Heeros’ strategy implementation proceeds according to plan. Profitability continued to improve in the first quarter despite weaker revenue resulting from coronavirus pandemic.
January–March 2021 summary
- Revenue remained at almost same level as last year and amounted to EUR 2.19 million (1–3/2020: EUR 2.21 million).
- Recurring revenue decreased slightly due to lower transaction revenue.
- EBITDA grew strongly to EUR 0.34 million (-0.29).
- Adjusted operational cash flow was EUR 0.46 million (0.19).
- Combined EBITDA margin and revenue growth percentage (Rule of 40) was 14.3% (-3.7%).
- During the reporting period, Heeros and its current e-invoice operator OpenText signed a strategic partnership agreement that will open a new sales channel for Heeros to small and medium-sized customers in Europe, enable expansion of Heeros services into new markets and improve the services for existing customers.
- Heeros’ outlook for 2021 remains unchanged: Heeros is expecting to increase the combined EBITDA margin (EBITDA, % of revenue) and revenue growth percentage (Rule of 40) to 30% level for the 2021 financial period.
Mikko Pilkama, CEO:
”Heeros’ business is proceeding according to plan. In the first quarter of the year, profitability continued to develop strongly, although transaction revenue, which is based on invoice volumes, decreased due to coronavirus pandemic restrictions and overall economic uncertainty. Pandemic-related restrictions affected our customers above all in hospitality sectors.
Recurring revenue was close to the level of the first quarter of last year when the corona pandemic not yet impacted Heeros’ revenue. In line with our strategy, we have continued to renew our customer contracts to reduce the impact of transaction-based revenues.
In the challenging operating environment, Heeros’ sales continued strong during the first quarter. We received customer orders worth about EUR 300 thousand in terms of ARR (Annual Recurring Revenue). Another success story that I want to highlight is that Heeros’ customer base grew by more than 800 new end-customers during January-March. The actions taken last spring to boost sales competitiveness are now bearing fruit: the ARR of customer orders has more than doubled from the first quarter of last year.
During the reporting period, we continued to build easier and smoother financial management for our customers.
As a part of this work, we signed a new strategic partnership agreement with OpenText. The contract will open a new sales channel for Heeros in Europe and enable expansion of our services into the fast digitalising European financial administration markets. This partnership will make it possible for us to offer even better support for our existing and new customers. We are excited about the opportunity to co-operate with the world’s leading e-invoice operator.
In the beginning of the year, Heeros’ product development launched new customer driven functionalities. An example of this is the tax interface of Heeros Kirjanpito (Heeros Accounting) that enables easy and automated sending of required official reports. Additionally, our new functionality of guided, fast and easy creation of new customers was launched to all our accounting firm customers, and the user path was further automated.
Interface development is another key theme in Heeros’ product development in 2021, in addition to development of renewed user interfaces and automation. By adding automated interfaces into our solution, we will enable an even better end-to-end user experience for our customers – also when financial administration has to be integrated to other business-critical systems.
We are thrilled to have started the renewal of Heeros’ mobile application in the first quarter. We have chosen as our partner the leading Finnish company, Qvik, with whom we will launch a new mobile enterprise application during the third quarter of 2021.
Heeros has now a scalable growth model and a cost level that supported continued strong profitability growth during the first quarter of the year. Additionally, significant progress was made in both sales and product development. I would like to extend my thanks to Heeros’ personnel for the outstanding work to achieve this.”
Find the press release HERE.
