Safeture (SFTR) Q3 2024 earnings summary

Executive summary

• Achieved first-ever quarterly profitability with EBIT of +125 KSEK and a 1% operating margin, driven by 15% revenue growth and a 79% gross margin.

• Recurring revenue comprised 99% of total, with churn at 0.8% and yearly net revenue retention at 104%.

• Added four new partners and three direct clients, including Bank of International Settlements, strengthening position in the financial sector.

• Industry consolidation and increased ESG/EHS focus present growth opportunities.

Financial highlights

• Q3 net revenue rose 15% year-over-year to 14,308 KSEK; ARR grew 16% to 58,300 KSEK.

• Gross margin at 79% (vs. 78% prior year); EBIT improved from -700 KSEK to +125 KSEK.

• Net result after tax for Q3 was +175 KSEK, compared to -549 KSEK last year.

• For the first nine months, net revenue increased 22% to 41,832 KSEK; EBIT at -446 KSEK (improved from -4,786 KSEK).

• Cash flow from operations for the first nine months was +8,009 KSEK; cash at period end was 21,922 KSEK.

Outlook and guidance

• Sustainable profitability expected at 65 MSEK ARR; current ARR at 58.3 MSEK suggests continued fluctuations around the profit line.

• Focus remains on partner-driven growth and capitalizing on industry trends in people risk management.