Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Formpipe Software AB (OSTO:FPIP, Financial) reported net sales of 130 million, reflecting a positive adjustment in customer mix.
- Recurring revenue now constitutes more than 80% of net sales, indicating a stable and predictable revenue stream.
- The company has secured new contracts, including extensions in the Danish municipalities and Swedish defense sector, showcasing strong client relationships.
- There is a clear positive uptick in underlying profitability, with a 30% growth in the source line contributing significantly to recurring revenue.
- Formpipe Software AB (OSTO:FPIP) has launched a new product packaging strategy for its LaserNet business, which is expected to facilitate customer growth and increase ticket sizes over time.
Negative Points
- The company experienced a cyber attack, although it was contained to internal servers with no external data leakage.
- The ACV for the quarter was negatively impacted by a currency effect of 4 million, resulting in a net ACV of 7 million, which is considered low.
- There were organizational changes in the public sector, leading to one-off costs of 6 million impacting profitability.
- The delivery line revenue is still 2.5 million lower than last year due to changes in agreements and vacation periods.
- The company is facing churn in its Swedish municipalities and has ended the life of its Plot in Life Science product, which may affect future revenue streams.
Q & A Highlights
Q: Can you elaborate on FormPipe's role and presence at the Dynamics Community Summit in Texas?
A: Joakim Alfredson, CFO, explained that the summit is a significant marketing investment for FormPipe, providing an opportunity to showcase their offerings and receive feedback from users and partners. The event allows FormPipe to understand how they fit into the Dynamics ecosystem and how they can contribute to it.
Q: How do partners feel about the new freemium model for LaserNet, and how easy is it to move customers up the tiers?
A: Joakim Alfredson noted that while it's early to determine the ease of moving customers up, the feedback has been positive. The freemium model allows customers to start small and grow, which is expected to facilitate growth over the next few quarters.
Q: When can we expect to see a positive inflow of customers and revenue from the new LaserNet model?
A: Joakim Alfredson stated that the inflow of customers should be visible in a few quarters, but revenue impact will take longer due to the subscription model.
Q: Why did FormPipe decide to end the life of the Plot in Life Science product?
A: Joakim Alfredson explained that the decision was made to focus on the promising LaserNet business, which has significant potential for growth in various ecosystems and geographical expansions.
Q: Can you explain the intensified development for cross-functionality between the three major platforms in the public sector?
A: Joakim Alfredson highlighted that the goal is to be more efficient in maintaining the platforms by extracting and jointly maintaining commonly usable functionalities. This efficiency will allow investment in new functionalities, such as AI, to support public sector clients.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
