Oneflow (ONEF) Q3 2024 earnings summary

Executive summary

• ARR reached SEK 155.8 million at Q3 end, growing 34% year-over-year, with net new ARR of SEK 3.8 million, down 29% from last year, but YTD Net New ARR up 3% to SEK 26.4 million.

• Net sales for Q3 were SEK 35.7 million, a 40% increase year-over-year; YTD net sales reached SEK 99 million, up 39%.

• Paying customers increased 25% year-over-year to nearly 4,000, with average customer value rising 7% to SEK 40,000 per month.

• Share of net sales outside Sweden increased to 37% in Q3, with customers in 41 countries.

• Directed share issue in August 2024 raised SEK 90 million before costs, supporting growth and AI initiatives.

Financial highlights

• Gross margin was 91% in Q3, slightly down from historical 94%, mainly due to increased partner sales commissions; expected to remain around 91%-92%.

• EBITDA for Q3 was minus SEK 6.1 million (margin -17%), with YTD EBITDA at minus SEK 34.7 million, a 39% improvement year-over-year.

• EBIT for Q3 was minus SEK 15.5 million; YTD EBIT was minus SEK 61.6 million, a 14% improvement year-over-year.

• ARR per full-time employee rose 42% to SEK 829,000.

• 98% of revenue is recurring.

Outlook and guidance

• Financial goals revised to target ARR growth above 30% year-over-year and to reach profitability with current funding.

• Management remains comfortable with new targets, aiming to exceed them, and is focused on balancing growth with cash reserves.

• Growth investments will be approached with more caution, balancing market challenges and cash flow management.

• Retention rates expected to stabilize and increase in line with market fundamentals.

• No significant headcount increases planned for next year; focus remains on maintaining growth and profitability.