Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bambuser AB (FRA:5JL, Financial) reported a 7% quarter-over-quarter increase in ARR at constant exchange rates, indicating a return to growth.
- The company expanded its relationship with high-profile clients such as LVMH and added new clients like Hy-Vee, Elemis, and Luisaviaroma.
- Bambuser AB (FRA:5JL) introduced a major enhancement to its platform, Shoppable Video, which allows clients to turn any video into an interactive shopping experience.
- The company launched an app framework that enables clients to create custom apps within the Bambuser platform, enhancing personalization and engagement.
- Despite a year-over-year decline in net sales, Bambuser AB (FRA:5JL) reported continued improvement in adjusted EBITDA due to disciplined cost control measures.
Negative Points
- Organic growth was negative by 2% quarter-over-quarter, indicating some underlying challenges.
- Year-over-year ARR comparison remains negative, primarily due to churn, negative net expansion, and the introduction of lower-priced Shopify plans.
- The Americas region showed a decline in ARR per customer group, driven by a tougher retail market and higher instances of bankruptcies.
- Overall NRR is at 63%, which is relatively low, although top 20 accounts show a more promising NRR of 104%.
- Gross margin was temporarily impacted due to the acquisition of HERO, although cost efficiencies are expected as integration progresses.
Q & A Highlights
Q&A Highlights from Bambuser AB (FRA:5JL) Q2 2024 Earnings Call
Q: You mentioned that the decline in ARR per customer group is mostly driven by the Americas. Could you perhaps give us some more flavor as to why the Americas is particularly affected?
A: Hi Nikola, this is Maryam. The retail market has been much tougher in the Americas compared to EMEA. Additionally, many of our top 30 clients, which are larger conglomerates, are headquartered in EMEA and have had stronger performance. In contrast, enterprise clients in the Americas have faced more bankruptcies and struggles. So, the difference is more market-driven rather than customer-driven. (Maryam Ghahremani, CEO)
Q: The new pricing model seems to have an adverse impact on average ARR. Is this a transitory effect as clients migrate from the old to the new pricing model?
A: The new pricing model, which has been in place for over a year, is more value-based and allows for variability based on usage. It's not macro-driven but rather a classical SaaS pricing model where customers commit to a certain usage annually. As clients exceed their usage limits, they either pay for overage or move to a higher tier, leading to potential upsell. The impact is more about transitioning existing customers to this model. (Jonas Lagerstrom, CFO & COO)
Q: Does the new pricing model allow for more upside compared to the old model?
A: Yes, the new model allows for more upside as it is based on usage. As the environment for retailers improves and our product becomes stickier, we expect to see more upsell opportunities. We are still transitioning existing customers to this model, and the potential for increased ARR lies in the future. (Jonas Lagerstrom, CFO & COO)
Q: Can you elaborate on the impact of the HERO acquisition on your financials?
A: The HERO acquisition positively contributed to our ARR bridge. However, it temporarily impacted our gross margin this quarter. As we fully integrate HERO into our tech stack, we expect to realize cost efficiencies and see our gross margin improve. (Jonas Lagerstrom, CFO & COO)
Q: What are your plans for expanding your high-value enterprise client segment?
A: We are laser-focused on growing our segment of high-value enterprise clients. Our top 20 accounts have a promising future with an NRR of 104%, indicating they are not only staying with us but also expanding their usage of our platform. (Jonas Lagerstrom, CFO & COO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
