Upsales Technology AB (publ) - interim report Q2 2022

Annual recurring revenue (ARR)

• ARR at the end of the period was MSEK 129.3 (98.4), an increase of 31.5 % compared to the same time last year
• The increase in ARR during the quarter was MSEK 8.9, a growth of 7.4 % during the quarter

April - june 2022 (compared to the same period last year)

• Net sales grew by 46.4 % to MSEK 32.2 (22.0)
• EBITDA increased to MSEK 7.6 (4.1)
• EBITDA margin increased to 23.4 % (18.5 %)
• Operating profit (EBIT) increased to MSEK 5.8 (2.2) 
• Net income increased to MSEK 4.6 (1.8) 
• Cash flow from operating activities increased to MSEK 3.3 (2.2)

January - june 2022 (compared to the same period last year)

• Net sales grew by 41.0 % to MSEK 61.8 (43.8)
• EBITDA increased to MSEK 13.2 (10.6)
• EBITDA margin decreased to 21.4 % (24.1 %)
• Operating profit (EBIT) increased to MSEK 9.7 (6.5)
• Net income increased to MSEK 7.6 (5.0)
• Cash flow from operating activities decreased to MSEK 8.4 (18.6)

CEO comment
The second quarter ended with an ARR (Annual Recurring Revenue) of 129.3 MSEK, an increase by 31.5 % during the last twelve months. Net sales increased to 32.2 MSEK during the quarter, an increase of 46.4 % compared to the same period last year. Net sales is growing rapidly, driven mainly by underlying ARR growth and lower churn. EBITDA increased to 7.6 MSEK, representing a margin of 23.4 %. We also saw a substantial improvement of our Operating profit margin (EBIT) despite a negative impact of -1.4 MSEK in currency fluctuations. 

We are seeing a continued strong growth of new clients, and existing customers adding more services in both Sweden and the UK. The actions we have taken to improve customer success continue to show results in the form of a lower ARR churn rate. Although we spend a lot of time and money on new customer acquisition, the existing customer base still represents a massive growth opportunity for Upsales for many years to come.

Our core market is still Sweden, and the bulk of our growth will come from Sweden in the foreseeable future. We believe that the market in Sweden can support Upsales’ growth to more than 1 BSEK in ARR. We are seeing solid progress in the U.K., and we continued to close new U.K. customers during the quarter. Scaling into another market takes time, experimenting, and patience. Upsales’ expansion to the U.K. is a long-term initiative, and we’re still in a learning phase where we’re continuously improving our product offering. 

We are proud to have a culture of effectiveness, and a long track-record of organic, profitable growth. Upsales is a net-cash company with zero debt, and the absolute majority of our customer contracts have labour cost index clauses. This makes Upsales resilient to the turbulence in capital markets. Upsales has not seen any negative effects on the business or our growth prospects. We follow the situation closely to see how it affects our current and potential customers. The outlook for the remainder of 2022 continues to look strong, with continued rapid and profitable growth.

Daniel Wikberg, Founder & CEO

Further information
The interim report is available in its entirety at www.upsales.com
Stockholm 2022-07-27