Litium - Strong ARR growth for Litium in Q1’21

Q1 ARR SEK 55m, +3. 7% vs. ABGSCe, +27. 3% y-o-y… …operational costs at SEK -19m, growing +16.

3% y-o-y Webcast scheduled for 11:00 CET Q1’21 details Litium reported its Q1’21 figures today, which offered ARR of SEK 55m, +3. 7% vs. ABGSCe, for a strong y-o-y growth of +27.

3%, which is within Litium’s financial target of growing ARR by 20-40% annually. Net sales were SEK 13m, -0. 2% vs.

ABGSCe, of which 97. 1% were recurring, slightly above Q1’20. 83.

2% of net sales were attributable to subscriptions and 16. 8% to the variable component of Litium’s revenues. The gross margin, which has been known to fluctuate between quarters (an effect which will be mitigated as Litium grows) was 66.

3%, -5. 2pp vs. ABGSCe.

The gross margin was slightly muted due to Litium’s customers experiencing increased levels of traffic during Q1, which impacts Litium’s COGS in the short-term as the performance of customer storefronts is ensured. Litium appears to yet again have had good control over its operational costs during Q1, where Q1 opex amounted to SEK 19m, growing 16. 3% y-o-y, while ARR grew 27.

3% y-o-y. Ultimately this yielded an EBITDA of SEK -3m, +22. 3% vs.

ABGSCe, and an EBIT of SEK -6m, +15. 3% vs. ABGSCe.

Outlook for 2021e We believe that in the long-term Litium will benefit from the COVID-19 tailwinds that’s furthering the shift from physical retail to digital commerce solutions. In the short-term however, we think that new customer intake will stay under pressure in H1’21e, as traditional retailers delay making new large investments into digital commerce solutions. We believe that this should recover in H2’21e and onwards, when we factor in growth picking up once again.

Final thoughts There is a webcast today at 11:00 CET where management will present the Q1’21 figures and host a Q&A session, link: https://content. litium. com/se/litium-q1-rapport-2021.