Here’s a very quick first look at the report. CEO Heikki will soon arrive at the office for an interview.
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Here’s Heikki’s fresh interview:
We went through the outlook at the end, and it’s worth noting that this point highlighted in the report also applies to H1 SaaS growth:
It’s easy to forget that the SaaS revenue item includes more than just process mining. In any case, growth for Process Analyzer is sure to continue at a rapid pace this year as well, but older products are slowing down the development.
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The growth in revenue was indeed a positive surprise in the report. Profitability did not see similar growth, as investments were made in marketing and sales. That famous hockey stick-shaped earnings growth will then possibly come sometime later, once sufficient top-line growth has been achieved.
Cash flow in the last quarter of the year was, as expected, strong, similar to last year. In addition, it’s worth noting the increased Trade receivables and other receivables, which grew significantly from the comparison period 1706 → 2355. Better cash flow should therefore be coming in the next few quarters as well. This year there should not be a holiday pay disbursement eating into cash flow like last year. Still related to cash, Advances received grew from 1558 → 2363. These increases should at least be reflected as nice growth figures in revenue and cash flow during the upcoming quarters.
I, for one, am not very concerned about the termination of customer agreements for old products, because despite that, the outlook is for moderate growth in the first half of the year. Should the guidance then be interpreted to mean that stronger growth is expected at the end of the year?
Indebtedness, by the way, is already starting to look quite good. With year-end figures, interest-bearing net debt is 577 thousand, from which, by adjusting for lease liabilities (Right-of-use assets) of 377 thousand, we get relatively close to being net debt-free. The financial position will soon enable larger growth investments if desired/decided. Of course, it would also be nice to make a bit of profit, as previous losses could also be utilized in taxation.
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Atte and Roni have completed the new company report after Q4. 
The Q4 report seals the company’s strong profitability turnaround achieved over the past two years, and going forward, the focus is once again more strongly on growth. Based on the outlook, the SaaS growth rate is calming down this year as revenue from older products declines, even though the process mining software, which is at the core of the strategy, continues its growth. We still predict a strong acceleration of SaaS growth in the medium term, which requires success in the growth investments now being added. However, the stock’s valuation (2025e EV/S 3.0x), which has risen sharply over the past year, has, in our opinion, already priced in clearly stronger growth than our expectations, which is why the risk/reward ratio is not currently attractive.
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It seems quite unlikely that they would now want to spend around a million euros more per year on sales and marketing and with this, only generate approximately €200k more in revenue compared to before. In interviews, the CEO has spoken a lot about continuous profit improvement and aiming for profitable results, which I believe will continue to be the goals. It would also be quite peculiar to intentionally drive equity into negative territory after the business direction has finally been turned around. Maintaining at least a slightly positive profit seems quite essential when pursuing growth in the coming years.
In the forecasts, cash flow was specifically examined, and the report states:
“We now assume the company aims to remain approximately cash flow neutral in the coming years and otherwise invest everything in accelerating growth.”
Compared to the previous turning point, the company’s comments after the Q4 report were now clearly more growth-oriented, and the cost structure had already been increased towards the end of the year relative to our previous expectations. It is also good to remember that seeking growth, especially in North America, is not cheap if, for example, recruitments are made there. The company will also further increase its visibility at various industry trade fairs this year, and in addition to travel expenses, marketing and sales costs will certainly see growth as a result. It could also be stated that in connection with the update, assumptions regarding capitalized development expenditures for the coming years were lowered. Thus, in terms of cash flow, the earnings forecasts did not come down as much as it might initially seem. And longer-term forecasts were simultaneously raised, which is also reflected in the increased DCF value.
My own feeling and guess is that the anti-dilution authorization received at the last general meeting will be used this year, and in reality, equity will therefore not go negative, even though it is currently hovering around zero with the forecasts. In terms of share valuation, now would also be an excellent time to raise additional growth capital.
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Regarding North American growth, at least one recruitment has come up this year. Based on LinkedIn, they still seem to be in Portugal, but responsible for expansion across the pond.
Latest marketing pitches to banks:
But then it seems to be organized to accelerate growth. Inside information: QPR Software Plc is exploring possibilities to implement a share issue in the first quarter of 2025; The company has received irrevocable commitments to subscribe for shares worth at least 1.4 million euros - Inderes
It’s good that the funds are being raised in advance like this, so no major problems should arise. First Fellow Oy was not yet found on the ownership list, but Risto Siilasmaa, who is among the old owners, seems to be involved there.
“First Fellow is a pretty strange investor when compared to most VCs. We only invest our own money; therefore, our only external stakeholders are the founders. We put 100% of our attention on them and don’t care about LPs as we do not have them. We are also not very exit driven, we would actually rather remain shareholders in a great company for 15 years or more — as we have in a few.” First Fellow Partners
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Here are Ate’s and Roni’s comments regarding this latest announcement.
In this regard, it’s also worth noting that I removed the previous sentence from the comment regarding the potential subscription price with the maximum number of shares mentioned in the release (4.5 million pcs). In discussions with the company, it became clear that the goal is not to use the entire authorization. Thus, calculating the subscription price using the formula (gross proceeds to be raised / 4.5 million shares) leads to an incorrect result.
A new partner has been found, with offices in Germany and the United States (San Diego). Fairmar and QPR Software: A Strategic Partnership to Drive Digital Excellence.
QPR Summit has produced at least one new partnership:
“Fairmar’s participation in QPR Summit 2025 in January 2025 has already highlighted the power of this partnership, offering valuable insights into industry trends and future innovations. Regular strategy meetings ensure continuous refinement of joint initiatives to maximize client value.”
QPR Software Plc launches an accelerated book-building process for a directed share issue QPR Software Oyj käynnistää nopeutetun tarjousmenettelyn suunnatun osakeannin toteuttamiseksi | Kauppalehti
Additionally, a press release was published today, which is not visible among the other releases. A couple of new partners have been acquired in addition to Fairmar. The interest in partnerships seems good.
PRESS RELEASE March 4, 2025 AT 16:15
“QPR Software strengthens its international growth with new partnerships in Germany and the United States. The company has started cooperation with Fairmar, which operates in both Germany and the United States. In addition, QPR strengthens its presence in the United States with new partners, DataCon and Praval Tech.”
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A new strategic partner has apparently been found from the Middle East, based on LinkedIn.
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Ukraine’s partner has released one customer. Towards the end of last year, the goal in that area was to replace Russian software with alternatives.
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The board’s expertise in leveraging artificial intelligence has been sought to be improved slightly. Product development will probably also focus more and more on utilizing artificial intelligence in the near future.
“The Nomination Committee has decided to amend its proposal regarding the selection of board members to better reflect the increased adoption of artificial intelligence in the Company’s products and operations, as well as related investments. Consequently, the Nomination Committee proposes that Maija Hovila, who has profound experience in leveraging artificial intelligence, be elected as a new board member instead of the current board member Linda von Schantz.” Amendment to the proposals of QPR Software Plc’s Shareholders’ Nomination Board for the 2025 Annual General Meeting - Inderes
Regarding LinkedIn followers, growth has been slower than at the end of the year. In February, the number of followers grew by 2.6% and in March by 2.1%. Comparative figures are not quite available yet, but on an annual basis, growth looks strong. Compared to the end of May, followers have increased by 31%, which hopefully will also start to be reflected in revenue development.
Reinforcements have been sought for the staff through recruitments of at least a controller and sales managers for Europe and the USA. These seem like investments in the right direction, especially when growth is intended.
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Atte and Roni have been getting a head start on the company report.
We have added QPR’s directed share issue to our forecasts. With the improved balance sheet position, the company has a stronger capacity to increase growth investments. US tariffs and a potential escalation of the trade war bring some uncertainty to the development of the demand environment, but we have not made changes to our forecasts at this stage. The review of growth prospects will again be central in the company’s Q1 report, to be published on April 24th at 9:00 AM. In our opinion, the stock’s valuation (2025e EV/S 2.6x) still prices in significantly stronger profitable growth than our forecasts. Due to the decreased risk profile through the improved balance sheet position, and the capital raised at a good valuation, we raise our target price to 0.75 euros (previously 0.70 euros) and reiterate our sell recommendation.
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Surprisingly weak quarter in terms of revenue. The termination of some client relationships was known, but the magnitude was not specified in more detail. On the Snowflake marketplace, things have at least slowly started to progress, and ProcessAnalyzer saw double-digit growth. Together with Q4, revenue was at least more tolerable. Something still feels like it’s falling short, as the high level of Received Advances doesn’t seem to materialize into revenue. Could there be some more detailed comments about this in the company’s interview?
However, the cost side seemed to remain relatively well under control, and EBITDA was, as promised, in positive territory. Personnel costs are quite high per person, and this seems to be the new normal level. Depreciation was 137 thousand higher than capitalized investments, so in practice, profitability is slightly better than reported.
The 12-month rolling operating cash flow is slightly over one million, and investing cash flow is approximately one-third of that. The market capitalization is approximately 19 million, and net debt is about -1 million, so the valuation level is quite tolerable relative to the operating cash flow. With the help of positive cash flow, it’s certainly good to move forward, and the implemented share issue also reduces the business-related risk.
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CEO Heikki Veijola was in an interview with Atte Riikkola.
Topics:
00:00 Introduction
00:12 Key highlights of the early year
02:28 Factors behind SaaS growth
03:57 Growth investments
05:50 Situation in North America
07:53 Europe and the Middle East
09:26 Key focus areas
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Atte and Roni have penned a new report on QPR after Q1.
QPR’s year started softly, and SaaS growth expectations are now increasingly focused on the second half of the year. The company aims for significant growth acceleration in the coming years, and the capital raised through the directed share issue now provides good prerequisites for this. This year, it is crucial for the company to succeed in its growth investments so that SaaS growth can be put back on track. Economic uncertainty and the decline in revenue from older products bring their own challenges to this task. QPR’s share valuation (2025e EV/S 2.7x) still prices in significantly stronger growth than our expectations, which is why, in our opinion, the risk-reward ratio is not currently in line.
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