Formpipe: Public SE continues to show improvements - ABG

4% sales miss, mainly due to lower license sales We cut our EBIT estimates on higher costs We continue to see strong growth prospects Better-than-expected ACV number
Formpipe delivered solid Q2 results, albeit with a 4% sales miss, resulting in lower-than-expected EBIT (SEK 0m vs. ABGSCe SEK 8m). Lower license sales and a shortfall in delivery sales explained the deviation, with public customers increasingly requesting the SaaS model while Public Denmark saw sequentially lower delivery sales on the back of tough comps. Because of the former, ACV sales were strong at SEK 10m (ABGSCe SEK 8m), up from SEK 9m in Q2’21. This gives us comfort in continued strong SaaS sales ahead. Encouragingly, Public Sweden continued to show improvements, driven by a healthy public market and from upselling efforts on sales of products to existing customers. In our view, the main disappointment in Q2 was an elevated personnel turnover rate, as headcount decreased by 6 q-o-q. We expect this trend to revert, however, as an elevated rate during H1 has also been observed at many other IT companies.