Qliro AB (publ) (QLIRO) Earnings Call Transcript & Summary

Welcome to Qliro Q2 Presentation 2026. [Operator Instructions]. Now I will hand the conference over to CEO, Christoffer Rutgersson. Please go ahead.

Thank you, and welcome to our Q2 presentation. So as usual, we will start with a quick update with some highlights. Walk through the financial update and talk a bit about the outlook and then end with some Q&A. So first of all, we still see a very large opportunity to build a new European composable payments. We believe the infrastructure in payments is changing. We really want to be the best positioned player for that change in the industry. And that is a key driver of our current growth in market shares. We do have to delivering a ordering experience for merchants and their customer journey, and this is something that truly differentiates us versus local competition. Q2 now marks the second profitable quarter in a row. So we reached breakeven in Q1 and that journey continues. We are growing our volume, our total payments volume by 28% in the quarter. And our most profitable volumes, the BNPL volumes is -- are accelerating to 47% growth in the quarter, which we're very proud of. Fourth, our net revenue growth is also accelerating now up to 24% growth, up from the 9% we saw in Q1 and the 14% we saw in Q4. We are trending upwards in the net revenue growth that has been lagging a bit behind the volume and the NPL growth in the past. Large share of the volumes from a growth perspective is now coming from our investments and success in the SME segment across all the Nordic markets. And we continue to grow the SME business as part of our also kind of our financials, both from a net revenue perspective and gross profit perspective given the higher margins in the segment. So that's now representing more than 60% of the volume growth in the quarter. And overall, in our Nordic expansion, both in Norway and Finland, we see a continued very strong momentum and large pipeline going forward. So Talking about the first point, we want to be a European leader in composite payments starting in the Nordics with global capabilities. And we're now in the process of adding more and more international payment methods in our checkouts to cater for international volumes of our Nordic merchants. But from a sales perspective, we're primarily targeting Nordic merchants. But also with the partnership with propositions addressing European merchants with a lot of Nordic volume, and we'll come back to that later in the presentation. Our vision is to deliver a worsening experience for merchants and their customer journey. I've been in this industry for more than 10 years. And my experience is that if no 1 is doing a really good merchant experience and combining that with full focus on the merchants customer journey, not selling a lot of other things to the consumers. And that's something differentiated us both versus local Mishan competitors as well as the more global BNPL players. And it's a large reason for why many merchants from a strategic perspective that they are shifting to our platform. Our ambition is to become the local market leader in the Nordics within the next 3 to 5 years. And with the current growth trends, we are well underway to get there. From a product perspective, we also launched a new generation of our set out in the quarter, clear checkout generation 4, with a focus on increasing our performance even further, both speed in the checkout conversion as well as our new upsell functions. Overall, we see a conversion uplift of 13% when we compare to Nordic competitors in the first Ates that was done versus competition. So when merchants are upgrading to our platform, they simply do EBITDA teaming some volumes on the former platform and some volume on kind of our platform. And so far, we haven't lost any of this AB test since 2024 when we launched the second generation of the checkout, which we call checkout generation 0.0. From a profitability perspective, we are increasing our profit compared to the first quarter, still despite the small margins, but we are happy we are continuing on the profitability trend. So even and we're targeting to reach also profitability, of course, for the full year with increased profits going forward. So we now have the large investment phase behind us in -- in December 2024, we decided to launch our international expansion. We're setting up the sales offices in Norway and in Finland as well as kind of doubling down on sales and marketing also in the Swedish market. That have very good results in growth and now taking us back to profitability. So going forward, we're planning to continue to grow, but being profitable at the same time. And these growth investments have led to kind of good volume growth during the last 1 or 2 years. And then we are in the current quarter, growing 28% compared to the same quarter last year. We are still seeing a very strong momentum in the SME segment. And I think this specific quarter, a slightly lower momentum in the existing enterprise portfolio with a bit less expected organic growth than we had in kind of the end of last year and a bit slower ramp-up of new enterprise merchants where that expected some larger deals to be sign the on-order before summer, but negotiations are still ongoing. And the pipeline is strong for us, but they didn't come live with the kind of asset now. So we're growing 28%. And as part of that, we've also recently renewed a large share of our enterprise portfolio. So -- we announced during this week that we are prolonging and extending the agreement with the group that's having the brands as well as decrease or 1 company within a group that are not processing with us today, but are shifts during the next year. So we've also, during the early this year, we have extended contracts with both Nelly and LePort of our other kind of top 5 merchants. So we are very well positioned with secured contracts in our existing portfolio. which creates a lot of stability for the business going forward. From a revenue perspective, we are growing net revenue by 24% in the quarter. So the net revenue have increased for the last 5 quarters in a row, a bit lagging the growth we have seen in the NPL volume and the NPL volume growth is now on kind of a very high level that's kind of 4% to 7% growth in the quarter, but also partly driven by shorter duration products. So we don't expect that to kind of fully materialize into net revenue growth, but it's still a very good leading indicator that our products are more and more used from a consumer perspective, not only for kind of the longer duration purchases, but also for more kind of frequent purchases with invoices and part payments being paid also on a shorter duration. And that short duration is also coming through in lower credit losses, which we also see kind of coming to that part of the financial presentation. From an some perspective, we are accelerating international business. We're adding more than 15 kind of new equity merchants on the platform in the quarter, as we now have more than 800 merchants processing on our platform, growing the merchant base -- and our net revenue growth from the SME segment is growing by 140% compared to last year. So now representing SEK 26 million in net revenue in the quarter. So given that, that's expected to continue going forward. We're now processing more than SEK 100 million per year in run late business, which is a very good number compared to -- this is a quite new initiative that we have launched, and we see a lot of success in investment business and expect this growth momentum to continue also going forward. Business now represents 23% of our net revenue and more than 60% of the new volume growth in the quarter. We also see good momentum in the new markets where we've always processed consumer products or kind of plate products also in Denmark. -- but it was not until late 2024, where we launched our Norvegia sales office. And in April last year, we launched our kind of finish sale of it that we started to sell to those local merchants in Norway, Finland. This has so far been very successful. We have more than SEK 3 billion in signed volume in from the margins locally that is expected to go live on the platform. And we continue to win more and more market share and kind of build momentum as both the pipeline gets more mature and strong year in each of the markets. As part of the international expansion, we -- so the third are is on the last page, we expect to target European and global volumes from kind of merchant selling into the Nordics more than 10% of Nordic e-commerce volume is coming from European and global merchants. The first step in this strategy is that we're launching an exclusive partnership with Pro as their Nordic NPL partner. So we will have exclusivity on these markets with our products. So they are offering Clinipath in their network of global payment service providers, so basically global shekel providers as well as some global really kind of Tier 1 merchants that are selling into the Nordic markets. This partnership is expected to go live kind of early next year and kind of start to process volumes during next year. So -- and we expect that this will be a significant kind of growth contribution going forward both on Pro as well as from this strategy in general of enabling Qliro has pellet the method into other global seal providers. And the strategic highlights going forward. In the mid-term, we expect to build a market-leading position in the Nordics, and we're well underway to get there. We see a strong commercial momentum, and we will continue to drive the market share growth, both in the SME segment as well as the enterprise segment. As mentioned, were there slightly slower kind of conversion to sign the contracts in the enterprise space in during H1, but we expect that to catch up during H2. The pipeline is still strong. They do have a loss, but rather pushed a bit into the future. We expect the revenue growth to continue during the year and going forward as more and more of the volume built up by our loan book and has started to generate more revenue will continue to grow with more than 30% growth in new volumes. And as mentioned, we're actually representing 60% volume growth in quarter. But going forward, we would also expect some larger enterprises coming in against there's a number in absolute numbers will not go down, but in share of total growth, we expect it to maybe be above 30%, but probably below 50%. So -- our Nordic expansion has also kind of a lot of potential to grow further. We now created a full Nordic the commercial organization. We recently announced that we are changing our organization a bit. We announced a Deputy CEO. As part of that poses Nordic commercial organization with kind of SME team across the Nordic enterprises across the Nordic and so on. And we believe that will help us to drive the Nordic successes and further. We'll also continue to focus on improving our income generation from the volumes to continue to improve our kind of later performance metrics. That is an important driver of our profitability. We are working on our scalability and efficiency and especially due to the kind of the new platform that we are launching for our elite products. We have announced previously that we launched it for the first part payment products in Sweden. That is now live for all our part payment products in Sweden for a small share of our volume, and we expect to ramp that up during kind of the rest of the year and then launch the platform was in our other markets. And that's an important part of also ensuring compliance with the new consumer credit directive that's implemented in Sweden during November of this year. So we're very well positioned for that. And we will continue to drive our revenue growth and profitability for the full year 2026. And with that said, let's jump into the more detailed financial update. So first of all, as mentioned before, our total payments volume is growing by 28%. That's translating into 24% growth on net revenue. And at the same time, we see credit losses declining by 14% -- so despite the growth in volume, our growth in loan book and our growth in net revenue, credit losses is actually declining, and that's very good. We have good momentum on gross profit. Gross profit on before variable cost, we which has been variable cost fairly flat at 2% growth despite the 28% volume growth. So we have done a lot of efficiency initiatives and cost saving initiatives on the variable cost side. during last year. We now see that coming through in the numbers. And that's leading to gross profit to growth of 47% in the quarter. At the same time, we are reducing our fixed costs by 4%. So that's leading to an operating profit of SEK 0.7 million in the quarter up from minus SEK 29.5 million last year, which was a low point in profitability during the investment phase. So very proud of these financial results, and we also see a good improvements on the margin metrics, both GM1 and GM2. The loan book is -- have a steady growth now of 8%. We expect that to increase a bit going forward as the NPL growth have are growing rapidly. The volume share of our total payments volume is now stabilizing around 16%. And we expect it to stay at that level or potential increase a bit both going forward as we as we continue to improve our plate offering. Our net revenue growth, as mentioned, is growing 24%, SEK 120 million in the quarter. And more or less fairly flat in absolute numbers compared to last quarter, and that's normally in the seasonality of our business where the volumes typically are a bit with a into Q1, Q2 and they are picking up the income the rest of the year with a high point in Q4. Our credit losses, as mentioned, is declining 40%, and the debt collection ratio is now started stabilizing. Previous quarter, we reduced it by 30%, but we're now coming into kind of slightly more challenging comparables. So it's not that the improvement is less. It's just that the improvements were already starting in kind of Q1, Q2 last year. but are still declining by 11% compared to last year. So that's also leading that we continue to expect improvement also from a financial perspective on credit process going forward. So the leading indicators on the credit side is good. Based on all the investments we have done during the last 2 years in both our new credit kind of infrastructure for both our basically all our databases variables, credit decision models, the credit limit frameworks and strategy. So we revamped that whole setup, and that is now kind of yielding very good results in from both financial perspective, but also from a consumer experience perspective. Part of this is also driven by the improvement in the consumer experience in general with a apps that have been launched in a new version also during the screen where we have poor kind of consumers to pay more on time. We lose some reminder for the revenue from that. So we have a bit of impact on that on the revenue side, where we believe that a better consumer experience and low credit losses will help us build a better business also. From a cost perspective, we've been working hard on cost control since Q2 last year, we did the restructuring program in September, October last year to take down cost as well as can ensure we had a more scalable foundation as well as kind of improving a bit on the tech side, which you will see on the next page. But there were all costs, including variable cost is declining 3%, and we have a 6% decline in terms of the rest of cost compared to losses. So basically a fairly flat cost base despite the growth we've seen in both volumes and net revenues. So we truly see kind of the scalability of the business model now coming through in practice. Also developing more and more with AI on the tech side. We're using cloud became fully in all teams -- and based on that as well as the new technical platforms we launched during last year, we have reduced our CapEx investments since Q3, and we are now running around SEK 22 million per quarter, so down roughly 35% compared to last year. Given the success with the FICO partnership as well as some other upcoming kind of partnerships. We are expecting to increase CapEx a bit again, but not to the previous levels, just to find a kind of the new business opportunities. From a profit perspective, as already mentioned, the investment phase is now behind us. That I see the good results on the growth as discussed, bringing us back to profitability, and we expect profitability to increase also going forward, yielding kind of the full year profit well '26. From a capital perspective, no big news. We are running at the level of 21.9%. So we're well capitalized, and that's also due to the rights issue that was successfully processed in April that was oversubscribed with 191%, bringing SEK 101 million before transaction costs. So that was it for the financial update. And looking ahead, I've already mentioned it, we will expect continued revenue growth going forward. We expect profitability for the full year. We continue to accelerate our kind of sales engine in both segments, and we will continue to build growth momentum in our new markets. So we are now improving our processes across the Nordics even more streamlined the supporter markets in the best way. We have learned a lot during the last kind of year or kind of 2 years in Norway, 1 year in Finland. -- to improve the products. We expect that success to increase going forward. And with that, we also focus on making sure that the volumes is turning into a profitable loan book that we continue to improve the scalability and efficiency with our new platform. And with that, we have our all mission to deliver market-leading experience for merchants and their customer journey, and we'll continue that focus going forward. Thank you very much, and I open up for questions.

[Operator Instructions]

We have one first question of considering your projected growth. How is your listening regarding capital injection from shares and capital requirements? And -- as we just mentioned, we did a very successful capital raise in April. We did a rights issue that was oversubscribed, 191%. We got in SEK 101 million in new capital. And with that, we are expected to fund our growth journey going forward. We are now profitable and expect to grow profitable also going forward. Secondly, we have a question regarding the new consumer credit directive CDI. That is the European regulation that is implemented in November in the Swedish continental as well as kind of also regulation in Finland and Denmark. And we are very well prepared from that from a technical perspective. That's why we're launching our new plate platform. that will not only help us be compliant from a regulatory perspective, but also increase our operational efficiency across all our processes related internally to having kind of consumer experience related to our related products -- so we get a much more kind of more than a cloud-based platform as well as kind of much more efficient processes as we can develop more does on top of the new platform level on the previous kind of legacy infrastructure. That will also be a platform that we can take into new markets if we would like to, going forward. Customer technical perspective, from a financial perspective, the new regulation commit on caps and so on. We are already within those caps, we don't kind have any large impact or any significant impact on the business from that perspective. And then there are some product changes we need to do from to kind of adapt the consumer experience that fits with new communication requirements, marketing requirements and so on. But nothing that we see currently that is impacting us from a financial perspective. But of course, we're working to ensure we always are compliance with all our products in all markets. So that's it. I think that's all the questions we have so far. I get to take from the moderator that there's no more questions. So -- and I wish you all a great summer. And if not before, we connect in 3 months from now. Enjoy your vacations. Thank you very much.