SmartCraft (SMCRT) Q3 2024 earnings summary

Executive summary

• Achieved 29% year-over-year growth in annual recurring revenue (ARR), with 10% organic growth, despite a challenging construction market and increased churn from bankruptcies.

• Completed and integrated two acquisitions (Clixifix and Locka), significantly contributing to ARR, average revenue per customer, and market expansion.

• Increased investments in development, marketing, and branding, including a one-off NOK 1.5 million branding project, to strengthen market position.

• Maintained strong operating cash flow, up 58% year-over-year, and a 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 ARR reaching NOK 474.4 million, up 29.2% YoY and 3% sequentially.

• Adjusted EBITDA margin declined to 25% due to acquisition dilution and one-off costs, but Q3 2024 margin was 36.0%; adjusted EBITDA increased 14% YoY to NOK 47.5 million.

• Recurring revenue share was 94.1% in Q3 2024.

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

• Net profit 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; continued focus on marketing, sales, and development investments.

• No major one-off marketing or branding initiatives planned for Q4, but opportunistic investments may occur.

• Clixifix in the UK expected to drive above-average growth; M&A remains a key strategy.