Release Date: February 14, 2025
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 strong SaaS revenue growth of 27%, aligning with their strategy to increase recurring revenue streams.
- The company achieved a significant increase in Annual Contract Value (ACV), reaching SEK14 million compared to SEK9 million the previous year, driven by successful public contracts and larger deal sizes.
- Recurring revenue now constitutes more than 80% of the company's overall revenue, demonstrating a successful transition towards a more stable income model.
- Formpipe Software AB (OSTO:FPIP) has effectively managed a cyber attack, accelerating their ISO 27,000 actions and improving cybersecurity measures.
- The company has a solid plan to improve EBIT numbers by autumn, with a focus on cost calibration and strategic investments in personnel and technology.
Negative Points
- Formpipe Software AB (OSTO:FPIP) issued a profit warning in January, indicating challenges in aligning costs with revenue growth.
- There was a significant decline in licensing revenue, down more than 50% compared to the previous year, impacting short-term net revenue and EBIT.
- The company incurred one-off costs of SEK4.7 million related to a cyber incident, affecting overall profitability.
- Operating expenses were higher than expected, with increased costs in personnel, marketing, and development.
- The transition away from the Plattina Life Science platform resulted in some churn, contributing to a decrease in support and maintenance revenue.
Q & A Highlights
Q: What is the remaining impact of Plattina Life Science's end of life on revenue?
A: Sophie Reinius, CFO: Most of the impact has already been accounted for, with only some support and maintenance left.
Q: Is the growth in SaaS revenues partly due to a decrease in support and maintenance?
A: Magnus Svenningson, CEO: They are independent. While support and maintenance are expected to decline, new business is continuously being acquired, especially in the dynamics area.
Q: Why were costs higher this quarter?
A: Sophie Reinius, CFO: Higher costs were due to personnel, marketing, and development investments. We are addressing these through competency shifts and reducing reliance on outsourced development.
Q: What contributed to the strong ACV performance in Q4?
A: Magnus Svenningson, CEO: Strong sales efforts, particularly in the public sector in Sweden and Denmark, and growth in the ERP business dynamics contributed to the strong ACV.
Q: How is the new product packaging affecting sales?
A: Magnus Svenningson, CEO: The new packaging has positively impacted pricing, increasing the average deal size, although it's too early to assess its full market penetration impact.
Q: What are the expectations for the one public initiative this year?
A: Magnus Svenningson, CEO: Customers can expect enhanced interaction with ecosystems like Microsoft and improved efficiency through AI, maintaining data integrity while supporting decision-making processes.
Q: How do you see the professional services revenue trend?
A: Sophie Reinius, CFO: Professional services are expected to decline in the Laissonnette side as partners take on more roles, while it remains stable and important in the public sector.
Q: What opportunities exist for LaserNet outside of Microsoft?
A: Magnus Svenningson, CEO: Opportunities exist in sophisticated supply chains across various ERP systems. The focus is on identifying suitable verticals and geographies for expansion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
