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Third party research

Formpipe: Ready for margin expansion - ABG

Formpipe Software

This is a third party research report and does not necessarily reflect our views or values

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Q3 slightly slower than expected, partly due to discontinued product
We cut '24e-'26e adj. EBIT by 3-1% due to lower sales
Poised for margin expansion, 16x '25e EV/EBIT


Note the SEK 1m ACV churn from non-core product

The trend of solid growth in Private (+15% y-o-y) alongside subdued sales activity in Public (-1% y-o-y) continued in Q3. The latter continued to face headwinds from lower deliveries to the important Landbrugsstyrelsen, although we expect this to gradually improve as the new agreement ramps up. In addition, Formpipe is taking measures to further strengthen profitability, including restructuring some personnel and realising synergies between its three different case document management products following the merger of the Swedish and Danish organisations in early 2024. We think it will take time for the full product synergies to be realised, but we are positive on the action. Meanwhile, Private (43% of sales) delivered a solid ACV of SEK 6m, albeit below our forecast of SEK 8.5m, which was partly due to Formpipe's decision to discontinue its non-core life sciences product, reducing ACV by SEK 1.2m. Overall, both sales and adjusted EBIT were 3% below our forecast.
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