Briox - Accelerating ARR growth in Q4 - ABG

A report in line with expectations
Briox's Q4 had high growth and stable opex. Sales were SEK 2.4m (-1% vs. ABGSCe SEK 2.4m). EBITDA was SEK -6.2m vs. ABGSCe at SEK -6.3m. Sales continued to grow faster than costs in Q4, showcasing the underlying scalability of the business model. The ARR grew 18% q-o-q and 63% y-o-y to SEK 13m, which is strong. Growth in licences was the highest in five quarters at 935 new licences sold, now 13,739 in total. Its strategy remains clear: to offer the most effective offering for micro businesses. It continues to work closely with bureau partners and is adding new features to the platform to increase conversion of new users via the bureaus. In addition, to reach a broader audience, Briox will focus more on strategic partnerships. For example, it will begin sales and marketing collaboration with its partners Palkkaus.fi (payroll system) and KTI Laskutus (factoring system), which should broaden its reach.

Sales estimates down slightly, but so is opex
Despite a solid Q4 report, in line with expectations, we are a bit more cautious on growth in the coming quarters because of the slowing economy. Therefore, we cut '23e-'24e sales by 7% and 1% respectively. That said, Briox navigated 2022 well, growing sales 40%, up from 38% growth in 2021, which we find positive. We have also cut expected opex as well, which mitigates the lower sales.

Well positioned for high growth and continued scaling
Looking ahead, we think Briox is well positioned to execute on its growth strategy. 2022 was a good year, with high growth (sales +40% y-o-y) while ending the year with the same number of employees as 2021 (28). Therefore, we are positive it will reach sustainable profitability as revenues catch up with its relatively fixed cost case. Up to 2025, we forecast a sales CAGR of 40%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/briox/Equity-research/2023/2/briox---accelerating-arr-growth-in-q4/