The strong market momentum was reflected in the results: a record intake of 40 new customers added to the existing ~200, and ARR growth was 21% y-o-y. Litium reported an ARR of SEK 63m, which was in line with our expectation. Net sales came in at SEK 17m, -12% below our estimate. That said, ARR is a more important metric to look at for Litium. EBITDA came in positive at SEK 1.7m (-6% vs. ABGSCe SEK 1.8m), corresponding to an EBITDA margin of 9.9% (vs. ABGSCe 9.3%). This still results in a negative EBITDA of SEK -2.5m for the full year. We expect the opex and sales trends to continue, however, resulting in a breakeven EBITDA for next year. Moreover, the new Commerce Cloud implies a new price model, in addition to a new platform. In the short term ARR growth may be pressured somewhat by the revenue mix, since the new business model generally charges less fixed costs in advance and more variable in arrears, based on use and generated sales. We expect this to have a small effect on ARR in 2022, as the customers using the older platform will not change to the new one straight away.
We estimate a ’21-’24e ARR CAGR of 29%
We keep our estimates largely intact, other than lowering ’22e-’23e ARR by 4% and 6% due to the above. Our estimates correspond to an ARR CAGR of 29% for ’21-’24e.
We slightly lower our fair value range to SEK 18-42 per share
On our new estimates the share is trading at ’22e-’23e EV/ARR of 2.5x-2.1x. We slightly lower our fair value range to SEK 18-42 (SEK 19-45), due to the reduction of our ARR expectations, corresponding to an EV/ARR of 3.0x-6.8x for 2023e.
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