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Adjusted ARR guidance for 2022

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Company Announcement No. 29-2022
Copenhagen, 13 October 2022

Penneo adjusts ARR guidance for 2022 from 77-82M DKK to 70-75M DKK. The adjusted ARR guidance corresponds to a year-on-year growth rate of 27%-36%. EBITDA guidance of negative 15-20M DKK remains unchanged.

In company announcement No. 5-2022, Penneo announced ARR guidance of 77-82M DKK for 2022. In company announcement No. 26-2022 regarding the financial report for 2022-H1 the ARR guidance remained unchanged with the following assumptions:

  • A continued low churn rate 
  • A continued level of engagement with the platform
  • A continued ability to obtain new customers across industries and markets
  • A continued ability to roll out Penneo KYC to large audit and accounting customers in the Nordics

After the ARR guidance for 2022 was announced, new and existing customers have postponed the decision of buying Penneo’s services, in part due to a more uncertain macroeconomic environment.  

Consequently, we have seen the following changes in our assumptions:

  • A lower increase in engagement with the Sign platform
  • A lower ability to obtain new Sign customers across industries and markets
  • A delay in the roll out of Penneo KYC to large audit and accounting customers in the Nordics

These changes are attributable to a combination of the following two items:

More cautious buying behaviour
In 2021-H1, growth in ARR uplift was fueled by the remote working conditions caused by Covid-19 restrictions which positively impacted customers’ level of engagement with the Sign platform. However, the extraordinary levels of growth in engagement with the Sign platform have decreased from 2021 levels in 2022-H1 and 2022-Q3 in relation to an experienced more cautious buying behaviour which materialised in fewer and smaller deals than anticipated. This results in lower average ARR per new customer and lower than expected increase in engagement from existing customers.

Postponements on larger KYC deals
The cautious buying behaviour also impacts KYC sales, particularly on larger and binary deals and is expected to continue into 2022-Q4. The plans of continuing to roll out Penneo KYC to audit and accounting customers in Nordics result in more binary opportunities that impact Penneo’s financial expectations when customers are postponing these initiatives to later.   

ARR guidance for 2022 reduced by 7M DKK
As a consequence of these items, the ARR guidance for 2022 is adjusted from 77-82M DKK to 70-75M DKK.

In 2022-Q4 Penneo will continue investments in the sales and product development departments to lay the foundation for continued growth into 2023. However, these growth investments will continue to be carried out with precaution as a consequence of the current and unpredictable market conditions. Consequently, EBITDA guidance for 2022 remains unchanged.

Fulfilment of the ARR guidance for 2022 depends on the following key drivers and assumptions to continue:

  • A continued low ARR churn rate
  • A continued level of engagement with the platform at 2022-Q3 levels
  • A continued ability to obtain new customers across industries and markets
  • A continued expectation to roll out Penneo KYC to audit and accounting customers in the Nordics

The 2022-Q3 report is expected to be released on 23 November 2022.

Guidance for the financial year 2023 will be included in the annual report for the financial year 2022.

Forward-looking statements
Statements about the future reflect Penneo’s current expectations for future events and financial results. The nature of these statements is affected by risk and uncertainties. Therefore, the company’s actual results may differ from the guided figures.

Q&A Session
The CEO and CFO will be available for questions online at a conference call hosted by Penneo today 13 October 2022 at 12:00 CET. The conference call will be conducted in English and can be attended live here. Participants are also able to dial in via phone ‪‪(DK) +45 70 71 49 69‬ PIN: ‪555 770 721‬#.

Further information
CEO, Christian Stendevad
Mobile (+45) 27 29 50 02

About Penneo A/S

Penneo is a provider of Software-as-a-Service (SaaS), and was initially established for the purpose of assisting businesses with digital document signing and digitising workflows. Today, the company has developed into an eco-system of digital solutions which automate work routines within for example anti-money laundering (AML) - a RegTech software that offers businesses an efficient and cost-saving way to comply with legislation. 

The original and widespread product "Penneo Sign", which helps customers secure easy online signing of documents, is still continuously developed by the company - while at the same time new products appear, such as Penneo KYC (Know Your Customer) - a product that digitises the work-flows in businesses and contributes to complying with legal requirements in connection with onboarding and identification of customers.  

Penneo holds a strong position in the Nordic countries, and in Denmark alone, more than 740,000 persons signed documents electronically with "Penneo Sign" in 2021. 

In April 2022, Penneo was listed on Nasdaq Copenhagen following a listing on Nasdaq First North in June 2020. This transition contributes to strengthening the company's focus on European expansion. 

For information about Penneo, please visit https://penneo.com/investors

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