Strong ACV number, but elevated costs
Formpipe is generally a company with comparatively low quarterly earnings volatility. However, Q4 contained several surprises: 1) costs were higher than we expected (adj. opex +7% y-o-y vs. +4% y-o-y in Q3) due to increased delivery capacity, higher marketing expenses, and costs for merging the two public business units (Denmark and Sweden); and 2) despite a weak contribution from Temenos, SaaS ACV reached a record high of SEK 12.5m, mainly related to the ERP business (mainly Dynamics, but also an interesting deal with IFS). Meanwhile, Delivery revenues, which were weak in H2'23-H1'24, continued to improve. Overall, sales was in line with our estimates, but higher opex resulted in a -58% y-o-y decline in adj. EBIT to SEK 7m (ABGSCe SEK 18m). Encouragingly, Formpipe has taken further measures to strengthen profitability, including layoffs of ~12 people in Lasernet, which will gradually bear fruit in 2025.
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