Airthings - Air Quality Measurement from Norway

[timontti]

I would like to open a thread about the Norwegian company Airthings. I have only familiarized myself with it very superficially, so the power of collective intelligence is needed

What we do
Established in 2008, Airthings is a global tech company led by a team of experienced scientists, engineers, developers and visionaries, with a common goal: to educate on the prevalence of radon, as well as other indoor air contaminants, and develop accessible technology solutions to help people stay healthy while improving energy efficiency in our buildings.

Now, Airthings employs over 90 people in offices around the world. With 300K+ monitors sold internationally and billions of air quality data points collected, Airthings is the global leader in “all things air.”

IR pages and presentations, webcasts

Airthings | Reports and Presentations

Case Studies

Airthings for Business Blog | Indoor Air Quality Monitoring for Workplaces...

PRODUCT

The product is suitable for any building, as it measures air quality (humidity, temperature, CO2, CO2) and Radon. Measurement related to “virus risk” has also been developed.

House Kit

RADON MEASUREMENT – potential competitive advantage

Radon is the second most common cause of lung cancer in the US after smoking. Radon measurement is the birthplace of the company’s product development, as can be read on the about page.

About Airthings | Investor Relations

Wave Radon

Comparison of measuring devices:

Best indoor air quality monitors 2024

Why two runners-up? Becauser the Airthings Wave Plus is just as unique as the Davis AirLink, but for a different reason: It’s the only device we’ve reviewed that can report on the presence of radon inside your home. Radon is one of the most common and deadly indoor pollutants, and it can’t be detected unless you’re actively looking for it. This monitor can also track the levels of carbon dioxide and VOCs.

Competitive landscape of continuous radon measurement

I checked STUK’s approved radon measurement methods. It’s worth looking at the continuous measurement products, which constitute the competitive field. Traditionally, radon measurement is done with sample jars etc., i.e., not as continuous measurement.

https://www.stuk.fi/stuk-valvoo/sateilyn-kayttajalle/tyontekijoiden-suojelu-ja-sateilymittaukset/mittausten-hyvaksynnat

From there, it can be noted that Airthings has very few competitors on the approved list… but would you, for example, buy such a “competitor”? Or your employer? I don’t think so.

STUK’s statement on the software of Airthings’ Corentium PRO device

https://www.stuk.fi/documents/12547/152948/Corentium-Pro-tiedote-13102020.pdf/1890871e-4a52-338f-93b2-a0a74ca2a6c1?t=1604034668748

Resellers and partners… incl. Walmart, Schneider Electric etc. involved.

Largest owners top-20

Airthings | 20 Largest Shareholders

A few words about the numbers

COMPANY GUIDANCE 2024 is approximately NOK200m+ ARR / revenue NOK 1000m+

The share of recurring revenue in turnover is small. In the long term, the target is about 20%. The gross margin on revenue, however, is high > 60%.

EV now approximately ~NOK 1300m, so upon reaching the target, 2024 EV/ARR would be about 6.5x. Still not super cheap. However, in my opinion, it trades below the IPO price.

Considering the company’s total revenue, EV/S for this year is ~4 and for 2024, according to the target, 1.3.

Analysts’ (2 pcs) targets are approximately 100% above today’s listing price.

CMD coming

Therefore, I would hope for a discussion about this topic, both for and against…

[Apinamies]

I’ve had a quick look, but haven’t had time to dive in deeply. I’ll continue later in the evening, but here are a few thoughts that came to mind during a quick scroll.

The core of the case is clearly the Radon measurement; otherwise, the product doesn’t seem to have much that would differentiate it in a highly competitive market, with basic CO2 measurement, temperatures, IoT, etc. As a moat, Radon measurement doesn’t seem to be among the worst, as its reliable measurement requires approval from the Radiation and Nuclear Safety Authority (STUK) in Finland and America. Even if competitors were interested in the market, mandatory regulatory approvals in different countries are, in my opinion, a relatively reasonable moat. However, there are still competitors in this field, and Airthings’ product, at a quick glance, seems to be among the most expensive on the market, at least in Finland.

Income statement 21Q2

Although the company has communicated its focus on growth, the income statement lines still catch my eye. Revenue growth is okay, and most of it was organic. Unfortunately, expenses almost always grow proportionally with sales, and the same pattern was observed in the 21Q1 and 2020 reports. Sales don’t seem to scale very well; to sell more products, more marketing, components, and salespeople are currently needed. One solution to this could be to focus more on B2B and professional sales, but for now, clearly most sales come from consumers (Q2 Consumers 49.8M NOK, Businesses 9.7M NOK, and Professionals 8.5M NOK). I’d be interested in the vision for how this operation will eventually turn profitable .

I also wonder a bit about the current valuation multiples, as this is pretty much a full-fledged product company whose operations don’t seem to scale very well. Not that it’s absolutely expensive in the current market, but there’s still a bit to prove. This is a very superficial scratch from my end too; I’ll try to go deeper in the evening.

[Imini]

Hey,
I don’t have investment-related experience with the company but I do have a good user experience to share
I got the device at the turn of the year, and to my surprise, it started showing a red value for radon. During the house construction, I cut corners a bit with the radon piping, so the pipes are in the ground but don’t go up to the roof (because this isn’t a radon area (poor reasoning!)). I’d guess the radon source is the crushed rock, about a 30-40cm layer, under the house’s foundation.

Well, with a little effort, I managed to get temporary piping from the boiler room’s fresh air vent to the outside air with the help of a duct fan. The values turned green within a day.

During the ski holiday week, I thought, why is that fan humming there when the house is empty? In a few days, the values were red again. Turned the fan on and the values were green again. The device seems to measure very well!

Now the pipe goes all the way to the roof; I’ll have to monitor it in the winter to see if it still needs a fan or if gravity will take care of it.

[Tzadam]

A quick Google search reveals that most of the company’s products are immediately available on Google Shop. And there don’t seem to be many competitors for these products. In Finland, for example, Gigantti and Verkkokauppa.com sell them. This latest product is clearly a “flagship” model at the higher end of the price range.

In itself, these are positive signs, as the products receive good reviews and are among the first to appear on Google Shop.

It still requires more digging and investigation, but this immediately caught my eye.