Formpipe: Surprisingly high Q4 costs to normalise in 2025 - ABG

Weaker Q4 than we expected, on higher opex, but ACV was strong
We cut '25e-'26e adj. EBIT by 5-8% on higher cost assumptions
14% adj. EBIT margin in '25e (vs. 7% '24), 17x EV/EBIT adj.


Strong ACV number, but elevated costs

Formpipe is generally a company with comparatively low quarterly earnings volatility. However, Q4 contained several surprises: 1) costs were higher than we expected (adj. opex +7% y-o-y vs. +4% y-o-y in Q3) due to increased delivery capacity, higher marketing expenses, and costs for merging the two public business units (Denmark and Sweden); and 2) despite a weak contribution from Temenos, SaaS ACV reached a record high of SEK 12.5m, mainly related to the ERP business (mainly Dynamics, but also an interesting deal with IFS). Meanwhile, Delivery revenues, which were weak in H2'23-H1'24, continued to improve. Overall, sales was in line with our estimates, but higher opex resulted in a -58% y-o-y decline in adj. EBIT to SEK 7m (ABGSCe SEK 18m). Encouragingly, Formpipe has taken further measures to strengthen profitability, including layoffs of ~12 people in Lasernet, which will gradually bear fruit in 2025.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/formpipe/Equity-research/2025/2/formpipe---surprisingly-high-q4-costs-to-normalise-in-2025/