Two weeks ago Zenterio’s Annual Report 2017 was released (read it here) which not only presented interesting industry outlooks but also showed great financial results compared to previous year. To get a better understanding about what the Annual Report presented and what the focus for 2018 will be we had a quick Q&A with our CFO, Steven Moodie.
The annual report has recently been published. What has Zenterio done to perform so much better in 2017?
Yes, 2017 was Zenterio´s best ever financial result where we, for the first time ever, achieved the important financial milestone of being EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) positive. In fact 2017 Full Year was SEK +19,6 million EBITDA versus a loss of SEK -10,3 million in Full Year 2016 and 3 of the 4 2017 Quarters were also EBITDA positive. In terms of how we achieved this there were several factors. Earlier in the year we successfully launched with Deutsche Telekom Germany new exciting TV propositions and we were more selective in our choice of new business to avoid risky strategic projects. Finally, we expanded our relationship with our Serbian partner for increased flexibility and scalability, however we still have much more to do.
Zenterio acquired AdScribe Inc in 2016. In what way is AdScribe an important component of Zenterio’s future strategy?
AdScribe is very important to our future strategy and we have high expectations for them in 2018, after now finalised their offerings. AdScribe’s analytical and advertising solutions are now merged with Zenterio’s to form a joint product roadmap. We are also scaling up our operational delivery capacity. Zenterio has a high proportion of its sales as one-off deliverables, and one way of improving this is to have multi-year, recurring revenue contracts like we have in Maintenance and Support. We also expect that AdScribe sales will get access to customers CMO`s who has a much shorter sales cycle than our current traditional offerings.
Zenterio has a strong board with many years of experience and expertise. What will Zenterio’s board and management focus on in 2018?
Yes we are very fortunate to have a strong and supportive board. The board meets on a monthly basis, plus certain members are also involved in specific projects and one even recently attended an important customer meeting to show the boards commitment. For 2018 we need to increase our customer base, including at least one new Tier 1 customer and there is a particular focus on North America. From a financial perspective whilst being EBITDA positive in 2017 was a great milestone, it still does not mean that we are cash positive and also for 2017 the top line revenues decreased by -1,4% compared to the previous year. So this is a major focus and target for 2018 and I am pleased to report that Q1 2018 revenues compared to Q1 2017 showed a 15% growth. There is still much work to do but this is a encouraging start to the year.