In continuation of Q3 2020, cBrain was able to note a very positive development and higher growth than previously expected, especially in relation to the sale of software subscriptions. Against this background, cBrain raised its expectations for the financial year 2020 back in October to a revenue growth of 18-20% and earnings before tax (EBT) of 10-12%.
The positive development is maintained in Q4, which is why cBrain is now raising its expectations for the financial year 2020 to a revenue growth of at least 21% and earnings before tax (EBT) of at least 13%.
It is noted that the upward adjustment is based on realized figures up to the month of November as well as known orders. A strong year-end can further strengthen the result, which is why cBrain has only stated a lower expectation for revenue growth and earnings.
cBrain's business and growth plan is based on the sale of the standard product F2, which is designed and built to support digitalization in the public sector. Originally, F2 was sold in the form of software licenses, but for a number of years, as part of the growth plan, cBrain has restructured its business with the purpose of selling F2 as a subscription in the form of a so-called Software-as-a-Service (SaaS).
As a result, the majority of cBrain's software revenue today is based on the sale of software subscriptions. In connection with the accounts for the first half of 2020, cBrain was thus able to state that the total turnover of subscriptions, including cloud services, maintenance of software licenses and support, now accounted for 48% of the total turnover in the semi-annual interim report.
It is therefore with great satisfaction that cBrain can now note that the significant growth in sales of software subscriptions has been maintained and is expected to increase further in the second half of the year. cBrain thus expects the total growth in the sale of subscriptions in the financial year 2020 to be over 30%.
The increased sale of subscriptions only affects costs to a very limited extent, and the higher expectation for growth in sales of subscriptions is therefore directly reflected in higher expectations for earnings.
At the beginning of the year, cBrain announced an expectation of revenue growth of 12-15% and earnings before tax (EBT) of 7-10%. cBrain can therefore look forward to a very positive year, where especially the very positive development in subscription sales means that cBrain during the year has managed to raise its expectations for revenue growth from 12-15% to at least 21% and its expectations for earnings (EBT) from 7-10% to at least 13%.