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Third party research

Litium: Linear growth likely to continue - ABG

Litium

This is a third party research report and does not necessarily reflect our views or values

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We trim '25e-'26e ARR by 1% on continued macro weakness
Still awaiting a return in B2C business momentum
EV/ARR ~2x, '25e EV/EBITDA ~8x


What to look for in Q4'24e

For Q4, we expect reported ARR of SEK 72m and sales of SEK 19m. These figures imply y-o-y growth rates of ~5% and ~3%, respectively. We also anticipate EBITDA of SEK 4.8m, which corresponds to a margin of ~25%, and operating cash flow of SEK 4.6m. Given the linearity of the ARR growth and the large share of recurring, fixed revenues, it is unlikely that sales will be more volatile than history suggests. It is still unlikely that volumes will recover during H2'24 for B2B and B2C clients, and for Litium this means that the company's operating leverage remains unused. We argue that it is a matter of time before conditions improve to the degree that this operating leverage can be unlocked.
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