Upsales (UPSALE) Q1 2020 earnings summary

Executive summary

• SaaS sales and marketing platform serving 500+ clients across nine countries, with annual subscriptions priced by users and functionality.

• Strategy centers on product investment to expand contract value, scaling sales and marketing to win new clients, and entering new markets.

Financial highlights

• ARR reached SEK 72.8 million at quarter-end, up 20% YoY and 4.2% QoQ; net sales rose 11.6% YoY to SEK 18.9 million.

• Recurring revenue was 90.2% of total revenue vs 79.6% in Q1 2019.

• EBITDA was SEK 2.8 million vs SEK 2.5 million; EBITDA margin was 14.6% vs 14.5%; net income was SEK 0.2 million.

• Operating cash flow was SEK 11.9 million vs SEK 7.8 million; total cash flow was SEK 10.5 million and quarter-end net cash SEK 27.1 million.

Outlook and guidance

• FY2020 goal remains positive ARR and revenue growth, though COVID-19 makes the pace difficult to predict; long-term ARR growth target is >30% annually.

• Recurring revenue target remains >80% of total revenue; management aims to grow while maintaining profitability.

• Product roadmap remains intact, with plans to hire more product staff than previously planned and continue hiring salespeople during 2020.

• New deals continued weekly through March and April; international expansion is not a near-term priority while much of Europe is in lockdown.