Equity research Teneo AI: A solid Q2 report with an impressive API call growth

 Today, 21 August 2024, Teneo AI (formerly Artificial Solutions) released its interim report for Q2 2024. Below is a comparison of the income statement results against our estimates:

Overall, net sales were marginally short of our estimates. On the other hand, profitability, in terms of adjusted EBITDA, was marginally better than expected. The share is currently down by 9.6%. At first glance, this share development appears to be unmotivated.

• In Q2 2024, net sales reached SEK 19.3m, reflecting a 31% YoY growth. This compares to our estimate of SEK 20m. As anticipated, growth was in large part driven by increased usage. Quarterly average SaaS API calls grew by an impressive 74%. NRR was reported at a solid 134%.
• Driven by increased high-margin usage revenue, the gross margin (after commissions) improved YoY by 7%-points to 79% from 72% in Q2 2023. Our estimate was 81%.
• The adjusted EBITDA result was improved by SEK 7,6m to negative SEK 6.3m from negative SEK 13.9m in Q2 2023. Our estimate was negative SEK 7m.
• The EPS came in at negative SEK 0.06. That can be compared to our estimate of negative SEK 0.04.

We intend to publish an updated equity research report shortly.

Please see our initiation of coverage report here.

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