Konsolidator Adjusts Expectations for 2024
Konsolidator has made a significant announcement regarding its expectations for the upcoming year, 2024. The company has reported a modest net growth in Annual Recurring Revenue (ARR) of just DKK 0.2 million, bringing the total ARR to DKK 19.6 million by mid-2024. This slower growth is primarily due to a decrease in new sales and reduced upselling to larger clients.
Updated Financial Forecast
In light of this slower growth, Konsolidator has revised its ARR forecast for 2024 down to DKK 21-23 million, a decrease from the earlier estimate of DKK 24-28 million. Similarly, the revenue outlook has been adjusted to DKK 21-23 million, down from DKK 23-27 million. The estimated EBIT loss for 2024 is now projected to be between DKK 10-12 million, compared to the previous guidance of a loss between DKK 0-5 million. This revision also reflects the company's investment in Konsolidator Iberia, which is expected to cost DKK 1-2 million.
Challenges in Global Sales
While Konsolidator has performed well in Denmark, it is encountering difficulties with its international sales efforts. The sales cycle and decision-making processes have taken longer than anticipated, contributing to the slower growth in both new sales and ARR. In the first half of 2024, the company achieved new sales and ARR upsales totaling DKK 1.2 million, leading to the net growth in ARR.
Effects of Market Conditions
The revised financial outlook reflects both the growth potential from existing business and new sales opportunities, including the recent launch of the Konsolidator Banking application. However, the realization of these new sales opportunities has been delayed due to an uncertain geopolitical climate, prompting Konsolidator to express caution regarding any immediate improvements in the sales environment.
Cost-Cutting Measures
To tackle these challenges and improve customer acquisition, Konsolidator has initiated several cost-cutting measures. By the end of August 2024, the workforce was reduced from 36 to 30 employees, and digital marketing efforts will now be outsourced. The financial benefits of these changes are expected to start becoming evident in Q1 2025. Additionally, in Q4 2024, Konsolidator plans to unveil a new three-year strategic plan aimed at further reducing churn by offering two-year contracts starting in Q2 2024.
Progress in Iberia
Konsolidator Software Iberia S.L. began operations in Q2 2024 and has already secured two customers, surpassing initial expectations. However, the investment in the Iberian market is anticipated to negatively impact EBIT by DKK 1-2 million in 2024.
Revised Guidance for 2024
The financial expectations for 2024 have been updated as follows:
- ARR of DKK 21-23 million
- Revenue of DKK 21-23 million
- EBIT loss of DKK 10-12 million
In addition, the adjusted guidance on other SaaS metrics for 2024 includes:
- CAC/new ARR of 40-60 months (previously 25-30 months)
- Net ARR increase/Cash Burn above 0.1-0.3 times (previously 0.5 times)
- Net retention of 93-98% (previously 99-101%)
- Churn of 10-12% (previously 8-10%)
The half-year report will be released soon, and the company is planning an investor webinar to discuss these updates and future expectations.
Contact Information
For further inquiries, you can reach out to the following contacts:
- CEO: Claus Finderup Grove, mobile +45 2095 2988, cfg@konsolidator.com
- CFO: Jack Skov, mobile, +45 2282 8845, js@konsolidator.com
About Konsolidator
Konsolidator A/S specializes in financial consolidation software designed to enhance the capabilities of Group CFOs around the world through automated financial consolidation and cloud reporting. Founded by financial experts and leveraging cutting-edge technology, Konsolidator simplifies financial consolidation processes, equipping CFOs with essential performance insights to aid in strategic decision-making. The company was listed on the Nasdaq First North Growth Market Denmark in 2019 under the ticker code KONSOL.
Frequently Asked Questions
What is Konsolidator's revised ARR expectation for 2024?
Konsolidator has revised its ARR expectation to DKK 21-23 million for 2024.
What challenges is Konsolidator facing in international sales?
The company is facing challenges such as longer sales cycles and extended decision-making processes, which have affected growth.
How has Konsolidator responded to the slow growth?
To address the slow growth, the company has implemented cost reduction strategies, including workforce cuts and outsourcing digital marketing.
What is the expected impact of Konsolidator Iberia?
Konsolidator Iberia is projected to negatively impact EBIT by DKK 1-2 million in 2024.
When will the half-year report be released?
The half-year report is expected to be released soon, along with a webinar to discuss the updates.
