Briox - Weaker sales but better EBIT than expected

+19% growth y-o-y (-4% vs. ABGSCe) ’21-23e sales down 8-13% ’21e, 22e and ‘23e EV/sales of 50x, 31x and 22x License sales back to positive q-o-q Briox reported Q1 sales of SEK 1. 2m, which was y-o-y growth of 19% (-4% vs. ABGSCe).

ARR was SEK 5. 6m (+7% vs Q1’20). Although sales were in line with our forecast, the number of licenses sold was below our expectation (+196 q-o-q vs.

ABGSCe +400). That said, it is encouraging to see that this number has again turned positive, as it was -53 q-o-q in Q4. EBIT was better than expected (SEK -4.

7m vs. ABGSCe SEK -6. 1m), mainly from a 30% y-o-y reduction in external costs (affected by a reclassification of some external costs).

In total, opex was -3. 5% y-o-y, demonstrating that the cost control remains strong. Completed share issue will help growth In the quarter, the company continued to execute on its new business plan, which includes a greater focus on close collaborations with accounting agencies, which in turn will drive the upselling of Briox’s solution to their customers.

According to management, it is a time-consuming but necessary process that has hampered sales in the short-term but will benefit growth in the long term. We conclude that the company’s recent share issue will provide good support for its growth initiatives. One initiative includes the release of a new product offering.

Here, the aim is to further enhance user experience and to enable a more efficient collaboration between agencies and the customers. In addition, the company recently launched its education platform, Briox Academy, which enhances the on-boarding process of new customers. Lowered sales and opex forecasts We lower’21-‘23e sales by 8-13% after the report, reflecting lowered assumptions for licenses sold.

We also reduce our opex estimates, which gives EBIT revisions of +4%, -1% and -7% for ‘21e, ‘22e, and ‘23e, respectively. On our new ’21, ’22 and ’23 estimates, Briox is trading at EV/sales of 50x, 31x and 22x, respectively.