The report in brief:
(Q3 2023 vs Q3 2022):
- Net revenue increased to KSEK 29,947 (17,057) which corresponds to a growth of 76 (78)%, of which 76 (52)% was organic.
- Gross profit for the period amounted to KSEK 25,062 (14,446) with a margin of 84 (85)%.
- EBITDA for the period amounted to KSEK 10,881 (2,308) with a margin of 36 (14)%.
- Cash flow from operating activities amounted to KSEK 7,650 (3,212).
- Net Revenue Retention LTM amounted to 173 (132)%.
- Cash and cash equivalents amounted to KSEK 31,887 (47,491).
CEO Letter from Quarterly Report
Almost all parts of the report demonstrate the large step we have taken during the quarter. The strong momentum we have flagged for has started to materialise in the numbers and we feel a continued strong tailwind. Revenue grows by 76% compared to the year before and we end the quarter with an annual pace exceeding MSEK 125. Worth noting is that growth is fully organic and has occurred simultaneously with improvements in profitability.
The fact that we have high margins and a maintained cost base despite significant growth, in my opinion, demonstrates the strength of our business model. As we grow we also strengthen almost all profitability measures. EBITDA amounts to MSEK +10.9 for the quarter and the EBITDA margin increases to 36%. The operating result strengthens and lands at MSEK +4.7 for the quarter, while cash flow improves. The ongoing operations generated MSEK 8 in cash flows during the quarter, and we are now starting to build net cash. We have previously flagged for continued gradual improvements in profitability as our revenues grow, an expectation that remains for the coming quarters.
Our long term financial target is to maximise the sum of revenue growth per share and EBITDA margin, in other words, prioritising a profitable and capital efficient growth. Overall, the target is a variation of the classic SaaS metric 'Rule of 40' and replaced the previous target, which didn't consider profitability or dilution and, thus, poorly aligned with what benefits us existing shareholders. The new target should create large shareholder values if we manage to deliver strong figures over time. Therefore, one might consider evaluating the target on an annual basis or longer, but for the third quarter, the sum comes to 106%. Thus, the quarter is well above the long-term ambition of 80% we set when the objective was adopted and significantly exceeds the classic benchmark of 40%.
The strength in the quarter comes foremost from the travel segment that is now our largest customer group in terms of revenue. The segment is still entirely dominated by the large European airline we cooperate with and that largely drives this development. Our rapid growth with existing customers makes the NRR figure rise sharply, to 173%, which historically is unusually high. I have previously spoken about the NRR figure as a key to understanding how well the business is going, and if we manage to continue delivering high retention rates looking forward, we should have several good quarters ahead of us.
It's possible to identify a potential weakness in the leverage that comes with the airline's size. In any case, it's evident that the customer's relative size currently establishes a clear connection between how this collaboration unfolds and our overall growth. We are confident in this reality and are working to further expand the customer. If we succeed with this while adding more large customers, we can both reduce the sensitivity of each individual customer and continue to take swift steps forward. Extrapolating the figures from this quarter, I find it difficult not to be optimistic about the potential in the business, even if we only add a handful of similar customers and manage to maintain high NRR figures. We will do our utmost to make that happen.
When it comes to new Enterprise customers we not only believe in the travel segment but also that we will be able to replicate the success in other sectors. One example I have previously mentioned of such a customer is the well-known Swedish fintech company that during the autumn has integrated our software. Our hope is that this agreement enters a revenue-generating phase as early as in the upcoming quarter. The company has over 150 million end users and handles about half of all online purchases in
In summary, quarter three was on an entirely new level, and we hope to finish the year strongly.
CEO and founder,
The full quarterly report is now published and available on: https://group.checkin.com/investors/reports/
Webcast (Swedish)
Investors, analysts and journalists are invited to a webcast 2023-11-09
https://www.finwire.tv/webcast/checkin-com/q3-2023/
An English version of the webcast will be published on the company's website later today.
For further information, please contact:
Jonas Köpniwsky, Head of
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