Scout experienced a slight decline in revenue in Q3, but its bottom line was improved due to a reduction in spending. This cost-cutting initiative followed the completion of a transformation program in August, which resulted in some staff reductions. Scout believes that these efforts will lead to a leaner and more efficient business, particularly in delivering services to B2B partners. The former CEO, Andreas Ternström, initiated the cost review, and although he left the company in June 2022, the cost-cutting measures continued and concluded in August this year. The current CEO, Niklas Jönsson, anticipates that the full effects of these initiatives will not become evident until Q1 2024, but he remains confident that they will support Scout’s long-term goal of achieving profitability.
In terms of financial performance, the group’s Q3 revenue decreased by 4.6% to SEK6.3m (£479,525/€548,232/$595,678). However, B2B revenue grew by 15.9% to SEK5.4m, attributed to a heightened focus on this vertical. On the other hand, B2C revenue declined by 47.4% to SEK1.0m, primarily due to a continued decrease in non-profitable marketing campaigns. Despite this decline, Scout management believes that the B2C operation has the potential for profitable growth under controlled measures, which they aim to realize in the remainder of the year.
The cost-cutting plan also had a positive impact on Scout’s net loss in Q3. Operating expenses were 27.8% lower at SEK12.2m, mainly driven by reduced staff expenses resulting from the headcount reduction. The pre-tax loss reached SEK5.8m after accounting for SEK104,000 in finance-related costs. Compared to the previous year, this represented an improvement from SEK14.3m. As a result of not paying any income tax in Q3, the net loss stood at SEK5.8m.
Looking at the year-to-date figures, Scout’s revenue for the nine months to 30 September increased by 26.7% to SEK22.3m. B2B revenue more than doubled to SEK18.0m, while B2C revenue fell by 48.4% to SEK4.4m. Operating costs were 23.6% lower at SEK75.0m, primarily due to reduced staff expenses. The pre-tax loss amounted to SEK60.2m, an improvement compared to the SEK64.4m loss in the same period last year. The net loss reached SEK60.2m, and the adjusted EBITDA loss was reduced to SEK21.8m.
Scout embarked on its cost-saving journey more than 18 months ago, following concerns over slow growth and rising expenses. Former CEO Andreas Ternström initiated a cost review and was later replaced by Niklas Jönsson. The company subsequently announced plans to reduce its workforce and implemented other strategic initiatives, including a share issue. By the end of Q2 2023, Scout had finalized the restructuring of its B2B operations and had 10 integrated and active B2B partners. Overall, despite challenges, Scout remains positive about its future profitability and expresses gratitude to its partners, shareholders, and employees for their support and belief.
