Upsales (UPSALE) Q2 2024 earnings summary

Executive summary

• Achieved a return to quarter-over-quarter ARR growth in Q2 2024, driven by improved retention, sales efficiency, and strategic efforts in the Nordic mid-market B2B segment.

• Focused on providing sales tools for medium-sized B2B companies in the Nordics, with a strong niche, customer-centric approach, and rapid results for customers.

• Continued investment in product development, expanding customer support, project management, and integrations to increase ACV.

• Maintains a strong market position with a focus on low capex for customers and tailored use cases.

• Strategic efforts led to reduced churn, increased winbacks, and higher new customer intake.

Financial highlights

• Q2 2024 ARR reached SEK 137.5 million, up SEK 1.6 million sequentially but down 2.8% year-over-year.

• Net sales for Q2 2024 were SEK 35.4 million, with year-over-year changes reported as both a 3.7% decrease and a 9.4% increase in different sources.

• EBITDA for Q2 2024 was SEK 6.7 million (19.0% margin), EBIT SEK 4.5 million (12.7% margin), and net income SEK 3.5 million.

• Operating cash flow was SEK 4.0 million, with net cash of SEK 33.5 million and no debt.

• Subscription revenue accounted for 95.8% of total revenue in Q2.

Outlook and guidance

• Management aims to return to historical growth rates of SEK 10 million ARR per quarter and 30% annual growth, though no specific guidance is provided.

• ARR growth is expected to continue through 2024, with Q3 anticipated to be seasonally slower due to holidays.

• Expects higher margins as revenue growth returns in coming quarters.

• Focus remains on profitable growth, positive cash flow, and long-term shareholder value through ARR expansion.

• Sees a long runway for growth in both existing and new customers, with an estimated 3%-5% market share in Sweden.