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IP - Kahoot! Group Reports Third Quarter 2021 Financial Results

Company: Kahoot! ASA Date: 2021-11-04 Language: English Register to download
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# Make learning awesome

**Q3 2021 Presentation November 4 2021**

# Healthy market environment

*As many markets return to more normalcy following the pandemic, we see a healthy market environment, and...*

**… Continued solid viral growth** of the Kahoot! platform, with expanded mix of usage, both virtual, hybrid and physical, across all business areas

**… Further strong usage uptake** on Clever across EdTech apps available on the platform. Clever saw good annual usage growth among the top 100 apps on its platform during the quarter

# **Our mission** is to make learning awesome

![](_page_2_Figure_2.jpeg)

**Our vision** is to build the leading learning platform in the world

# Highlights Q3 2021

![](_page_3_Picture_1.jpeg)

- Achieved strong growth with **\$27.8 million in invoiced revenue** in Q3, up 139% YoY, solid post-pandemic performance across Kahoot! Group
- Scalable effects and all-time high **operational cash flow of \$7.4 million**, up 38% YoY, representing 31% of operating revenue, after five acquisitions LTM
- Accelerated commercialization, **reaching 1M paying seats,** up 180% YoY, positive momentum across all business areas, including larger corporate accounts
- Continued viral adoption with **1.9Bn+ participating players LTM** and reached 30M+ active accounts and strong usage of platform with 300M Kahoot! sessions
- Strategic expansion in the US K-12 market, through completion of **acquisition of Clever,** digital learning platform used by 95K+ schools, 175+ new team members

# New and existing customers are making learning awesome in Q3

![](_page_4_Figure_1.jpeg)

![](_page_5_Picture_0.jpeg)

# Kahoot! platform growth levers

![](_page_5_Picture_2.jpeg)

**Lead with engagement** and distinct software solutions for learning with great user experience

![](_page_5_Picture_4.jpeg)

**Expand commercial offerings** to drive even greater operating leverage

![](_page_5_Picture_6.jpeg)

### **Continuously deliver innovative solutions**

across user segments and geographies

![](_page_5_Picture_9.jpeg)

**Leverage and productify** vast platform and ecosystem of users, partners and content

![](_page_5_Picture_11.jpeg)

**Solid free cash flow to support growth**  through organic initiatives and inorganic investments

**Leveraging Kahoot!'s strong global engagement brand and platform to capture increasing investments in learning across all segments**

![](_page_6_Picture_0.jpeg)

![](_page_6_Figure_1.jpeg)

![](_page_7_Picture_0.jpeg)

### **Viral growth**

Free and paid subscription for individuals, teachers and students with premium offerings for schools and organizations

![](_page_7_Figure_3.jpeg)

### **Community & Brand**

Lifelong learning platform with global footprint in home, schools and corporations

### **User generated content**

> 100 million kahoots created by users and premium content partners easily accessible

### **Innovation**

Easy to use and engaging user experience for all use cases being continuously improved – live and on demand

![](_page_8_Picture_0.jpeg)

# **Q3 Financials**

# Kahoot! Group financials Q3 2021

- **Strong organic growth on the Kahoot! platform** with more than 30m active accounts last twelve months, up 41% YoY
- **Reached more than 1m paid subscriptions** across all services, up 180% YoY, representing an **organic increase from the second quarter of more than 80K**, whereof more than 45K on the Kahoot! platform. Per the end of Q3, Kahoot! At Work reached 435K paid subscriptions, Kahoot! At School reached 335K paid subscriptions and Kahoot! At Home & Study reached 245K paid subscriptions
- **Invoiced revenue** (billings) **reached \$27.8m in the third quarter, up 139% YoY,** including Clever, which contributed \$5.7m for the month of September as part of the Kahoot! Group. Excluding Clever, invoiced revenue in the third quarter grew \$10.5m YoY to \$22.1m, up 90%. **For the first nine months invoiced revenue grew \$39.7m YoY to \$67.5m** (including Clever for September), **up 143%**
- **Total revenue** and other operating income **of \$23.7 million, up 162% YoY**. For the first nine months total revenue and other operating income grew \$40.2 million YoY to \$58.2 million, up 223%

# 41%

YoY Q3 growth LTM in active accounts - Kahoot! platform

# 180%

YoY growth in paid subscriptions per Q3

139%

Q3 YoY growth in invoiced revenue

# Kahoot! Group financials Q3 2021

- **ARR** (Annual Recurring Revenue) **of \$124 million, up 288% YoY**, whereof Clever contributed with \$44 million from its U.S. ecosystem partners
- **Adjusted EBITDA** (excluding share-based compensation expenses and related payroll taxes, acquisition related expenses and listing cost) **of \$6.0 million, representing 25% adjusted EBITDA margin.** For the first nine months adjusted EBITDA grew \$13.3 million YoY to \$13.8 million
- **Cash flow from operations** (excluding payment of listing and acquisition cost, and cash effects related to share-based compensation) **of \$7.4 million, up 38% YoY**, with positive contribution from Clever, and \$17.8 million for the first nine months, up 71% YoY
- **Cash and cash equivalents** as of 30 September 2021, **totaled \$206 million**  whereof \$6 million is cash held for employee withholding tax to be paid in the fourth quarter for exercised employee share options - the Group has no interest-bearing debt
- **Completed the acquisition of Clever** for a total consideration reflecting an Enterprise Value (EV) of \$435-500 million, on a cash and debt free basis, including an up to \$65 million 2021-2022 performance-based element

# 288%

Q3 YoY growth in Annual Recurring Revenue

25% Q3 adjusted EBITDA margin

31% Q3 cash flow margin

from operations of total revenue

![](_page_11_Picture_0.jpeg)

# Kahoot! Group accelerating momentum

![](_page_11_Figure_3.jpeg)

![](_page_11_Figure_5.jpeg)

- Reached more than 1m paid subscriptions across all services by the end of Q3 2021, up 180% YoY, representing an organic increase from Q2 2021 of more than 80K, whereof more than 45K on the Kahoot! platform
- Per the end of Q3 2021, Kahoot! At Work reached 435K paid subscriptions, Kahoot! At School reached 335K paid subscriptions and Kahoot! At Home & Study reached 245K paid subscriptions

*1) Paid subscriptions is defined as total number of users on paid subscription per the end of the period, including new units from the time of acquisition 2) Conversion to paid subscriptions in all segments from customers in more than 150 countries*

![](_page_12_Picture_0.jpeg)

# Kahoot! Platform – continued growth

![](_page_12_Figure_2.jpeg)

Continued organic user growth on the Kahoot! platform (over the past 12 months). More than 30 million active accounts, up 41% YoY. 314 million hosted sessions, up 40% YoY. More than 1.9 billion participants (nonunique) globally, up 44% YoY. and 64% YoY growth on core Kahoot! paid subscriptions.

![](_page_13_Picture_0.jpeg)

# Key financial figures development

|                                      | Q3'21 | Q2'21 | Q1'21   | Q4'20 | Q3'20 | Q2'20 | Q1'20 | Q4'19 |
|--------------------------------------|-------|-------|---------|-------|-------|-------|-------|-------|
| Invoiced revenue                     | 27.8  | 20.6  | 19.1    | 17.5  | 11.6  | 9.6   | 6.5   | 5.3   |
| Invoiced revenue growth YoY          | 16.2  | 11.0  | 12.6    | 12.2  | 8.2   | 7.3   | 4.5   | 3.6   |
| Invoiced revenue growth YoY %        | 139 % | 114 % | 195 %   | 230 % | 241 % | 317 % | 222 % | 219 % |
| Invoiced revenue growth QoQ          | 7.2   | 1.5   | 1.6     | 5.9   | 2.0   | 3.1   | 1.1   | 1.9   |
| Invoiced revenue growth QoQ %        | 35 %  | 8 %   | ਰੇ ਕੇਂਦ | 50 %  | 21 %  | 49 %  | 21 %  | 56 %  |
| ARR                                  | 124   | 75    | ਦਰ      | 60    | 32    | 25    | 18    | 14    |
| Revenue and operating income         | 23.7  | 18.4  | 16.2    | 11.5  | 9.0   | 5.2   | 3.8   | 2.8   |
| Cost of sales                        | 1.3   | 1.7   | 1.3     | 1.4   | 1.4   | 0.7   | 0.4   | 0.3   |
| Employee benefit expenses            | 8.7   | 6.5   | 6.2     | 5.7   | 3.2   | 2.5   | 2.9   | 2.5   |
| Other operating expenses 3           | 7.6   | 6.1   | 5.0     | 4.1   | 2.3   | 2.3   | 1.9   | 1.9   |
| Total operating cost                 | 17.7  | 14.2  | 12.5    | 11.2  | 6.9   | 5.4   | 5.2   | 4.7   |
| Adjusted EBITDA                      | 6.0   | 4.2   | 3.7     | 0.2   | 2.2   | -0.3  | -1.3  | -1.9  |
| Adjusted EBITDA marqin               | 25 %  | 23 %  | 23 %    | 2%    | 24 %  | -5 %  | -35 % | -69 % |
| Net cash flow from operations "      | 7.4   | 5.0   | 5.4     | 7.0   | 5.2   | 3.9   | 1.1   | 1.4   |
| Cash flow from oper. in % of revenue | 31 %  | 27 %  | 34 %    | 61 %  | 58 %  | 76 %  | 28 %  | 52 %  |
| Cash and cash equivalents            | 206   | 440   | 254     | 256   | 73    | 73    | 34    | 41    |
| Employee full time equivalents       | 445   | 244   | 204     | 182   | 127   | 128   | 120   | 110   |

### **Comments:**

- Continued strong quarterly YoY invoiced revenue growth of more than 100% for the past eight consecutive quarters
- Recurring revenue business model growing ARR to \$124m by the end of Q3 2021 whereof Clever contributed with \$44m
- Scalable business model with increased leverage; Infrastructure cost for both free and paid users included in existing cost base
- Adjusted EBITDA growth YoY, with 25% Q3 2021 margin
- Solid net cash flow from operations <sup>4</sup>of \$17.8m per Q3 2021, up 71% YoY, representing 31% of operating revenue

*<sup>1</sup> Cost of sales only include direct third-party sales and distribution cost*

*<sup>2</sup> Not including calculated share-based payment expenses and related payroll taxes for the Group's share option program*

*<sup>3</sup> Not including acquisition-related expenses and listing cost*

*4 Adjusted for cash outflow for acquisition and listing cost, and cash effects related to share based payment*

![](_page_14_Picture_0.jpeg)

# Condensed profit and loss statement

|                                          | Q3 2021 4 | Q3 2020 3 | YTD 20214 YTD 2020 5 |       | FY 2020 3 |
|------------------------------------------|-----------|-----------|----------------------|-------|-----------|
| Total revenue and other operating income | 23.7      | 9.0       | 58.2                 | 18.0  | 29.5      |
| Cost of sales 1                          | 1.3       | 1.4       | 4.4                  | 2.4   | 3.8       |
| Employee benefit expenses -              | 8.7       | 3.2       | 21.4                 | 8.6   | 14.4      |
| Other operating expenses 3               | 7.6       | 2.3       | 18.7                 | 6.4   | 10.6      |
| Total operating expenses                 | 17.7      | 6.9       | 44.5                 | 17.5  | 28.7      |
| Adjusted EBITDA                          | 6.0       | 2.2       | 13.8                 | 0.5   | 0.8       |
| Adjusted EBITDA margin                   | 25.2 %    | 23.9 %    | 23.7 %               | 29%   | 26%       |
| Share based compensation expenses        | 2.8       | 0.5       | 6.7                  | 1.1   | 3.1       |
| Payroll tax share based compensation     | 1.4       | 2.5       | (4.5)                | 4.8   | 14.2      |
| Acquisition transaction and listing cost | 3.3       |           | 6.3                  |       | 1.0       |
| Reported EBITDA                          | (1.6)     | (0.9)     | 5.3                  | (5.3) | (17.5)    |

*<sup>1</sup> Cost of sales are direct third-party sales and distribution cost*

*<sup>2</sup> Calculated share-based payment expenses and related payroll taxes for the Group's share option program are not included*

*<sup>3</sup> Acquisition-related expenses and listing cost are not included*

*<sup>4</sup> Includes Clever from 1 September 2021*

*5 Restated, ref. note 1 and 8 to the interim consolidated financial statements in the Q3 2021 report*

### **Comments:**

- Continued strong YoY revenue growth in Q3 of 162%, up \$14.6m to \$23.7m. YTD revenue growth YoY of 223%, up \$40.2m to \$58.2m
- Operational payroll and related benefit expenses <sup>2</sup> were \$8.7m in Q3, up \$5.5m YoY impacted by consolidation effect of acquired companies
- Total operating expenses 2,3 of \$17.7m in Q3, up \$10.8m, and \$44.5m YTD, up \$27m impacted by consolidation effect of acquired companies
- Adjusted EBITDA for Q3 of \$6.0m, up \$3.8m YoY, and YTD adjusted EBITDA of \$13.8m, up \$13.3m YoY
- Q3 reported EBITDA of -\$1.6m include \$4.2m share-based compensation expenses and related payroll taxes, and \$3.3m acquisition transaction and listing cost

# Condensed balance sheet

|                                         | 30.09.2021 | 31.12.2020 2 |
|-----------------------------------------|------------|--------------|
| Goodwill                                | 507.8      | 77.8         |
| Intangible assets                       | 179.8      | 34.4         |
| Property, plant and equipment           | 0.7        | 0.4          |
| Right-of-use assets                     | 3.0        | 3.2          |
| Total non-current assets                | 691.4      | 115.7        |
| Trade receivables                       | 13.4       | 3.2          |
| Other current assets                    | 4.6        | 3.2          |
| Cash and cash equivalents               | 206.4      | 256.1        |
| Total current assets                    | 224.4      | 262.5        |
| Total assets                            | 915.7      | 378.2        |
|                                         |            |              |
| Total equity                            | 556.4      | 286.2        |
| Lease liabilities                       | 2.2        | 2.3          |
| Deferred tax liability                  | 47.9       | 5.8          |
| Other non-current liabilities           | 44.7       | 15.4         |
| Total non-current liabilities           | 94.8       | 23.6         |
| Lease liabilities                       | 1.0        | 1.0          |
| Trade payables                          | 3.9        | 1.8          |
| Contract liabilities (deferred revenue) | 54.5       | 30.5         |
| Other current liabilities               | 205.1      | 35.1         |
| Total current liabilities               | 264.5      | 68.4         |
| Total equity and liabilities            | 915.7      | 378.2        |

### **Comments:**

- Total assets increased by \$537.6 million to \$915.7 million first nine months, primarily attributable to acquisitions
- Per 30 September 2021, non-current assets were \$691.4 million, up from \$115.7 million due to goodwill and intangible assets from the acquisitions of Clever, Motimate and Whiteboard
- Total liabilities first nine months increased by \$267.4 million to \$359.4 million per 30 September 2021, whereof deferred tax liability represents \$48.0 million, contract liabilities (deferred revenue) \$54.5 million. Deferred and contingent consideration for acquisitions amounts to \$223.1 million (whereof \$44.7 million are non-current) to be settled in combination of shares and cash.
- The Group has no interest-bearing debt and equity ratio of 61% per 30 September 2021

*1 Restated, ref. note 1 and 8 to the interim consolidated financial statements in the Q3 2021 report*

# Cash flow statement

|                                                | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | FY 2020 |
|------------------------------------------------|---------|---------|----------|----------|---------|
| Net cash flow from operating activities        | 12.1    | 5.4     | 20.9     | 10.4     | 17.4    |
| Net cash flow from investing activities        | (245.8) | (0.1)   | (265.3)  | (0.2)    | (34.4)  |
| Net cash flow from financing activities        | 0.5     | (7.0)   | 195.9    | 24.5     | 231.1   |
| Net change in cash and cash equivalents        | (233.2) | (1.6)   | (48.5)   | 34.8     | 214.1   |
|                                                |         |         |          |          |         |
| Cash and cash equivalents at begin. of period  | 440.5   | 73.4    | 256.1    | 40.9     | 40.9    |
| Effects of exchange rate changes on cash       | (0.9)   | 0.8     | (1.3)    | (3.1)    | 1.2     |
| Cash and cash equivalents at end of period     | 206.4   | 72.5    | 206.4    | 72.5     | 256.1   |
| Adjusted cash flow from operating activities 2 | 7.4     | 5.4     | 17.8     | 10.4     | 17.4    |

*<sup>1</sup>Adjusted for cash outflow for acquisition and listing cost, and cash inflow related to share based payment*

### **Comments:**

- Adjusted cash flow from operations for Q3 was \$7.4 million, up 38 YoY, YTD adjusted cash flow from operations of \$17.8m, up 71% YoY
- Cash flow from investing activities of -\$245.8 million in Q3 due to payment for the acquisition of Clever. For the first nine months 2021, cash flow from investing activities was - \$265.3 million which includes the acquisitions of Motimate, Whiteboard and Clever.

# Full Year 2021 Outlook

|                     | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
|---------------------|---------|---------|---------|---------|
| Invoiced revenue    | \$3.5m  | \$13m   | \$45m   | \$107m+ |
| Paid subscriptions* | 46K     | 170K    | 675K    | 1.1m    |

- For the full year 2021, the Kahoot! Group expects to exceed \$107 million in invoiced revenue up from \$45 million in 2020, with continued solid positive cash flow from operations, and to reach 1.1 million paid subscriptions. The invoiced revenue contribution from Clever is included in the full year 2021 invoiced revenue expectation and expected to exceed \$16 million for the four-month period from September till December 2021. Clever is expected to exceed \$47 million in invoiced revenue for the full year 2021, implicating 29% YoY growth.
- For the fourth quarter 2021, the Kahoot Group expects invoiced revenue to exceed \$40 million with more than \$29 million from the Kahoot! Group (excluding Clever) and more than \$11 million from Clever, with continued solid positive cash flow from operations.
- As previously communicated, and following the completion of the Clever transaction, the Company is exploring the opportunity for a secondary listing, and expecting to conclude the assessment before the end of Q1 2022

*\*Including acquired units, except Clever*

# Kahoot! Group Ambition 2022

![](_page_18_Figure_2.jpeg)

- For 2022, the current ambition for the Kahoot! Group including Clever is to reach \$190-200 million in invoiced revenue
- The operational cost base2) is expected to represent approx. 70% of invoiced revenue which indicates approx. 30% cash conversion of invoiced revenue
- Kahoot! Group long term ambitions will be disclosed with the Q4 2021 report

*1) Includes invoiced revenue from Clever for the four-month period from September till December 2021* 

*2) The operational cost base does not include depreciation and amortization, and is adjusted for special operating items. Special operating items are material expenses and other material transactions of either a non-recurring nature or special in nature compared to ordinary operational expenses and include adjustments for share based compensation expenses and related payroll taxes, acquisition-related expenses, and listing cost preparations.*

![](_page_19_Picture_0.jpeg)

# **Business Areas**

![](_page_20_Figure_0.jpeg)

# **Engagement & Communication**

![](_page_21_Picture_1.jpeg)

# **Company culture**

![](_page_21_Figure_3.jpeg)

![](_page_21_Figure_4.jpeg)

# **Training & development**

![](_page_21_Picture_6.jpeg)

# **A better experience for all learners**

![](_page_21_Picture_8.jpeg)

Over

**10K**

educational institutions have already deployed multiuser Kahoot! teacher licenses

# **Make lessons interactive**

![](_page_22_Picture_6.jpeg)

![](_page_22_Picture_8.jpeg)

Equip IT admins with increased control, security & compliance

Elevate learning at your entire school or district

![](_page_22_Picture_11.jpeg)

### **courses**

Maximize student engagement by designing full class sessions

![](_page_22_Figure_14.jpeg)

**at school**

**100s of millions**  of students

Embraced by over **9 million**  teachers globally

![](_page_22_Picture_18.jpeg)

# **10m+**

are using Kahoot! at home with over 100 million games played by families

> Premium subscription for awesome learning for the entire family

![](_page_23_Picture_3.jpeg)

**at home**

Learn

math &

algebra

*Coming soon*

Learn

to read

**Kahoot! Kids:** Fun learning experience for kids age 2 - 7

### **Language Learning**

![](_page_23_Picture_7.jpeg)

![](_page_23_Picture_8.jpeg)

**Kahoot!+ Study**  *Study with friends* with flashcards, tests and challenges

![](_page_23_Picture_10.jpeg)

# **9m+**

**educators & teachers**, and hundreds of millions of students across the world use Kahoot! to make learning awesome

> **Marketplace coming Q4**

High quality, verified content

![](_page_24_Picture_4.jpeg)

![](_page_24_Picture_5.jpeg)

**portal**

# Embraced by over **30 million**  players monthly

![](_page_24_Picture_7.jpeg)

**If teachers didn't try new things, our students wouldn't get the best from us.** "

Aimee Copple

# **Premium learning content**

By verified educators and publishers to engage students

![](_page_24_Picture_12.jpeg)

### **Enhanced learning experience with premium IP**

![](_page_25_Picture_1.jpeg)

![](_page_25_Picture_3.jpeg)

![](_page_25_Picture_4.jpeg)

Available on Amazon Appstore

Apple Schoolwork features make teaching with Kahoot! even more awesome

![](_page_25_Picture_8.jpeg)

Engage with Kahoot! directly in Microsoft Teams and Powerpoint

# *Accelerated growth through the Kahoot! partner ecosystem*

![](_page_25_Picture_11.jpeg)

![](_page_25_Picture_12.jpeg)

Extending the Kahoot! experience with Google Classroom

# **Selected new partners**

## **Premium content partners**

![](_page_25_Picture_16.jpeg)

![](_page_25_Picture_17.jpeg)

![](_page_25_Picture_18.jpeg)

![](_page_25_Picture_19.jpeg)

![](_page_25_Picture_20.jpeg)

![](_page_26_Figure_0.jpeg)

![](_page_27_Picture_0.jpeg)

# **Summary**

![](_page_28_Figure_0.jpeg)

# Kahoot! main growth initiatives 2022

![](_page_29_Figure_1.jpeg)

Complete offering for professional development and learning with organization-wide license plan

Elevated learning with complete site licenses for schools, districts and campuses

Premium subscription for the entire family, study-peers and friends

Leveraging global user base and partner ecosystem to offer commercial marketplace for verified content creators

The leading digital learning platform for U.S K-12, a community for students, families and educators

# Summary Q3 2021

![](_page_30_Picture_1.jpeg)

*Strong continued growth and Back-To-School and -Work season*

- Healthy post-pandemic market environment with strong uptake of usage and revenue growth across Kahoot! Group
- Scalable software platform yields strong cash flow from operations and initial positive synergies from acquisitions
- Accelerated commercialization, including onboarding of larger corporate accounts for the Kahoot! at Work category. Implementation of Actimo and Motimate cross-sales and product integration into Kahoot! at Work offering commenced
- Continuously developing and launching innovative, user-centric products, features and offerings to increase user value, across all business areas. Key commercial initiatives launched for mid to long-term revenue trajectory
- Post acquisition close, Clever performing ahead of expectations. Strategic expansion projects as well as alignment of product roadmap and sales initiatives with Kahoot! Group

# Kahoot! Group

![](_page_31_Figure_2.jpeg)

A globally recognized brand across sectors and segments

![](_page_31_Picture_4.jpeg)

A scalable cloud platform supported by a viral business model

![](_page_31_Figure_6.jpeg)

Experienced organization with growth track record from the industry

![](_page_31_Picture_8.jpeg)

Clear path to profitable growth with positive cash flow from operations

![](_page_31_Picture_10.jpeg)

Continuously improving all services for all segments and user groups

![](_page_31_Picture_12.jpeg)

Solid funding for strategic partnerships and non-organic growth

![](_page_32_Picture_0.jpeg)

# Join the Kahoot! journey

**Parent**

[kahoot.com/school](https://kahoot.com/school) [kahoot.com/study](https://kahoot.com/study) [kahoot.com/work](https://kahoot.com/work) [kahoot.com/investor](https://kahoot.com/investor) [kahoot.com/home](https://kahoot.com/work)

![](_page_32_Picture_10.jpeg)

![](_page_32_Picture_11.jpeg)

Stay up to date, visit **[kahoot.com/news](http://kahoot.com/news)**

![](_page_33_Picture_0.jpeg)

# **www.kahoot.com/investor**