Penneo: A decent quarter; ~27% y-o-y ARR growth - ABG

ARR in line with ABGSCe, adj. EBITDA weaker
~27% ARR growth in Q1 despite negative FX impact
Reiterates FY'23 guidance; limited cons. estimate changes


ARR in line with ABGSCe, but weaker adj. EBITDA

Penneo reported Q1 ARR of DKK 74.2m (+0.3% vs. ABGSCe at DKK 74.0m). Churn was in line with our estimate of 4% y-o-y. Uplift was slightly better at ~17% y-o-y (+1.3pp vs. ABGSCe at ~16%), while new ARR was weaker at ~14% (-0.9pp vs. ABGSCe at ~15%). Q1 revenues came in at DKK 18.0m (-2.0% vs. ABGSCe at DKK 18.4m). The gross margin was 3.9pp better vs. ABGSCe. However, staff costs and other external expenses were slightly higher than we had expected (primarily due to more hirings than we had expected), driving the 10% miss on adj. EBITDA for the quarter. As we expected, FY'23 guidance was reiterated (ARR of DKK 87m-95m and adj. EBITDA of negative DKK 10m-15m), assuming continued cautious buying behaviour for the remainder for '23. The cash position was at DKK 51.0m at the end of Q1 (DKK 53.1m at YE'23), as the inflow of DKK 3.9m somewhat compensated for the negative FCF.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/penneo/Equity-research/2023/5/penneo---a-decent-quarter-~27-y-o-y-arr-growth/