Q1 2025 Crayon Group Holding ASA Earnings Call Transcript
Key Points
- Crayon Group Holding ASA (CRAYF) achieved a 5% gross profit growth in Q1, with strong international growth, particularly in Europe with a 19% increase.
- The company saw exceptional 71% growth in its consulting business, highlighting its expanding service capabilities.
- Net working capital improved significantly, ending at NOK1.4 billion, marking the best performance ever and an improvement of NOK401 million compared to Q1 2024.
- The US market showed robust growth of 15%, driven by strong performance in both direct and channel businesses.
- Crayon is well-positioned in the evolving Microsoft partner ecosystem, with the scale and technical capabilities to capitalize on opportunities in areas like AI adoption and software asset management.
- The company underperformed in the Nordics, with only 7% growth, impacting overall results and necessitating management changes.
- Adjusted EBITDA margin decreased by 1.8 percentage points to 12.1%, reflecting ongoing investments and increased headcount.
- The transition from Microsoft enterprise agreements to CSP put negative pressure on Q1 gross margin, although it improved later in the quarter.
- The year-over-year comparison was affected by an exceptionally high incentive payout in Q1 2024, creating a challenging baseline for current performance.
- The direct business in the Nordics showed disappointing growth of only 3%, with the consulting business also underperforming at 5% growth.
Good morning and welcome to Crayons Q1 presentation. My name is Kjell Hansen, and I'm the Head of Investor relations. With me today presenting the results for the quarter, we have our CEO, Melissa Mulholland; and our CFO, Brede Huser. After the presentation, there will be a live audio Q&A session.
I will now hand it over to Melissa.
In Q1, our gross profit growth ended at 5%. I'm pleased that we continue to deliver solid international growth. However, I'm disappointed that we underperformed in the Nordics, which consequently impacted our overall results. In addition, we saw the market dynamics Q4 relating to Microsoft enterprise agreements to CSP transition spilling over into January. This put negative pressure on our Q1 gross margin. However, we see that the shift is gradually stabilizing as gross margin improved later this quarter.
Our adjusted EBITDA ended at 12.1%, down 1.8 percentage points
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