Linkfire’s (NASDAQ: LINKFI.ST) Q1 2023 interim report
“Steady revenue growth with significantly improved profitability”
Flash highlights Q1 2023 compared to Q1 2022:
- Recognized revenue increased by 17 per cent to DKK 13.1 million (Q1 2022: DKK 11.2 million)
- Gross profit increased by 33 per cent to DKK 10.7 million (Q1 2022: DKK 8.0 million) at a gross margin of 82 per cent
- EBITDA improved by 83 per cent to negative DKK 2.1 million (Q1 2022: negative DKK 12.4 million)
- EBITDA ratio of negative 16 per cent, an improvement of 95 per cent
- Revenue Per Mille (RPM) increased by 19 per cent to DKK 11.33 (Q1 2022: DKK 9.52)
Lars Ettrup, CEO and Co-Founder, comments:
Q1 of 2023 has shown strong development in earnings, with an 83 per cent improvement in EBITDA compared to Q1 of last year. This is a testament to the narrowed commercial focus and a major step in our breakeven plan.
We are pleased with our disciplined execution during the quarter, which resulted from our narrowed commercial focus. We remain laser-focused on balancing growth and profitability, and we are confident that our growth strategies, flexible operating model, and talented teams will drive profitable growth in the future.
Selected financial highlights and key figures
| Income Statement (DKK thousand) | Q1 2023 | Q1 2022 | Key Metrics | Q1 2023 | Q1 2022 | |
| Recognized Revenue | 13,104 | 11,231 | Consumer connections (Traffic) (Million) | 367 | 481 | |
| Operating loss before interest, taxes, depreciation & amortization (EBITDA) | (2,148) | (12,428) | y/y Growth | -24% | 36% | |
| Operating loss before interest & taxes (EBIT) | (7,100) | (16,053) | Consumer connections, Platform (Million) | 357 | 371 | |
| Result of financial items | (306) | (424) | y/y Growth | -4% | 19% | |
| Profit after tax | (6,082) | (15,101) | Consumer connections, Partners (Million) | 10 | 110 | |
| y/y Growth | -91% | 166% | ||||
| Balance Sheet (DKK thousand) | Q1 2023 | Q1 2022 | Revenue, on constant currency basis (DKK thousand) | 12,260 | 11,141 | |
| Intangible assets | 74,659 | 84,678 | Revenue Growth | 10% | 46% | |
| Additions, property, plant and equipment | - | - | Organic Revenue Growth | 10% | 46% | |
| Cash and cash equivalents | 6,707 | 21,488 | Subscription Revenue, on constant currency basis (DKK thousand) | 8,107 | 6,560 | |
| Total assets | 101,507 | 136,823 | y/y Growth | 24% | 26% | |
| Equity | 38,100 | 79,801 | Commission Revenue, on constant currency basis (DKK thousand) | 4,154 | 4,581 | |
| y/y Growth | -9% | 88% | ||||
| Financial ratios | Q1 2023 | Q1 2022 | Commission Revenue per Mille (RPM)*, on constant currency basis (DKK) | 11.33 | 9.52 | |
| Operating profit before interest, depreciation & amortizations (EBITDA) margin (%) | -16% | -111% | y/y Growth | 19% | 38% | |
| Operating profit margin (EBIT) (%) | -54% | -143% | Gross Margin, on constant currency basis | 83% | 72% |
Insights for the quarter:
- Earnings improved significantly as a result of a strategic focus to improve capital efficiency and thereby focusing on activities with short-term return profiles.
- Compared to Q1 2022:
- EBITDA improved by 83 per cent (EBITDA margin improved 100 percentage points)
- External expenses were down 45 per cent
- Recorded revenue increased by 17 per cent
- Paid partner traffic decreased by 100 million as a consequence of the strategic decision to discontinue this activity for the time being. This led to an overall decrease in consumer connections but an improvement of monetization metrics (RPM).
- Compared to Q1 2022:
- Consumer connections decreased by 24 per cent
- RPM increased by 19 per cent
- Future goal is to operate at the new cost base while maintaining steady revenue growth, improving earnings further.
Financial guidance and results for 2023
For the financial year 2023, Linkfire confirms its financial guidance released in April 2023, totalizing revenue in the range between DKK 60-70 million, corresponding to a yearly growth of 14-33 per cent, and its EBITDA to be in the range of negative (DKK 5 million) and positive DKK 5 million.
During 2022, the company has taken several initiatives to eliminate risk in the breakeven plan. We have narrowed our operating focus to short-term return initiatives and the least capital-intensive deployment of cash. In 2023, Linkfire expects to utilize the lighter operating setup to perform EBITDA breakeven for the year.
Linkfire maintains its mid-term financial target of 20-40 per cent organic revenue growth and a gross margin of approximately 80 per cent.
Webcast and report material
Linkfire hosts an interim report webcast for investors and media on May 25, 2023, at 10.00 AM CEST. The report is presented by Lars Ettrup, Co-founder & CEO, and Tobias Demuth, CFO.
The presentation for the webcast can be downloaded 30 minutes before the webcast starts, and a recording of the event will be available after the webcast. The Q&A session is moderated through a chat function, which can be accessed via the webcast link below.
Link to register for webcast: https://lnk.to/Q1-23
After registration, you will receive a link to access the webcast via e-mail.
Link to report material: bio.to/LINKFI_IR
For further information, please contact:
Linkfire
Lars Ettrup, CEO, Linkfire
Telephone: +45 61 33 99 53
E-mail: [email protected]
Linkfire’s Certified Adviser
Aktieinvest FK AB
Telephone: +46 739 49 62 50
E-mail: [email protected]