Penneo achieves 27% year-on-year ARR growth in Q1-2023

Company Announcement No. 22-2023
Copenhagen, 16 May 2023
Quarterly financial report for the period 1 January 2023 - 31 March 2023

Q1-2023 performance highlights

• ARR increased by 3.3M DKK to 74.2M DKK in Q1-2023, corresponding to 27% year-on-year (YoY) growth at the end of the quarter
• ARR increase from Newbizz amounted to 2.0M DKK compared to 1.9M DKK in Q1-2022
• ARR increase from uplift amounted to 2.0M DKK compared to 1.6M DKK in Q1-2022 
• ARR lost to churn amounted to 0.6M DKK compared to 0.4M DKK in Q1-2022
• ARR from foreign markets increased by 0.9M DKK compared to 2.1M DKK in Q1-2022
• EBITDA amounted to negative 6.6M DKK compared to negative 6.0M DKK in Q1-2022
• Free Cash Flow (FCF) amounted to negative 4.4M DKK compared to negative 9.9M DKK in Q1-2022

Guidance

ARR
Penneo continues to assume an ARR level of 87-95M DKK at the end of 2023 corresponding to an ARR growth rate of 23-34%. 

EBITDA
The expected EBITDA level for 2023 continues to be in the range from negative 10M DKK to negative 15M DKK. 

The outlook is based on currency exchange rates per end of 2022. Penneo reports ARR based on actual currency exchange rates end-of-quarter.

Business summary

In Q1-2023, Penneo made solid progress achieving a year-on-year ARR growth of 27%. ARR increased by 3.3M DKK compared to 3.1M DKK in Q1-2022, and reached a year-to-date total ARR of 74.2M DKK. 

This result was achieved in spite of a significant negative currency related ARR impact of 0.9M DKK which is due to the recent downtrend of the SEK, and especially the NOK which is currently at a historically low level when viewed against the DKK. Penneo reports ARR based on actual currency exchange rates end-of-quarter. In a constant currency base scenario, however, Penneo would have achieved a 4.2M DKK ARR increase in Q1-2023.

During Q1-2023, Penneo also demonstrated an improved ability to acquire new customers, onboarding 111 new customers compared to 98 in Q1-2022. The company maintained a low year-on-year ARR churn rate of 4% and observed continued healthy uplift from existing customers based on increased engagement with Penneo Sign and cross-selling of Penneo KYC.

Another noteworthy development in Q1-2023 was the growth achieved in ARR from new business in foreign markets. Penneo secured 29 new customers in Belgium and achieved an ARR growth of 33% compared to end-of-year 2022. In Q1-2023, 57% of the ARR from new customers came from foreign markets. Since gaining a foothold on new markets while simultaneously growing existing markets is a key part of our growth strategy, this is a development that we are particularly pleased with.

Penneo's guidance for 2023 remains unchanged. The guidance is based on continued cautious buying behavior in 2023. Looking further ahead Penneo expects solid demand for its solutions due to increased focus on digitalization and stricter regulatory demands, especially in industries regulated by anti-money laundering (AML) regulation. 

Penneo's Board of Directors has also recently welcomed a new member, Jakob Neua Nørgaard, who co-founded the company in 2014. With this addition, the Board now consists of five members; Christian Sagild, Rikke Stampe Skov, Morten Kenneth Elk, Steffen Heegaard, and Jakob Neua Nørgaard.

Presentation

The Q1-2023 report is available to read here and will also be presented at an online conference hosted by Penneo today, 16 May 2023 at 10:00 CET and a webinar hosted by HC Andersen Capital at 13.00 CET. The conference call hosted by Penneo will be conducted in English and can be attended live here. Participants are also able to dial in via phone ‪(DK) +45 7071 4124 and enter PIN: 668 715 032#. Prior to the event, investors and interested parties can also submit and upvote questions to Penneo’s management team via Stokk.io, a QA platform that can be found here. During the live event, Penneo will answer questions posted on this platform after responding to questions from analysts.

The webinar hosted by HC Andersen Capital can be attended live by registering here.

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 digitizing 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 digitizes 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 across the geographical markets it operates in. 

In total, 1.8 million individuals signed documents electronically with Penneo in 2022 across all of the markets we operate in. 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/investor