Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Qliro AB (OSTO:QLIRO, Financial) reported a significant strategic shift towards focusing on its payments business, with over 35% growth in payment volumes expected.
- The company successfully raised over 100 million in capital during the quarter to fuel growth and expansion efforts.
- Qliro AB has seen a strong increase in merchant onboarding, with more than 200 merchants now live on the platform, representing a 175% growth compared to the previous year.
- The launch of new products, including Checkout 0.0 and Loyalty Driver, has set new standards for conversion and improved consumer experience.
- Geographical expansion is underway, with new offices in Norway and plans to launch in Finland, aiming to capture a larger market share in the Nordics.
Negative Points
- Qliro AB's adjusted operating profit decreased to minus 12 million due to increased focus on growth and geographic expansion.
- Credit losses increased to 27 million, attributed to changes in product mix and temporary issues in the dunning chain.
- The company's pay later volume decreased by 14%, driven by continued lower invoice volumes.
- There is a mismatch between lending rates and funding rates, with a lag expected before convergence, impacting financial performance.
- Increased investments in sales and marketing have led to higher operating expenses, impacting short-term profitability.
Q & A Highlights
Q: You target to be north of 35% volume growth by Q2. Is that a peak or a sustainable growth figure now that you've gained momentum in signing new merchants?
A: We expect those levels to continue and possibly increase as we have a bigger pipeline now than before. We anticipate maintaining or even accelerating our current sales velocity.
Q: When do you expect income growth to reach around 35%? Is there a delay, and if so, how long?
A: Income growth typically materializes with a delay of about 18 months. From new contracts or volume, 50-60% materializes into income in the first year, reaching 80-90% in the second year.
Q: There's a mismatch between lending rates coming down and funding rates. Can you elaborate on this and when you expect convergence?
A: We are primarily funded by consumer deposits, which have not decreased as quickly as public interest rates. There may be a lag of up to six months before deposit rates align with official rates.
Q: On commission income, should we expect slower growth due to lower late fees?
A: We reduced reminder rates by 20% on our BNPL product, which benefits consumer experience and merchants. This impacts operating income short-term but should positively affect credit losses mid-term.
Q: Regarding costs, is the current level a good starting point, and should we expect a 30% cost growth for 100% volume growth?
A: We are expanding in new markets, incurring costs before revenue. Over time, we aim not to increase fixed costs more than 30% for a 100% volume increase, potentially reaching this sooner than later.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
