• Sales slightly above ABGSCe, ARR in line
• Limited consensus estimate revisions are likely
• Variable revenue on the rise

Q4'24 report

Litium reported an ARR of SEK 72.3m (+/-0% vs. ABGSCe ~72m), net sales of SEK 19.5m (+3% vs. ABGSCe 19m) and EBITDA of SEK 4.9m (+2% vs. ABGSCe 4.8m). Overall, the report was in line with our estimates. We are positively surprised by the increase in the variable revenue, which suggests that client volumes are recovering.

Thoughts and outlook

Litium has so far benefited from its fixed revenue base. However, the benefit of variable revenues could materialise as client volumes appear to recover (as evidenced by a larger share of variable revenues). It is now more evident that business momentum is improving and that the company's pipeline is strong. CEO Patrik Settlin is leaving the company, to be replaced by Martin Billenius, a member of the board, with previous SaaS experience. All that said, our view of the company's operating characteristics remain unchanged and somewhat more positive than previously due to the increasing variable revenue share.

Cons. estimate revisions and valuation

Based on the first impressions from the report, we anticipate consensus to make limited revisions. The company is trading at an EV/ARR of ~2x based on reported figures. Litium will host a webcast today at 11:00 CET to present the Q4 report and to conduct a Q&A session.