Litium: Sequential ARR growth streak continues - ABG

ARR of SEK 67.4m, up 15% y-o-y, -3% vs. ABGSCe
Committed to cash flow break-even
Share trading at ’23e 12.1x EV/EBITDA


Q3 report reflections

The company delivered a solid report in line with our expectations. The reported ARR of SEK 67.4m was only 3% below our estimate (adjusted for client migrations, the deviation was only 1%). This showcases that the company is rather well insulated against weaker consumer sentiment thanks to the B2B exposure. Moreover, we believe that the top line can remain relatively robust since Litium includes indexation clauses in its customer agreements. We also find it reassuring that the company reaffirmed its commitment to become cash flow positive sometime during 2023. Management believes that the current cash position will be sufficient to carry Litium until it can sustain further growth through internally-generated funds.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/Litium/Equity-research/2022/10/litium---sequential-arr-growth-streak-continues/