SmartCraft ASA today reported its results for the third quarter of 2022, ending the period with annual recurring revenue (ARR) of NOK 303.6 million, which represents a 12-month growth of 17 percent. Organic growth was 16 percent compared to the third quarter 2021. Revenue in the third quarter 2022 was 82.4 million (+16 percent organic growth), of which 97 percent was recurring. Adjusted EBITDA was 38.8 percent in the quarter an improvement from 36.7 percent in the same period in 2021.
“SmartCraft continues to deliver on our strategy of profitable organic growth and accretive bolt-on acquisitions. I am particularly satisfied with the strong operating margin and high cash flow in the third quarter, providing evidence of the scalability and strength of our business model,” said Gustav Line, CEO of SmartCraft.
SmartCraft continues to move customers over to SaaS based subscription contracts, leading to 97 percent recurring revenue share in the third quarter. The recurring revenue growth was 19 percent in the third quarter compared to the third quarter 2021. Annualized churn remained low, at 5 percent.
“We are extremely focused on customer satisfaction and ease of use for our customers. This is key to drive new sales and to reduce churn even further,” said Gustav Line.
SmartCraft is a leading Nordic provider of mission-critical SaaS solutions to small and mid-sized companies in the construction sector, a market with a potential of above NOK 10 billion, growing annually at a double-digit rate.
“The market for our solutions remains strong, and the demand for digitalization remains strong despite a gloomy macro picture and rising concerns around slowdown in the construction industry. Our customers are mainly small and medium sized enterprises, and this segment is historically less affected by economic slowdown. With almost all our revenue being recurring, we have long visibility in terms of financial development. Furthermore, 19% growth in transactional revenue in the quarter shows that our customers are performing well,” said Gustav Line.
SmartCraft’s ambition is to drive consolidation with regards to software for the Nordic construction industry. Right after the end of the third quarter, the acquisition of Inprog was announced, adding NOK 5 million of ARR (this is not included in the 303,6 MNOK ARR at quarter end).
“Inprog is a great addition to our portfolio of services for electricians. We are now working on capturing synergies from the different solutions under our umbrella, and we expect to see further benefits in terms of product features and profitability going forward. Our search for attractive M&A objects continues, and we have several prospects for accretive acquisitions in sight,” said Gustav Line.
SmartCraft targets 15-20 percent annual revenue growth in the medium term, with the addition of bolt-on acquisitions. Margins are expected to increase due to scalability of the business.
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For further queries, please contact:
Gustav Line, CEO
Phone: +47 952 67 104
Kjartan Bø, CFO
Phone: +47 410 27 000