Penneo realises 29% year-on-year ARR growth at the end of 2022-Q3

Company Announcement No. 31-2022
Copenhagen, 23 November 2022
Financial report for the period 1 July 2022 - 30 September 2022

Key features 

• ARR increased by 1.5M DKK to 65.0M DKK in 2022-Q3, corresponding to 29% year-on-year (YoY) growth at the end of 2022-Q3
• ARR increase from Newbizz amounted to 1.1M DKK compared to 1.4M DKK in 2021-Q3
• ARR increase from Uplift amounted to 1.0M DKK compared to 1.8M DKK in 2021-Q3
• ARR lost to churn amounted to 0.7M DKK compared to 0.6M DKK in 2021-Q3
• ARR from foreign markets increased by 0.5M DKK compared to 0.5M DKK in 2021-Q3
• EBITDA amounted to negative 4.7M DKK compared to negative 8.1M DKK in 2021-Q3
• Free Cash Flow (FCF) amounted to negative 7.3M DKK compared to negative 3.2M DKK in 2021-Q3

Guidance

ARR

ARR guidance remains unchanged at 70-75M DKK.

EBITDA

EBITDA guidance remains unchanged at negative 15-20M DKK.

Business summary

Addressing the uncertainties in the macroeconomic environment to support growth

The transformation of the sales organisation which was initiated in 2022-H1 is well under way. The sales development team is up and running, with an increase in outbound activities. Moreover, the newly established customer success team is being ramped up to ensure continued strong collaboration with current customers.

To support its international scaling plans, Penneo has opened a local office in Belgium, where the Head of Sales for the Belgian market is building a local commercial team to secure growth and expansion in the market.

Despite the volatile macroeconomic environment, Penneo sees a continued need and demand for its solutions on the key markets it operates in (digital signatures and e-KYC markets), driven primarily by

• an increase in the digitalisation and automation efforts in the public and private sectors to improve efficiency and achieve time/cost savings, supported by political initiatives and regulation at EU level
• more demanding and stringent regulatory compliance requirements from a legislative level, driving companies to be more accountable for the way they do business

The proactive initiatives Penneo is currently undertaking will support the growth of the company and its plans for expansion and internationalisation.

Looking ahead

In 2022-Q4 Penneo will continue with the focus on upselling KYC to audit and accounting customers, as announced in the annual report for 2021. Additionally, Penneo has seen an increase in uplift on Sign customers such as the extended agreement with Bankdata which was communicated in company announcement No. 30-2022. 

Preparation for acceptance in the European Commission Trust list

As announced in the 2022-H1 report, Penneo has been working towards upgrading the Sign platform from offering Advanced Electronic Signatures (AES) to offering the highest level of electronic signature in the eIDAS regulation: Qualified Electronic Signatures (QES) upon acceptance on the EU Trust List.

In order to become accepted on the Trust List, Penneo has passed the external Trust List audit and handed it in for approval by Digitaliseringsstyrelsen and the European Commission, with an expected finalisation date in 2022-H2.

Conditioned upon approval, Penneo will become a Qualified Trust Service Provider (QTSP) offering QES, listed on the European Union Trust List. In Denmark, the only entities currently listed on the Trust List are the Danish Government and Nets.

Gaining the status of QTSP offering qualified electronic signatures provides Penneo the foundation for continuing the European expansion.

Presentation
The 2022-Q3 report will be presented at an online conference hosted by Penneo today, 23 November 2022 at 10:00 CET and a webinar hosted by HC Andersen Capital at 13.00 CET.

The conference call hosted by Penneo will be conducted in English and can be attended live here. Participants are also able to dial in via phone ‪(DK) +45 70 71 44 23 and enter PIN: 642 394 163‬#.

The webinar hosted by HC Andersen Capital will be conducted in English and can be attended live here.

For more details please see the 2022-Q3 report attached.