Heeros Plc’s financial statement release 1 January – 31 December 2024: Higher revenue growth in the last quarter of the year than at the beginning of the year
Heeros Oyj | Company Release | February 04, 2025 at 09:30:00 EET
Profitability, operational cash flow and order intake for financial period 2024 improved from previous year
This release is an unofficial translation of the summary of Heeros Plc’s 2024 financial statement release. The complete financial statement release in Finnish, including tables, is available on the company’s website at www.heeros.com/tiedotteet.
July – December 2024 in brief
- Revenue increased by 2% year-on-year to EUR 5.7 (7-12/2023: 5.6) million.
- Recurring revenue (contract and transaction revenue) was at the level of comparison period at EUR 5.4 (5.4) million. Contract revenue increased by 3% to EUR 4.5 (4.3) million. Transaction volumes decreased by 6% and transaction revenue declined by 15% to EUR 0.9 (1.1) million.
- New customer order intake in terms of Annual Recurring Revenue (ARR) was approximately EUR 320 (240) thousand.
- EBITDA decreased by 16% to EUR 1.4 (1.7) million, which was 24% (29%) of revenue. Adjusted EBITDA decreased by 17% to EUR 1.5 (1.8) million, which was 26% (31%) of revenue.
- The combined adjusted EBITDA margin and revenue growth percentage (Rule of 40, adjusted) was 27% (33%).
January – December 2024 in brief
- Revenue increased by 1% year-on-year to EUR 11.4 (1-12/2023: 11.3) million.
- Recurring revenue decreased by 0.2% and was EUR 10.7 (10.8) million. Contract revenue increased by 4% to EUR 8.9 (8.6) million. Transaction volumes decreased by 7% and transaction revenue declined by 15% to EUR 1.9 (2.2) million.
- New customer order intake in terms of Annual Recurring Revenue (ARR) was approximately EUR 760 (590) thousand.
- EBITDA increased by 10% to EUR 2.7 (2.5) million, which was 24% (22%) of revenue. Adjusted EBITDA increased by 10% to EUR 2.9 (2.7) million, which was 26% (23%) of revenue.
- Operational cash flow increased by 86% to EUR 3.8 (2.0) million.
- The combined adjusted EBITDA margin and revenue growth percentage (Rule of 40, adjusted) was 26% (25%).
- On 22 November 2024 Accountor Finago Ltd announced a voluntary recommended public cash tender offer for all shares and option rights in Heeros Plc.
- Due to tender offer made by Accountor Finago, Heeros will not provide financial outlook for the year 2025.
- The Board of Directors proposes that no dividends be paid out for the 2024 financial period.
KEY FIGURES
| EUR thousand | Q4/ 2024 | Q4/ 2023 | Change % | H2/ 2024 | H2/ 2023 | Change % | Financial period 2024 | Financial period 2023 | Change % |
| Revenue | 2,893 | 2,810 | 3% | 5,719 | 5,630 | 2% | 11,363 | 11,296 | 1% |
| Recurring revenue 1 | 2,700 | 2,712 | 0% | 5,384 | 5,407 | 0% | 10,748 | 10,774 | 0% |
| Contract revenue | 2,231 | 2,171 | 3% | 4,474 | 4,342 | 3% | 8,887 | 8,578 | 4% |
| Transaction revenue | 469 | 541 | -13% | 910 | 1,065 | -15% | 1,861 | 2,195 | -15% |
| EBITDA | 152 | 781 | -80% | 1,394 | 1,653 | -16% | 2,737 | 2,478 | 10% |
| EBITDA, % of revenue | 5% | 28% | 24% | 29% | 24% | 22% | |||
| EBITDA (adjusted) 2 | 585 | 799 | -27% | 1,462 | 1,772 | -17% | 2,917 | 2,654 | 10% |
| EBITDA (adj.), % of revenue | 20% | 28% | 26% | 31% | 26% | 23% | |||
| EBIT | -254 | 225 | -213% | 449 | 562 | -20% | 749 | 293 | 156% |
| EBIT, % of revenue | -9% | 8% | 8% | 10% | 7% | 3% | |||
| EBIT (adjusted) 3 | 179 | 243 | -26% | 605 | 681 | -11% | 1,016 | 469 | 117% |
| EBIT (adj.), % of revenue | 6% | 9% | -28% | 11% | 12% | -13% | 9% | 4% | 115% |
| Profit for the period | -277 | 222 | -225% | 384 | 500 | -23% | 619 | 177 | 250% |
| Profit for the period, % of revenue | -10% | 8% | 7% | 9% | 5% | 2% | |||
| Profit for the period excluding goodwill depreciations | -137 | 362 | -138% | 664 | 780 | -15% | 1,178 | 734 | 60% |
| Rule of 40, % | 8% | 25% | 26% | 31% | 25% | 24% | |||
| Rule of 40, % (adj.) 2 | 23% | 26% | 27% | 33% | 26% | 25% | |||
| Operational cash flow | 2,397 | 1,117 | 115% | 3,752 | 2,016 | 86% | |||
| Equity ratio, % | 70% | 66% | |||||||
| Return on Equity (ROE), % | 8% | 3% |
1 Recurring revenue is divided into two parts: contract revenue (fixed usage fees and service agreements) and transaction revenue.
2 The adjusted EBITDA for Q4/2024 include an adjustment of EUR 433 thousand for non-recurring restructuring costs. The adjusted EBITDA for 2024 include an adjustment of EUR 524 thousand for extraordinary income and an adjustment of
EUR 703 thousand non-recurring restructuring costs.
3 The adjusted EBIT for Q4/2024 include an adjustment of EUR 433 thousand for non-recurring restructuring costs. The adjusted EBIT for 2024 include an adjustment of EUR 524 thousand for extraordinary income and an adjustment of
EUR 791 thousand non-recurring restructuring costs.
NIKLAS LAHTI, CEO
“Expectedly, Heeros delivered a strong and positive performance in the final quarter. We exceeded our full-year targets in both new sales and profitability. The performance was very good, especially considering that a decline in transaction volumes weighed on revenue growth throughout the year.
In 2024 Adjusted EBITDA grew by 10% and EBITDA-Cash by 39%
The adjusted EBITDA for the financial year increased by 10% from the previous year to EUR 2,917 thousand (1–12/2023: EUR 2,654 thousand), accounting for 26% (23%) of revenue. In October–December, the adjusted EBITDA decreased by 27% from the previous year to EUR 585 thousand (10–12/2023: EUR 799 thousand), representing 20% (28%) of revenue.
As in the previous quarter, the relative decline in adjusted EBITDA was significantly impacted by a much larger performance bonus provision compared to the previous year. However, I’m pleased that achieving our targets also means increased bonuses for our employees, even if it comes at the expense of EBITDA.
The investment-adjusted EBITDA (EBITDA-Cash), which is calculated by deducting investments in tangible and intangible assets from EBITDA, increased by 39% during the year to EUR 1,746 (EUR 1,252) thousand, reaching 15% of revenue. In 2022, EBITDA-Cash stood at EUR 482 thousand. Improving this indicator has been our primary objective as a company, and we have achieved excellent progress over the past two years. Operating cash flow grew by 86% during the year to EUR 3,752 (EUR 2,016) thousand.
Higher revenue growth in the last quarter of the year than at the beginning of the year
Total revenue grew by 3% in the final quarter, reaching EUR 2.9 million. Contract revenue increased by 3% year-over-year in the last quarter, while transactional revenue continued to decline, decreasing by 13% in Q4/2024. Net revenue retention (NRR) remained strong at 101% (106%).
EBITDA decreased due to restructuring costs
The EBITDA for this and the previous quarter was negatively impacted by one-off expenses related to the announced voluntary cash tender offer. Primarily due to these items, EBITDA for October–December decreased to EUR 152 (EUR 781) thousand, representing 5% (28%) of revenue. The acceptance period for the tender offer was still ongoing at the end of year 2024. The company's financial advisors' Success Fee costs, which are dependent on the completion of the transaction, amount to EUR 511 thousand and will be recorded as an expense upon the transaction’s completion.
Order intake better than expected
New customer orders grew by 77% during the quarter compared to the previous year, reaching EUR 199 (EUR 112) thousand. For the full year, growth was 28%, with orders totaling approximately EUR 760 (EUR 590) thousand. The full-year performance in new customer acquisition was impressive, especially considering the major changes in the new sales team that significantly weakened the first quarter.
A glance into the future
Heeros enters 2025 from an excellent position. We have invested in our products, personnel, and operational development while strengthening our organization. We are well-prepared to capitalize on growth opportunities and continue improving our profitability.
Accountor Finago Ltd, a portfolio company of KKR & Co. Inc., has made a voluntary recommended public cash tender offer for all outstanding shares and options of Heeros Plc. The Board of Directors of Heeros has unanimously recommended that Heeros' shareholders and option holders accept the offer.
If the offer is accepted, we will have the opportunity to accelerate our investments, particularly in our sales and purchase invoice software, and create an even brighter future for our customers, partners, and employees. I look forward to the next chapter of Heeros with excitement and confidence.”
FINANCIAL OUTLOOK FOR 2025
Due to tender offer made by Accountor Finago, Heeros will not provide financial outlook for the year 2025.
FINANCIAL INFORMATION AND ANNUAL GENERAL MEETING IN 2025
In 2025, Heeros Plc will publish the following financial reports:
4 February 2025 – Financial Statements and the Report of the Board of Directors for 2024
24 April 2025 – Business Review January-March 2025
13 August 2025 – Half-year Report January-June 2025
23 October 2025 – Business Review January-September 2025
The Annual General Meeting will be held on 18 March 2025. The company's Board of Directors will summon the meeting separately at a later date.
Heeros Plc
Board of Directors
More information:
Niklas Lahti, CEO, tel. +358 40 774 1777, niklas.lahti@heeros.com
Juho Pakkanen, CFO, tel. +358 40 506 9898, juho.pakkanen@heeros.com
Distribution:
Nasdaq Helsinki
Essential media outlets
www.heeros.com/sijoittajille
Heeros in brief
Heeros is a pioneer in SaaS corporate software with a mission to develop software for streamlined business management. Heeros seeks to meet the needs of corporate and financial management clients by providing the software suites offering the best user experience for the digitalisation of business-critical financial management, ERP and HR processes. Heeros was established in 2000. The company’s shares are listed on Nasdaq First North Growth Market Finland, maintained by Nasdaq Helsinki Oy, under the trading ID HEEROS. www.heeros.com