Briox: ARR growth accelerated slightly in Q3 - ABG

ARR of SEK 11m in Q3, up 47% y-o-y
We cut 2022e sales by 6% on the slightly soft Q3
Share trading at 15x-12x EV/sales on ’23e-’24e


Sales up 31% y-o-y, Q3 EBIT slightly down

Briox grew sales and ARR at a rapid pace in Q3, while keeping costs under control. Sales was SEK 2.1m (-12% vs. ABGSCe) for 31% growth y-o-y, with ARR of SEK 11m for 47% growth y-o-y. The y-o-y growth in ARR accelerated from 44% in the previous quarter, indicating that Briox has not seen any slowdown in growth (which the CEO confirmed on the conference call). The number of bureau partners increased by one, to 118. Active licenses grew by 378 over Q2’22, to 12,804. Accelerated growth in the number of licenses compared to bureau partners reflect Briox’ initiative to increase activity through existing bureau partners. Opex was flat q-o-q yielding SEK -5.9m in EBIT (SEK -0.6m vs. ABGSCe -5.3m), which was slightly lower than SEK -5.0m last year owing to increased growth investments. Furthermore, the company continues with its intensive product development initiative to maintain its high growth rate. Management also highlighted the roll out of its new payroll system and the potential value creation from its ongoing AI initiative as important factors short-term.

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