Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Upsales Technology AB (OSTO:UPSALE, Financial) reported a return to quarter-over-quarter ARR growth in Q2 after five quarters of stagnant or negative growth.
- The company maintains a high share of recurring revenue, with 95.8% of total revenue coming from subscriptions.
- Upsales Technology AB (OSTO:UPSALE) is a net cash company with zero debt, providing financial stability.
- The company has a strong niche focus on medium-sized B2B organizations in the Nordics, which helps in creating a strong market positioning.
- Upsales Technology AB (OSTO:UPSALE) continues to invest in product development and integrations, enhancing its offerings and addressing more customer needs.
Negative Points
- Annual recurring revenue (ARR) decreased by 2.8% year-on-year, despite growth during the quarter.
- Net sales declined to SEK35.4 million from SEK36.7 million in Q2 2023.
- EBITDA margin dropped to 19% from 32.3% in the same period last year, indicating reduced profitability.
- Operating cash flow decreased significantly to SEK1 million from SEK7.2 million in the previous year.
- The company experienced lower margins due to continued hiring despite several quarters of low growth.
Q & A Highlights
Q: After hiring a salesperson, how long does it take for them to contribute meaningfully to ARR growth?
A: Typically, successful salespeople become productive within three to four months. If they are not productive within the first six months, they usually leave the company. – Daniel Wikberg, CEO
Q: How has ARR growth per salesperson developed over the past year, excluding recent hires?
A: There hasn't been a significant shift in ARR growth per salesperson compared to historical levels. – Daniel Wikberg, CEO
Q: How has the balance between new customer growth and existing customer growth been in recent quarters?
A: Recently, new sales have been slightly higher than historical levels. However, as a small company, these ratios can vary significantly from quarter to quarter. – Daniel Wikberg, CEO
Q: What growth rate is Upsales aiming for, given the recent 1.6% quarterly ARR increase?
A: Historically, we have grown by SEK10 million per quarter and 30% annually. We aim to return to these levels, although we do not provide specific guidance. – Daniel Wikberg, CEO
Q: Is it easier to hire successful salespeople now compared to the past year?
A: Yes, it is slightly easier to attract talent now compared to one or two years ago, both in sales and product roles. – Daniel Wikberg, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
