Welcome to today's event, where we had the pleasure to present Agillic. To help us through today's presentation, we are joined by you, new CEO Christian Samsø , and of course, I think therefore we will also do a more thorough introduction to you than we would normally do on an event. And of course, you, CFO Claus Boysen.
Today's topic, of course, the financial results 2024 , 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 on the balance sheet and what you didn't pre-announce. As always, you're very welcome to ask questions in the box down below, during the presentation or after, but we will take the main part of the Q&A in the end of this presentation. For now, I will hand the call over to you, Christian.
Thank you. Thank you, Michael. As you all know, it's the first time I present Agillic as CEO, and therefore a short introduction after this little disclaimer. My background is within B2B, SaaS businesses. I have worked with this area for the last 20 years, being CEO in a couple of companies, MapsPeople, ScanAd, and so forth. Last job I came from was Goodiebox, where I headed a turnaround for - DKK 40 million in EBITDA, ending up in a positive result for last year for DKK 5 million.
I have worked as CEO for the last 25 years, and before SaaS business, I 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. Next thing, just quick overview of the 2024 results.
It was, as announced in our announcement from 6th of February, we almost hit the ARR target, ended up in DKK 65.5 million, just below the low range of guidance of DKK 66 million, but then our EBITDA of DKK 1 million was within the guidance. Claus, our CFO, will come back in details in a few minutes from now. Let us focus on what to do in 2025. An introduction to Agillic, and for you who know us, this should be a recap.
What we do is we offer a customer engagement platform, empowering brands to work with 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 spam for the recipients and higher efficiency and profit for our clients, such as Meta, Andel Energi, Kræftens Bekæmpelse, Sydbank, Aller Media, being some of our largest clients. The next thing, how do we plan to position ourselves in the future, and how do we plan to capitalize on the opportunities as we see them?
When I was appointed as New CEO, November 1st last year, my most important task was to found a new management team, which was in place before Christmas, but also to formulate a new strategy as a foundation for our efforts and the budget for 2025. Naturally, this starts with the markets and the needs of our clients. To be brutally honest, the market for martech system is tougher than tough.
It is totally a red ocean with a lot of different vendors, a lot of different products with different market positions and very different value proposition. 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 towards 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 clients. We also have a point-and-click personalization tool, meaning we are not doing one-to-one, we're going to one-to-many communication, but one-to-one communication individually based on data and behavior. This is done in a very easy way in the Agillic platform, as it does not 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. We have a proven E.U. security and data compliance setup, as all our data centers are placed in Europe, and our send-out infrastructure is also based in Europe, covering all messages, email, SMS, app push, etc. 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 is to be the leading Nordic customer engagement platform.
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 client's first choice of vendor when they are to invest in a customer engagement platform, which happens every six to seven years for the bigger clients and the most inexperienced clients. To execution, we have four pillars of execution. First, of course, we focus on aggressive sales. That means nurturing leads, building pipelines, 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. First, product releases, more focus on development and faster releases.
As you have seen in 2024, we have released more features than before, especially within the AI area. Local support is very important for us because being able to offer this personal support gives us real advantages, especially compared to the American competitors. Now to the number and details. Claus, the floor is yours.
Thank you. If we look at our ARR figures over the years, we knew when we guided for 2024 that we were going to decrease our ARR, which mainly was driven from Q1 and that we have talked about in the last couple of quarterly presentations. 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. In Q4, we increased our ARR subscription by 4% and our ARR transaction as well with 5%.
This was all in alignment with our predictions and our beliefs in how 2024 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. When you look at the 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 Q4.
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 DKK 1 million. That was within our guidance of DKK 0-DKK 2 million.
We had a special situation in 2024 with a change in the management, where we have also seen a part of what we call one-time costs. If we look, part of those one-time costs, which add up to DKK 3.1 million, the EBITDA would have been ending above our guidance. All in all, we show an EBITDA of DKK 1 million, but impacted by a one-time cost of DKK 3.1 million, which is mainly related to reorganization related to severance costs. That is a financial way of treating these types of costs.
To some SaaS highlights for 2024, the number of clients ended at 118, and the clients in Q3 was 114, 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. If you look at our committed revenue at the end of 2024, we are showing DKK 27.4 million, which is much higher than the previous years. The committed revenue is a representation of the revenue that we have not taken into our P&L yet, but we have invoiced and been paid for by our clients.
These DKK 27.4 million is what we can say is already secured into the 2025 figures. On the net revenue retention, 2024 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% year by the end of 2024. CAC and months to recover CAC. CAC is DKK 500,000, and months to recover is 12 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 sales and marketing is the most efficient. Once we invested and once we sell, yeah, we have an average value of a new client of DKK 600,000. That's why our investments is being in average being paid back within 12 months. Somewhat more on our liquidity. If we look at cash-adjusted EBITDA, we introduced in the beginning of 2024 that we towards 2025 and 2026 want to be positive cash-adjusted EBITDA.
The development throughout three years has been positive to now we are at DKK -1.6 million in cash-adjusted EBITDA. If we look apart from the DKK 3.1 million, which was the one-time cost, we would actually have been already cash-adjusted positive EBITDA in 2024. The strategic target is to be positive by the end of 2025. This is driven by three factors, of course, the EBITDA, the development in the committed revenue that I spoke about under the SaaS highlights.
The reason of us changing our 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&D, in our platform, is slightly decreased from DKK 11.7 million to DKK 10.9 million in 2024.
This was purely an interaction of us launching a huge upscale of our platform in Q1, which led to an upscale of our organization in R&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 Christian mentioned. As well as the positive improvement in our cash-adjusted EBITDA, we also have a significant improvement in our free cash flow.
By 2024, for the first time in three years, we have a positive free cash flow of DKK 1.3 million, driven by our improvement in our working capital while we are maintaining our investment in the R&D platform. Lastly, something about our guidance. We have the same strategic goals also towards both 2025 and 2026 that we want to grow double digit. We want to be positive EBITDA. We want to show a positive cash flow from operation to be self-sufficient in our cash and a positive cash-adjusted EBITDA.
That has led to the guidance that we announced on the 6th of February, where the revenue is DKK 60-63 million. The ARR from subscription is DKK 56 million-60 million, and an increase in EBITDA from this year's guidance of DKK 0-2 million up till DKK 5 million-8 million. The increase in EBITDA up to DKK 5 million-8 million should be compared to two things. Both the slight positive development in our ARR subscription during the last couple of quarters in 2024, but also the normalized EBITDA of DKK 4.1 million.
Basically, the cost optimization that we introduced during 2024 and also by the end of 2025 is leading to this positive development in EBITDA while we are focusing on growing our ARR business. Good.
Yeah, should we jump to some questions?
Yes, please.
Perfect.
Yeah, but let's start with the most interesting thing when we have, you might say, management change and a new CEO. What has attracted you as a CEO to this job? Is it a great potential and not utilized, or is it more like a turnaround case? 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?
Yes, of course. It's not at all a turnaround case. Yes, I came from a turnaround successfully with Goodiebox, but I have always concentrated on growing companies, making growth and increasing profitability. I really do see a potential for Agillic, especially in the Nordic markets.
That is why we have changed our focus to solely concentrate on Scandinavia and then also Finland and Iceland. We can exploit that potential if we change the way we are operating, especially sales-wise and marketing-wise. That is why I see a huge potential and a lot of opportunities to grow the business.
I think maybe already they answered the questions on 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?
Yes, 100% because Claus here, he has done a very good job in the finance department, processes, structures, and so on. We have a very skilled CTO, and R&D is also functioning very well. 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.
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, sorry, sales division.
Hopefully, we will come with some good announcements in the year to come around this.
Perfect. I think on the first slide, you really already have told what are your unique qualifications, what are you bringing to the company. I think we have went through that pretty well on that slide. Maybe just one to Claus, your capital needs. Capital situation is stretched. I think maybe this was asked before the reporting. I think you showed maybe a little bit more healthy cash capital, cash capital you had than maybe people had expected.
Can you talk a little bit about the moving parts for you not needing to cash, meaning of course earnings is positive, but will you also have positive cash flow? How about maybe your debt reduction and so on, the moving parts here you're thinking on your capital requirements?
Absolutely. I think the slides that I presented around our cash flow development throughout 2024 actually support this very well. 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 higher profit in EBITDA that we guide now from DKK 5 million-DKK 8 million.
Those two drive 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. The last part is our debt side, where we are now down to DKK 19 million in debt to EIFO. We have one that is supporting us with debt, that is EIFO.
We have a very, very solid communication and cooperation with EIFO 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 have the sufficient cash. Both being precautious, but constantly optimizing the way that we are spending and maintaining the investment level that we currently have.
Perfect. Maybe back to you, Christian. Now you have an outside look into the company. The competitiveness of your product, I think you already said where you want to place Agillic in the market, but you did not allude so much. Do you have a competitive product, especially if we are looking at some of the bigger US giants?
Yes. As I said in my presentation, it is totally Red Ocean. 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, so forth and so on, and we have some value proposition. Of course, we have very tough competitors. We have a big competitor in Sweden called Voyado. Luckily, they are only strong in one vertical, and that is the retail vertical.
We have two major American competitors, Braze and Bloomreach, which we are competing one-to-one on. These three competitors are the major one we struggle with. We can see that this more or less would be the same competitors in the years to come. Of course, we also have Adobe, Salesforce, so forth and so on, but it's another level of competition. We are more or less focusing on the other three.
That is for the time being with all this debate around security and datas. For the first time, I may be happy with Trump because he seemed to change the early agreement between Europe and US around data security. That will be an advantage for us because we have this European data and security setup. It is not a low competition market we are in. I have to say that. Challenges, we welcome them.
If we should look back at smaller and medium-sized Danish SaaS companies, what I think if we look at the more successful one, at least when they explain their success, is the simplicity. The simplicity to work with, the simplicity to implement, the simplicity to run it. Is that also something you see as you have made sure of as a factor in your system? Maybe the local presence there as also a part of that equation.
Yeah. I don't know if I understand the question correctly, but again, local presence is an advantage. The simplicity. There's no simple matrix system. You could say that some of our competitors' systems are easier to start with, but when you have worked with matrix system for a couple of years, our offering tends to succeed more because, yes, it could be seen as complex, but it's also because it offers so many features.
All our 118 customers are very, very satisfied with us as a vendor. Many of our clients simply tell us that the opportunities we offer them are more nice, that gives them more possibilities for doing what they actually want to do. 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.
Check. There is a little bit of question surrounding on whether you need to make further cuts or how do you bridge your EBITDA, the 5-8 from currently. I think maybe a part of the explanation was we expected DKK 1 million in EBITDA. If you made adjustments from the OTIs, it maybe looked a little bit different. In general, do you need to further make cost cuts and employee cuts to get that, or is there other driving parts that will drive your EBITDA improvement in 2025?
We have no plans for more cutting. Everything has been done.
That is top-line driven, yes.
On your ARR guidance, in the low end, DKK 1.7 million calculated about, and that's three clients you expect to take in with the average there. It's just a question, isn't that a little bit conservative, or are you? The other way around, if that's conservative, are you still expecting to see some churn? That's the reason.
Are you still experiencing technology churn on what you saw in the earlier part of the year? A little bit about the amount of ARR growth, whether it's conservative or in the low end, or is there a narrow explanation you still expect some churn?
I still have my CFO, Claus, three days for now, so I will let him answer that question.
We have in 2024 seen some of these consolidations that we have explained what has happened in the market. 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 had exit interviews with them. They have been very, very satisfied with our platform.
We will see some churn in 2025, primarily here in the beginning of the year based on those consolidations that we saw a year ago and more than that. 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 for many companies, it's an expensive investment. 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.
Yes. Check. Maybe the last question, we always focus on that, and it's always hard to predict it. I know that. Anything you see, some kind of a news flow that you as shareholders could look forward to? Are you seeing some bigger news flow arising here in 2025? I know you can't maybe precisely tell us what it is because then it should have been announced to market.
Anything you want to highlight as maybe something we should look out for as investors, not only the financial result, but other results that you are going to announce that are going to come with this year?
Said with a smile, please look out for more press releases around new customers. That is what we are aiming for. You're right, I can't tell you anything specifically. We will also try to be better at communicating to the market when something happens, good or bad, and hopefully only good things. I have learned that there might not have been so many announcements as there could have been, and I would like to change that as well. Hopefully based on good news.
Perfect. You just got a sorry.
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 being done with the product. As we said, there's focus on releasing items that can actually help supporting existing clients and be better at selling the features to new clients.
We just got a last question, and I don't know how specific you want to be, but how much cost have you been able to take out of the business and how many FTEs? Just to get a kind of a run rate if you have that, Claus.
How many we have been?
Yeah. How much cost have you been able to take out? If we look at it as a run rate, how much have you been able to take out in 2024 and how many FTEs? I don't know whether you have the figures here precisely or you want to actually tell that to market.
We have the annual report where we say how many FTEs we have by year end. These are due to implementations and cost reductions that we did during 2024. Some of it will in a runway go out during 2025 as well. There will be a decrease in both our expected employee cost and operational cost during 2025 based on the things that were done and implemented in 2024.
Perfect. I will just check. That was the last question. Thank you to you, Christian, for trying to present us for why you have chosen to join the company as you know and take it forward. Thank you to you, Claus, for the last time we will see here on joining here. Thank you for you answering the questions and taking us to your company. May everybody have a nice day.
Thank you.
Thank you. Thank you.