Impero A/S releases Annual Report 2024: Realizes 34% growth in Annual Recurring Revenue in 2023 and improves free cash flow to net-new ARR ratio from negative 3.4 to negative 1.6

Company Announcement No. 3-2024

Copenhagen, 14 March 2024

Annual Report for the period 1 January 2023 to 31 December 2023.

SaaS metrics and financial highlights on 31 December 2023
 

• ARR increased by 34% to DKK 30.4M at the end of 2023
• Revenue for the year increased to DKK 27.6M, corresponding to growth of 39% compared to 2022
• Free cash flow to net-new ARR ratio of -1.6 improving from -3.4 at year-end 2022
• Churn of 6%, compared to 1% for the 12-month period ending 31 December 2022
• Uplift increased to 17%, from 16% for the 12-month period ending 31 December 2022
• Net Revenue Retention (NRR) of 111%, compared to 115% in 2022
• Average ARR per customer (ARPA) increased to DKK 190T from DKK 170T at the end of 2022
• EBITDA for the year amounted to DKK -10.6M, compared to DKK -17.1M in 2022
• In Q4 2023 net ARR grew DKK 2.2M, same level as in Q4 2022

Development of the business

Set against the backdrop of a challenging market for Danish b2b SaaS companies, we are pleased to deliver more than DKK 30M in ARR for the first time. This included a strong uplift of 17% from our existing customers, which continue expanding use across their organization and various compliance domains.

For the first time since our formation, markets outside Denmark now make up more than half Impero's ARR. The total addressable market available in Denmark and the DACH region remains substantial, and our partnerships add to Impero's use cases. Our 2023 results show that our land-and expand strategy continues to deliver and is a strong foundation on which we can grow the business.

Key wins in 2023 included welcoming 38 new customers, 20 in the Danish market, 13 in the DACH region, and five in other parts of Northwestern Europe, including landing our first customers in the Swedish market. In particular, we were excited to welcome some large and respected consumer brands, including BAUHAUS in Scandinavia and Iceland, and Royal Unibrew. This was complemented by several blue-chip DACH market brands, including Deutsche Bahn, a large German bank, and an additional German automotive brand, among many others.

To provide more organizations with the opportunity to simplify compliance processes, Impero has embarked on the development of templated solutions with ready-made content provided by partners in the Danish and DACH markets. These solutions build on successful implementations with our partners and form the basis for faster onboarding of customers. The templates include Tax CMS provided in partnership with KPMG Germany, as well as a Month-End Closing solution for the Danish market delivered in partnership with Basico, and a solution for the EU's Corporate Sustainability Reporting Directive (CSRD) in partnership with KPMG Denmark.

Impero has initiated the implementation of a Marketplace with a range of templated solutions to build upon our core offering and continue to simplify and scale the breadth of use cases.

As the finance area within organizations continues to expand its responsibility for non-financial reporting, particularly for ESG, Impero remains a natural fit for enterprises subject to new non-financial reporting requirements.

At the core of our ability to attract and retain customers and keep churn low is a deeply customer-centric product development philosophy that prioritizes enhancements and new functionality that will deliver the most impact to the largest cohort of customers and enable us to continue to attract new business.

Based on current customer relationships, Impero believes there is a vast potential in supporting corporations subject to SOX compliance, as well as good compliance practices in general through improved functionalities. We therefore continue investing in features enabling customers to embrace a wider range of the ever-evolving compliance challenges such as Control Testing, supporting the third line of defense.

New Chief Technology Officer

Following the decision of our Chief Technology Officer and Executive Board Member Allan Lykke Christensen to step down in February 2024, we are very pleased to welcome David Højelsen as our Chief Technology Officer, starting in March. David brings a wealth of experience as entrepreneur, investor and from product leadership roles in scaling fast-growing SaaS companies. We are grateful for Allan's three years of product leadership at Impero and are at the same time excited to welcome David to the leadership team.

Strategic direction 2026 - Increasing the impact

With our current capital foundation, we are aiming to at least double our customer base and become cash flow positive on a recurring basis before the end of 2026. Should strategic opportunities arise that can lead to excess growth, the strategic direction, the investment levels, and capital needs will be reassessed by the Board of Directors.

Rikke Stampe Skov, CEO: "Trustworthy organizations are worth working for, buying from, selling to, collaborating with, and investing in. If one part of any organization loses trust, the rest suffers. That is the driving force behind our continued focus on helping more organizations embrace compliance. The more widespread the use of Impero, the bigger the impact."

Read the Strategic direction in full in the Report.

Outlook 2024

Based on the Live ARR methodology, Impero expects ARR in the range of DKK 38M to 42M by the end of 2024, with ARR at the end of 2023 being DKK 30.4M. The outlook corresponds to growth rates between 25% and 38%. Impero will invest in scaling the organization to ensure long-term ARR growth and at the same time focus on lowering the cash-burn from ordinary activities. We expect EBITDA for 2024 to be in the range DKK -11M to -9M.

The expectations for the above are based on assumptions that the company can retain and attract partners as well as commercial and technical profiles to expand and develop the platform. Furthermore, the timing of revenue recognition for new customers is essential in relation to the outlook. The company's pipeline proves that the demand for Impero's offerings is intact and that continuous investments in product development as well as commercial expansion add value for Impero's customers and shareholders.

Dealing with global customers, Impero is also exposed to the macroeconomic environment and geopolitical situation, where increased uncertainty and fluctuating interest rates may lead to longer sales cycles and potentially lead to higher churn. The outlook is dependent on no further aggravation of the macroeconomic and geopolitical instability observed.

Presentation of the Report

Read the Report in its entirety via https://impero.com/investors/ or in the attached.

CEO Rikke Stampe Skov and CFO Morten Lehmann Nielsen will present the Annual Report at a webinar on 18 March 2024, at 1:00 PM CET.

Register for the webinar via:  https://www.inderes.dk/videos/impero-praesentation-af-arsrapport-2023