Canopy Holdings AS

OSE:CAN

Good afternoon, everyone, and thank you very much for joining us for our Q2 earnings presentation. My name is Christian. I've been with Spotlio for about 1.5 years now. I'll be taking you through the business update and the key highlights. And I'm welcomed today by Ida Bolsønes, our interim CFO, who will be filling in for James Price as he's currently on paternity leave. Ida will take you through the results of the quarter as well as our KPIs, and then we'll take time during a live Q&A session to answer your questions at the end of the presentation.

So this is our mission, elevating fun to enhance experiences. This is why me and 65 staff show up every day to empower attractions, water parks, ski areas and other ticketing businesses to maximize revenue and provide great guest experiences by improving the digital journey. And our global team of 65 people work across multiple continents, supporting over 220 clients in 14 countries. Spotlio connects millions across our platform, generating over 3 million guest experiences annually. And our mobile apps boost an impressive average rating of 4.71. This is up from 4.6 only 3 months ago, and this is over 10,000 of reviews, and we facilitated more than $1.5 billion of online sales transactions in resorts and the attractions sector.

Our NPS score of 67 demonstrates that we are a trusted partner of our globally recognized brands, including the likes of Aspen Snowmass and Arosa Lenzerheide to Vail Resorts and Val Cenis. Now with this great foundation, let's look at what we've been doing.

Since we last came to you in September, we announced the coming together of 3 businesses in creating Spotlio. At the same time, we recruited a new Chief Revenue Officer, first 1 of the business, and that was Ben Faden. Very happy to say he's been successfully onboarded. Since Ben has come on board, we've also recruited our first head of partnerships. And we'll be talking about some of the partnerships that we've developed over the last few months. So this has been a very impactful role. And also bringing together these businesses, we now have 1 fully integrated commercial team and tech stack in terms of support and CRM. So it helps us have that focus on the business.

And speaking of focus, we are laser-focused on the opportunity ahead, and we see dynamic pricing, pricing as a service as our main opportunity, I'll delve into that in a few minutes in a little bit more detail. But innovation at our core. Over the last 6 months, we've been beginning to integrate our tech teams from various continents, all within Spain. And this has allowed us to streamline the operations, but also look for ways to develop products more quickly. And so since we've last booked, we've launched a few new products. And again, I'll talk through that and some customer names in a little bit in a few minutes. And last but not least is operational excellence. Since I've started, we've had ongoing improvements to bolster our path to profitability, looking for cost savings, but also looking at how to just optimize and do things more efficiently and better to ultimately provide greater impact for our clients.

Now let's shift focus around our dynamic range of products. Spotlio is guided by a well-defined product road map aimed at bolstering revenues, enriching customer experiences. Our portfolio comprises of 3 main offerings: Pricing Services, the Parks and Attraction suite and the Mountain Resort suite. Starting with the Pricing Services. As I mentioned, we see this as our largest growth pillar over the coming years. This is primarily driven from demand that we see in the market from direct customers, but primarily through partnerships. So we are expanding our reach of our robust pricing engine to support every e-commerce solution in the market that caters towards this segment.

And we're also anticipating an influx of demand pricing partners to our platform, so we're gearing up to meet those needs effectively. And with over 35,000 businesses in North America alone, we recognize this sector has a very diverse set of verticals within the segment. So we're customizing our engine to cater towards each micro segment with precision. Last and most importantly, we're enhancing our infrastructure to ensure it scales seamlessly and grows with the demand.

Next up, our Parks and Attractions suite. We've recently launched our inaugural mobile app platform dedicated to this segment, along with our first website, tailored specifically to meet the needs of the consumers. Additionally, we've introduced a new content management system designed to efficiently support both mobile and websites, so the true omnichannel approach. We're also excited about the latest upgrade of our e-commerce platform which now accommodates a wider range of product categories and payment options, all within our highly effective conversion flow. And the potential for third-party integrations who may offer other solutions from food and beverage to hotels. So a typical water park, 50% of the revenue might come from ticket sales and the other 50% comes from food and beverage and potentially even more coming from hotels. So we look to really capitalize on that and offer a solution for a wider network of third-party providers.

Our third proposition is our Mountain Resort suite that we've been offering since we started as a business. We are focused on enhancing the performance of our websites and streamlining our technology by consolidating it into a single app platform. And I'm pleased to say this work has been completed. As we have increased our packaging capabilities, the average order is going from EUR 100 to thousands of euros. So we're going to be including new payment options to accommodate consumer buying preferences. So consumer buying behaviors have changed rapidly and with a higher ticket price, we're including convenient Buy Now Pay Later solutions like Klarna, which is offered globally, and a firm in North America primarily.

So additionally to that, we're automating the process of season pass renewals. This strategy not only bolsters consumer loyalty and retention, but also boosts cash flow for resorts, during times our cash flow is typically not coming in. And this aids them in leveraging their brand more effectively.

So moving on to the sales update. As we are beginning the ski season, our focus has been on primarily providing a great client experience as the ski season kicks off. So we know we're poised for growth. I've talked about some of the growth rates in the ski sector. And during this time, we're thinking about summer '24, so in particular, with the Parks and Attractions segment. So we're very much looking to 2024 because we built a robust pipeline to ensure a great outcome. We're excited about the new partnerships and customer engagements that we've secured in this area. We're now leveraging the opportunity to cross-sell our new products to the existing client base, given our expanded range of offerings. Notably Morey's Piers has engaged us for a new e-commerce solution, so now we have a full omnichannel integrated ticketing solution, both web and app, for Parks and Attractions, marketing our expansion in the space for Spotlio, not just in North America, but Europe as well.

And next, we're experiencing swift expansion through partnerships that utilize our existing sales teams and our client networks to drive new logo acquisition. A recent highlight is our newly signed partnership with RocketRez, a cutting-edge, web-based point-of-sale solution tailored towards Parks and Attractions segment. Through this collaboration, we'll be providing our dynamic pricing to their customers as well as leveraging their solutions for Spotlio clients alike.

Now I'd like to move on to the Q2 results. So I'd like to hand over to Ida. Ida?

Thank you, Christian. I will now take you through the main highlights of our Q2 results. This is the period from August 1 to October 31.

Starting with the revenues. For Q2, we are down 19% year-on-year, which corresponds to an amount of USD 280,000 A part of this is timing of subscription invoices. So if you look at total revenues for Q1 and Q2 together, comparative revenues for that period are down 8%. This decrease comes from -- partly from churn, both forced and unexpected, as well as fewer ticket sale days in the Parks and Attractions segment compared to prior year. And looking only at same-store sales, revenues are up for both SaaS business and the transactional part of our business. That's 12% and 5%, respectively.

Q2 is historically our softest quarter in terms of revenue as the ski season hasn't started yet and many of the summer parks, such as water parks, are starting to close down. However, with the increased focus on partnership that Christian just mentioned, this will make it possible to secure more year-round revenues in the future.

So looking forward now into Q3, this is historically 1 of the quarters where we generate most of our revenues, and we can expect at least the double of revenues as seen in Q2. On the cost base side, total personnel and other operating expenses are down 14% year-on-year, and this despite some severance expenses of $0.1 million. We remain focused on our cost rationalization initiative that we started during last financial year. And the current run rate of personnel and other operating expenses are 23% lower year-on-year when excluding severance costs and other one-offs.

Our gross profit margin is 66%, and this is similar to what we saw last quarter. And lastly, on the P&L side, EBITDA is negative $1.5 million for Q2, and this represents improvement of 8% from prior year. Looking at our cash position at the end of Q2, this is at $0.8 million. And as we now move into Q3, our business will be highly cash generative. Accounts receivable at the end of Q2 is $1.6 million. And this, together with cash from our transactional segment is expected to come in now during Q3.

Moving on to some of our key financial metrics. Total ARR, which is annual recurring revenue, at the end of Q2 is USD 7.4 million. This is around 75% coming from the transactional segment and 25% coming from the SaaS segment. Total logos are currently at 220 and ARR churn for Q2 is 4%. Our focus is on keeping churn as low as possible. And as mentioned previously, churn for the period is both forced and unexpected churn. And we continue to focus on retaining high ARPU clients and cross-selling our products as well as growing through acquisitions of new logos.

Finally, looking at recurring revenue, it remains high as previous quarters. Currently, we're at 98%. This is an important metric for us as it provides us predictability throughout the year.

And with that, I will hand back over to Christian.

Thank you, Ida. As we conclude today's presentation for the second quarter, I'm excited to provide an update on the latest trends. As the winter season is here, our optimism is high, particularly with the Mountain Resort suite offering in North America and Europe. Virtually every ski resort that's a customer of ours today in Europe is open for business. So you can see here on the screen, a good example of Baqueira in Northern Spain. We have outperformed this November versus last season and the European ski business is showing remarkable start, achieving a revenue increase of over 14% year-to-date.

This surge in revenue is particularly significant, considering that our third quarter typically generates more than double the revenue of Q2. So we remain committed to our strategic goals and eagerly anticipate further updates with you in the next year.

I'd now like to take time for some Q&A.

We have a few questions here. Here's 1 for you, Ida. Given your -- given the current cash position, will the business need to have another funding round?

No. Our plan is not to go through another funding round. Our current cash position, which is at $0.8 million now is at low point in the year. And as previously mentioned, we have $1.6 million in accounts receivable, and we also expect to receive cash in from the transactional part of our business in Q3 and Q4 going forward. So the answer is no.

Great. One more question here. Do you expect growth in ski resort revenue in the next quarters, given there were fewer season ticket sales last year?

Well, in the bookings as we track the bookings as well, we see a lot more bookings than last year, and the price per ticket has gone up. So I'd say the appetite is there and with 14% growth year-to-date in the European ski, pretty bullish on the ski resort revenue coming in, in the coming quarters. That is it needs to continue to snow. So we're hopeful.

So there are no more questions at this time. So with that, I'd like to wrap up, and thank you all for your time, and we'll see you again early next year. Take care. Bye-bye.