Moderate growth continues, market conditions may extend current financial performance

24SevenOffice continues with modest growth, but the plan of improvement has been slower than desired and thus we are therefore still experiencing an unsatisfactory financial performance with respect to growth and resulting profitability that has taken longer than expected to improve. 24SevenOffice will continue on our plan to improve this in the near quarters. However, just as other similar tech companies, 24SevenOffice’s business model is  exposed to the harder external market conditions experienced today. Nevertheless, we continue to work relentlessly targeting profitable growth.

The financial results for the first three quarters show a moderate growth to MSEK 187.6 in revenue, a 22.2% increase from last year, with an EBITDA of MSEK -67.2. During the third quarter the company had MSEK 61.2 in revenues, 18.8% up from last year, with an EBITDA of MSEK -20.0. If adjusted for the July vacation pay effect of MSEK 8.8, the EBITDA would have ended at MSEK -28.8.

In addition to the previous events this year leading to the current financial performance and the fact that we are continuing to invest in the product and other impactful revenue initiatives with external consultants throughout this year, we are also facing a challenging and tougher market environment than ever before. 

The critical geopolitical situation and the expected coming economic downturn with higher interest rates and inflation, the increased costs from suppliers are directly impacting 24SevenOffice. Moreover, 24SevenOffice is also impacted indirectly through our customers, which are also facing tougher market conditions and drop in revenues due to end-customers reducing their spend. As 24SevenOffice’s new pricing model is heavily based on customers’ usage and transactions, this will most likely also have a temporary downward impact on the short term growth.

Nonetheless, we remain positive and optimistic about the future, having several existing and new growth areas developing, expected to generate long term value for our customers and investors. Our material & resource planning (MRP) module is still experiencing significant growth in the US with approximately 100% YoY growth, whilst it was also launched in the Nordics in September. Our payroll module is still growing continuously with more than BSEK 5 in accumulated paid out salaries for our customers onboarded on the solution, and we’re expecting this to increase further during the busy months in Q4 and Q1 next year. 

We also launched our new invoice reminder and payment collection system to the market in September, already having more than 600 new customers onboarded, and the current market situation is expected to accelerate the growth of this product even further. In addition, with the latest product developments, the advancements in the AI-functionality and the new sales and marketing team we have in place, we are selling to an increased share of new enterprise customers, ultimately driving higher revenues and additional up-sale potential to 24SevenOffice.

Building the organization for the future

The management group is continuously being optimized for future growth, and we are now currently recruiting a new CFO as it was announced on October 17th. In addition, we are preparing the organization for the expected coming economic downturn. After a long period with growth and increased focus on hiring, we are now reviewing measures to both secure a sustainable cost base, but also identifying short term wins in revenue generating initiatives, and becoming a more effective and productive organization as a whole.

With the resilient team we have in place and will get in the future, along with all our trusted customers and partners, I am certain we have the foundation to excel through the challenging market environments and geopolitical situations we are facing, and I am looking forward to driving the 24SevenOffice train in full speed ahead to come out as one of the leading tech companies after the temporary economic downturn.

This disclosure contains information that 24SevenOffice Scandinavia AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 10-11-2022 07:30 CET.

For further information please contact:

Eirik Aalvik Stranden, CEO

Tel: +47 247 00 030, eas@24sevenoffice.com

24SevenOffice in brief

24SevenOffice's vision is to empower businesses for the future, through delivering world class cloud based business systems. The business system is module-based, where the modules are provided independently or packaged as complete solutions. For more information see www.24sevenoffice.com