Equity research Observit, Q2 2023: Strong performance from software company
22 Aug 2023
Today, Observit published its interim report for Q2 2023. Below is a compilation of our first impressions.
- At the end of Q2 2023, quarterly recurring software revenue (QRR) amounted to SEK 4.0m, corresponding to a growth of 21.8% and annual recurring software revenue (ARR) of SEK 16.0m. By the end of 2023, we anticipated an ARR of SEK 17.1m.
- Net sales for the quarter amounted to SEK 10.4m, corresponding to a growth of 42.1%. During the first 6 months of the year, net sales amounted to SEK 21.6m. For the full year 2023, we anticipated net sales of SEK 45.2m.
- The quarter’s EBITDA result amounted to minus SEK 0.5m. The corresponding figure for the first 6 months of the year is plus SEK 0.7m. For the full year 2023, an EBITDA result of SEK 2.2m was expected, corresponding to a margin of 4.5%.
- In Q2 2023, free cash flow amounted to minus SEK 1.3m and during the first six months of the year to minus SEK 1.1m. For the full year, we expect a free cash flow of minus SEK1.3m. At the end of Q2 2023, cash amounted to SEK 1.1m.
Overall, it is our assessment that the company develops closely in line with our full-year forecasts, although there is still some way to go. As expected, cash is thin. However, given a motivated value in the initial coverage report of SEK 0.28 per share, the share price should increase on the Q-report.
Read the initial coverage report here.
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