Upsales (UPSALE) Q2 2020 earnings summary

Executive summary

• SaaS sales and marketing platform serving ~600 clients across 9 countries; ~90% of revenue is subscription-based.

• ARR growth remained positive despite COVID-19 pressure on clients, with profitable results and improved operating cash flow.

Financial highlights

• Q2 ARR was SEK 75.5m vs SEK 64.7m a year earlier, up 16.7%; ARR increased SEK 2.7m during the quarter.

• Net sales were SEK 18.3m vs SEK 17.3m in Q2 2019; growth lagged ARR as consulting and one-off revenue declined.

• EBITDA was SEK 5.1m, with a 27.7% margin; EBIT was SEK 2.8m, with a 15.4% margin; net income was SEK 2.1m.

• Operating cash flow improved from negative SEK 0.3m to SEK 2.4m; total cash flow was SEK 1.5m.

Outlook and guidance

• Aggressive hiring planned for H2 2020, with increased investment in product and sales to accelerate growth.

• Growth will be prioritized over profitability, while maintaining a balanced approach and positive cash flow; margins may fall as growth initiatives ramp up.

• Profitability was expected to continue improving, before planned growth investment potentially moderates margins.