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Agillic A/S delivered its Q4 2024 earnings call with promising signs of financial improvement and strategic restructuring. The company reported a positive free cash flow of $1.3 million, a first in three years, alongside an EBITDA of DKK 1 million, aligning with its guidance. Despite a slight miss on the annual recurring revenue (ARR), the company remains optimistic about its strategic direction, focusing on AI-driven innovations and market expansion in the Nordic region. Agillic’s stock saw a 2.79% increase, closing at 8.95. According to InvestingPro analysis, the stock is currently trading slightly below its Fair Value, suggesting potential upside opportunity despite its -36.52% one-year return.
Key Takeaways
- Agillic achieved a positive cash flow for the first time in three years.
- The company is restructuring with a new management team and reduced R&D investments.
- Focus remains on AI-driven product innovation and Nordic market expansion.
Company Performance
Agillic’s performance in Q4 2024 indicates a strategic shift towards stability and growth. The company’s positive cash flow marks a significant milestone, suggesting effective cost management and strategic planning. Although ARR slightly missed expectations, improvements in net revenue retention from 89 to 91 demonstrate enhanced client engagement and retention. InvestingPro data reveals impressive gross profit margins of 81.75%, though the company faces short-term liquidity challenges with a current ratio of 0.3. The company’s focus on its core markets in the Nordics and its competitive edge in personalized communication are central to its growth strategy. For deeper insights into Agillic’s financial health and detailed metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.
Financial Highlights
- Annual Recurring Revenue (ARR): DKK 65.5 million
- EBITDA: DKK 1 million
- Positive free cash flow: $1.3 million
- Net Revenue Retention (NRR): Improved from 89 to 91
- Committed Revenue for 2025: DKK 27.4 million
Outlook & Guidance
Agillic provided optimistic guidance for 2025, with projected revenue between $62 million and $63 million. The company aims for an ARR subscription target of DKK 56-60 million and an EBITDA target of 5-8 million. Strategic goals include achieving double-digit growth, maintaining positive EBITDA, and ensuring positive cash flow. InvestingPro analysis shows the company’s historical revenue CAGR of 11% over the past five years, though recent performance indicates a -12.09% revenue decline in the last twelve months. The company also emphasized its commitment to transparent communication and minimal client churn in 2025.
Executive Commentary
CEO Christian Samson highlighted Agillic’s differentiation through personalized communication, stating, "We differentiate, we give a possibility of differentiating the communication against competitors." CFO Klaus Boysen emphasized financial goals, saying, "We want to be positive EBITDA and show a positive cash flow from operations." These statements underscore the company’s focus on financial health and competitive advantage.
Risks and Challenges
- Intense competition in the MarTech market, described as a "red ocean."
- Potential market saturation in key verticals such as banking and retail.
- Economic uncertainties that could impact client spending.
- The need for continuous innovation to maintain a competitive edge.
- Dependence on the Nordic market may limit growth opportunities elsewhere.
Agillic’s Q4 2024 earnings call reflects a company in transition, with a clear focus on strategic restructuring and market expansion. The positive stock movement indicates investor confidence in the company’s direction, driven by its innovation and operational improvements.
Full transcript - Agillic A/S (AGILC) Q4 2024:
Michael, Moderator/Host: Welcome to today’s event where we had the pleasure to present Agility. To help us through today’s presentation, we are joined by you, new CEO, Christian Samson. And, of course, I think, therefore, we will also do a a a more thorough introduction to you than we would normally do on on an event. And of course, you, CFO, Klaus Boysen. Today’s topic, of course, the financial results ’24, you pre announced some results and you gave guidance.
But let’s dig a little bit more deeper into this and also have a little bit of on the on the balance sheet and and what you did in preannounce. But as always, you’re very welcome to ask questions in the box down below. Do it during the presentation or after, but we will take the main part of the Q and A in the end of this presentation. But for now, I will hand the call over to you, Kersten.
Christian Samson, CEO, Agilic: Thank you. Thank you, Michael. And as you all know, it’s the first time I present Agiligo as CEO. And therefore, I have a short introduction after this little disclaimer. My background is within BCP SaaS businesses.
I have worked with Lazarra for the last twenty years, being CEO in a couple of companies, Maps People, Skandia, WebSaven and so forth. Last job I came from was Scootebox, where I headed a turnover for minus 40,000,000 Danish kroner in EBITDA, ending up in a positive results for last year for 5,000,000 Danish kroner. I’ve worked as CEO for the last twenty five years and before SaaS business, I’ve worked in various media companies like Egmont, Observer and TV3. My background is purely commercial that is within international sales, partner sales, marketing and business development. So next thing, just quick overview of the 24 results.
It was as announced in our announcement from February 6, we almost hit the ARR target, ending up in 65,500,000.0 just below the loan range of guidance of DKK 66,000,000. But then our EBITDA of DKK 1,000,000 was within the guidance. Klaus, our CFO will come back in details in a few minutes from now. But let us focus on what to do in 2025. And an introduction to Agilic and for you, who knows us, this should be a recap.
What we do is we offer a customer engagement platform, empowering brands to work well, data driven insights and content to create, automate, and send personalized communication to millions of recipients. By this, we create the most meaningful, the most impactful, and the most individualized customer experience. In plain words, less spend for the recipients and higher efficiency and profit for our clients, such as Matrix, Antilenergy, Kraft and Spokembrese, Sulfur, Elamidea being some of our our largest clients. Then next thing, how do we plan to position ourselves in the future? And how do we plan to cap capitalize on the opportunities as we see them?
When I was appointed as new CEO November first last year, my most important task was to to found a new management team, which was in place before Christmas, but also to formulate a new strategy as a foundation for our ethos and and the budget for 2025. And naturally, this starts with the markets and the needs of our clients. And to be brutally honest, the market for MarTech system is tougher than tough. It is totally red ocean with a lot of different vendors, a lot of different products with different market positions and very different value proposition. But as we see the market and our position, whereas most competitors, they offer out of the box platforms, only giving their clients opportunities for doing the exact same things to us, their customers, we offer a platform where we can differentiate the communication and the messages to the target groups.
That actually means that we have a unique ability to create competitive advantages for our for our clients. We also have a point of click personalization tool, meaning we are not doing one to one, we are in a one to many communication, but one to one communication individually based on data and behavior. And this is done in a very easy way in the Agileq platform as it doesn’t include coding at all. Personal support, is also very important for us, and we offer personal support by local product specialists with deep client knowledge as they have served our clients for many years. And then we have a proven EU security and data compliance set up as our all our data centers is placed in Europe and our send out infrastructure is also based in Europe common all messages, email, SMS, app push, etcetera.
So to exploit this, being able to deliver value faster for our clients through differentiation, we need a more narrow focus. We already are very strong in markets as Denmark and Norway and now we are aiming at the other Nordic countries, firstly Sweden and then Finland and Iceland. Primary verticals, we cover many different verticals. But historically, we have a very strong foothold in these verticals, banking, energy, media and publishing, charity and NGO, retail and I also showed you a couple of customers in the slides before. Our vision to be the leading Nordic customer engagement platform.
And in fact, we are already by far the leading platform based on number of clients. But this also means that we want to be the clients’ first choice of vendor when they are to invest in a customer engagement platform, which happen every six to seven years for the bigger clients and the most inexperienced clients. To execution, we have four pillars of execution. Tracks, of course, we focus on aggressive sales that means nurturing leads, building pipeline and closing deals. It will be an absolute must in the future.
Strong partnerships, we continue to expand our ecosystem of solution and technology partners with whom we innovate and serve our clients. We have a lot of traction together with our partners and they have a lot of clients where we can co sell. Fast product releases, more focus on development and faster releases, as you have seen in 2024, we have released more features than before and especially within the AI area. And then again, local support is very important for us because being able to offer offering this personal support give us a real advantage, especially compared to the American competitors. Now to the number and details.
Claus, the floor is yours. Thank you.
Klaus Boysen, CFO, Agilic: So if we look at our ARR figures over the years, we knew when we guided for 24% that we were going to decrease our ARR, which mainly were driven from Q1 and that we have talked about in the last couple of quarterly presentations. But as you see here, over the quarters in 2024, we have slightly increased the ARR subscription and as well as ARR transactions quarter by quarter. So, in Q4, we increased our ARR subscription by 4% and our ARR transaction as well with 5%. So, this was all in alignment with our predictions and our beliefs in how ’24 was going and this shows the path from our deep dip in Q1. If we look at our revenue, this is slightly more or less attached to the ARR part.
So when you look at the ARR revenue from subscription, we have been fairly stable based on our ARR development through the first three quarters. But as we have increased the ARR over the last couple of quarters, we also present a higher revenue from subscription here in q four. Same thing goes with revenue from transactions. That is more or less like a seasonality. If you look at the past, Q4 is always the highest where there are most transactions engaged in our platform, particularly within the retail and the travel segment where there is a lot of communication being sent out by our clients.
On the EBITDA side, we have been EBITDA positive for four years and the last EBITDA here in 2024 showed 1,000,000. That was within our guidance of zero to 2,000,000. We had a special situation in ’24 with a change in the management, where we have also seen a part of what we call one time costs. And if we look part of those one time costs, which add up to SEK 3,100,000.0, the EBITDA would have been ending above our guidance. So all in all, we show an EBITDA of 1,000,000 but impacted by a one time cost of 3,100,000.0 which is mainly related to reorganization related to severance costs.
And that’s a financial way of treating these type of costs. To sum SaaS highlights for ’24, the number of clients ended at 24 at 118. And the clients in Q3 was 140, so an increase of net four clients in the last quarter. Our average ARR, we have this included in our presentation to show that it is very, very stable. We get new clients, we onboard them, we grow them and that means that we constantly have an average ARR around DKK 600,000.
More interestingly, the committed revenue. The committed revenue is what we have invoiced to our clients at year end. And if you look at our committed revenue at end of twenty twenty four, we are showing 27,400,000.0, which is much higher than the previous years. And the committed revenue is a representation of the revenue that we have not taken into our P and L yet, but we have invoiced and being paid for by our clients. And these 27,400,000.0 is what we can say is already secured into the 2025 figures.
On the net revenue retention, 24,000,000 was impacted by the churn and the decrease in Q1 that I talked about in the ARR on subscription. If we look at the Q3 numbers, the NRR was 89 and we have increased that number to 91 here by the end of twenty twenty four. CAC and must to recover CAC. CAC is half a million and months to recover is twelve months. The CAC and the months to recover CAC, there’s not a fixed amount or fixed target what we want to hit.
We want to make sure that the investments and the cost that we spend on on sales and marketing is the most efficient. And once we invest it and once we sell, yeah, we have an average value of a new client of 600,000. So that’s why we our investments is being in average being paid back within twelve months. Somewhat more on our liquidity. If we look at cash adjusted EBITDA, we introduced in the beginning of ’twenty four that we towards ’twenty five and ’twenty six was to be positive cash adjusted EBITDA.
The development throughout three years has been positive to now we are at minus 1,600,000 in cash adjusted EBITDA. And if we look apart from the $3,100,000 which was the one time cost, we would actually have been already cash adjusted positive EBITDA in 2024. But the strategic target is to be positive by the end of twenty twenty five. This is driven by three factors, of course, the EBITDA, but also, but the development in the committed revenue that I spoke about under the SaaS highlights. And the reason of us changing our and and constantly improving our contractual setup with our clients also gives the ability to make sure that we secure our future revenue as well as our cash position.
On the other side, the investments in our R and D, in our platform, is slightly decreased from €11,700,000 to €10,900,000 in twenty four million euros This was purely an interaction of us launching a huge, a huge upscale of our platform in Q1, which led to an upscale of our organization in R and D instead of need to focus too much on some legacy and now being able to actually produce some new features in our roadmap as we can make it. As well as the positive improvement in our cash adjusted EBITDA, we also have a significant improvement in our free cash flow. So by 2024, we have a for the first time in three years, we have a positive free cash flow of $1,300,000 driven by our improvement in our working capital while we are maintaining our investment in the R and D platform. Lastly, something about our guidance. So, still, we have the same strategic goals also towards both ’25 and ’26 that we want to grow double digit.
We want to be positive EBITDA. We want to be, show a positive cash flow from operations to be self sufficient in our cash and a positive cash adjusted EBITDA. That has led to the guidance that we announced on the February 6 where the revenue is $62,000,000.63000000 the ARR from subscription is 56,000,000 to 60,000,000 and an increase in EBITDA from this year’s guidance of zero to two up till five to eight. The increase in EBITDA up to 5.28 should be compared to two things: both the slight positive development in our AR subscription during the last couple of quarters in 2024, but also the normalized EBITDA of 4,100,000.0. So basically, the cost optimization that we introduced during 2024 and also by the end of twenty twenty five leading to this positive development in EBITDA while we are focusing on growing our ARR business.
Good.
Michael, Moderator/Host: Yes. But should we jump to some questions? Yes, please. Perfect, please. Yeah.
But let’s let’s start with what what the the most interesting thing when we when we have, you might say, management change and and a new CEO. What has attracted you as a CEO to this job? Is it a great potential on and not utilized? Or is it more like you know, a turnaround case? So, you know, we have those two cases or maybe a little bit of both.
But, can you talk a little bit about what attracted you to the company?
Christian Samson, CEO, Agilic: Yes. Of course. It it’s it’s not at all a turnaround case. Yes, I came from a turnaround successfully with the Goodybox, but I have always concentrating on growing companies, making growth and increasing profitability. And I really do see a potential for Adelig, especially in the Nordic markets.
And that is why we have changed our focus to solely concentrate on Scandinavia and then also Finland and Iceland. But also in, we can exploit that potential if we change the way we are operating, especially sales wise and marketing wise. And that is why I see a huge potential and a lot of opportunities to grow the business.
Michael, Moderator/Host: And I think maybe already there answered the questions on what would be what you are seeing to be changed. Is that really your first focus here? Has that been on the marketing part of the business, getting that up to gear and performing on a higher level?
Christian Samson, CEO, Agilic: Yes. 100% because Claus here, he has done a very good job in the finance department processes, structures and so on. And we have a very skilled CTO and R and D is also functioning very well. But there was some what can I say, there was a lot to do within the sales and marketing system? And that is what I have been concentrating on so far mostly.
Michael, Moderator/Host: So that is where we should see and have seen concrete new stuff after the change. That has been primarily in the marketing division. In the sales department. Sorry. Sales division.
Christian Samson, CEO, Agilic: And hopefully, we will come with some good announcements in the year to come around this.
Michael, Moderator/Host: And perfect. And I I think on the first slide, you you really already have told what are your unique qualifications, what are you bringing to the company. It it I I think we have went through that pretty well on that slide. Then maybe just one to to Klavs. Your capital needs, capital situation is switched.
I think maybe the this was asked before the reporting. I think you showed maybe a little bit more healthy cash cash capital you had than maybe people had expected. So can can you talk a little bit about the the the moving parts for you not needing to cash? Meaning, Of course, earnings is positive, but will you also have positive cash flow? And how about maybe your debt reduction and so on, the moving parts here, your thinking on your capital requirements?
Klaus Boysen, CFO, Agilic: Absolutely. And I think the slides that I presented around our cash flow development throughout 2024 actually supports this very well. So the focus on optimizing our general structure around our contracts is a part of helping out in our working capital. The operational efficiency where we are more focused in our sales and marketing costs, for instance, and have made some lean changes in the organization leads to a profit a higher profit in EBITDA that we guide now from 5% to 8%. So those two drives an increase in our cash flow from operation that is the most sort of positive side of the cash flow.
While we believe that we maintain the investment in our current platform, we would like to invest more. But we are investing in a way where we are focused on producing the most significant parts and those that can contribute to new clients and growing our existing clients. And then the last part is our debt side where we are now down to 19,000,000 in debt to Eifel. We have one that is supporting us with debt, that is Eifel. We have a very, very solid communication and cooperation with Eifel around these.
And we have made some changes to our debt structure throughout the last couple of years in minor details that have sort of helped us out making sure that we, that we have the sufficient cash. So both being precautious, but constantly optimizing the way that we are spending and maintaining the investment levels that that we currently have.
Michael, Moderator/Host: Perfect. And then maybe back to you, Christian. And now you had a outside look into to to the company. The competitiveness of your product, I think you already said where you wanna place at Jellic in the market. Yeah.
But you you didn’t allude to us. Are you do we have a competitive product, especially if we are looking at some of the bigger US giants?
Christian Samson, CEO, Agilic: Yes. As I said in my presentation, it is totally red ocean. And you could say that we are all offering the same and then again, we are not. We differentiate, we give a possibility of differentiating the communication against competitors and so forth and so on. And we have some value proposition.
But of course, we have very tough competitors. We have a big competitor in Sweden called Ojado, who, luckily, they are only strong in one vertical and that is the retail vertical. And then we have two major American competitors, Grace and Broomage, which we are competing one to one on. So these three competitors are our the major one we struggle with. And we can see that this more or less would be the same competitors in the years to come.
Of course, we also have Adobe (NASDAQ:ADBE), Salesforce (NYSE:CRM), so forth and so on. But it’s another level of of competition. So we are more or less focusing on the other three. And that is for the time being with all this debate debate around security and and data. And for the first time, I may be happy with Trump because he seemed to change the early agreement between Europe and and US around data security.
And that will be an advantage for us because we have this European data and security set up. But it’s not it’s not, it’s not a low competition market we are in. I have to say that. But challenges, we welcome them. And and and
Michael, Moderator/Host: and, you know, if if we should look back at at at at at at smaller and medium sized Danish test companies, what what what I think if we look at the more successful one, at least when they explain their success, it’s the simplicity. You know, the simplicity to work with the simplicity to implement the simplicity to run it. Is that also some something you see as as, you have made sure of as a factor in your system? And maybe the local presence there as also a part of that equation.
Christian Samson, CEO, Agilic: Yeah. I don’t know if I understand the question correctly. But again, local presence is a advantage. The simplicity, there’s no simple MarTech system. You could say that some of our competitors’ systems are easier to start with.
But but when you have worked with Matrix System for a couple of years, our our our offering tends to succeed more because, yes, it could be seen as complex, but it’s also because it offer so many features. So all our 118 customers are very, very satisfied with us as a vendor. And many of our clients simply tell us that the opportunities we offer them are more lines that gives them more more possibilities for doing what they actually want to do to do. So we have to embrace that this is a complex field. And with that goes complex software platform.
It’s not easy peasy, and it will never be.
Michael, Moderator/Host: Check. Then there’s a little bit, question surrounding on whether you need to make further cuts or how do you bridge your your your EBITDA, the five to eight from from currently. And I think maybe a part of the explanation was we expected 1,000,000 in EBITDA. And, you know, if if you made the adjustments from the from the OTIs, it maybe looked a little bit different. But in general, do we need to to further, make cost cuts and employee cuts to get that, or is there other driving parts that will drive your EBITDA improvement in in ’25?
Christian Samson, CEO, Agilic: We have no no plans for for for more cutting. Everything has been done.
Michael, Moderator/Host: So that is top line driven. Yes. Then on your on your IR guidance, in the low end, 1,700,000.0 calculated about and that’s that’s three clients you you expect to take in with with the average there. And and and and it’s just a question, isn’t that a little bit conservative? Or are you and and the other way around, if that’s conservative, are you still expecting to see some, churn?
And and and that’s the reason. Are you still experience the technology churn on on what you saw in in in the early of the year. So a little bit about the amount of our growth, whether it’s conservative or in the low end, and and or is there another explanation you still expect some churn?
Christian Samson, CEO, Agilic: I still have my CFO, Klaus Fidesz, for now, so I will let him answer
Klaus Boysen, CFO, Agilic: that question. And to we have in 2024 and seen some of these consolidations that we have explained what has happened in the market. And just to pick up on an earlier note, you said all the clients that we have seen churn during 2024 and actually announcing their churns within this consolidation. We have had exit interviews. Our owners have exit interviews with them.
They have been very, very satisfied with our platform. So, we will see some churn in 2025, primarily here in the beginning of the year based on those consolidation that we saw a year ago and more than that. But so the driver here is, first of all, to be cautious about the sales challenges that we have sort of spoken about. We do a lot of things to change how to make the sales complete. The sales cycles are fairly long within this because it’s for many companies it’s an expensive investment.
And lastly, there will be a few clients that will churn that we expect to churn due to primarily this consolidation happening in the market, but not the same values as we saw in 2024.
Christian Samson, CEO, Agilic: Yes.
Michael, Moderator/Host: And maybe the last question, we always focus on that, and it’s always hard to predict it. I know that. But anything you see some kind of a news flow that that you, we as as as the shareholders, could look forward to. Are you seeing some some bigger news flow, arising here in ’25? And I don’t know you can’t can maybe precisely tell us what it is because then it should have been announced to market.
But anything, you wanna highlight as as as maybe something we should look out for as as investors, not only the financial result, but but other results that that you are going to announce this going to come with this year? So, Seth, that’s why. Please look out for for for more press releases around new customers. That is what we are aiming for. And, you’re right,
Christian Samson, CEO, Agilic: I can’t tell you anything specifically. But we will also try to be better at communicating to the market when something happens good or bad and hopefully only good things. Because I have learned that there might not have been so many announcements as it’s that could have been and I would like to change that as well and hopefully based on good news.
Michael, Moderator/Host: Perfect. And, Scott, sorry?
Klaus Boysen, CFO, Agilic: In support to that, I would say both the press releases on new clients but also when the presentation of each quarterly financials, there are highlights around what is doing what is being done with the product. And as we said, there’s focus on releasing items that can actually help supporting existing clients and be better at at selling the features to new clients.
Michael, Moderator/Host: And then we just got a last question in there. And I I don’t know how specific you wanna be, but, how much cost have you been able to take out of the business and how many FTEs, you know, just to to get a kind of a run rate if if you have that, clouds?
Klaus Boysen, CFO, Agilic: So how many we have been
Christian Samson, CEO, Agilic: Yeah.
Michael, Moderator/Host: Yeah. The the how much cost have you been able to take out? You know, if we look at as a run rate, how many how much have you been able to take out in twenty four? And how many FTEs? It’s I I don’t know whether you have the figures here precisely or you want to actually tell that to market.
Klaus Boysen, CFO, Agilic: We have the annual report where we say how many FTS we have by year end. And these are due to implementations and cost reductions that we did during 2024. And some of it will in a runway go out during 2025 as well. So there will be a decrease in both our expected employee cost and operational cost during the ’25 based on the things that was done and implemented, in ’24.
Michael, Moderator/Host: Perfect.
Christian Samson, CEO, Agilic: I will just check.
Michael, Moderator/Host: That was the last question. Thank you, you, Christian, for trying to present us for why you have, chosen to to join the company as as you know and take it in the forward. And and thank you to you, Klaus, for for the the last time we will we’ll see here on joining here. But thank you for for you answering the questions and and and taking us to your company. May everybody have a nice day.
Christian Samson, CEO, Agilic: Thank you. Thank you.
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