DecideAct H1 Report 2022: Growth in ARR of 73% (YOY) and on track to reach the ARR target of a minimum of 80% in 2022

DecideAct A/S [ACT]
Company Announcement No. 09-2022:
NASDAQ FIRST NORTH GROWTH MARKET, COPENHAGEN
27 AUGUST 2022

DecideAct’s half-year Report for the period January 1 to June 30, 2022, was approved by the Board of Directors today. The Report is attached to this release and can be read here: https://www.decideact.net/investor-relations/

The DecideAct business is in good shape. From the end of 2020 to the end of 2021, we increased our ARR by 145%, and now after the first six months of 2022, we have significantly increased our AAR with a growth of 73% compared to the end of H1 2021. With the contracts already signed and the highly promising pipeline we have built, we look to the future with great optimism, and therefore remain focused on our 2022 target of expected growth range in ARR of a minimum of 80% up to 150%. The longer-term objective to reach DKK 100 million in ARR also remains unchanged.

THE METRICS
(CONSOLIDATED FOR THE GROUP ON 30 JUNE 2022)

ARR: DKK 9.6 million
ARR GROWTH YOY: 73 %
CHURN: 4 %
GROWTH IN NUMBER OF CUSTOMERS IN H1 2022: 30 %
TOTAL CASH RESERVE/LIQUIDITY: DKK 5.4 million
NEW CASH RESERVE AFTER THE BALANCE SHEET CLOSING: DKK 15 million
EQUITY: DKK 12.5 million
NEW INVESTMENTS (SOFTWARE DEVELOPMENT): DKK 3.6 million
INTANGIBLE ASSETS: DKK 14.8 million

• Year-over-year (June 2021 – June 2022) growth in ARR 73%
• We maintain our 2022 end-of-year ARR growth target of a minimum of 80% and up to 150%
• Our pipeline has grown steadily, and we have more in the contracting phase than ever before
• Cash reserve of DKK 15 million including new capital injected after the closing of the balance sheet

Since the end of 2021 we have booked the following operational achievements:

• Continuously grown the customer base and entered new verticals
• Strengthened our sales efforts and expanded the pipeline
• Launched a brand-new part of the platform focused on Promise-Based Execution
• Totally pivoted our marketing approach to be fully data-driven
• Hired a Head of Partnerships and entered new and important strategic partnerships
• Entered a strategic partnership to achieve a dominant position in the Danish public sector

On track to realize our growth target
The hesitancy we, like many other companies, experienced in contracting after the outbreak of war on 24 February has been replaced by good progress in the third quarter. Experience shows that most deals in the SEM space close in Q3 and Q4 and with prospects in the pipeline we are very optimistic about the future. Therefore, we believe it is realistic to realize the target of minimum 80% ARR growth year over year as per the end of 2022. In the first half of 2022, we experienced a 4% churn. We expect that continued customer growth will be accompanied by churn in the range of 5-10%. 

Strong support from our investors
We are pleased with the strong support and confidence we are experiencing from our investors. In March DecideAct strengthened its balance sheet as we agreed with private investor Jens Munch (J. Munch Holding ApS) that he invested a further DKK 5.2 million into DecideAct by way of a directed issue. After closing the balance sheet, Jens Munch added another DKK 6.5 million to his investment in DecideAct. Furthermore, a loan of DKK 3 million has been committed from the Danish Growth Fund (Vækstfonden).

These capital injections represent a boost to the Company’s capital base and will be deployed to further ensure the long-term scaling of DecideAct, whilst enabling DecideAct to navigate today’s turbulent markets with a steady hand.

Commenting on the additional investment, Jens Munch said: “DecideAct is developing well. I have always seen DecideAct as a long-term investment with great potential. Therefore, I am pleased to have the opportunity to inject this extra capital.”

We go for the win
Commenting on the H1 report, Flemming Videriksen, CEO and co-founder of DecideAct says: “DeciceAct’s goal is not just to participate, but to become a dominant player in our category. At DecideAct, we go for the win and intend to make the tough decisions and investments required to do so. This means remaining balanced and sensible while taking the bold steps necessary. This is exactly what are doing".