This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0.
Event: 3Q22 preliminary results revealed – 31% yoy growth of revenues – below expectations.
After yesterday’s market close, DataWalk released preliminary financials for 1-3Q22 with the revenues at PLN 25.8 million (up 29% yoy) which implies 3Q22 revenues at PLN 7.7 million (up 31% yoy) while an implied 3Q22 operating loss adjusted for the incentive program costs reached PLN -7.3 million. The incentive program valuation had a positive impact on the reported result. Operating costs grew in 3Q22 (up 65% yoy and 8% qoq) to PLN 15.0 million.
The CEO Paweł Wieczyński commented on the results:
- DataWalk expected a revenue dynamic growth in 3Q22, but this expectations did not materialize;
- In 3Q22 the Company witnessed a slowdown in making purchase decisions by some clients in spite of the fact that the implementation of solutions offered by DataWalk is deemed indispensable. The Company does not lose contracts, albeit they are delayed and in some cases split into parts with a lower first order;
- The CEO believes that even if uncertain economic circumstances prevail, DataWalk will come out of it with the stronger organization enabling the Company to accelerate its growth.
Our comment: 2Q22 poor dynamics were justified by insufficient training and performance of field engineering teams handling the pre-sale (software trial version installation) and post-sale services (software implementations); this time, in 3Q22 the situation was aggravated by the problems of the wide market such as clients’ delaying decisions stemming from a harsher economic reality.
The full 1-3Q22 report will be published on November 22, 2022.
Expected impact: Slightly negative; as the revenue growth dynamic disappointed. Nevertheless, it looks like this has been partially discounted by the market.
Analyst: Tomasz Rodak, CFA +48 797 487 381
GPW’s Analytical Coverage Support Programme 3.0
