Published 2024-11-07 06:30
Checkin.com Group (STO:CHECK) reports a challenging quarter, but positive long-term outlook remains.
The report in brief:
Q3 2024 (vs Q3 2023):
CEO Letter from Quarterly Report
In the Market Update we shared three weeks ago, it was communicated that revenues during the third quarter continued to be below our previous expectations. Therefore, we could also conclude that 2024 will be a lost year in terms of our growth. Part of the Market Update also addressed the uncertainty regarding roll-out and continued use by the large Swedish fintech company. We are still working to develop our collaboration, and despite the uncertainty surrounding the continued use, it is important to emphasize that the agreement remains intact.
As part of our long-term strategy, we have chosen to focus on attracting enterprise level customers, particularly within the Travel vertical. This means that a large part of our resources in marketing and product development has been directed towards the travel industry over the last year. In the short term, these investments have not paid off. Travel, and especially airlines, have a significantly longer lead time than our other verticals, both in terms of the general sales process and regarding procurements, due diligence, and compliance processes. Despite this, we are seeing strong interest in both our products and our company. A handful of discussions/procurements are ongoing with global airlines, some of which have progressed further than others, and some are even close to completion. Furthermore, as previously communicated, the collaboration with Europe's largest airline continues with the goal of expanding the use of the software to additional markets.
Our previous acquisition of the technology company Datacorp OÜ, completed at the beginning of 2022, which brought cutting-edge technology in AI for image analysis, facial recognition, and machine learning, is fully integrated as part of Checkin.com's offering today. With the acquisition, a contract with the customer RingCentral was also included, which during the first half of 2024 generated revenues of approximately MSEK 1.1 per month. This customer simultaneously incurred personnel costs at levels corresponding to the revenues, which meant that the agreement was not particularly profitable and had no potential for further development. We have therefore, together with RingCentral, decided to terminate the collaboration between the companies. The termination has had a negative impact on net revenues in the quarter, but operating costs have also decreased by an equivalent amount, and the number of employees in the group has decreased from 63 in Q2 to 51 now at the end of Q3.
The iGaming segment has also developed weakly for us during 2024, partly connected to the fact that one of our previously largest markets, Germany, has made it difficult for operators to operate there, which in turn leads to decreased revenues for us as a company. However, we see that the demand for our software is starting to return, among other things through the collaboration with Stake.com, who has already chosen to add additional modules. But perhaps the biggest opportunity is the upcoming regulation of the iGaming market in Brazil, which is expected to become the world's largest regulated iGaming market from January 1, 2025. The regulation is generally very strict on how end-users are verified, and Checkin.com's technology fits well with these regulatory requirements. We are engaged in many discussions with companies concerning Brazil, and we have, among other things, signed an agreement with Superbet, which is expected to become one of the leading operators.
Our partnership with the Salesforce challenger Creatio has also taken a positive step forward. Our product is now verified on Creatio's marketplace and can therefore be offered to their customer base of over 7,000 companies. We see this as a great opportunity to reach new industries and regions, which further strengthens our market offering.
Overall, we have high ambitions for Checkin.com. Although we see a challenging fourth quarter and that the financial ambition for 2024 will not be met, our long-term goal remains for the full year 2025 and beyond. We are aware that the outcome so far this year has not met our own or the shareholders' expectations, but we also see great opportunities ahead with many promising discussions within all our customer verticals. We are working purposefully to regain our position as a growth company and look forward with confidence to a very exciting 2025.
Christian Karlsson
CEO, Checkin.com Group
The full quarterly report is now published and available on: https://group.checkin.com/investors/reports/
Webcast (Swedish)
Investors, analysts and journalists are invited to a webcast 2024-11-07 08:30 CET where the company’s CEO and CFO will present the report, followed by a Q&A session. The presentation is available through this link: https://www.finwire.tv/webcast/checkin-com/q3-2024/
An English version of the webcast will be published on the company’s website later today.
For further information, please contact:
Jonas Köpniwsky, Head of Communications Checkin.com Group, [email protected]
This information is information that Checkin.com Group is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at the time stated by Checkin.com Group's news distributor Cision at the publication of this press release.
Certified Adviser
Checkin.com Group’s Certified Adviser is Carnegie Investment Bank AB (publ).
About Checkin.com Group
Checkin.com Group creates shareholder value through capital efficient growth achieved by strong organic growth and strategic acquisitions. The Group’s advanced technologies and innovations offers a unique end to end solution that reshapes how end users checkin with products and brands online. The comprehensive framework gathers multiple hyper specialized technologies that covers every aspect of an end user’s checkin experience.
The company has its headquarters in Stockholm, Sweden, but operates and recruits globally to attract world-leading talent across the globe.
Checkin.com Group’s share is since 2021 listed on Nasdaq First North Growth Market under the trading symbol "CHECK”.
For more information about the company visit: https://group.checkin.com/investors/