Konsolidator A/S ($KONSOL)

Hello, everyone. Welcome to this webinar where we will go through the Q1 and as you know, the Q1 and the Q3 webinar is a trading update. So it's not a webinar where we go through all the finance, but mainly the trading. This is a new format where we are trying the Teams environment. So if you have any questions or anything, you can just write them in the chat. Then I will take them either along the way or at the end after the presentation. But let's get started. I will go through 3 things today. The key metrics, look into the metrics for the first quarter of the year. And then from there, I will move into the outlook. I can already now say that there are no changes to the outlook that we gave end of last year, but I will present them anyway. And then in the end, I will go a little bit more into the strategic direction we have set for the company. And of course a lot of people are talking about the AI so I will also touch a little bit upon how we work with AI in Konsolidator. So let's get started. So first, the key metrics. Those parameters that we measure Konsolidator on is in more or less the same format, as you know, from the annual report and starting with the revenue. We started the year with a revenue for the first quarter of DKK 7.2 million, which is 20% higher than the DKK 6 million we generated last year. So 20% growth on the quarter. That is definitely satisfying for us. Same on the EBITDA. As you all know then, we have worked hard to become profitable and this quarter, that is the first quarter where we can have a year-to-date profit. We also had profit in Q3 and Q4 last year, but not at a year-to-date level. Whereas this year we started the year with a small profit only DKK 100,000, but it's still an improvement of the first quarter last year where we had a minus of DKK 1.1 million. So very satisfied that now we can produce year-to-date profit. Those 2 combined together that is the metric called Rule of 40, which is a combination of the growth and the EBITDA ratio. It's called Rule of 40 because the intention is to reach 40%. So that is of course what we are striving to reach this first quarter, which is the last 12-month measure. So it's not only year-to-date '26, it's the last 12 months and there we have now reached 20% in plus, which is 51 percent point higher than last year where we was at a level at minus 31%. So also a significant improvement on that very important measure. Our ARR (sic) [ CARR ] landed at DKK 25.4 million, which is an 8% growth compared to last year where we had DKK 21.6 million at this time after Q1. So all in all, we would say significant improvement on all the key or on the major KPIs for us. Another important metric that is this CAC payback period and for you who are familiar with SaaS, you know what it is. But for you who are not so familiar with SaaS, then I can say that the CAC payback period. That is a measure that says a little bit about how fast does it take to cover the sales and marketing cost. So with a CAC payback of 16 months, it says it takes 16 months before a new customer has covered the sales and marketing cost for generating, for acquiring that customer. And 16 months, that is seen as a fairly good level. Of course it can be lower. But in general, that's a reasonable level for a company like ours. And as you can see, a year ago we were at 33 months. So that's a significant improvement as well. The CAC payback period has to be seen together of what is the customer lifetime value of a customer. So therefore, you take this CAC and then you see how much is actually the total worth of a customer and if you take that value and divide by the CAC and then in our case, you reach a 6, that is actually a very, very high level. So when you look at the CAC payback, you also have to consider how much value does it bring to the company. And the measure of 6 is considered very high; above 4 or 5, then that's very good. And as you can see, last year we were at 3.2. So that has also been a significant improvement and that is mainly because of the CAC payback period has been reduced so much. Then actually the only KPI which has improved, that's the churn rate. The churn rate is at the level at 11.2% for the last 12 months, which is higher than last year and that is of course not satisfactory. But as some of you maybe know or can remember, then we have guided that this year will be lower. It will be at 6% to 9%. So we will get the churn rate down to a reasonable level. But the first quarter having the last 12 months also had in the last 3 quarters from last year ended at a level at 11.7%, which is definitely too high and not satisfactory. That also has a consequence on the net retention. Net retention, that is how much do you get from an existing customer for the last 12 months. And because of the churn rate, which is minus of 11.7%, then the net retention ended at 93%. Again the goal is to reach 100% or above and we believe we can also reach that level by reducing the churn. And then as I will also explain a little bit more about later that with the upcoming upsales potential in the FP&A and in the data warehouse solution, we believe that we can get the net retention up at around 100% for the year. So these are the key metrics for the first quarter. All in all, significant improvement on all of them except the churn. But as we expect the churn to get down to a reasonable level in this year, then we believe that we have some very solid and stable KPIs. But let's look a little bit about the development because one thing is that at the current level, how has we developed. And the Rule of 40 has, as you can see, improved a lot over the past year. You can also see now that the improvement has dropped a little bit from 17% to 20%. But coming from a very low level in a year ago, we are very proud of now being at least not only positive, but also at 20% and we believe that we will again improve this number even further during the year as this again is the last 12 months. And as we had a loss last year and we expect a positive EBITDA this year, then we believe that we can improve this number even more this year. Another thing which we have not talked so much about is the free cash flow. That's of course also an extremely important parameter for any company, but also especially maybe for a SaaS company. And as you can see that now we actually have a positive free cash flow, it's only DKK 300,000 so it's not that much. But again this last 12 months so the free cash flow for the first quarter was around DKK 1 million positive and we believe that it will continue in that direction as we expect to grow further and to stabilize the cost. So we believe that you will see that this free cash flow, they will improve even more during the year. So that's of course also very, very important for us to look at these metrics. Perfect. So that was the metrics for the first quarter. If you have any questions, then of course shoot them in the chat and then I will answer them as good as I can. All right. Then have a look at the outlook for '26. We haven't changed the outlook for the year. Given we have started very well, then we have not changed the outlook. Let's see what is going -- what will happen during Q2, but we are definitely going in a positive direction. So the current guidance for ARR (sic) [ CARR ] is still DKK 27 million to DKK 29 million. But ending the first quarter with DKK 25.4 million, then of course we are at least close to the lower level of the guidance. So we are optimistic. But for now we stay with the current guidance, which is equivalent to 11% to 19% growth. More or less the same as on the revenue. Traditionally, our revenue is very close to the ARR (sic) [ CARR ] and we also continue to have the guidance on DKK 27 million to DKK 29 million. As you might remember then, the revenue for the first quarter was DKK 7 million. So we are expecting to be fairly safe within this range. And if we end in this range, then that's equivalent to a growth of 7% to 15% growth compared to '24. The EBITDA, as you can see, the first time since we got listed that we have guided on a positive EBITDA and again first quarter was DKK 100,000. So we expect that the last 3 quarters can be even better than the first quarter. You can see we were at minus DKK 2 million last year. So a positive EBITDA should definitely be possible. So we are continuously optimistic about that. And then the churn rate. As I said before, we believe that we have finally found a way to reduce the churn, which has been, you can say, a pain for the last 2 to 3 years, 3 to 4 years, where we had a churn above 10%. Now we believe that we have got it under control and expect it to be between 6% and 9% this year. And that is maybe 9% is a bit too high compared to the expectation and the comparison to other SaaS company. Down in the 6%, 7% area, that is probably where you can say many of SaaS companies which we are comparing ourselves to are at the moment. With all the things going on out in the world, I mean many SaaS companies including us see a little bit higher churn than we did in the past. But we believe that we can get down to this range this year and then let's see whether we can further improve it next year. But an expected 30% to 50% improvement on the churn rate, that is what we are aiming for and expecting to reach this year. Yes. Little bit about the strategic direction because of course how AI will impact us, our product and our customer is of course extremely relevant not only for the customers and for the company, but also for the investors. So I think it's fair to talk a little bit about that. Before I start, I will start by saying we are very, very optimistic about the AI and the impact for us both as the product, the company and also the organization. So of course there are a lot of uncertainty out there, but we believe that we have a product which has resonated very well with AI. But let me explain little bit more about that when we get to it. So first of all we now, as you know, have a full suite. We're not only a consolidation product anymore. We also have an FP&A solution, which we launched here in Q1. And we now also have a data warehouse, which we call data management solution, which is a data warehouse built on Microsoft technology Fabric which is, you can say, built for AI technology. So we have decided the Fabric solution because that can resonate very well with AI. In general, as you probably know, AI really like when data are structured. And you can say 1 thing about Konsolidator that is that all our data are structured extremely well because as you also know, we are what we call a real SaaS solution meaning that we only have 1 software and all data are at the same place structured exactly in the same way for all our customers. So it is fairly easy, easy is maybe a wrong word, but AI is definitely -- our data is definitely structured to get the best out of AI. So we are very, very optimistic in solution that can help our customers utilizing AI on top of their data. So in general when we look at AI, we are looking at AI and looking most into and what we think is most interesting to talk about. That is something which matters most for our customers. And what can we create that can benefit the customers also so we can monetize voice, but of course also so the customers can make more value out of Konsolidator. So that is the first thing that we are looking at. So therefore, the first thing you can start talking about when you're talking about AI, that is what is going on in the product development. So we have some internal focus and we have some external focus. Internal focus, that is how does the programmer, how does the coder work with AI and what benefit can that bring to the product. And you can say that the one thing that you probably all of you know that is that the programming today is much, much faster than it was just 3 or 4 or 5 months ago. So the time to value for any new feature, any new module is much, much faster. We can now build prototypes of a new solution within a day, which took much, much longer time before. And then as those who decide how to develop things, we can see a real product type very, very fast, which is much, much easier to talk about and then program it from there. And then also the actual programming is also faster today than it was in the past. And this is of course only the beginning. This will only develop faster and faster, but that is mainly internally. Talking to customers how we can utilize AI directly into the product. As I said before, I mean the data is structured very well for all customers. So we can build agents that can help customers in generating reports very fast. He can see development. He can make analysis on for example how and why has my debtors increased so much or how has it dropped and what impact does it have on my working capital and stuff like that. So we can utilize AI on top of Konsolidator in a way that you have never seen before. So these are some of the first things that we are building and presenting to customers. There are all kind of other use cases, but these are some of the areas that we will work with first, faster development and make some analytics to customers based on the AI agents. Then you can also -- AI also have an impact in all kind of other departments in the company. And for example in sales and marketing, we expect that we can reduce the CAC and we can have a higher sales conversion. Also based on agent that we can understand, customers who are reaching out to us and also when we are reaching out to customers much, much better than we could in the past. So we are seeing that we can show much more empathy in sales meeting because we understand the customers much, much better by having agents creating reports for us, which we can use in the sales meeting. Also in customer success, we believe that with AI, we can create much, much faster onboardings and also much more satisfying onboardings where customers don't have to do so much manual work. We also believe that we can reduce churn even more by knowing much more about our customers, what kind of function are they using in the product and being able to reach out to customers not utilizing the product fully much faster than we can today. And same like in sales, we can show a much, much higher degree of empathy because we can understand the customers much better not only what they're using in Konsolidator, but also I mean what industry are they in and what kind of pain and gain do they see and by then showing much more to the customers that they are understanding what kind of situation they are in. So these are some of the areas where we are touching upon, but like any others, we have just got started. But I just want to tell you that we are not -- I mean we are working very proactively on AI already in all departments and we'll of course continue to be very proactive in this area. So to sum up a little bit what is our strategic focus. As you saw, the numbers are improving every quarter and of course the intention is to continue on that path so that we can continue to show better numbers each and every quarter. It starts with sales. So you can say a focus that is continued the momentum we are on. We had a good Q1. We have a good pipeline for Q2 and to keep that momentum in the headquarter in Denmark, in Spain and also with partners. So that is just keep up what we are doing now. And then also continuous improve the AI adoption. What we do now is much more what we did 3 months ago and what we did 3 months ago was much more than we did 3 months before that. And exactly when we get to the next webinar in August, then hopefully and expected, we will do even more on AI than we are doing today when I'm sitting here and talking of what we are doing today. So that is just to continuously improve the adoption of all those capabilities that are available in the AI. Upsell, one thing is getting churned down, but we also need to sell much more of our new FP&A and our data warehouse. The traction is good. The interest is high. The meeting that we are having with customers are high and we expect to sell the first FP&A solution in this quarter. And we have sold the first data warehouse solution and expect to sell some more in Q2. So we do expect that we can improve or we will improve the net retention both by, as I said before, by reducing the churn, but also by improving and increasing the upsell. That has been one of our challenges in the past that we didn't have any other product at Konsolidator and now we have these 2 add-on products, which again resonate very well with our customers and where they are in their transition of the finance function. So that is expected to improve the net retention this year already. Yes. And then as one of our strategic pillars, that is continuing to be even better on the operation. So we have a loan which we entered 3 years ago where our numbers was different. So the interest rate we are paying on that loan can and is expected to be reduced again significantly when we can refinance it as of 1st of July. So we expect to get a better loan then, which again will improve our free cash flow. And besides the cash flow, we also have continuous eyes on the growth and the EBITDA as you of course know. So these are the things. So mainly doing more of what we are doing today not so much new. You can say maybe FP&A and data warehouse is new, you can also say AI, but we have done it now for some time and it's continuing that direction. So that was kind of my 20 minutes update for the quarter.

And now if there are any questions, then put them in the chat. Let me just see. I'm not sure whether there are any, not yet. So I'll give you a minute or 2 to ask any questions if you have any. Otherwise, yes, we will stop here within a minute or 2. It doesn't seem like there are any questions -- there is 1 here. When do we expect to be profitable? Yes, EBITDA positive this year. That is expected before tax, it depends a little bit on 2 things. One is the interest rate that we will pay. So we need to see what we can come up with as a new loan. And then another thing, which also -- that's how much can we depreciate on the development. So it's a little bit more uncertain on what happens below EBITDA for the rest of the year because we mainly have 2 things below EBITDA. That is interest rates, which we don't know what we will renegotiate and the other thing that is depreciation on development. So that's always depend on how much of new development will be taken into production. So it's a little bit difficult to say. So that is actually also one of the reasons why we guide on EBITDA because we know that we can control that. So EBITDA positive this year. On top of this profitability, I just want to share another thing that's of course the cash flow. And the free cash flow, as you saw, is positive. And that's of course the most important to us is to have a positive cash flow so we are able to pay the bills that we have and the salary to employees and there we are positive now. So that's of course very important to us.

There is one in the Q&A, there's a new question.

Churn for the year should be known already as client have 9-month notice. So what level of churn you already have in the pipeline for the year? That is actually correct that 9-month notice. So we do know the churn for the year. So that's also the reason why I can say I'm fairly optimistic of being within the 6 to 9 months. We are not saying what the churn is today for 2 reasons. One thing, companies can go bankrupt. So even that they have a notice, but if they go bankrupt then they will not pay their bill. That's considered as a churn. So therefore, the churn can be higher than what is today. That is 1 negative aspect. A positive aspect is that with the FP&A, we are trying hard to revoke some of the churn that we have received. So hopefully, we will not receive any termination because of bankruptcy and hopefully, we can take some back that has churned. But I can say that we are, otherwise I wouldn't say that we are within the range of 6% to 9%. But I cannot get it more -- I cannot say more what it is now for those 2 reasons. Okay. Thank you very much. Thank you for participating. And again if you have any more questions, you can always call me or write me. But yes, thank you for today. Goodbye.