4 has Black Week and Christmas period where typically merchants don't want to make changes during the peak season. But our expectation is definitely an acceleration going forward.
Q: Could you share anything in terms of quantifying expectations or ambitions for 2025 by any metric?
A: (Christoffer Rutgersson, CEO) We expect a higher growth rate given the acceleration, but since we haven't done any official guidance, it's challenging to specify right now.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.