Interim report, January - March 2022

Net sales increased by 34.6% year over year. Consolidated net sales ended at 65,317 (SEK 000s). EBITDA totaled -16,265 (SEK 000s). Operating profit, EBIT, was -36,124 (SEK 000s). Profit after tax was -29,171 (SEK 000s). Earnings per share was SEK -0.43.

CEO's comments

Record high Q1 sales; investment period extended

24SevenOffice is now demonstrating all time high sales, and has successfully overcome the covid pandemic and resulting implications. I’m incredibly grateful to all of my impressive and resilient team members, colleagues, partners and customers that are truly driving the organization to the next level.

The financial results for the first quarter show a strong and increasing growth to MSEK 65 in revenues, 35% up from last year, with a negative EBITDA of MSEK 16. During this and the previous quarter we initiated necessary investments to accelerate future growth, and we’re expecting these investments to continue for the next few quarters. As there are several highly attractive growth areas across existing regions and verticals, we are extending the current investment period by 6-12 months delaying the expected positive trend in EBITDA until next year. This will however fuel 24SevenOffice’s journey for hyper growth in the long term.

As we are strongly funded with approximately MSEK 350 in cash, we’ll leverage our financial robustness and the increased investment period to finalize the holistic 24SevenOffice product offering and recruit relevant talent and partners to bring 24SevenOffice closer to our ambitious revenue targets for the upcoming years. Given the financial strength of the company and the ongoing hyper growth trajectory, we are certain the upcoming years will become one of the strongest periods in 24SevenOffice’s history.

Hyper growth journey manifesting

The demand for 24SevenOffice’s advanced cloud offerings such as amongst other the AI-accounting, time registration and payroll functionality are still growing substantially and fueling our hyper growth ahead.

By the end of the first quarter we are approaching almost 3,000 customers on-boarded on the payroll solution, with more than BSEK 2 in paid salaries. In addition, the roll-out of the AI-module speaks for itself; we had more than a 100% increase in both postings and revenues again from the previous quarter, and we’re still expecting a steep development in sales, onboarding and adoption to continue. Another investment becoming material for 24SevenOffice is time registration by Busy. YoY growth for this quarter shows more than 200% growth in recurring revenues. We have extremely high ambitions for all of these ventures, and of course the rest of 24SevenOffice’s market leading product offering.

Looking ahead, the majority of 24SevenOffice’s clients will be converted to the new transaction-based pricing model by Q2 this year, which compared to the previous model now scales with the clients’ degree of automation and usage. The increased demand for 24SevenOffice’s products, along with new pricing model and enterprise focus, results in an expected significant positive trend in EBITDA throughout the next year and onwards.

Enterprise ready and marketplace approach in focus

In addition to offering the core cloud accounting and ERP software, 24SevenOffice’s ongoing ambition is to capture the full life cycle of our clients providing full enterprise functionality, with an additional marketplace offering on top, between our customers and their customers and employees. Throughout 2022 we’re focusing on fully integrating our product offering into a holistic service, but we are still continuously monitoring attractive and relevant M&A opportunities within new SaaS technology, teams or customer portfolios.

Masterplan, our cloud based material planning software has already been integrated to 24SevenOffice. It continually demonstrates an impressive growth rate and adoption in the US, with 100% YoY growth in recurring revenues for this quarter and expecting an increased growth rate ahead, and we are now launching it in the Nordics. In addition, we’re looking into possibilities to expand further into Asia with this technology. The market size is tremendous and we’ll share updates on this venture in case it materializes.

The Nordic HR-software market is estimated to be more than BSEK 5 with strong growth ahead, and we are thrilled to have completed the purchase of the Danish HR software company INNOMATE A/S at the start of the first quarter. We have begun integrating it into 24SevenOffice and expect to launch it to the remaining 24SevenOffice customers later this year.

The unique combination of HR and recruiting, alongside our existing pay-roll, payment and financing services will create immense synergies and new income areas, through customized and personalized products directly to the several hundred thousands employees of the 24SevenOffice’s customers, such as credit lines and paytech/fintech, pension and insurance plans. In addition, the piloting of the payment reminder and debt collection software is moving forward at a high pace and showing great results and feedback. We’re expecting to roll it out towards several hundred customers before the summer.

Building the organization for the future

We recently announced the establishment of a fully owned corporate venture company, 247Ventures, with the purpose of investing directly in early stage companies with promising teams that have developed interesting business models and technology. We have already signed two investments; Tidbit, a Norwegian company delivering an online point of sales system, and Subtrackr, a Norwegian company delivering automation of companies´recurring subscriptions and contracts.

In addition, we’re strengthening the capabilities within the analytics, financials and operations teams. We have recently landed top talent from high esteemed consulting and tech firms, and we’re also looking forward to welcoming our new Chief Operating Officer after the summer. This will surely create a more efficient and data-driven organization, ready to scale 24SevenOffice across the existing and new markets.

I’m certain that continuing focusing on building a winning team, developing & integrating our enterprise software and creating a one stop-shop platform using a marketplace approach, will enable us to fully capture the whole life cycle of our customers and generate enormous value for both our customers and investors going forward. We have such a great product offering and employees, and I’m grateful for being a part of this journey ahead.

Eirik Aalvik Stranden

CEO

This disclosure contains information that 24SevenOffice Scandinavia AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 05-05-2022 07:15 CET.