Good morning everyone, and welcome. I'm Etienne Jacquet, Vice President, Corporate Development and Investor Relations at MotorK. I'm delighted to welcome you today for the presentation of our full year 2022 financial results. I'm joined today by our CFO, Andrea Cervo. In terms of agenda, we will first start with the key highlights of the year, focusing on our main operational and financial achievement, and also reflect on some of the strategic initiative that we launched this year. We will then comment in greater details of financial performance for the year. Finally, we'll share with you our outlook for 2023. As usual, we'll then move to a Q&A session, and we'll be happy to answer any question you may have. For the Q&A, you can obviously post the question that you have on the webcast directly.
Without further ado, I now leave the floor to Andrea for the presentation.
Thank you, Etienne. Good morning, everyone. My name is Andrea Servo, and I am the Group Chief Financial Officer of MotorK. Welcome again to this full year 2022 results call. Let's start from the highlights. The past year has been one where we invested expanding our team by design and focusing on the more strategic parts of the organization, and achieving what we now consider critical mass. We continued to innovate in our product offering along the way, and follow it up with our M&A strategy to gain market shares and open new territories, while we kept on integrating the companies that we recently acquired, in order to fully extract all the synergies that we are expecting.
In terms of main KPIs, we expanded our operation to both nurturing our existing customer base with a 122% NRR, also factoring a low 4.5% churn, which decreased during the year compared to the past year, and reaching a record 18K almost of average ACV per customer. Adding also new customer acquisition, we reached a superior 40% growth organic in ARR, which doubled to almost 80% overall ARR expansion, also including the M&A contribution. This implied, as expected, to invest significantly to foster the current and future growth, as shown by the Cash EBITDA, which is a proxy of our operating cash flow, that consumed EUR 15.6 million last year.
Going forward, we will be leveraging on EUR 5.2 million of committed ARR, whereby the committed means that we have already signed engagement by the customers, and on a pipeline which is growing and accelerated, especially in Q4 2022, both in retail and enterprise, to the point that for the first time, the pipeline in enterprise is higher than in retail. We finally have a number of live discussion with potential M&A targets to foster our future external growth. Focusing on ARR, we reached EUR 27 million for the full year, thanks to the strongest ever Q4, which benefited from many business initiatives, showing their impact in the second half of the year. This included a specific focus on enterprise, migration from recently acquired businesses, and most importantly, the commercial launch of the SparK platform.
The final quarter also benefited from some spillover of business from a weaker Q3, as you remember. As you can see, the yearly growth is the result of both organic and M&A expansion. The revenue growth of 40% year-on-year reflects the growth in billings that has been overall by 29%. This rate was a blend of a consistent 63% growth of the most valuable recurring portion, as opposed to a small contraction by 10% of the non-recurring revenue, in line with our strategy of focusing on the higher margin recurring billings.
As stated before, our organic growth in the year was fostered by both new customers, thanks to a +18% in number of retail organic customer, and by the expansion of the existing base with NRR up to a very healthy 122% and churn down to 4.5%, reaching, and I would say passing, the pre-COVID levels for these KPIs. As a result, the average ACV per retail customer went up 20% to a record level of EUR 18K, supported by multi-product adoption and by the launch of the SparK platform. As you know. Okay, sorry. This is the table showing the average ACV.
You can see the expansion throughout the year with the Q3, which somehow leveled up compared to the Q2, and then increasing Q4, thanks exactly to the platform adoption. As you know, we have the ambition to grow as a Pan-European leader and player, and to be able to serve our customers wherever they need and they are. In this respect, the new geographies expansion, besides Italy, is an important focus for us. It is already showing important results. As you can see, Italy weight on the total retail ARR decreased in the year by almost 20 percentage points, representing now less than half of the group business for the benefit mostly of France and Germany and the new entered Belgium through the acquisition of the Carflow.
With Spain, that has been somehow diluted by other geographies, growth. We closed the year with a great momentum, I said, that not only impacted on our reported year-end ARR of EUR 27 million, but also has created, as I said, a bulk of over EUR 5 million of ARR that has been already signed and binding with customer that is just waiting to be transformed in billings in the coming months. The pro forma ARR, including these commitments, has reached over EUR 32 million, which compares to the guidance of EUR 28 million-EUR 30 million that we gave last. If we also consider that we have a very strong pipelines, as I mentioned before, we have a great momentum towards a year 2023 that is announcing again, a very satisfactory year in terms of expansion along our strategy.
These results of incomparable growth couldn't be achieved without executing also on our strategy of investing, both in our teams that grew, especially in R&D, sales and marketing, and operation, and also in expansion of non-HR costs to support our growth. A significant part of our spending went also into R&D developments that were capitalized. I would say that we are where we wanted to be actually. Overall, we think it's a healthy growth, and that we balance growth with profitability during the year. We feel that we have reached the right peak of mass now, where we are able to manage in a more cash conscious way of our future investments and let operational leverage kick in towards a positive cash flow generation. The reported adjusted EBITDA closed in 2022 at EUR 0.2 million, substantially stable year-on-year.
We are also monitoring the Cash EBITDA, which is a measure that adjusts for the non-cash impact of our revenue recognition rules and factors the R&D CapEx expense. This Cash EBITDA landed last year at a negative EUR 15.6 million, which is a proxy of our operating free cash flow. Overall, we consumed during the year a total of EUR 24 million. This is due mostly to the EUR 15.5 million of operating free cash flow, which is negative, to be seen in the context of the +80% growth in annual recurring revenues. The M&A acquisitions absorbed a net EUR 5.4 million, with another EUR 3 million for exceptional and other non-operating costs. We closed the year with more than EUR 19 million cash available to sustain our future developments.
If we look at the outlook. For the current year, 2023, we will be focused on continued growth at scale, aiming at closing the year with an ARR landing between EUR 39 million and EUR 43 million, which is around +50% growth year-on-year. In this respect, we build our confidence also on the committed ARR and on the solid pipeline I described before. That was built as of December, which is still growing in these months. Moreover, we will be halving our cash consumption, thanks to operating leverage kicking in along with the expected M&A synergies. We will have a specific focus on investing efficiently as we now achieve the critical mass in most strategic areas of our organization.
As a result, we expect to reach a Cash EBITDA in the minus EUR 6 million - minus EUR 8 million range, which is a safe use of liquidity in light of the EUR 19 million of cash available at the start of the year. We remain acquisitive in terms of M&A, pursuing accretive targets among a number set of potential and live situation in our pipeline. Beyond next year, our growth trajectory, coupled with significant operating leverage and fine-tuning of our investment, will lead to start generating operating cash already during the year 2024, and to accelerate cash generation significantly thereafter.
In summary, I hope you can appreciate that the year 2022 has marked another step into our growth to maturity, whereby our investments were still significant in absolute and relative terms, as we expected, but are allowing the business to fully deliver on the planned growth. We have now approached the level where we can be more selective in our investments and start delivering not only on the growth, but we remain very strong in the coming years, but also on profit and cash generation. Thank for your attention so far. I will now hand back to Etienne Jacquet for the Q&A session.
Please feel free to, you know, post question on the webcast, and we'll be happy to take the questions. Any question from the panel? Just, you know, on the technical point of view, I mean, you have to, you know, to post the question on the webcast. We have now first question from Kepler. Question on the R&D cost. Andrea, could you please develop on the recent or future product development that the group has?
Yes, for sure. We are obviously, in terms of R&D, we have been focused on expanding our product to create the platform that we commercially launched and to improve our all of our features and the pillars in the platform, that being the wealth part, the leads part. We also worked on the integration of the acquired business, which also requested some investments in order to have a smoother migration of the customers onto our platform. This is more or less what we have been investing in terms of R&D. Yes, sure. Other operating costs have increased indeed during the year.
They were dedicated mostly to support all the teams, sales and marketing, to foster also the lead generation. We have seen the results in the pipeline that we have now. All the general costs that support our business expansion, for example, in the software part of the cost, and also the cloud services where we have migrated to another platform. This is more or less the most important aspect of the cost. Obviously, growing of people, growing in terms of geographies, also entails increasing some other general costs.
In respect of the IPO promise and ambitious target for the EBITDA, we still think we will be able to deliver. You need to consider that we have a great operating leverage, meaning that the gross margin is very high. Therefore, as the revenue kicks in, then we will be able to deliver also on the EBITDA margin.
This is also impacted by our revenue recognition, as you know, that amplifies any even small movement and change into our billings and ARR evolutions, so that as we will be growing faster our or a bit slower, depending on the situation, our billings and ARR, this will have an amplified impact on our revenue, and therefore the EBITDA margin is an indicator which is not very stable, and we have seen it also in the last year. This is why also we are currently focusing on our billings and ARRs, and we are focusing on our cash bill. As relates the cash burn in 2022, net cash position of EUR 6.5 million. But as I said, we have a cash, a liquidity position of over EUR 19 million.
This is sufficient for us to go through the year in terms of organic expansion. We can also possibly dedicate some investment to M&A. We will be actively also pursuing some dedicated debt facility in order to fund our M&A expansion. We think we have some open discussion currently. We expect to be able to finance our new M&A investments partially with our cash and partially with also additional debt. Not for significant amounts, but we are comfortable that we will be able to deliver on our strategy.
Thank you, Andrea. Next question from Julian at ABN. Would like to understand, I mean, the dynamic and the momentum in Q4 and the strong acceleration that we've seen in the back end of the year that have been Q4.
Sure. Well, it was actually expected. This is because many of the strategic actions that we took during the year were expected to deliver their results mostly in the second half, and they did actually in the last quarter of the year. This had a great impact in terms of bookings, whereby the final months of the year were really impressive in this respect. As I said before, bookings and the start of the billing and the generation of new ARR is even amplified in terms of revenues by our revenue recognition that, as a reminder, recognizes in simple terms, the full contract value of a contract that is starting to be delivered at the moment when we start the performance of the services.
Therefore, even a small difference in terms of customer bookings and delivery will have an impact. Also, as I said, we had some spillover effects from Q3. You remember Q3 was not a very strong quarter. This was due to the fact that some of the deals that were expected to close during that quarter were pushed to the next one. This resulted in having a Q4 very strong and being able to create a pipeline of committed ARR and also of a new ARR that is expected to materialize in the first months and quarters of this year, 2023.
Thank you, Andrea. Next question from Anna at Berenberg. Effectively, we've been given, you know, the guidance on the Cash EBITDA, Anna would like to understand how we translate in term of Adjusted EBITDA terms. Can you comment and maybe try to give a bridge for that?
I think that in terms of trajectory, the bridge between the Cash EBITDA and the Adjusted EBITDA will be more or less similar to the one that we showed for the year that just closed. We think that the Cash EBITDA is an important indicators in terms of alignment to our cash generation. As it's been shown, there are two main items bridging from the Cash EBITDA to the Adjusted EBITDA. One is the capitalization of our internal R&D costs, and the other one is the impact of our revenue recognition and being the change in contract assets. We expect that both items will grow next year, but not so significantly.
We may expect a growth in both items in the region of around ±10-15%. I think that that will make it easy to create a bridge between Cash EBITDA and Adjusted EBITDA.
Thank you, Andrea. I have three other questions from Catherine at Edison. The first one is could you please comment on, you know, the enterprise momentum or more generally, the enterprise pipeline and all the initiatives that we put in place during 2022 and how it's, you know, materializing, you know, into 2023, basically?
Yeah. Well, actually, as I said, enterprise has been a very satisfactory part of our business during the last months of the year. There were several factors. First of all, we all know that the sales cycle there are longer. Even if we started earlier in the year to work on many, many potential deals, most of them did materialize at the end of the day, of the year. They also are a significant part of the committed ARR that we are showing at the end of the year. We invested in the team. We invested also in the relationship. We took part in to...
We made many, many, we had many contacts, generated many leads in terms of enterprise to the point that now, as I said, the enterprise pipeline is even higher than the retail one, and is approaching more than EUR 10 million of pipeline. This is something that we think will last long because it's one of our distinctive strategic asset to be able to serve Pan-European customers and to be able to serve and to deal at OEMs level.
Thank you for that, Andrea. Other question from Catherine, it's on the OpEx. I do think you already, I think, addressed this question. It's on the OpEx, effectively higher in H2. The question is more, how the level of OpEx is going, you know, to evolve, in the, you know, in the following years ahead. I believe that you mentioned that, you know, it will be essentially around, you know, operational leverage and the cost base will be essentially flat. Do you want to elaborate a bit more on the, on the cost base and how we see that, in the coming years?
Yeah. As I said, we invested significantly in our teams, in our structure, and we had to scale up some costs, including in G&A. This was really done by design. What has been meant to create, let's say, a basis for the current growth and the future one. Now we think that we can enter into a different phase whereby the biggest bulk of the investment has been made. It was really expected also since the IPO, we were mentioning the fact that we will be investing upfront and then reducing the pace of growth of many of our costs, starting from the G&A, which should be leveling immediately.
Then, with the other costs, mostly sales and marketing and R&D, they will be still growing but not at the same pace as the revenue that we expect to come. We think really this is a turning point, and this is also reflected in our guidance, whereby we expect to be consuming much less cash already in year 2023, and to become positive in terms of cash generation within 2024. We expect to be not growing as fast across as we did last year. We will be very much cost conscious and cash conscious, and therefore will be very much selective in our decision of investment and to increase costs.
We have already started a number of initiatives around potential savings and streamline of cost. Nothing that is dramatic in terms of impact on our business model. We believe we'll show its impact in terms of cash generation.
Thank you, Andrea. I have a last question from Catherine. It's more related to M&A. Can you just, you know, give us a bit of, you know, update on, you know, the migration of the recently acquired company engineers taking, you know, the progression on the M&A side?
Well, I think the migration is progressing. The numbers already in year 2022 prove that our strategy is confirmed. We are able to migrate customers. As we migrate them, we have upsells and also cross-sales for even higher amounts than we could expect. Obviously, in order to have the migration start in full, there need to be some adjustment in our products and some reorganizations, et cetera, which we were doing last year. In the second part of the year, we really started the migration.
We have a plan whereby the majority of the customers to migrate will be migrated during this year, 2023, and there will be still some other customer left to migrate during the year 2024. More or less we are in line with our plan. This year is when the migration will really show the biggest numbers as expected.
Thank you, Andrea. Just waiting for any final question. Any more question for the panel? Okay. I think, Andrea, maybe some words, just to conclude and try to wrap up, you know, this call for the full year 2022 results.
Yeah, sure. Well, I think, I said almost all. We are satisfied with how we closed the year, especially the last, the final part of the year. It was expected, but still it required a massive work by all the teams. We are very much focused on our continued growth. We are, we are happy with the investments we have been made. And we think that this year, 2023, will be very important in terms of aligning our growth trajectory, which will remain more or less unchanged, with some other targets of achieving also our break-even in cash generation going forward.
Thank you. Thank you very much for that, Andrea. Thank you all for participating to the call, and thank you for the question. Really appreciate, I mean, the engagement of you guys. Let's discuss for the next event will be, you know, the Q1 2023. Thank you very much and talk to you soon.
Thank you. Bye, everyone.