Divio Technologies AB (Publ) grows Net Sales by 19%, improves margins and expands new sales strategy with funding secured

SUMMARY OF THE REPORT 

Third quarter: 1 JUL 2022 TO 30 SEPTEMBER 2022

• Net sales increased by 19%, to KSEK 4,495 (3,770) 
• Subscription revenue was KSEK 4,288 (3,588) 
• EBIT was KSEK -2,321 (-2,500) 
• EPS before dilution was SEK -0,03 (-0,02) 
• Cash position was KSEK 3.920 (14.060)
• MRR in September was KUSD 141 (143)

Year to date: 1 JAN 2022 TO 30 SEPTEMBER 2022

• Net sales increased by 14%, to KSEK 13,530 (11,866) 
• Subscription revenue was KSEK 11,916 (11,048) 
• EBIT was KSEK -7,936 (-7,244)
• EPS before dilution was SEK -0,09 (-0,08) 

SIGNIFICANT EVENTS (Third quarter)

• New sales strategy launched
• Fredrik Wallmark recruited as new CFO

SIGNIFICANT EVENTS (Year to date)

• Achieved ISO 27001 certification 
• Strengthened the board of directors with the recruitment of Leif Liljebrunn as Chairman

SIGNIFICANT EVENTS AFTER THE QUARTER

• The Board of Directors have decided to execute an issue of units, consisting of shares and free warrants raising initially 12 MSEK to fund new sales- and partnership strategy

CEO COMMENTS

I am happy to announce that Divio has decided to bring in more capital. Divio’s funding round is on track and the guarantee was oversigned by investors. This will provide a solid foundation and enable us to execute our ambitious growth strategy. 

Our engineering team has proudly maintained and further developed our best-in-class platform, with a solid value proposition and solutions to real industry problems. Our focus has remained on increasing security and compliance while continuing to integrate partner products like Cloudflare into our platform, maximizing the reliability and security of the web applications we manage. The satisfaction of our clients and the very low churn we experience speaks for itself. 

While the quality of our offering is high, the scalability potential of our product remains untapped. We are now scaling up our small yet efficient sales team.

Our sales team learned a lot from the many interactions with clients and the analysis of the general market developments. Hence we began the quarter with expanding our sales focus towards SMEs rather than focusing solely on large multinationals. SMEs are much faster in their decision-making processes and more willing to trust a smaller, pioneering and innovative company like Divio. 

To further facilitate sales, we rebranded and launched a brand new communication platform with the sales-critical website at its core. This communication platform is much clearer about our value proposition and the problems we solve, even for less technical readers. While a large part of our service is based on a platform, we also put forward our consultative expertise. Complex selling in the cloud management industry is about trust and know-how. Divio’s main product is our automated platform, but our sales team will be more consultative in their sales approach. That is why we plan to recruit technical sales experts to support our sales team. From our experience, this strategy has proven to be much more accurate and effective.

In addition to our updated sales strategy, we have established a top tier partnership with one of the world's largest cloud providers. We will now be able to approach more customers through the offerings of a much larger sales organization compared to our in-house capacities. This partnership is another clear marker of the genuine quality and professionalism of our team. All of the above will enable us to move from a 20% growth rate to at least 30% YoY on average over a 5 year period.

With the recruitment of a new CFO we now have a full finance team in place to produce more frequent updates and reports to the market. The successful move to a quarterly report is the first realization of our financial plan of action.

I am very proud of our smart and excellent team who has shown a production rate that far exceeds the benchmark. Despite this, we need to increase resources to support our growth objectives. We need to recruit more technical sales and skilled engineers to leverage the scalability potential of our product and turn our new partnership into a fruitful collaboration. The upcoming funding round is a central piece of this strategy.

Thank you

Jon Levin, CEO