Teneo AI (TENEO) Q3 2024 earnings summary

Executive summary

• Achieved record 90% year-over-year revenue growth in Q3 2024, driven by SaaS API call revenues and strong customer acquisition, with total ARR reaching 84.3 MSEK.

• Transitioned to the Teneo.ai brand, completed rebranding, changed stock ticker to TENEO, and finished the ISO 27001 certification cycle.

• Added three new customers year-to-date, including Valcon (OEM), renewed a major Swedish grocery chain contract, and expanded U.S. partnerships.

• Launched a groundbreaking LLM orchestration solution and Copilot feature, enabling rapid multilingual deployment and automation.

• SaaS platform usage surged to 700 million annualized API calls, with volumes up 81% YoY and a 59x increase over three years.

Financial highlights

• SaaS API call revenues reached 9.3 MSEK (+90% YoY); SaaS ARR at 54.3 MSEK (+58% YoY); total ARR at 84.3 MSEK (+29-30% YoY); net sales at 21.2 MSEK (+29% YoY).

• Recurring revenues totaled 21.1 MSEK, nearly 100% of net sales, with 63% from SaaS and nearly 70% of SaaS revenues from variable API calls.

• Gross margin improved to 79% (up from 63% YoY); adjusted EBITDA loss narrowed to -5.9 MSEK (+54% YoY).

• Net Revenue Retention (NRR) at 127% in Q3 2024, reflecting robust expansion within existing accounts.

• Cash and bank position at quarter-end was 31.5 MSEK, adjusted to 37 MSEK after post-quarter collections.

Outlook and guidance

• Confident in achieving >1 billion API calls in 2024 and >200 MSEK ARR in 2025, with a long-term EBITA margin target >30%.

• Continued investment in marketing and sales expected to slightly increase OpEx; OPEX run rate at 116 MSEK in Q3 2024.

• Aiming for at least one month of positive cash flow from operations in 2024, but more volume is needed for sustained profitability.

• Will begin disclosing pipeline numbers in future reports.

• Focus remains on expanding partner coverage and targeting large enterprise contact centers globally.