Research note


Talkpool: First comment Q1’18, outperforming the path set for 2021

This morning, Talkpool published the report covering the first quarter report of 2018. Talkpool’s sales came in lower than our expectation of EUR 6.1m. However, most interesting of the report was the strong gross margin which amounted to 25.5 %. As a result, EBITDA amounted to EUR 0.5m which was fully in line with our expectation.

Talkpool sales of EUR 6.1m came in somewhat lower than we expect of EUR 7.2m. The main explanation of the deviation is LCC and the region of Benelux which delivered slightly lower sales than estimated.

However, in our opinion, the most important thing to derive from the report is the strong margins. Talkpool reported a gross margin of 25.5 %, which is higher than our estimates of 23 %. The main driver of the higher margin is that Talkpool delivered more niche projects and higher IoT-sales than they have done in the past quarters. EBITDA and EBIT came fully in line with our estimates of EUR 0.5m and EUR 0.4m respectively. The strong EBITDA and EBIT is a explained by higher gross margin and lower administration cost.

Also interesting, is that Talkpool now has disclosed the IoT-sales as of total sales, EUR 0.4m (6.2 %). This is slightly above our estimates and we will, therefore, look into our IoT-sales going forward. In addition, Erik Strömstedt (CEO) commented that the interest in their IoT-solutions is increasing and that Talkpool is talking with many companies regarding their IoT-solution. We believe that the primary threshold for increased sales in IoT is the IoT-network coverage, which is the reason why Talkpool founded Noit.

All in all, we find the report as positive since Talkpool showed strong margins. We believe that sales will increase in the coming quarters as a result of seasonality. EBITDA and EBIT came in line with our expectation which makes us more confident that the reports in the coming quarters will be strong. Now, Talkpool has established the robust platform needed to leverage their expertise in areas where margins are higher, hence, IoT and niche TNS. We will take a closer look at the numbers and follow up with a more detailed research update within the few next days. 

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