Divio Technologies AB (publ) Year-end report H2 2019 - Divio grows with 49 percent MRR, and system development increases the potential market

Divio Technologies made significant investments in the development of PaaS and CMP platforms during 2019. Divio has transformed from a development-focused to a sales-focused company and implemented an enterprise sales strategy. The overall MRR increased by 49% compared to the previous year, and there is an expanding pipeline of prospects.

For the period 2019-07-01 – 2019-12-31

• Total revenue amounted to 8,250 (12,388) KSEK
• Revenue from Subscriptions and Professional Services amounted to 5,983 (7,758) KSEK
• Operating loss for the period -10,891 (-4,120) KSEK
• Earnings before tax for the period -9,471 (-4,489) KSEK

For the period 2019-01-01 – 2019-12-31

• Total revenue amounted to 16,354 (18,444) KSEK
• Revenue from Subscriptions and Professional Services amounted to 11,851 (11,237) KSEK
• Operating loss for the year -21,033 (-14,212) KSEK
• Earnings before tax for the year -19,578 (-14,589) KSEK
• Cash flow from operating activities -21,238 (-3,008) KSEK

Significant events during the period

• Initiated the transition from a development to a sales-focused company
• Made a significant change in company strategy towards enterprise sales
• Strengthened the management team in October with the recruitment of a sales-driven CEO
• Made major investments in the platform, adding functionality and broadening the customer base
• Listed on Nasdaq First North Growing Markets

Important events after the period

• Rights Issue in March – preparing for strategic investments in sales
• Recruited two outstanding enterprise sales professionals 
• Launched self-service cloud shifting functionality

Rights Issue

• Divio Technologies AB, listed on Nasdaq First North, announced that the company’s Board of Directors, subject to approval of the extraordinary general meeting, proposes a rights issue of approximately SEK 17.6 million.
• The rights issue will secure investment in building up the sales organization, meeting increased demand for Divio's services and continuing to develop new business opportunities.
• An Extraordinary General Meeting will be held on 11 March 2020 for approval of the new share issue. The terms of the share issue mean that two existing shares give the right to subscribe for one new share at the subscription price of 0:80 SEK. The issue is guaranteed up to 15 MSEK by external investors.

CEO Comments

I had the pleasure to join Divio in mid-October and, together with the management team, started to implement the new sales strategy. We began building a new sales organisation with straight forward messages, clearer offer and outreach sales that is harmonizing with our marketing and communication strategy.

The first half of the year started off strongly with a distinct growth in the order backlog and several new customers of various sizes including Village Capital, NSC, Global, Gateley, Kunsthaus Zürich and many more were onboarded. During the year we increased our Monthly Recurring Revenue (MRR)  by 49% but with a tendency to plan out towards the end of the year. Smaller and medium-sized companies in combination with additional sales accounted for much of the growth in the number of customers and MRR during the earlier part of the year. Ahe slowdown in growth appears in the period in which we implemented the necessary and important changes in the strategy.

Our new strategy is to focus on direct sales to large enterprise companies with good long-term revenue potential and significantly longer sales cycles. For sales activities targeting small-to-medium-sized enterprises (SMEs) with shorter sales cycles, we are increasing our cooperation with selected partners. Our partners will primarily manage SME customers in the future. We therefore invested significant sales time in onboarding and training for partners during the last quarter.

 The second half of 2019 was a busy time for the engineering team, as we invested heavily in the platform and made some significant enhancements. These include a new backup and recovery system that makes the process straightforward and stress-free. Enhancements to the interface and control panel give an even better user experience. And by adding support for new technologies such as Node.js, we have broadened our customer base.

An important development in 2019 was being able to reference our largest customer: Fidelity International, a global investment management company. This is an important step in external sales communication for a company such as Divio, with a relatively new service offering. A proven track record reinforces security and trust, which are crucial in all customer dialogues.

Interest in the Divio platform increased significantly towards the end of 2019, and we have now laid the foundations for a strong increase in sales. We have high expectations for 2020. 

Our employees, partners and third parties closely related to the company have worked hard and did a fantastic job in 2019. I am confident that our efforts will bear fruit in 2020, and we will continue to focus on sales and growth.

Jon Levin - CEO

Press enquiries
For further information about Divio Technologies, please visit divio.com or contact CEO Jon Levin (jon.levin@divio.com) +46 732 44 70 66.

Divio Technologies AB (Publ) is the Cloud Management Software development group behind the Divio platform, which simplifies cloud hosting, deployment and development via a PaaS solution. The platform allows enterprises to reduce costs, time to market and the burden on employees, as well as decreasing dependency on cloud vendors.

The company’s Certified Adviser is FNCA Sweden AB: +46(0)8-528 00 399, info@fnca.se

Divio Technologies AB (publ) is obligated to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on 2020-03-06 at 16:48.”