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Introduction & Market Context
Oneflow AB (STO:ONEF) presented its Q1 2025 results on May 9, 2025, highlighting continued growth despite challenging market conditions. The Swedish contract management software provider reported 23% year-over-year ARR growth and a 27% increase in net sales, while making progress toward profitability in a difficult economic environment.
The company’s stock closed at 28.5 SEK on the presentation day, significantly below its 52-week high of 43.9 SEK but above its 52-week low of 21.5 SEK. The market reacted positively to the results, with pre-market trading showing a 4.91% increase.
Quarterly Performance Highlights
Oneflow reported ARR of MSEK 164.6 for Q1 2025, representing a 23% year-over-year increase. The company noted that this growth was achieved despite a MSEK 3.4 currency headwind and weak market sentiment. By the end of April 2025, ARR had further increased to MSEK 166.2.
As shown in the following chart of ARR growth:
Net sales reached MSEK 39.2 in Q1, up 27% compared to the same period last year. The company also highlighted that 40% of net sales now come from outside Sweden, demonstrating successful international expansion.
The following chart illustrates net sales growth and international expansion:
Oneflow’s customer base continued to grow, with paying customers increasing by 17% year-over-year to 4,300. The average customer value (ACV) reached TSEK 38.2, showing the company’s ability to maintain pricing power.
Detailed Financial Analysis
The company’s efficiency metrics showed improvement, with ARR per full-time equivalent (FTE) increasing by 28% year-over-year to TSEK 905. This metric indicates Oneflow is generating more recurring revenue with fewer resources.
However, retention rates have come under pressure. Net retention rate decreased to 101% in Q1 2025 from 109% a year earlier, while gross retention fell to 89% from 91%. The company acknowledged these challenges but expressed expectations for stabilization and improvement ahead.
Gross margin remained strong at 92%, providing what the company described as "high scalability potential." This consistent margin demonstrates Oneflow’s efficient delivery model and limited direct costs.
Oneflow continued to make progress toward profitability, with EBITDA loss improving to MSEK -6.8 in Q1 2025. EBIT loss also narrowed to MSEK -19.4, representing a MSEK 2.1 improvement from Q1 2024.
Strategic Initiatives
During the presentation, Oneflow emphasized its positioning as a comprehensive contract workspace rather than just an e-signing solution. The company highlighted that its platform addresses the entire contract lifecycle, from creation and collaboration to signing, storage, and analysis.
The company also announced an updated ARR formula, which now registers churn on the contract termination date (previously on customer notice date) and new ARR on the contract start date (previously on contract sign date). This change aims to improve transparency and provide a clearer picture of growth and retention trends.
Oneflow outlined its product roadmap for Q2 2025, which includes AI Extract capabilities, expanded AI Review and AI Insights concepts, and deeper integrations with Hubspot. These enhancements align with the company’s strategy to increase intelligence in contracts and improve workflow automation.
Forward-Looking Statements
Oneflow reiterated its financial goals but acknowledged a shift in immediate priorities. While maintaining a long-term target of over 30% year-over-year ARR growth, the company emphasized that becoming profitable with current funding is the immediate focus.
CEO Anders Hamnes emphasized the value proposition of Oneflow’s time-saving capabilities, stating, "Time is the most precious thing we have in life. So if you can save time, that’s worth a lot." This messaging reinforces the company’s focus on efficiency and productivity gains for customers.
The company’s presentation highlighted that once profitability is achieved, Oneflow will shift focus back to accelerating growth while remaining profitable. This balanced approach aims to address investor concerns about cash burn while maintaining growth ambitions.
Despite current challenges, CFO Natalie Jelveh expressed confidence in achieving the company’s long-term goals, stating, "We do still believe in the long run that we’re going to achieve ARR growth over 30%." This suggests management views current growth deceleration as temporary rather than structural.
As Oneflow navigates a challenging market environment, its focus on profitability, efficiency improvements, and product enhancements demonstrates a strategic approach to building sustainable growth in the contract management software space.
Full presentation:
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