Interim Report Q3 2023

"On the edge of turning the profit corner"

Safeture

Q3 Highlights

"On the edge of turning the profit corner"

  • Annual recurring revenue (ARR) growth of +26% to 50,3 MSEK.
  • Recurring revenue amounts to 12,3 MSEK compared to 9,2 MSEK last year (+33%).
  • EBIT improvement year-on-year of 2,3 MSEK, reaching -0,6 MSEK.
  • Bottom-lineresult at -4% of net sales compared to -31% one year ago.
  • Quarterly churn at 0,5%
  • Yearly NRR at 113%

Interim Report

July - September 2023

2

Safeture

Summary of Interim Report

Classics

First nine months (2023-01-01 to 2023-09-30)

  • Net revenue amounted to 34 182 (26 242) TSEK (+30%).
  • Loss after financials amounted to -4 639 (-11 816) TSEK.
  • Loss per share before dilution amounted to -0,12(-0,39) SEK.
  • Loss per share after dilution amounted to -0,11(-0,37) SEK.

SaaS Traction

Third quarter (2023-07-01 to 2023-09-30)

  • Annual recurring revenue (ARR) at the end of Q3 2023 reached 50 332 (40 085) TSEK, a year-on-year increase of +26%.
  • Recurring revenue increased +33% to 12 262 (9 218) TSEK, which represents 99% (100%) of the quarterly revenue.
  • Churn for the quarter was 0,5%.
  • Net revenue retention (NRR) was 113%.

Third quarter (2023-07-01 to 2023-09-30)

  • Net revenue amounted to 12 438 (9 229) TSEK (+35%).
  • Loss after financials amounted to -550(-2 859) TSEK.
  • Loss per share before dilution amounted to -0,01(-0,09) SEK.
  • Loss per share after dilution amounted to -0,01(-0,09) SEK.

Revenue (KSEK)

EBIT (KSEK)

7 452

8 152

8 861

9 229

9 583

10 668 11 076 12 438

6 123

6 600

6 621

-4 665 -4292

-2 859

-2 497 -1592 -550

-5648 -5 345 -5 146

-5 311

-7 169

Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 Q123 Q223 Q323

Interim Report

July - September 2023

3

Safeture

Message from the CEO

"On the edge of turning the profit corner"

Financial performance and progress towards profitability

The third quarter was a typical "summer quarter". The number of opportunities was promising but didn't materialize to the extent we wanted, bringing the Annual Recurring Revenue (ARR) to 50,3 MSEK, an increase of +26% year-on-year. Due to a higher order intake in Q2, sales increased by 35% from Q3 last year, reaching 12,4 MSEK. The Net Revenue Retention (NRR) was 113%, of which quarterly churn was a mere 0,5 %. A very healthy number.

Continuous improvement in the gross margin combined with strict expense control helped us to get close to our short-term target of reaching profitability. Safeture is now on the verge of reaching profitability.

The partner base brought in 100 % of new ARR. The importance of continuing to work on our partner positioning is evident and will help us to continue to grow while maintaining our current cost structure.

Management team transitions

Last quarter, two key members of our management team, the CRO and the CFO, successfully transitioned to exciting opportunities in other tech companies. We commend their achievements in securing new, demanding roles in the industry.

Having 2 members of the management team leaving could stress any CEO out, but with a great team effort, we pulled through. A new CRO, Andreas Granath is in place. Andreas has previously held senior sales positions at Qlik, NodeGraph, Readsoft and HP. In addition, we are excited to announce the appointment of our new CFO, Jessica Eberhagen. Jessica joins Safeture with extensive financial expertise acquired from her diverse background in business controller and leadership roles within multinational companies spanning various industries.

Scaling for Success: Navigating Complexity in Onboarding Projects

From spring up until now, Safeture has been engaged in several large onboarding projects with big partner clients. We know the drill, but the bigger they get, the more complex it becomes. Not only the sheer number of users but also the integrations requested, ranging from travel booking integrations, HR databases and single sign-on setups. It's easy to believe that "just add more resources" is the answer, but we firmly believe that this is not the only solution. Instead, we focus on how we can scale our existing organization. We aim to have proper processes, clear documentation, the right tools and cross-functional knowledge sharing. It's not a quick fix, and the most important thing is to have the mindset to continually improve how we do things.

Now it's time for the last sprint of the year, where the objectives are crystal clear. Focus on costs, reach profitability, successfully onboard the new team members, and close deals.

Interim Report

July - September 2023

4

Safeture

Key Figures - Quarterly Trend

21Q1

21Q2

21Q3

21Q4

22Q1

22Q2

22Q3

22Q4

23Q1

23Q2

23Q3

Sales

6 123

6 600

6 621

7 452

8 152

8 861

9 229

9 583

10 668

11 076

12 438

Cost of Sales

-1 957

-2 066

-2 051

-2 153

-2 263

-2 251

-2 413

-2 541

-2 648

-2 709

-2 742

Gross Margin

4 165

4 534

4 570

5 299

5 890

6 610

6 816

7 043

8 020

8 366

9 697

Gross Margin %

66%

69%

69%

71%

72%

75%

74%

73%

75%

76%

78%

OPEX

-11 974

-10 812

-10 111

-11 084

-11 402

-11 693

-9 977

-13 481

-11 340

-10 359

-10 338

Capitalization

1 631

1 677

1 283

1 770

2 033

2 022

1 603

2 457

2 194

1 840

1 421

Depreciation

-963

-1 017

-1 064

-1 115

-1 161

-1 219

-1 245

-1 296

-1 370

-1 437

-1 479

EBIT

-7 169

-5 648

-5 345

-5 146

-4 665

-4 292

-2 859

-5 311

-2 497

-1 592

-550

EBIT %

-117%

-86%

-81%

-69%

-57%

-48%

-31%

-55%

-23%

-14%

-4%

Cashflow - Operating Activities

-5 875

-2 320

-5 904

-955

-5 193

-3 102

-3 392

1 109

-3 185

519

-4 011

Cashflow - Investing Activitites

-1 631

-1 676

-1 283

-1 770

-2 033

-2 022

-1 603

-2 457

-2 194

-1 840

-1 421

Cashflow - Financing Activitites

38 426

-214

261

-336

-214

93

5 404

21 682

0

84

94

Cashflow

30 920

-4 210

-6 926

-3 061

-7 440

-5 031

409

20 334

-5 378

-1 237

-5 338

Cash

32 262

28 052

21 126

18 065

10 625

5 594

6 003

26 337

20 959

19 722

14 384

ARR

27 061

28 865

29 942

32 186

34 576

37 289

40 085

41 325

43 978

48 623

50 332

Churn

0,8%

0,3%

1,7%

3,0%

0,5%

1,0%

0,2%

5,5%

1,5%

1,9%

0,5%

NRR

119%

119%

110%

109%

116%

113%

Yearly Sales Growth

27%

39%

18%

17%

33%

34%

39%

29%

31%

25%

35%

Yearly ARR Growth

42%

66%

33%

35%

28%

29%

34%

28%

27%

30%

26%

Interim Report

July - September 2023

5

Safeture

Highlights & Significant Events

Significant events during Q3 2023

  • There were no significant events during the quarter.

Highlight events during Q3 2023

  • Linda Canivé, CFO at Safeture since 2019, decided to terminate her employment as she has accepted an offer from another technology company. Linda's last working day will be October 25th.

Highlight events after period close

  • Safeture hires Andreas Granath as new CRO (Chief Revenue Officer), starting October 1st. Granath comes from a role as Director Customer Success Nordic at Qlik.
  • Safeture hires Jessica Eberhagen as new CFO (Chief Finance Officer), starting January 1st. Eberhagen joins Safeture with broad financial experience from various business controller- and leadership positions in multinational companies operating in a number of different industries.

Interim Report

July - September 2023

6

Safeture

About Safeture

About Safeture AB

Safeture is a Swedish Software as a Service (SaaS) company that offers an advanced open platform within the area ERCM (Employee Risk & Crisis Management). We offer medical-, risk- and security assistance providers the ability to effectively automate medical, safety and security processes by collecting risk information, employee location and facilitate communication - all in the same platform.

History & Vision

The Company was founded in 2009, triggered by the experience of the global SARS epidemic, the Indian Ocean tsunami and the Mumbai terror attacks, where lives could have been saved if people had been warned earlier and received more information. The company was listed in 2014.

Our vision is to save lives and to prevent harm by making risk, safety and security information available to users at the right time, no matter where they are. We will achieve this by providing the best platform and content that enables implementation of risk, safety and security processes and distribution of reliable information to individuals and organizations.

Financial Targets Mid-term

  • Average sales growth of at least 30% (year-on-year).
  • Continuously improved margins from current level to above 80%
  • Continuous growth of ARR with the aim to be profitable at an ARR of 65 MSEK.

Sales & Strategy

Safeture´s global sales strategy is to target assistance providers and offer them a best-in- class open platform for employee safety. The business model is SaaS, Software as a Service, where close to 100% of our revenue is recurring revenue. More than 85% of our revenue originates from customers in Europe, 10% from customers in the US and 5% from Southeast Asia.

Research & Development

Research and development are prioritized areas within Safeture, and we operate in a market area that is still immature. The company invests continuously in research and development to maintain its technological lead. Thanks to a close cooperation with our partners, we develop and adapt our products continuously. The cutting-edge knowledge that we gather from the cooperation with our partners is used in our technical development to invent new solutions and keep our advantage in relation to our competitors.

Risks & Uncertainties

Safeture is exposed to general business related and financially related risks. These risks are described more in detail in the Annual Report for 2022, available on the company's web page.

Organization & Personnel

The average number of employees in the parent company during the nine months of 2023 amounted to 31 (36). The corresponding figure for the Group amounted to 31 (36).

Interim Report

July - September 2023

7

Safeture

Financial Review

Revenue (KSEK)

6 123 6 600 6 621

7 452 8 152

8 861 9 229 9 58310 66811 07612 438

Q121

Q221

Q321

Q421

Q122

Q222 Q322 Q422 Q123

Q223 Q323

Growth rate YoY

39%

33%

34%

39%

31%

35%

27%

29%

25%

18%

17%

Revenue

Net revenue for Q3 reached 12 438 TSEK (9 229 KSEK), an increase of +35% YoY and well above the financial target of 30%.

As communicated since the beginning of this year, we focus on delivering sustainable profitability and sacrificing short-term sales growth in favour of building a more resilient and profitable business over the long term. The entire organisation is fully focused on planning, developing, marketing and selling the best possible platform to partners within medical and risk/security assistance services. In Q3, 100% of both new business and upsell was originated from this customer segment.

From a geographical perspective, the sales increase came from the partner network in Europe and in the US.

Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 Q123 Q223 Q323

Interim Report

July - September 2023

8

Safeture

Financial Review

Fixed CoS

Variable CoS

Gross Margin %

78%

73%

74%

73%

75%

75%

70%

72%

68%

68%

66%

Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 23Q1 23Q2 23Q3

EBIT (KSEK)

-550

-1 592

-2 859

-2 497

-4665-4292

-5345-5146

-5 311

-5 648

-7 169

Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 Q123 Q223 Q323

Margins & Result

The gross margin in the quarter increased to 78%. The positive trend aligns with the forecast and financial targets communicated earlier. We still believe that Safeture will be able to achieve a gross margin of at least 80% in the short term.

The high portion of fixed cost related to running the platform in combination with a growing number of installed user base and invoiced licenses will continue to drive the positive trend.

Operating expenses are 0,4 MSEK higher than Q3 last year. Negative FX effect on the revaluation of the balance sheet combined with a cautious approach to potential customer losses are somewhat offset by lower external marketing investment and a tight travel expense budget.

The EBIT result of -550 TSEK represents an improvement of 2 308 TSEK compared to last year. Increased revenue combined with improved gross margins improves EBIT % from -31% to -4%.

Interim Report

July - September 2023

9

Safeture

SaaS Metrics

Annual Recurring Revenue (ARR) Trend

Quarterly Development (TSEK)

Base

50 332

Increase

43 978

YoY Increase

66%

40 085

34 576

46%

45%

27 061

29 942

19 080

22 517

42%

33% 35%

34%

29%

30%

37%

28%

28% 27%

26%

26%

Annual Recurring Revenues (ARR)

The annual recurring revenue (ARR) grew to 50 332 TSEK, corresponding to a growth rate of 26% YoY and 4% QoQ.

Net growth in ARR compared to Q3 last year and previous quarter was 10 247 TSEK and 1 709 TSEK respectively.

New ARR order value originates 100% from the partner network.

Interim Report

July - September 2023

1

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Disclaimer

Safeture AB published this content on 18 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 October 2023 07:12:30 UTC.