Q4 2023: Continued growth with high margins, reduced churn, and strong cash flow

SmartCraft ASA, the leading Nordic provider of mission-critical SaaS solutions to small and mid-sized companies in the construction sector, today reported its results for the fourth quarter of 2023, ending the period with annual recurring revenue (ARR) of NOK 387 million, which represents a growth of 21 percent compared to the same period 2022. Organic ARR growth was 14 percent.

Reported revenue in the fourth quarter was NOK 107 million (+18 percent), of which 97 percent was recurring. Adjusted and reported EBITDA margin was 39 percent. Operating cash flow was NOK 32 million in the fourth quarter, compared to NOK 29 million in the same period last year. For the full year 2023 operating cash flow was 153 million, up 32 percent compared to 2022, and net profits were 115 million, an increase by 71 percent. In the fourth quarter the group had a churn of 7.2 percent, a reduction from 7.9 percent in the third quarter of 2023.

“We ended 2023 with another strong quarter of growth and profitability, and I am happy to be able to highlight the strength and scalability of our business model. Our clients work on renovation rather than new construction, which is a great strength to us as the renovation segment is bigger than the new build part of the industry and has proven to be less volatile, growing steadily over the last years, supported by an ongoing digitalization of the construction industry. Combined with our SaaS based model this implies predictability and low risk related to our development, said SmartCraft’s CEO Gustav Line.

The good development in 2023 provides SmartCraft with solid growth momentum for 2024.

“We are working hard and systematically across our brands with marketing on digital and traditional platforms. This has resulted in a 23 percent rise in customer leads in the fourth quarter compared to the same quarter in 2022 which gives us great revenue opportunities in 2024. At the same time, the constant development of digitalization and professionalization of the construction industry represents a strong long-term megatrend for our business. Our software solutions enable small- and medium-sized construction companies to enhance their productivity and earnings, which is more important than ever. We remain confident in our medium-term financial target of 15-20 percent organic growth and increasing margins due to the scalability of the business,” said Gustav Line.

In addition to the organic growth, SmartCraft is actively pursuing an acquisition strategy, and in 2023 the company made its tenth acquisition, Coredination in Sweden.

“We have a good pipeline of potential acquisition objects, and our history of improving profitability and growth in acquired companies is convincing. At the same time, we will remain disciplined regarding capital allocation,” said Gustav Line.

Visit Reports and presentations to see the full report, presentation and webcast.

For further queries, please contact:
Gustav Line, CEO
Phone: +47 952 67 104

Kjartan Bø, CFO
Phone: +47 410 27 000

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