• Sales Growth: 18% in Q3.

• EBITA Margin: 25% in Q3.

• ARR Growth: 28% in Q3.

• Subscription Revenue Growth: 31% in Q3.

• Service Agreements Decrease: 22% in Q3.

• Recurring Revenue: 64% of total revenue.

• EBITA Margin (Last 12 Months): 25.1%.

• Personnel Expenses: 58% of net sales LTM in Q3 2024.

• Operating Expenses Increase: 14% in the last 12 months.

• Net Debt to EBITDA: 1.0.

• Dividend Payout: 56% of net profit.

• Warning! GuruFocus has detected 2 Warning Sign with CHIX:LIMEs.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lime Technologies AB (CHIX:LIMEs) reported an 18% sales growth and a 28% ARR growth in Q3, indicating strong financial performance.

• The company has a diversified customer base, with the top 10 customers accounting for only 7% of revenue, reducing dependency on a few large clients.

• Lime Technologies AB (CHIX:LIMEs) has successfully expanded into seven markets with 11 offices and nearly 500 employees, showcasing its international growth strategy.

• The company is transitioning customers from old upfront agreements to new subscription models, resulting in a 31% growth in subscription revenue.

• Lime Technologies AB (CHIX:LIMEs) is investing in future growth by recruiting over 30 new employees and focusing on sales, marketing, and product development.

Negative Points

• The third quarter was challenging due to slower deal closures in August and early September, impacting overall performance.

• The Rest of Europe segment showed only 6% growth, which is below expectations and highlights the need for improvement in international markets.

• Expert services revenue saw a slower pace, indicating potential challenges in this area that need addressing.

• Personnel expenses increased to 58% of net sales, partly due to the acquisition of SportAdmin, impacting profit margins.

• The EBITA margin slightly decreased to 24.8% in Q3 from 25.6% the previous year, reflecting increased investments in growth over profitability.

Q & A Highlights

Q: In the CEO statement, you mentioned positive signals in customer engagement and an increasing pipeline. What does this mean for Q4 and 2025? A: We observed fewer deals closed in the early part of Q3, leading to a stronger pipeline. The key is converting this pipeline into closed deals. We saw a good inflow of new deals towards the end of Q3, which should positively impact both Q4 2024 and 2025. The focus now is on starting these projects to maintain momentum.

Q: How is the internationalization of SportAdmin progressing? A: Since acquiring SportAdmin, we've been preparing the product for international markets. We're assessing market conditions in countries like the UK, Denmark, Netherlands, Germany, and Finland. Progress is on track, and we're narrowing down the best markets to enter first.