Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lime Technologies AB (CHIX:LIMEs) reported an 18% sales growth and a 28% ARR growth in Q3, indicating strong financial performance.
- The company has a diversified customer base, with the top 10 customers accounting for only 7% of revenue, reducing dependency on a few large clients.
- Lime Technologies AB (CHIX:LIMEs) has successfully expanded into seven markets with 11 offices and nearly 500 employees, showcasing its international growth strategy.
- The company is transitioning customers from old upfront agreements to new subscription models, resulting in a 31% growth in subscription revenue.
- Lime Technologies AB (CHIX:LIMEs) is investing in future growth by recruiting over 30 new employees and focusing on sales, marketing, and product development.
Negative Points
- The third quarter was challenging due to slower deal closures in August and early September, impacting overall performance.
- The Rest of Europe segment showed only 6% growth, which is below expectations and highlights the need for improvement in international markets.
- Expert services revenue saw a slower pace, indicating potential challenges in this area that need addressing.
- Personnel expenses increased to 58% of net sales, partly due to the acquisition of SportAdmin, impacting profit margins.
- The EBITA margin slightly decreased to 24.8% in Q3 from 25.6% the previous year, reflecting increased investments in growth over profitability.
Q & A Highlights
Q: In the CEO statement, you mentioned positive signals in customer engagement and an increasing pipeline. What does this mean for Q4 and 2025?
A: We observed fewer deals closed in the early part of Q3, leading to a stronger pipeline. The key is converting this pipeline into closed deals. We saw a good inflow of new deals towards the end of Q3, which should positively impact both Q4 2024 and 2025. The focus now is on starting these projects to maintain momentum.
Q: How is the internationalization of SportAdmin progressing?
A: Since acquiring SportAdmin, we've been preparing the product for international markets. We're assessing market conditions in countries like the UK, Denmark, Netherlands, Germany, and Finland. Progress is on track, and we're narrowing down the best markets to enter first.
Q: Can you elaborate on SportAdmin's impact on profits and margins this quarter?
A: We don't disclose exact numbers, but SportAdmin had an EBITA of 17% at acquisition, slightly impacting profits as expected. The focus is on growth, and we're satisfied with SportAdmin's performance in terms of growth and profitability.
Q: How will the increased recruitment impact cost levels going forward? Are these costs reflected in Q3?
A: Not all recruitment costs are reflected in Q3, as many new employees joined in August. We expect to see these costs more fully in future quarters. Our low employee churn and effective onboarding contribute to stable staffing costs.
Q: How is the mix between upsells versus new sales trending?
A: The mix remains similar, with a 50-50 split between upsells and new sales, especially in Lime CRM. Lime Go sees more new sales, while Connect and SportAdmin maintain a balanced split.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
