2021 was a good year for Flowscape with a positive cash flow, successful establishment in Great Britain and the USA as well as sharply increasing recurring license revenues. This despite of the pending market in the wake of the pandemic, but now the companies plan to open offices again.
The pandemic has driven the biggest office change in a century. After hundreds of millions office workers working from home for almost two years, they have seen the benefits of saved travel time and undisturbed worktime. Business executives have also seen the benefits and in Gartner's survey among HR managers around the world, 99 percent say that they believe employees will continue to work two to three days a week from home. The reason for coming to the office will mainly be for cooperation, while individual work is performed as well or better from home. The hybrid approach is here to stay.
The Hybrid Office, A Revolution That Requires Space Management Tools
To make the hybrid way of working efficient, new innovative IT solutions are required. In this area, Flowscape is considered a world leader - and analysis companies such as Memoori and Verdantix believe in strong growth in our market in the next few years. This is logical, because change is now happening all over the world at the same time, and we have prepared ourselves to meet increased demand.
Flowscape predicts strong market growth in 2022 and beyond
We often hear in procurements in both the USA and Europe that Flowscape has the strongest market offer for the new hybrid approach. When only half the staff is in the office and it the other half work from home, it no longer makes sense for each employee to have their own workplace, but they will have to share. The offices must be adapted to new needs – while simultaneously evaluate the opportunities to reduce office space and make big savings. We can help our customers the whole way, from the analysis of how employees use the existing office to get it hybrid office to work efficiently.
How the pandemic made smart office solutions mainstream
Our strategy during the year has been to increase our software sales, which give us annual recurring revenue, and reduce the share of hardware and one-time revenue. This will generate a higher and long-term stable growth. So far, we have succeeded well as our recurring revenue increased by 49 percent during the year and at the turn of the year, they amounted to SEK 18.8 million per year (ARR). We are very happy with this outcome and will continue to work in the same direction.
However, the decrease in one-time sales of hardware meant that total net sales did not increase more than 3 percent, for the full year, to SEK 32.6 million. For the fourth quarter, net sales increased by 6 percent, compared with the same quarter last year. Thanks to a high margin from the increasing sales of software, and that we were able to keep operating costs down, cash flow ended of plus SEK 2.2 million, for the full year.
The fourth quarter showed very good order intake; a total of a doubling compared to the previous quarter with "All time high" in December. That month, we signed new agreements corresponding to SEK 6.6 million in the first year and thereafter SEK 2.4 million in annually recurring income. This bodes well and gives us a lot of anticipation for when the world reopens.
Our international venture in the UK and US has been very successful. The number installations
increased in both these markets from 5 to more than 50 and the recurring license revenues tripled during the year. Now we are switching up even more with a new office in Germany and in Norway and another in the US and a doubled sales force.
Read the end-of year report for 2021 here.
CEO, Flowscape Solutions
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