Konsolidator lowers expectations for 2023 and 2024

Company announcement no 18-2023

Søborg, August 8, 2023 

Konsolidator lowers expectations for 2023 and 2024

In Q2 2023, the net growth in Annual Recurring Revenue (ARR) only increased by DKK 0.1m reaching an ARR of DKK 18.7m as per June 30, 2023. The net ARR growth is now expected to be 14-20% for 2023 (previous guidance: 20-30%). The net ARR growth is impacted by a high churn for the remainder of 2023 and by a lower-than-normal sales conversion rate which leads to Konsolidator revising the expectations for 2023. Konsolidator now expects an ARR at the end of 2023 in the range of DKK 20-21m (previous guidance: DKK 21-23m). Revenue in 2023 is expected to be in the range of DKK 19-20m (previous guidance: DKK 20-22m) with an expected EBIT loss of DKK 9-11m (previous guidance: loss of DKK 5–8m). Other SaaS metrics are also impacted as net growth in ARR is part of the metric.

During Q2 2023, Konsolidator has experienced a higher termination from customers than expected which impacts the ARR negatively for the remainder of 2023. Furthermore, the sales conversion rate was impacted by changes in the sales department. The lack of sales impacts our guidance for ARR, revenue and EBIT. The revenue and EBIT have been impacted by fewer onboardings and less consultancy work than expected. The development in Q2 2023 has not been satisfactory and several new initiatives have been launched to secure growth.

Churn will be reduced in 2024
Inflation and a stronger cost focus from especially smaller customers have increased churn more than expected. Furthermore, attention to current customers has not been satisfactory during 2022 due to lack of resources. This unfortunately leads to higher churn during 2023.

To break the negative trend new resources have been added in customer success. This is expected to reduce churn during 2024 and increase up-sales.

Sales conversion rate is expected to return to previous levels during H2 2023
During H1 2023 the sales department suffered from less-than-optimal staffing. The number of sales meetings was still at a high level, but the sales conversion rate was lower than in previous periods.

With a strong pipeline and the sales department resources back to normal, the sales conversion rate is expected to return to previous levels during H2 2023

Claus Grove Finderup, CEO at Konsolidator comments:
“A coincidence of unfortunate circumstances means that we have to lower our expectations for 2023. Looking back we have underestimated the impact of downsizing the organization and management time spent on the capital restructuring. However, we remain positive about the future as our pipeline continues to be strong and we are starting to see positive effects from our free trials. Furthermore, we have reasons to believe that the churn will return to an acceptable level as we have hired two new employees to focus on our current customers. We are still a growth company.”