SmartCraft (SMCRT) Q2 2024 earnings summary

Executive summary

• Annual recurring revenue (ARR) reached NOK 461.3 million in Q2 2024, up 32% year-over-year, with 11% organic growth and churn at 7.9%, driven by acquisitions and product innovation.

• Two acquisitions, Lokka (Sweden) and Clixifix (UK), expanded the addressable market to NOK 50 billion, added 600 customers, and enabled entry into the UK.

• Marketing and sales initiatives increased brand exposure fivefold and inbound leads by 30%, with average revenue per customer up 23% year-over-year.

• Product innovation included the launch of Telus for emissions data, a new app for major customers, and new packaging to enable cross-sell and upsell.

• Maintained a leading position in the Nordics, with a CAGR of 29.4% in ARR from 2019 to 2023 and a customer base over 13,300.

Financial highlights

• Q2 2024 revenue: NOK 133 million (up 32% YoY); ARR: NOK 461.3 million (up 29–32% YoY, 11% organic).

• Adjusted EBITDA margin at 29%, with margin dilution of 3.5 percentage points from acquisitions and investments.

• Recurring revenue share: 89.6% (group), 97.4% (excluding acquisitions); churn rate: 7.9% (up from 7.4% YoY).

• Operating cash flow increased over 200% (or 45% YoY), with net cash positive after NOK 157 million spent on acquisitions.

• Net profit: NOK 27.0 million (down from NOK 29.3 million YoY); EPS: NOK 0.16 (Q2 2023: NOK 0.17).

Outlook and guidance

• Medium-term targets reiterated: 15–20% organic growth and margin improvement expected as scalability increases.

• Focus on SME customers in renovation, with stable demand and resilience to construction downturns.

• Margin dilution from recent acquisitions expected to be temporary as integration progresses.

• UK market and renovation segment seen as major growth opportunities, both organically and via further M&A.

• Pipeline for new customers and acquisitions remains healthy, with continued expansion in the UK.