Litium: Miss on sales, but outlook maintained

Litium: Miss on sales, but outlook maintained - ABG

Q3’21 ARR SEK 59m, up 20% y-o-y
We cut ‘21e-‘23e sales by 3-4% on transitory effects
4.2x-2.8x EV/ARR for ‘21e-‘23e

Litium reported Q3’21 ARR of SEK 59m, -3.2% vs. ABGSCe, for organic ARR growth of 20% y-o-y. Quarterly sales were SEK 14m, -8% vs. ABGSCe, corresponding to 18% growth y-o-y. Opex increased 7% y-o-y, leading to EBITDA of SEK -0.1m, which was below ABGSCe of +SEK 0.7m, but an improvement compared to SEK -1.3m in Q3’20. The miss on EBITDA was attributed to the lower-than-expected sales, but also a gross margin of 68.4%, 1.8pp lower than we expected. EBIT was SEK -2.7m vs. ABGSCe at SEK -2.0m, and SEK -3.5m in Q3’20. Our conclusion is that the operational leverage of Litium’s business model continues to steadily bring it towards profitability. The highlight of the quarter was the launch of its new Litium Commerce Cloud concept, which brings new functionalities for clients to accelerate growth, as well as a new growth-oriented business model with the new platform version, Litium 8. Commerce Cloud is built with flexibility in mind, with increased modularity and a new, more dynamic business model, where pricing is based on utility, allowing clients to scale efficiently. Lastly, the new platform version is run on Microsoft’s .NET 5 technology, which strengthens Litium’s value proposition toward partners.

We keep the fair value range at SEK 19-45 per share. On our new estimates, Litium is trading at an EV/ARR of 4.2x-2.8x for ‘21e-‘23e.

Litium: Miss on sales, but outlook maintained - ABG

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Börsläget den 10 december, 2024

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Litium: Miss on sales, but outlook maintained - ABG

Agnes Michanek pekar ut vägen framåt

Börsläget den 10 december, 2024

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