Release Date: April 29, 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 a significant increase in net sales, reaching SEK139 million, up from the previous year's SEK25 million.
- Recurring revenues now constitute more than 80% of total revenues, showcasing the stability and quality of the company's business model.
- The company achieved a substantial improvement in EBIT, rising from SEK4 million to SEK30 million, excluding one-offs, due to effective cost reductions.
- The Lasernet division secured 19 new deals, highlighting its growth, particularly with notable clients like Caterpillar and Metcash.
- Formpipe Software AB (OSTO:FPIP) has successfully initiated cost-saving measures, leading to a notable improvement in EBITDA margin from 17% to 21.6% year-over-year.
Negative Points
- The 'Back to Finance' initiative brought in only two banks this quarter, which was slower than expected.
- The company faced a negative impact on ARR due to currency fluctuations, resulting in a SEK19 million decrease.
- There were one-off restructuring costs of approximately SEK8 million, primarily affecting the Lasernet and public business areas.
- The company is still in the early stages of learning from its new premium business model, making it too soon to gauge its long-term effectiveness.
- Despite improvements, the company acknowledges the need for continued cost control and strategic investments to maintain growth and profitability.
Q & A Highlights
Q: Could you elaborate on how the new packaging in Lasernet is transforming into higher sales?
A: Magnus Svenningson, CEO: We are utilizing a premium business model with a basic offering that is free for Dynamics users, and a four-tiered package from advanced to enterprise. This model allows partners to introduce our output management solutions earlier in the sales cycle, making it easier to engage clients and potentially upgrade them to higher tiers.
Q: Do customers typically upgrade from the essential package, and how long does that take?
A: Magnus Svenningson, CEO: It's too early to draw conclusions, but the essential package offers limited functionality, which encourages clients to upgrade. We expect clients to seek more advanced features over time, although the exact timeline is still being observed.
Q: What are the potential new geographies and industries for Lasernet?
A: Magnus Svenningson, CEO: Our offering is horizontal, suitable for all verticals. The U.S. and Western Europe, including Germany and France, are key markets. We are exploring whether to partner with other ecosystems like SAP or IFS or remain ERP agnostic.
Q: What is the potential for Lasernet's profitability going forward?
A: Sophie Reinius, CFO: We aim for profitable growth, balancing investments with maintaining strong margins. We are committed to expanding profitably, ensuring we have a robust margin to support our growth initiatives.
Q: Are you satisfied with the cost savings program's impact this quarter?
A: Magnus Svenningson, CEO: Yes, we are satisfied with the efficient execution and positive impact. While cost focus remains important, we will now explore new growth opportunities.
Q: How is the macroeconomic environment affecting FormPipe?
A: Magnus Svenningson, CEO: ERP systems are resilient, and we expect minimal impact. The European IT industry has opportunities to grow, and FormPipe is well-positioned to contribute to this growth.
Q: Why continue to simplify and decentralize the group?
A: Magnus Svenningson, CEO: Simplifying the group structure aligns legal and business areas, allowing leadership to operate more independently and facilitating potential inorganic growth and asset management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
