Smartcraft (SMCRT) Q3 2024 earnings summary

Executive summary

• Achieved 29% year-over-year growth in annual recurring revenue (ARR), reaching NOK 474 million, with 10% organic growth despite a challenging construction market.

• Completed and integrated acquisitions of Clixifix (UK) and Locka (Sweden), significantly contributing to ARR and market expansion.

• Increased investments in development, branding, and marketing to strengthen market position and future competitiveness.

• Maintained strong operating cash flow, up 58% year-over-year, and a stable, net cash positive balance sheet.

• Focused on the renovation segment, which is less volatile and offers consistent growth opportunities.

Financial highlights

• Total revenue grew 32% year-over-year to NOK 132 million, with 94%–97.5% now recurring revenue.

• Adjusted EBITDA margin ranged from 25% to 41.9%, diluted by acquisitions and one-off marketing and branding costs.

• Churn increased to 8.3%, mainly due to customer bankruptcies in a tough market.

• Operating cash flow rose 58% year-over-year, driven by deferred revenue and strong working capital management.

• Net profit for Q3 2024 was NOK 21.8 million, with EPS of NOK 0.13.

Outlook and guidance

• Medium-term targets reiterated: 15%–20% organic growth and margin improvement as synergies scale.

• Expect churn to normalize as market conditions improve; no further major one-off marketing or branding costs planned for Q4.

• Continued focus on transitioning non-recurring to recurring revenue streams and leveraging M&A for growth.