Good afternoon, and welcome to this Q3 presentation and Q&A with Konsolidator. With us today, we have the CEO, Claus Finderup Grove, and CFO, Jack Skov. There have already been pre-submitted questions on Stokk.io, and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to Claus and Jack to start the presentation. Claus and Jack, your lines are now open.
Thank you. I am Jack Skov, CFO, and I will have the honor to start out the presentation today. With me, I have Claus, who is live from Vienna. So I'll start out today, and Claus will come in at the end of the presentation. The agenda is familiar. This is what we usually go through in our investor meetings. We'll have a little bit about Konsolidator and then the financial. And then at the end, Claus will explain about our growth initiatives, and then we'll have our Q&A at the end. Our vision and mission remain the same, not changed. We reached an annual recurring revenue of DKK 20 million at the end of September. And at the moment, we have 31 FTEs this year, including our Konsolidator Iberia.
A little from our customers, which we continuously try to, or will try to develop new things on our platform and have them test as well as use this. What we do, financial consolidation, it looks easy because we are aggregating numbers. However, looks can be deceiving, and in a consolidation, there are eliminations that you need to address in order to get the right elimination. You can see there is a group, and what the consolidation does is looking on what the numbers are to the outside world, outside of the group section, meaning that if you had any sales between two companies within the group, you need to eliminate those things. You also need to take into consideration any outside investors to some of the subsidiaries. Further, there are exchange rate translations, so companies can be in different currencies.
So 2+2 might not equal four, but could be more than that when you have different currencies. Looking at our financials, it's been more of the same in Q3. We have wanted to optimize cost, where we have had to let two people go in marketing because we have outsourced our digital marketing. We've also said goodbye to a person in the onboarding and consulting department, which we have not put in a rehire. And all this to get to the cash flow positive side in Konsolidator. We've also been looking to improve the equity and also investing in our product. If you look at the revenue, we've realized the revenue for Q3 on DKK 4.9 million, and in total for the nine months, almost DKK 50 million. The increase has been for subscriptions, and we had a decrease in our onboarding and consultancy business.
We still have a little bit of loss, and it's been increasing. It's primarily, it is due to Konsolidator Iberia, our investing in Konsolidator Iberia, as they have realized numbers for six months in 2024, and it'll take some time for them to get to positive numbers. But we are keeping good faith. The good part is that even though our EBIT loss increased compared to last year, it is still less than what Konsolidator Iberia had. Further, our cash situation is only DKK 0.3 million, which is why we during the quarter and also before looked for capital, wanted a capital increase. It is also to help our negative equity. In the beginning of October, we had a capital increase of DKK 2.2 million. So it is not enough for the positive equity to be regained, but we will still look for investments in our capital increases during Q4.
The cash flow is impacted by Konsolidator Iberia in the operating cash flow. Going to the SaaS metrics, we realized an annual recurring revenue of DKK 20 million , which is an increase of 7% year- on- year. The increase was DKK 0.5 million for Q3, which is the highest in 2024, which we're pretty happy about, and even though our churn is still, annualized churn is still pretty high, meaning that our new sales for the quarter has been pretty good, and we are seeing an upward trend in this, so positive signs, we'll see. Then if we go back to our outlook, we have maintained our guides, which is an ARR of DKK 21 million-DKK 23 million , revenue of DKK 21 million-DKK 23 million , and an EBIT loss of DKK 10 million-DKK 12 million .
The net revenue is DKK 21 million-DKK 23 million and will be also hopefully impacted by some of our new sales segment in Q4, and it's, yeah, that we realize some of the revenue. This was my part, and I will give.
Thank you. Yes. I'm sitting in Vienna, as Jack's just saying, so there might be some background noise because I'm attending a huge Business Central partner event, more than 3,000 attendees. Having a lot of speeches, and just an hour before, we gave a presentation for more than 100 where we talk about how Konsolidator fits into Business Central. It's three very exciting days down here in Vienna. As Jack said just before, we have optimized some of the cost in the past quarter. We have reduced the cost, not only just to reducing the cost, but also because some of our CAC, customer acquisition cost, was too high with the previous marketing setup. That is one of the two reasons why we have reduced the cost in marketing and outsourced that to an external bureau, which just started in August.
But what I will talk more about, that is where we see the future growth coming from. So if Jack can go into this, back in February, in our annual report, we told about some areas where we could see that there was a potential for high growth. And so this presentation here in Q3, that would be an update on where we are on these different most interesting initiatives. And starting with the first one, the direct sales, which we have done since we started 10 years ago, we will always continue, sorry, to do direct sales because one thing is to have partners and others who can grow your business, but the way we are, we are always getting inbound leads from a part of the world where we don't have partners. We have, for example, a dialogue last week with someone from South Africa.
And as you probably know, Konsolidator is country agnostic, then we should always be open to talk to customers, potential customers from all around the world, as long as they are okay with the software in English or in Spanish, and also because of our operating hours, then we can take on customers from all around the world. So number one, the core business, direct sales, that will continue. It has been fairly successful the past year, 16% growth. It's not what we're used to, but it's acceptable. But again, because of our higher than normal churn, the net growth has only been 7%. But new customers are still coming into Konsolidator. I think we got around 40 the past year, new customers. So that's actually acceptable.
But to come back to the high growth number, which we wanted to be and where we used to be, one of these initiatives that is playing along with the Microsoft Dynamics 365 partners, and that is what I'm doing down here in Vienna, that is to engage with Microsoft partners who have customer base for groups. Business Central is both small, single entity companies, but also huge, large groups. And we are trying to engage with those customers, those partners that have customers within the larger segment of Business Central. Over the past six to nine months, I have seen a larger interest from Big Four to become onboarding partners. And the reason for that is that Konsolidator is moving up in the market.
We are getting larger and larger customers, which you can also see on our average AR, which has increased by, I think, around 50% the past three or four years, and that is not only because of price increases. That is simply also because our customers are getting larger and larger. When the customers are getting larger, then it's also getting increasingly interesting for the Big Four partners, where we have a fairly close cooperation with PwC, but we can also see an increasing interest from KPMG and also EY. That's, of course, possible, positive, because the more who knows us and the more who also knows what kind of value we deliver, the better we can serve the customers out there. In order to be better and better for the partners, we just thought we're going to launch a new BC demo app today.
There was some errors, so we will probably launch next week. That will make it much, much easier for the partners to present Konsolidator because they can actually, from within Business Central, just prepare and upload data and create a customer in Konsolidator and then be showing Konsolidator without knowing anything about consolidation. That demo app, we believe, will be a great tool for the partners. Iberia, as you all know, we started in Iberia just before the summer. They have, I would say, not an aggressive plan, but they have a budget which is both ambitious but also realistic. I can say that they are ahead of the plans and are moving in the direction that we want to.
They are very ambitious, and they want to expand not only having Spain and Portugal, but also South America who speaks the same language. So they are already now in dialogue with some of the large Big Four customers in Mexico. So no customers there yet, but we do still are very ambitious on behalf of Iberia. Number four, data warehouse, goes a little bit alongside why the Big Four is getting increasingly interesting. That is that customers are moving up, as I said, in the market, and they're kind of looking for a broader solution than just a consolidation tool. They want a corporate data warehouse.
We do not want to be a consultant that goes out and builds data warehouses to all our customers, but we do want to have a fairly strong demo environment which we can show to customers and which customers also, maybe by themselves or with other partners, can adapt this demo data warehouse to their needs. Hopefully, we can launch a demo data warehouse soon. My own ambition is before Christmas. I don't know whether it's realistic, and it's nothing that I will promise, but there is a huge demand for a broader solution than just Konsolidator. Of course, we want to live up to that and show what we can do and how we can use our numbers broader than just consolidated numbers.
And then the last, and probably the one with the highest expectation and also something that can really generate high growth for Konsolidator, and that is what we call Konsolidator Banking. Konsolidator Banking, that is using our tool in the bank's department to produce a large volume of fairly simple consolidation. And as many of you know, we do have some POC, we call it proof of concept with some of the larger banks in Denmark. Nothing has been signed yet, then you would have known because that is so large. So there will be a company announcement the day that happened, if that happened. So nothing has been signed yet, but there are still some very positive signs from the banks. And we ourselves believe that we can solve a problem for the banks and give them value by using Konsolidator Banking.
Specifically, we are spending a lot of time trying to understand what is it exactly a pain they have and what is it exactly that Konsolidator Banking can do, what kind of value creation is it that we can provide the banks, and neither Jack nor I or any other from Konsolidator has tremendous experience in the banking segment. So we are drinking a lot of coffee with the people who know much more about that to fully understand what value we can create. But it still looks positive, and we are still spending resources on this growth initiative. Yes, so how does the future look like? First, as you know, we have guidance for 2024, but we have not provided any guidance for next year yet.
We will, of course, do that whenever we believe that it fits right and we know we can say more for certain what next year will bring, but it's not the biggest secret that we are aiming for profitability as fast as possible on the core business, so we have some, you can say, excess resources to do more in the growth initiatives, but yeah, and those growth initiatives I just explained, they will continue. We are looking at continuing with Spain. We are continuously looking at D365, Microsoft partners, the financial data warehouse, and maybe some add-on products around that, banking, and then coincidentally, there can be a spin-off from banking where the large, very large groups are also using banking in their credit control departments, and we have had the first meetings with some of the very large customers to see whether there is a fit.
And yeah, there might be a fit there. At least the two first meetings we have had were positive, and they were interesting to see what we could bring to them in this regard. Yeah, that was what I had to say about the growth opportunities. Thank you.
Perfect. Thank you for the presentation, Jack and Claus. Let's move directly into the Q&A with the first question from the audience here. Q3 was the best ARR increase so far this year, but in order to reach just the low end of your guidance, you need to add at least DKK 1 million in ARR in Q4. How confident are you to be able to do that?
Yes, thank you. That's actually perfectly right. It's a fairly easy number when we reached DKK 20 million and the guidance is DKK 21 million-DKK 23 million . So yeah, so that's right. I would say we are fairly comfortable reaching the DKK 21 million , and that is on our core business. In order to reach DKK 23 million , we need some extra from some of these growth initiatives. But October went fairly well, and the pipeline looks promising for the rest of the year. So we are comfortable with the DKK 21 million . DKK 23 million , we need something extra.
If Konsolidator should continue to be a growth company, you need to see growth back in 2025. Can you explain what went well in Q3 since ARR increased, and how will you manage to increase growth in 2025?
Actually, Q3, I mean, one thing is churn is luckily reducing. So the net growth is increasing just with the same new ARR coming in because churn is dropping. So that is one thing. But the other thing that is also the average size of the deals we are getting is much, much higher. We are getting closer on DKK 100,000 now in some of the new deals where we used to be DKK 40,000, DKK 45,000. And I think the average now is more than DKK 70,000 for all our customers for all 10 years. So we are seeing an increase in that, which of course makes it easier to reach the million. Where we four years ago to reach the million, we should have, I don't know, what is that, how many customers that is, and now you almost need the half.
So that is one part of it. The other thing that is that I think one of the reasons why the past three years has been difficult is that many of our customers are on Business Central, Navision, Axapta platform, and they have been extremely busy converting from on-premise to cloud version. If you look at the Microsoft cloud growth, it's incredible, and of course, our potential customers, they are very, very busy in this conversion, and they want to do this conversion before they move on to add-on products, so that we can see also Denmark, which has been fairly quiet for a couple of years, maybe not a couple of years, but for some time, is back on track. I mean, we are seeing a lot of inbound requests on Danish customers because they have finalized their conversion from on-prem solution to cloud, so that's also another reason.
And then looking into 2025, I believe that we can make at least around DKK 3 million in net new ARR direct. That we have done for a couple of times, also active the past 12 months, and we will continue with that. So that's secure, you can say, the bottom of the growth, but that will not give us high number growth. We do need some of these growth initiatives to materialize in actual customers in order to get back to high growth rates. And that's, of course, what we are running fast to succeed with. Yeah. And again, one of the reasons is why I'm sitting down here in Vienna and talking to partners. How can they produce more customers to us? So I don't know whether that gave a fairly long answer. So if you got a little bit confused, then it's okay.
Then you can counter-question me with another question. So yeah.
Yeah. Thank you for the answer, Claus. The next question. You have two banks using Konsolidator Banking and giving feedback. Are they paying customers, and what is the outlook for this segment?
First, no, they're not paying. It's a free POC, and I actually think that is fair because they are also helping us develop what we call a banking app. Just to understand, the banking is that the engine in Konsolidator will not change, but they need a front end where the banks can operate from, and this front end, I mean, they have been very helpful in helping us developing and also some of the reports they need back after they've done the consolidation, so that has actually been, you can say, a cooperation where we got the feedback, so that has been free, and we are running on actually three banks, but two or three banks is not so important.
But we believe that when if we get the first customers and other banks are interested, then we will probably charge a fee for it because then you can say we have the product in place. So no, they haven't paid, which we actually find is okay because we also got things back. And hopefully we can turn them into a paying customer soon.
We are at the last question here. You raised DKK 2.2 million at the beginning of October. The last couple of years, the company has been going from cap raise to cap raise while no significant growth/profitability has been shown. When can we expect to see positive operational cash flow?
That's a good question. And that's what we've really been focusing on this year and what we've done with the cost initiatives that we've had and looking into different other things because those are the things that we can control. We're also trying to get back on track with the onboarding and consultancy revenues, but it's not as much in our hands, so going forward to 2025, I expect to see some positive operational cash flows, not in the beginning of 2025, but in the latter part of 2025.
I can add a little bit to that, just to some other numbers. As Jack said, we were 31 employees. We are 23 in Denmark. And as you know, we only own 60% of the Spanish company. But we are 23 in Denmark, and our guidance for this year is DKK 21 million-DKK 23 million. So we are pretty close to profitability. And again, our expectation is that some of these growth initiatives start to pay off sooner rather than later. And if when that happens, then we will be very close to profitability, maybe above right. But of course, you will hear more about that when we get to the guidance for 2025 soon.
Yeah. Perfect. That was all the questions. So that finalizes the Q&A. But before we end the webcast, I will just hand over the word for you. So if you have any final remarks, you're welcome to give them now.
Thank you very much for joining this webcast. It's possible to, if you want to go back and see it, it's possible it's going to be posted on our website. Thank you very much for joining, and see you when the annual report is being released. Thank you.