In this Research Note, we examine the Swedish digital workplace vendor, Flowscape Technology AB, based on their year-end report for the period January – December 2022, issued on 21st February 2023, investor presentations and events throughout the year.

Founded in 2011, Flowscape is a public company, listed on the Nasdaq First North Growth Market with headquarters in Stockholm and offices in Sofia, San Francisco and London. The firm is a small SaaS provider of digital workplace solutions for the hybrid office, with revenues under $10 million.  

Their main product, Flowmap, gives companies an overview of the office and enables them to quickly find rooms, desks, office equipment and colleagues as well as the capability to analyse the use of spaces. Flowscape also has a communication tool for efficient geo-fence-specific communication to people in a building or people within an area in the event of a crisis.

Flowscape 2022 Annual Results

Amounts are stated in thousands of kroner. Figures in brackets refer to the corresponding period of the previous year.

• Turnover amounted to SEK 41.067M (32.962).
• Operating profit before depreciation amounted to SEK -2.364M (1.356).
• Profit after financial items amounted to SEK -25.57M (-22.386).
• Incoming orders amounted to SEK 26.247M (26.727), of which SEK 8.044M (9,432) is annually recurring revenue.

Despite a somewhat wait-and-see market, mainly during the second half of the year, our annual revenue (ARR) continues to rise by +33%, over the full year 2022, to SEK 25 million.

Peter Reigo, Flowscape CEO commented

Turnover increased to SEK 41.1 million, an increase of 25% compared to the previous year. During the fourth quarter, turnover was SEK 8.2 million, which was lower than expected, mainly due to temporary hardware delivery problems which meant that the company could not complete and invoice projects.

The fourth quarter was burdened with several one-off costs, which together with the reduced turnover meant that EBITDA during the fourth quarter amounted to -4.0 MSEK, which also resulted in a negative EBITDA of -2.4 MSEK for the full year.

Primarily, the increased costs during the quarter are due to an inventory write-down of hardware and an exchange of hardware in connection with a three-year extension of a customer agreement, totalling a value of SEK 0.8 million. There were also one-off costs in connection with their move to Nasdaq. The company reported 37 employees and full-time consultants in 2022.

Flowscape Significant Events

Flowscape Technology AB received final approval for listing on Nasdaq First North Growth Market in the fourth quarter. The list change from the Spotlight Stock Market is a natural step in Flowscape's development to expand in the US market.

An Australian customer in Adelaide, decided to expand their existing installation. The solution is used to manage their hybrid way of working and to analyze the space utilization of offices. The order value in the first year is 72,000 AUD (500,000 SEK) and thereafter 18,200 AUD (130,000 SEK) recurring annually.

A large global customer expanded Flowscape's solution with additional offices and more users to meet the hybrid way of working. The order value in the first year is SEK 1,220,000 (111,000 Euro) and thereafter SEK 77,400 (7,002 Euro) annually recurring.

After the end of the financial year, Flowscape received a breakthrough order from one of America's leading hospitals and research institutes in cancer treatment. The organization chose Flowscape to analyze their workplace and office utilization. For Flowscape, this is an important breakthrough in the US healthcare sector. The order value in the first year is USD 42,600 (SEK 440,000) and thereafter USD 15,800 (SEK 160,000) annually recurring.

2023 Outlook

The company sees a good influx of leads, higher activity and positivism above all in North America, but the decision-making processes are still longer than they would like. This is likely a result of increased anxiety in many markets and recession in several countries. In the Nordic region, the company is seeing a significant increase in activity after the turn of the year and they are now investing in expanding their sales force with another person.

The global office market is undergoing major changes, which means that customers once again want to talk about solutions to support the hybrid way of working and tools to optimize office spaces.