Q3/2023: LeadDesk grew and improved its EBITDA

LeadDesk Plc unofficial translation of Company Release 25/10/2023 at 9.20 am  

Figures in parentheses refer to the equivalent period in the previous year unless otherwise stated. Figures presented in this business review are unaudited.
 

July–September 2023

• Revenue EUR 7,336 (7,012) thousand, growth 4.6%
• Annual recurring revenue contract base EUR 25,709 (23,825) thousand, growth 7.9%[1]
• EBITDA EUR 1,095 (996) thousand, 14.9% (14.2) of revenue

January–September 2023

• Revenue EUR 21,809 (20,776) thousand, growth 5.1%
• Annual recurring revenue contract base EUR 25,709 (23,825) thousand, growth 7.9%
• EBITDA 2,914 (2,344) thousand, 13.4% (11.3) of revenue

CEO Olli Nokso-Koivisto comments on the third quarter of 2023:

” LeadDesk is a leader in European cloud-based contact center software. The LeadDesk product and the new AI features improve the efficiency of our customers’ operations, helping them provide a better customer experience and increase sales productivity. Our products are used weekly by over 20,000 customer service and sales professionals in Europe.
 
Profitable growth continues

In the third quarter, our revenue increased by 4.6% compared to the same period last year. Our monthly recurring revenue grew faster than total revenue and was EUR 2,010 (1,895) thousand at the end of the period, a growth of 6.1%. Our annual recurring revenue contract base grew by 7.9% during the period.

We are proud of the development of our growth story considering the context where, as in the first quarter of the year, the weakened Swedish and Norwegian krona exchange rates significantly impacted our revenue in this quarter. At the exchange rates of the same period last year, our revenue for January-September would have been approximately EUR 22.7 million and growth 9.1%.

Quarterly EBITDA margin was 14.9% (Q3/2022 14.2%). For the full year, our EBITDA margin is in line with our guidance.


Significant steps in the development of AI features

We have made rapid progress in developing the AI features of the LeadDesk product. Our products have been using AI for a long time, and now we are finding new ways to use it. From dozens of pilots early in the year, three AI features were selected. The three features have been commercialised and are now generating revenue for the company.

In the third quarter, we took three of our AI features from the pilot phase into production, i.e., into daily use by our customers. Thanks to our rapid development, the production phase solutions have already started to generate revenue. We've also made the necessary actions and investments that enable AI to make our operations more efficient.

We are making good progress towards our goal for AI solutions. By early 2025, all our customers should use at least one of LeadDesk's AI tools.

The three AI tools in production improve the customer service and sales of the companies using our products. The tools also improve customer service and sales reporting and quality management. During the third quarter, our product development team also made progress in developing our AI transcriber, which now converts speech to text more efficiently. Our solution focuses on an exciting market: the automatic speech-to-text conversion of phone call recordings in European languages. Our solution has particularly interested customers in the social and healthcare sectors, as it allows confidential data to be processed without third parties.      

A positive outlook on the acquisition market

This summer, we completed the acquisition of Länsilinkki Oy. The integration of Länsilinkki's business into LeadDesk has gone very well. Our measures have rapidly improved the business and Länsilinkki's profitability. Profitability has improved even faster than we had predicted.

We are also constantly evaluating other potential acquisition targets. We are particularly interested in companies with cutting-edge AI, omnichannel, workforce management or work automation expertise.
 

There are many attractive companies for us to consider, and company valuations are more realistic than before.

Looking ahead to the last quarter of the year with gratitude

The past year has been challenging for the company's growth due to the impact of exchange rates. I am, therefore, delighted that the LeadDesk team is full of talented and motivated people. Thanks to them, we achieved good profitable growth. A big thank you to our team! A warm thank you to our customers for their open-minded adoption of our AI solutions. Together with our customers, we can improve customer experience and sales productivity in unprecedented ways. The new AI features of our products are just the beginning of where LeadDesk is going.”

Future prospects

Outlook and guidance for 2023

The company repeats the guidance on revenue and profitability given on 20 September 2023. The company expects 3–7% annual revenue growth and 10–15% profitability as measured by EBITDA margin. The outlook does not consider the impact of significant acquisitions on revenue or profitability. 

Financial information

The company estimates that it will publish its 2024 reporting schedule on 24 November 2024. 

LeadDesk Plc

Board of Directors

More information

Olli Nokso-Koivisto, CEO, LeadDesk Plc

+358 44 066 5765

olli.nokso-koivisto@leaddesk.com
 

Approved advisor:

Oaklins Merasco Ltd, tel. +358 9 6129 670
 

Distribution:

Nasdaq Helsinki

Relevant media
http://www.leaddesk.com

LeadDesk Plc in brief

LeadDesk is a leading European provider of cloud-based contact centre software. The LeadDesk cloud service, powered by artificial intelligence, improves customer experience and sales productivity. Over 20,000 customer service and sales professionals work more efficiently with LeadDesk weekly. In 2022, the Group's revenue was EUR 28.1 million, most of which came from outside Finland. The Group has offices in eight European countries. LeadDesk Plc's shares are traded on the Nasdaq First North Finland marketplace under the ticker LEADD. www.leaddesk.com

[1] The value of the recurring revenue contract base is calculated by converting a contract denominated in a currency other than the euro into euro at the exchange rate for the month in which the contract enters the contract base or when existing contracts are amended.