Penneo: Q3 overall slightly below our expectations - ABG

Q3: 18% ARR growth vs. ABGSCe 19.5%, FCF slightly lower
'24 guidance modified yesterday - lower ARR, but better profitability
Expect cons '24e EBITDA up 10-20%, more limited revisions in '25e


Q3 numbers vs. ABGSCe

Q3 ARR of DKK 97.4m was slightly below our DKK 98.6m estimate and corresponded to 18% y-o-y growth. Churn of 5% and new sales of 12% were in line, but uplift of 8% was 2pp weaker than our estimate. NRR was thus 103% and continued to slide vs. previous quarters (it was 114% in Q3'23 and 105% in Q2'24). Q3 revenues of DKK 17.0m came in materially below ABGSCe, driven both by seasonality in revenue recognition and the temporary downgrades from a few customers earlier this year. Adj. EBITDA of DKK -2.0m thus missed our estimate of DKK 0.6m despite lower-than-expected opex. Lastly, FCF (excl. leases) of DKK -6.5m in the quarter was roughly in line with our estimate of DKK -6.1m, taking the cash position to DKK 21.7m (in line with ABGSCe at DKK 21.8m). Despite the growth setback, however, we note that Penneo's SaaS metrics continue to develop more favourably (see graph below), with ARPA edging slightly higher and CAC continuing to decline.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/penneo/Equity-research/2024/11/penneo---q3-overall-slightly-below-our-expectations/