CEO comments

I am very pleased with our performance and the overall outcome of our efforts this year. We set ambitious targets to scale our business and increase profitability - and took decisive steps in the right direction. Net sales grew by an impressive 27%, while monthly recurring revenue (MRR) grew by 33%. The big increase in net sales came in the last quarter of 2024, showing an impressive 86% increase in net sales compared to the last quarter of 2023.

Our efforts in sales have borne fruit - both by attracting new customers and by securing another significant enterprise customer, marking an important milestone in our growth journey. As mentioned earlier, we have signed a major three-year contract with a Swiss pharmaceutical company, worth SEK 44 million. The deal generates an initial USD 56,000 in monthly revenue, in addition to USD 59,000 in recurring consulting fees. This single deal has had a significant impact on our MRR growth of 33% year-on-year. The onboarding has been successfully completed, and we have met the high standards set by this prestigious client. A particularly important test was to ensure a stable infrastructure for their annual report - a challenge we met with flying colours, which was also acknowledged by the client's stakeholders.

In addition, we have signed several new agreements with companies where we see great potential for continued growth. Although their initial investments are smaller, they offer strong opportunities in the long term. Helping these customers to fully realise the value of our platform is a strategic focus area, as their success directly contributes to our own. We have also further strengthened our position through new agreements with the Swiss Army and recently renewed agreements with a number of customers.

Our partner strategy continues to develop in the right direction. As mentioned earlier, we have recruited a new partner manager, carefully selected from an agency with solid experience of our platform. During the beginning of 2025, we have received some new business and not least leads via our partners, which further improves our position. At the same time, our partnership with AWS has deepened further - our participation in their accelerator programme has strengthened our position in their ecosystem. This partnership has already had a positive impact on our results, both through direct and indirect sales, and is also an important stabilising factor.

On the financial side, we have made significant improvements through restructuring and cost optimisation, including by shifting some of our expenditure to more cost-effective regions. The results of these measures are now becoming clear. Combined with improved sales figures, especially in the last quarter of 2024, this has led to a sharp reduction in our losses, and we are now moving steadily towards profitability. We have little left to do and are fully focused on getting all the way to our goal of becoming cash flow positive. Our efficiency efforts are clearly reflected in other cost items. Currency movements - in particular a sharp weakening of the CHF against the USD - have impacted the reported MRR in USD, but do not significantly affect our journey towards a positive cash flow.

As communicated in our quarterly report for Q1 2025, Divio is close to achieving a neutral cash flow EBITDA. However, operating cash flow remains relatively weak in 2025 At the time of publishing this annual report, there is uncertainty as to whether there is sufficient cash to fund operations for the next 12 months. The main reason for this is the two-year prepayment received at the end of 2023, relating to the 2024-2025 service period under the company's largest contract. This discrepancy between revenue and cash flow will cease at the end of 2025, when the next advance payment is received for the remaining 12-month period.

Divio is confident that this short-term cash flow challenge will be addressed through a combination of additional upfront payments within existing contracts, cash contributions from new customers and, if needed, structured investments from selected investors - without negatively impacting the company's shareholder value.

With the strong momentum we have built in 2024, our focus is now on accelerating growth further and reaching our main goal: to become cash flow positive and profitable. This goal is now within reach - and will lay the foundation for an even more stable and sustainable future for the company.

Jon Levin, CEO

https://www.divio.com/company/investors/