Earnings Release • Nov 4, 2021
Earnings Release
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Kahoot! Group
"During our third quarter the Kahoot! platform realized record-level activity and solid viral growth as societies across the world returned to more normalcy. The quarter was further fueled by strong Back-to-School and work seasons as educators, students and professionals alike embraced both in-person and hybrid models for digital learning. We achieved significant growth in both free and paid usage, resulting in more than 30 million active accounts over the past 12 months and reaching more than 1 million paying subscriptions across all services, resulting in Kahoot! Group invoiced revenues of \$27.8 million in the quarter. Kahoot! continued the YoY growth in Q3 in all regions and within the Work, School and Home & Study categories. We also completed the strategic acquisition of digital learning platform, Clever, positioning Kahoot! to reach even wider audiences and greater revenue streams." – Eilert Hanoa, CEO of Kahoot!
"With strong performance also in our third quarter Kahoot! has delivered eight consecutive quarters of invoiced revenue growth exceeding 100% YoY. This quarter also demonstrates the scalability of our platform as well as positive initial synergies from five acquisitions over the last 12 months with an all-time-high adjusted operational cash flow of \$7.4 million, up 38% YoY, representing 31% cash margin of operating revenue" – Ken Østreng, CFO of Kahoot!
In order to enhance the understanding of the Kahoot! Group's performance, the Group presents certain measures and ratios considered as alternative performance measures (APMs) as defined by the European Securities and Markets Authority, and these should not be viewed as substitute for any IFRS financial measures. The APMs includes Invoiced Revenue, Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), EBITDA, adjusted EBITDA, adjusted cash flow from operations and equity ratio. These APMs are presented as the Group considers them to be important supplemental measures to understand the overall picture of revenue and profit generation in the Group's operating activities.
| Restated | Restated ' | Restated | |||
|---|---|---|---|---|---|
| USD in millions | Q3 2021 6 | Q3 2020 | YTD 2021 YTD 2020 | FY 2020 | |
| 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 |
| 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 | ||
| EBITDA | (1.6) | (0.9) | 5.3 | (5.3) | (17.5) |
| Invoiced revenue | 27.8 | 11.6 | 67.5 | 27.7 | 45.3 |
| ARR end of period | 124.0 | 32.0 | 124.0 | 32.0 | 60.0 |
| Adjusted EBITDA margin | 25.2 % | 23.9 % | 23.7 % | 2.9 % | 2.6 % |
| Cash flow from operating activities | 7.4 | 5.4 | 17.8 | 10.4 | 17.4 |
| Cash and cash equivalents end of period 3 | 206.4 | 72.5 | 206.4 | 72.5 | 256.1 |
1 Cost of sales are third-party sales and distribution cost.
2 Employee benefit expenses include regular operational payroll and employee related benefit expenses. Calculated share-based payment expenses and related payroll taxes for the Group's share option program are not included.
3 Other operating expenses not including acquisition-related expenses and listing cost.
4 Q3 2021 adjusted for \$1.8 million cash outflow for expenses to acquisition and listing cost, and for \$6.5 million cash inflow held for employee withholding tax to be paid in the fourth quarter for exercised employee share options.
5 Includes per third quarter 2021 \$6.5 million cash held for employee withholding tax to be paid in the fourth quarter for exercised employee share options.
6 Includes Clever from 1 September 2021.
7The Group has updated the model for estimating the recognition of revenue over time (deferred revenue). Please see note 1 and 8 to the interim consolidated financial statements.
compensation expenses and related payroll taxes, acquisition-related expenses and listing cost preparations was \$13.8 million compared to \$0.5 million for the corresponding period 2020.
As societies return to some level of normalcy after the disruption of the Covid-19 pandemic, the Kahoot! platform continues to experience strong organic performance, predicated on the viral growth that has defined Kahoot!'s journey and success to date. We continue to see strong underlying growth, as well as steadily expanding use cases for our software solutions and learning platform, across all our business areas through Q3 and with good momentum into Q4.
The continued growth has also sustained and accelerated for Clever, Kahoot!'s most recently acquired company, a single sign-on portal for teachers and students and one of the most widely-used digital learning platforms by U.S. K-12 schools. Clever's continued growth is particularly encouraging for Kahoot! but also for the industry, with Clever representing one of the most used gateways to hundreds of the most popular EdTech apps across the U.S. K-12 schools, including solid growth in usage of 18% of the top 100 apps on its platform in Q3, compared to the strong Q3 2020.
Ultimately, with Kahoot!'s versatile software platform applicable to an array of business segments and user preferences and increasingly diverse portfolio of learning products, our strong performance both pre-, during- and post-pandemic and the encouraging performance that Clever represents indicating a strong demand for EdTech solutions, we consider Kahoot! to be optimally positioned to continue its viral, scalable and commercial growth into the coming quarters and beyond.
The Kahoot! platform has experienced continuous YoY growth across all geographies and business areas. Reaching 1 billion participants (non-unique) in the U.S. and Canada the last twelve months, up 47% YoY. In the third quarter, U.S. and Canada represented 56% of invoiced revenue, including Clever (from 1 September 2021).
Used by 97% of Fortune 500 companies, Kahoot! at Work occupies a bespoke space at the intersection of employee engagement, corporate learning, training and culture building. The business area's main offering Kahoot! 360 Spirit is uniquely complemented by the apps Motimate and Actimo, offering an engaging mobile learning platform and a customizable frontline worker app respectively. During Q3, Kahoot! at Work continued to develop its portfolio in particular through the launch of Team mode and Courses. As evidenced in the findings of the recently published Kahoot! 2021 Workplace Culture Report, HR professionals acknowledge that collaboration tools will continue to gain importance. The Kahoot! at Work business area stands optimally positioned to respond to these needs with a diverse portfolio of solutions and plans that deliver the elements to support thriving corporate cultures now, and in the future of work.
Spearheaded by the Kahoot!+ offering, encompassing award-winning Kahoot! DragonBox and Poio apps, Kahoot!'s ad-free platform and apps enables families, students and children to connect and learn in an engaging way at home, either through self-study or family fun. In Q3, Kahoot! became more accessible than ever through its availability in 11 languages. Poio, the explorative learn-to-read app, also extended its reach further as it was translated into French and Brazilian Portuguese. Additionally, DragonBox's MathLabs represents an exciting new addition to the segment's offering, while its Numbers app was named on Parents' "Best Learning Apps for Kids" list for the second year in a row. The Kahoot! at Home category is poised to begin an accelerated phase of its development with the pending launch of Kahoot! Kids, a tailor-made experience for young learners and parents, and Kahoot! Study, set to reimagine how higher-ed students enjoy effective study.
Educators across the world make learning awesome with Kahoot! by tapping into the vast, inherent potential for playful education experiences to unlock every student's learning potential. During this Back-to-School season the Kahoot! at School category enabled more than 9 million teachers LTM to educate hundreds of millions of students globally, whilst Kahoot! EDU continued to gain traction, reaching 10,000 schools and districts on paid subscriptions. This momentum is particularly encouraging when taken in context with the pivot to post-pandemic normalcy as EdTech solutions retain and gain added relevance. Additionally, new Team mode stands to further develop students' collaboration skills through in-class and virtual learning settings, with Courses bolstering the already considerable opportunities to maximize student engagement through diverse content formats.
Kahoot! Academy is a global knowledge platform, online community and marketplace which enables anyone to access premium learning content and high-quality learning resources produced and curated by verified publishers and content creators. Kahoot! Academy served high-quality curated content to more than 30 million participating players monthly in Q3, also adding world-renowned brands to its list of premium partners, among them one of the most enduring brands of all time, Star Wars™️. Kahoot! Academy is set to welcome new globally influential partners, in addition to launching Kahoot! Academy Marketplace, where Verified educators can monetize their exclusive learning content, share it for free or benefit from the commission-free donation option. Made possible by the singular viral growth and scale of the
Kahoot! brand and platform, these developments serve to strategically position Kahoot! to reach a captive and vast global market of educators and learners.
Born of the desire to save valuable time in the classroom and afford more space for innovative teaching and learning, Clever is a single sign-on portal for teachers and students, and one of the most widely used digital learning platforms by the U.S. K-12 schools. A milestone for the Kahoot! Group in the third quarter was to complete the acquisition of Clever. The potential represented in the acquisition was apparent as the Kahoot! App and Kahoot! EDU were made available on the Clever platform, quickly becoming the most popular app amongst the platform's 22M+ monthly active students and 1.4M monthly active teachers. Clever continued to innovate during the quarter, adding parent/teacher messaging, enabling parents and teachers to communicate seamlessly. Clever and Kahoot! continue to explore synergies and possibilities, with Kahoot! seeking to expand its considerable footprint across K12 schools in the U.S. and Canada. Similarly, efforts will continue to realize the vast potential for Clever to leverage Kahoot!'s global viral footprint to deliver its platform to educators globally.
The information contained in this report has not been audited and may be subject to change. Please see Kahoot! News on kahoot.com/news to stay up to date on company news and updates.
Eilert Hanoa, CEO Phone: +47 928 32 905 Email: [email protected]
Ken Østreng, CFO Phone: +47 911 51 686 Email: [email protected]
Kahoot! is on a mission to make learning awesome! We want to empower everyone, including children, students, and employees to unlock their full learning potential. Our learning platform makes it easy for any individual or corporation to create, share, and host learning sessions that drive compelling engagement. Launched in 2013, Kahoot!'s vision is to build the leading learning platform in the world. In the last 12 months, 300 million sessions have been hosted on the Kahoot! platform by 30 million active accounts, with 1.9 billion participants (non-unique) in more than 200 countries and regions. The Kahoot! Group also includes Clever, the leading US K-12 EdTech learning platform, together with the learning apps DragonBox, Poio, Drops, Actimo, Motimate, and Whiteboard.fi. The Kahoot! Group is headquartered in Oslo, Norway with offices in the US, the UK, France, Finland, Estonia, Denmark and Spain. Kahoot! is listed on the Oslo Stock Exchange under the ticker KAHOT. Let's play!
Overview of active accounts, hosted sessions, and participants (non-unique) on the Kahoot! platform 2 last twelve months per end of quarter:
| (Numbers in millions) | Q1'20 | Q2 20 | Q3'20 | Q4'20 | Q1 21 | Q2 21 | Q3 21 |
|---|---|---|---|---|---|---|---|
| Active accounts LTM | 16.8 | 20.3 | 21.5 | 24.8 | 28.2 | 29.0 | 30.3 |
| USA and Canada | 8.6 | 9.5 | 9.6 | 11.2 | 12.2 | 12.8 | 13.1 |
| Europe | 5.1 | 6.5 | 6.7 | 7.4 | 8.9 | 8.8 | 9.3 |
| Asia Pacific | 1.6 | 2.1 | 2.4 | 2.6 | 2.8 | 2.7 | 3.2 |
| Latin America and The Caribbean | 0.9 | 1.4 | 1.8 | 2.4 | 2.9 | 3.2 | 3.2 |
| Africa, The Middle East, and India | 0.5 | 0.8 | 0.9 | 1.2 | 1.4 | 1.4 | 1.4 |
| By category 1 : | |||||||
| Work | 0.3 | 0.4 | 0.5 | 0.5 | 0.6 | 0.5 | 0.6 |
| School | 6.0 | 6.4 | 6.9 | 7.6 | 8.3 | 8.7 | 9.1 |
| Home & Study | 10.4 | 13.5 | 14.2 | 16.7 | 19.3 | 19.7 | 20.6 |
| Hosted sessions LTM | 217.6 | 210.2 | 223.8 | 250.5 | 278.9 | 303.5 | 314.2 |
| USA and Canada | 110.3 | 97.8 | 101.8 | 115.6 | 129.3 | 146.3 | 149.1 |
| Europe | 64.5 | 64.3 | 66.2 | 71.9 | 80.3 | 84.5 | 88.4 |
| Asia Pacific | 22.0 | 23.3 | 24.6 | 25.5 | 26.4 | 26.8 | 30.7 |
| Latin America and The Caribbean | 12.7 | 14.7 | 18.6 | 22.6 | 26.6 | 29.7 | 29.7 |
| Africa, The Middle East, and India | 8.0 | 10.0 | 12.5 | 14.8 | 16.4 | 16.2 | 16.3 |
| By category 1 : | |||||||
| Work | 2.7 | 2.7 | 3.1 | 3.9 | 4.6 | 4.6 | 4.9 |
| School | 79.0 | 68.7 | 76.9 | 94.3 | 112.3 | 129.6 | 134.0 |
| Home & Study | 135.9 | 138.8 | 143.8 | 152.2 | 162.0 | 169.3 | 175.3 |
| Participants (non-unique) LTM | 1,305 | 1,245 | 1,339 | 1,492 | 1,619 | 1,855 | 1,927 |
| USA and Canada | 742 | 655 | 683 | 760 | 818 | 973 | 1,005 |
| Europe | 344 | 347 | 360 | 392 | 423 | 472 | 493 |
| Asia Pacific | 126 | 128 | 143 | 152 | 160 | 171 | 191 |
| Latin America and The Caribbean | 59 | 73 | gg | 124 | 148 | 168 | 168 |
| Africa, The Middle East, and India | 34 | 42 | 54 | 65 | ਦਰ | 70 | 70 |
| By category 1 : | |||||||
| Work | 19 | 20 | 23 | 28 | 31 | 32 | 35 |
| School | 877 | 812 | 880 | 1,006 | 1,135 | 1,341 | 1,381 |
| Home & Study | 409 | 413 | 436 | 459 | 453 | 481 | 510 |
1Category is based on account registration data.
2 All user data from the Kahoot! platform not including other services in the Kahoot! Group.
| (Numbers in thousands) | Q1'20 | Q2'20 | Q3'20 | Q4'20 | Q1'21 | Q2'21 | 03'21 |
|---|---|---|---|---|---|---|---|
| Paid subscriptions | 202 | 270 | 360 | 675 | 760 | ਰੇਤੇਤ | 1,015 |
| Work | 83 | 100 | 105 | 245 | 255 | 403 | 435 |
| School | 91 | 125 | 180 | 230 | 275 | 295 | 335 |
| Home & Study | 28 | 45 | 75 | 200 | 230 | 234 | 245 |
1Including acquired units from time of acquisition. Actimo were included with 125K in Q4 2020, Drops with 100K in Q4 2020, Whiteboard with 7K in Q1 2021 and Motimate with 130K in Q1 2021.
| Restated | Restated | Restated | ||||
|---|---|---|---|---|---|---|
| USD in thousands | Note | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | FY 2020 |
| Revenue from contracts with customers | 3 | 23,650 | 9,030 | 57,994 | 17,888 | 29,328 |
| Other operating income | 3 | 249 | 144 | 175 | ||
| Total revenue and other operating income | 23,650 | 9,030 | 58,244 | 18,032 | 29,502 | |
| Cost of sales | 1,348 | 1,367 | 4,400 | 2,434 | 3,790 | |
| Employee benefit expenses | 12,928 | 6,240 | 23,587 | 14,515 | 31,625 | |
| Other operating expenses | 10,940 | 2,279 | 24,985 | 6,428 | 11,553 | |
| Operating profit/(loss) before deprec. and amortiz. (EBITDA) | (1,567) | (856) | 5,272 | (5,345) | (17,467) | |
| Amortization of intangible assets | 2,433 | 360 | 5,602 | 1,036 | 1,897 | |
| Depreciation | 364 | 163 | 892 | 465 | 685 | |
| Operating profit/(loss) (EBIT) | (4,364) | (1,379) | (1,222) | (6,846) | (20,048) | |
| Financial income | 173 | 42 | 498 | 256 | 372 | |
| Financial expenses | (47) | (14) | (142) | (195) | (329) | |
| Net change in fair value of financial instruments | 3,031 | 1,710 | 848 | |||
| Net foreign exchange gains (losses) | (1,332) | (379) | (1,622) | (618) | (17,510) | |
| Net financial income (expenses) | 1,825 | (351) | 444 | (557) | (16,619) | |
| Profit/(loss) before income tax | (2,539) | (1,730) | (778) | (7,403) | (36,668) | |
| Income tax | (4/3) | (27) | (1,067) | (a) | (656) | |
| Profit/(loss) for the period | (2,066) | (1,703) | 289 | (7,311) | (36,012) | |
| Profit/(loss) for the period is attributable to: | ||||||
| Equity holders of Kahoot! ASA | (2,066) | (1,703) | 289 | (7,311) | (36,012) | |
| Earnings per share in USD | ||||||
| Basic earnings per share | (0.00) | (0.00) | 0.00 | (0.02) | (0.09) | |
| Diluted earnings per share | (0.00) | (0.00) | 0.00 | (0.02) | (0.09) |
| Restated | Restated | Restated | |||
|---|---|---|---|---|---|
| USD in thousands | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | FY 2020 |
| Profit/(loss) for the period | (2,066) | (1,703) | 289 | (7,311) | (36,012) |
| Other comprehensive income/(loss): | |||||
| Items that might be subsequently reclassified to profit or loss: | |||||
| Exchange differences on translation of foreign operations | (3,474) | (646) | (7,154) | (236) | (325) |
| Item that are not reclassified to profit or loss: | |||||
| Exchange difference on translation to another presentation | |||||
| currency | 4,982 | (4,181) | 17,413 | ||
| Total comprehensive income/(loss) for the period | (5,540) | 2,632 | (6,865) | (12,029) | (18,924) |
| Total comprehensive income/(loss) is attributable to: | |||||
| Equity holders of Kahoot! ASA | (5,540) | 2,632 | (6,865) | (12,029) | (18,924) |
| Restated | |||
|---|---|---|---|
| USD in thousands | Note | 30.09.2021 | 31.12.2020 |
| ASSETS | |||
| Goodwill | 2 | 507,787 | 77,757 |
| Intangible assets | 2 | 179,773 | 34,373 |
| Property, plant and equipment | 750 | 409 | |
| Right-of-use assets | 3,048 | 3,165 | |
| Total non-current assets | 691,357 | 115,704 | |
| Trade receivables | |||
| 13,371 | 3,157 | ||
| Other current assets | 4,584 | 3,173 | |
| Cash and cash equivalents | 206,403 | 256,120 | |
| Total current assets | 224,357 | 262,451 | |
| TOTAL ASSETS | 915,715 | 378,155 | |
| EQUITY AND LIABILITIES | |||
| Share capital | 4 | 5,669 | 5,228 |
| Share premium | 627,226 | 357,383 | |
| Share-based payments reserves | 11,984 | 5,542 | |
| Foreign currency translation reserves | (7,192) | (375) | |
| Accumulated deficit | (81,331) | (81,620) | |
| Total equity | 556,357 | 286,159 | |
| Lease liabilities | 2,169 | 2,312 | |
| Deferred tax liability | 47,950 | 5,843 | |
| Other non-current liabilities | 44,689 | 15,447 | |
| Total non-current liabilities | 94,807 | 23,602 | |
| Lease liabilities | ggg | 964 | |
| Trade payables | 3,921 | 1,817 | |
| Contract liabilities (deferred revenue) | 54,497 | 30,501 | |
| Other current liabilities | 205,132 | 35,111 | |
| Total current liabilities | 264,550 | 68,393 | |
| Total liabilities | 359,357 | 91,996 | |
1 includes \$6.5 million held for employee withholding tax to be paid in the fourth quarter for exercised employee share options.
| Share-based | Translation | |||||
|---|---|---|---|---|---|---|
| Share | Share | payment | differences | Total | ||
| USD in thousands | capital | premium | reserves | reserves | Accum. deficit | equity |
| Balance at 1 January 2020 (As reported) | 1,473 | 92,621 | 2,095 | (20) | (40,112) | 56,026 |
| Correction of opening balance (note 8) | (716) | (716) | ||||
| Balance at 1 January 2020 (Restated) | 1,473 | 92,621 | 2,095 | (20) | (40,828) | 55,311 |
| Profit/(loss) for the period | (36,012) | (36,012) | ||||
| Currency translation differences | 334 | 21,480 | 378 | (325) | (4,780) | 17,088 |
| Total comprehensive income/(loss) for the period | 334 | 21,480 | 378 | (325) | (40,792) | (18,924) |
| Issuance of shares | 3,421 | 253,520 | 256,940 | |||
| Transaction costs on equity issues | (10,237) | (10,237) | ||||
| Share option program | 3,069 | 3,069 | ||||
| Balance at 31 December 2020 (Restated) | 5,228 | 357,383 | 5,542 | (375) | (81,620) | 286,159 |
| Profit/(loss) for the period | 289 | 289 | ||||
| Currency translation differences | (337) | (6,817) | (7,154) | |||
| Total comprehensive income/(loss) for the period | (337) | (6,817) | 289 | (6,865) | ||
| Issuance of shares | 441 | 278,230 | 278,671 | |||
| Transaction costs on equity issues | (8,387) | (8,387) | ||||
| Share option program | 6,779 | 6,779 | ||||
| Balance at 30 September 2021 | 5,669 | 627,226 | 11,984 | (7,192) | (81,331) | 556,357 |
| Share-based | Translation | |||||
|---|---|---|---|---|---|---|
| Share | Share | payment | differences | Total | ||
| USD in thousands | capital | premium | reserves | reserves | Accum. deficit | equity |
| Balance at 1 January 2020 (As reported) | 1,473 | 92,621 | 2,095 | (50) | (40,112) | 56,026 |
| Correction of opening balance (note 8) | (716) | (716) | ||||
| Balance at 1 January 2020 (Restated) | 1,473 | 92,621 | 2,095 | (50) | (40,828) | 55,311 |
| Profit/(loss) for the period | (7,311) | (7,311) | ||||
| Currency translation differences | (171) | (6,742) | (148) | (536) | 2,880 | (4,717) |
| Total comprehensive income/(loss) for the period | (171) | (6,742) | (148) | (536) | (4,432) | (12,029) |
| Issuance of shares | 2,911 | 25,836 | 28,748 | |||
| Transaction costs on equity issues | (815) | (815) | ||||
| Share option program | 1,066 | 1,066 | ||||
| Balance at 30 September 2020 (Restated) | 4,213 | 110,900 | 3,013 | (588) | (45,259) | 72,280 |
| Restated | Restated | Restated | |||
|---|---|---|---|---|---|
| USD in thousands | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | FY 2020 |
| Cash flows from operating activities | |||||
| Profit/(loss) before income tax | (2,539) | (1,730) | (778) | (7,403) | (36,668) |
| Adjustments for: | |||||
| Paid taxes | (6) | (6) | |||
| Depreciation and amortization | 2,797 | 523 | 6,494 | 1,501 | 2,582 |
| Net interest income | (47) | (14) | (142) | (195) | (329) |
| Share-based payments expense | 2,846 | 538 | 6,754 | 1,066 | 3,069 |
| Change in trade and other receivables | (270) | (377) | (2,221) | 203 | (207) |
| Change in contract liabilities (deferred revenue) | 3,687 | 2,562 | 8,972 | 9,676 | 15,694 |
| Change in trade payables | 258 | 382 | 1,283 | 306 | 591 |
| Change in other current assets and other liabilities | 5,175 | 3,504 | 17 | 5,033 | 32,322 |
| Interest received | 173 | 42 | 498 | 256 | 372 |
| Net cash flow from operating activities | 12,075 | 5,429 | 20,931 | 10,442 | 17,426 |
| Cash flows from investing activities | |||||
| Payment for acquisition of subsidiary, net of cash acquired | (245,185) | (264,575) | (34,227) | ||
| Payment for intangible assets | (561) | (561) | |||
| Payment for property, plant and equipment | (73) | (73) | (156) | (164) | (214) |
| Net cash from investing activities | (245,819) | (13) | (265,292) | (164) | (34,441) |
| Cash flows from financing activities | |||||
| Proceeds from issuance of ordinary shares | 819 | (6,443) | 204,856 | 26,105 | 241,931 |
| Transaction costs on issuance of ordinary shares | (367) | (8,166) | (1,182) | (10,237) | |
| Repayments of lease liabilities | (258) | (88) | (701) | (361) | (537) |
| Paid interest on lease liabilities | (29) | (96) | (90) | (58) | (78) |
| Net cash from financing activities | 531 | (6,994) | 195,899 | 24,504 | 231,079 |
| Net increase/(decrease) in cash and cash equivalents | (233,213) | (1,638) | (48,462) | 34,782 | 214,064 |
| Cash and cash equivalents beginning of the period | 440,487 | 73,350 | 256,120 | 40,851 | 40,851 |
| Effects of exchange rate changes on cash and cash equiv. | (871) | 781 | (1,256) | (3,140) | 1,205 |
| Cash and cash equivalents as of end of period | 206,403 | 72,493 | 206,403 | 72,493 | 256,120 |
Kahoot! ASA (the Company or Kahoot!), the parent company of the Kahoot! Group (the Group) is a public limited liability company incorporated and domiciled in Norway, with its head office in Fridtjof Nansens plass 7, 0160 Oslo. The Company is listed on Oslo Stock Exchange has the ticker "KAHOT".
The condensed consolidated interim financial statements consist of Kahoot! ASA and its subsidiaries. As a result of rounding differences, numbers or percentages may not add up to the total.
These interim condensed consolidated financial statements for the nine months ending 30 September 2021, have been prepared in accordance with IAS 34 Interim Financial Reporting, and authorized for issue by the board of directors on 3 November 2021. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for 2020.
The accounting policies applied in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2020, except for the following changes in the principles applied (the changes are described below):
As of 1 January 2021, the parent company Kahoot! ASA changed its functional currency from NOK to USD. The indicators of functional currency changed in the second part of 2020. The company had strong growth in the last year and revenue is mainly denominated in USD, while the expenses are mainly denominated in NOK. However, financing has also moved from NOK to USD, evidenced by the contributions from capital increases held in USD.
The effect of a change in functional currency is recognized prospectively from the date of change, considered to be 1 January 2021.
Kahoot! ASA translates all items into the new functional currency using the exchange rate at the date of the change. The resulting translated amounts for non-monetary items are treated as their historical cost.
For the translation of equity items to the new functional currency the exchange rate at the date of the change of functional currency are applied. This means that no additional exchange differences arise on the date of the change. For the subsequent changes, equity items will be translated using their transaction date rate.
The comparable figures are not restated.
The Group has assessed the changes made to the product sold to schools for the school year 2021-2022 (1 August 2021 to 31 July 2022) and concluded that the changes in the product, its functionality and how the product is used and benefits the students, teachers and schools now satisfies the criteria of performance obligation over time.
As a result, the Group has as of 1 August 2021, changed the revenue recognition principles for the license revenues for DragonBox sale to schools from at point in time to over time, meaning that the license revenue is recognized over the subscription period (typically over 12 months). If the license revenue had been recognized at point in time, the Group's revenue would have increased by \$2,416 thousand to total revenue of \$26,066 thousand for the third quarter 2021 and \$60,660 thousand for year-to-date 2021 respectively. The Group's net income (loss) would have increased by \$1,911 thousand to -\$155 thousand for the third quarter 2021 and \$2,200 thousand for year-to-date 2021 respectively. Earnings per share and diluted earnings per share would have been \$ 0.00 and \$ 0.00 for third quarter 2021 and year-to-date 2021 respectively.
The comparable figures for 2020 are not restated.
During the third quarter, the Group has updated the model for estimating the recognition of revenue over time (deferred revenue). The effect of the change in accounting estimates results in an increase in the balance of contract liabilities (deferred revenue), offset by lower recognized revenue for previously reported periods.
The effect of the change in accounting estimates can be summarized as follows:
Contract liabilities (deferred revenue) increased by \$1,531 thousand as per 31 December 2020, offset as reduced recognized revenue (revenue from contracts with customers) of \$1,531 thousand in 2020.
The effect on recognized revenue in 2020 can be attributed to the following quarters:
| USD in thousands | Reported | Effect Restated | |
|---|---|---|---|
| Q1 2020 | 4,215 | (371) | 3,844 |
| Q2 2020 | 5,576 | (418) | 5,158 |
| 03 2020 | 9,238 | (208) | 9,030 |
| Q4 2020 | 12,005 | (535) | 11,470 |
| FY 2020 | 31,034 | (1,531) | 29,503 |
See note 8 for the complete restated consolidated statement of profit or loss, consolidated balance sheet and consolidated statement of cash flows for 2020.
Clever Inc. ("Clever") was acquired by a purchase of 100% of the shares effective from 1 September 2021. Clever, one of the most widely-used digital learning platforms in U.S. K-12 education was acquired for enterprise value (EV) of \$435 – 500 million on a cash and debt-free basis, including a performance-based element for 2021-2022. The first part of the initial consideration was settled by a combination of cash and issuance of 7,300,765 shares in Kahoot! ASA at a subscription price of NOK 64.77 per share. A total of \$135 million of the initial consideration is deferred.
The performance-based element relating to Clever is determined based on certain operational metrics at the end of 2021 and end of 2022. Given the contingent liability will be determined and settled in the future, the nominal value is discounted to present value. Present value of the contingent liability relating to the acquisition was recognized at \$63,033 thousand, whereof \$47,877 thousand is current. The main three factors used in assessing the fair value of the earnout is forecast of probability, cash flow and discount rate. The discount rate applied for Clever was 8.5%.
The amounts recognized at the date of acquisition in respect of identifiable assets acquired and liabilities assumed are set out in the table below, using the exchange rate as of 1 September 2021 for Clever.
Goodwill from the acquisition of Clever is attributable to synergies and will lead to additional value for the Group's subscription-based product offering when combined with the Kahoot! products.
Acquisition costs of \$2,834 thousand arose as a result of the transaction. These have been recognized as part of other operating expenses in the statement of statement of profit or loss.
Since the acquisition date 1 September 2021, Clever has contributed with \$3,738 thousand to the Group's revenue and negative net income contribution of \$553 thousand to the Group's total profit. If the acquisition of Clever had occurred on 1 January 2021, the revenue for the Group would have been \$84,136 thousand and the Group's loss would have been \$2,855 thousand.
| USD in thousands | Clever |
|---|---|
| Purchase consideration | |
| Cash consideration | 389,842 |
| Shares issued | 55,039 |
| Contingent liability / earn-out | 63,033 |
| Total purchase consideration | 507,914 |
| Brand | 72,647 |
| Technology | 31,339 |
| Customer relationships | 32,172 |
| Property, plant and equipment | 344 |
| Trade and other receivables | 8,628 |
| Cash and cash equivalents | 9,657 |
| Deferred tax liability | (40,629) |
| Trade payables and other current liabilities | (16,855) |
| Total net identifiable assets acquired at fair value | 97,302 |
| Total purchase consideration | 507,914 |
| Goodwill | 410,612 |
| Net cash outflow arising on acquisition | |
| Cash consideration | 254,842 |
Motimate AS ("Motimate") was acquired by a purchase of 100% of the shares effective from 22 April 2021. Motimate, an employee engagement and learning app provider for organizations of all sizes was acquired for a total consideration reflecting an enterprise value (EV) of USD 25 – 27 million on a cash and debt-free basis, including a 2021 performance-based element. The initial consideration was settled by a combination of cash and issuance of 1,104,994 shares in Kahoot! ASA at a subscription price of NOK 93.90 per share. A total of USD 5 million of the initial cash consideration is deferred and is expected to be settled at the end of the fourth quarter 2021. The deferred settlement has been recognized at its nominal value within other current liabilities.
The performance-based element relating to Motimate is determined based on certain operational metrics at the end of 2021. Given the contingent liability will be determined and settled in the future, the nominal value is discounted to present value. Present value of the contingent liability relating to the acquisition was recognized at USD 1,814 thousand, whereof all is current. The main three factors used in assessing the fair value of the earnout is forecast of probability, cash flow and discount rate. The discount rate applied for Motimate was 12.5%.
The amounts recognized at the date of acquisition in respect of identifiable assets acquired and liabilities assumed are set out in the table below, using the exchange rate as of 22 April 2021 for Motimate.
Goodwill from the acquisition of Motimate is attributable to synergies and will lead to additional value for the Group's subscription-based product offering when combined with the Kahoot! products.
Acquisition costs of \$249 thousand arose as a result of the transaction. These have been recognized as part of other operating expenses in the statement of statement of profit or loss. Since the acquisition date 22 April 2021, Motimate has contributed with \$1,954 thousand to the Group's revenue and negative net income contribution of \$1,151 thousand to the Group's total profit. If the acquisition of Motimate had occurred on 1 January 2021, the revenue for the Group would have been \$58,972 thousand and the Group's loss would have been \$1,259 thousand.
| USD in thousands | Motimate |
|---|---|
| Purchase consideration | |
| Cash consideration | 14,759 |
| Shares issued | 12,533 |
| Contingent liability / earn-out | 1,814 |
| Total purchase consideration | 29,107 |
| Brand | 666 |
| Technology | 11,328 |
| Property, plant and equipment | 5 |
| Trade and other receivables | 536 |
| Cash and cash equivalents | 2,521 |
| Deferred tax liability | (2,211) |
| Trade payables and other current liabilities | (901) |
| Total net identifiable assets acquired at fair value | 11,945 |
| Total purchase consideration | 29,107 |
| Goodwill | 17,161 |
| Net cash outflow arising on acquisition | |
| Cash consideration | 9.759 |
| Less: cash and cash equivalents acquired | 2,521 |
Digital Teaching Tools Finland Ltd ("Whiteboard.fi", hereafter referred to as Whiteboard.fi) was acquired by a purchase of 100% of the shares effective from 23 February 2021. Whiteboard.fi, an online whiteboard tool for teachers and classrooms that helps engage students both in the physical classroom and through remote learning was acquired for an initial consideration of \$6 million, in addition to a performance-based element up to \$6 million depending on Whiteboard's performance in 2021-2022. The initial consideration was settled by a combination of cash and 184,892 new Kahoot! ASA shares at a subscription price of NOK 110.39 per share.
The performance-based element relating to Whiteboard.fi is determined based on invoiced revenue targets in 2021 and 2022 subject to EBITDA margin and a net cash flow conversion condition. Given the contingent liability will be determined and settled in the future, the nominal value is discounted to present value. Present value of the contingent liability relating to the acquisition was recognized at \$4,314 thousand, of which \$2,702 thousand was noncurrent. The main three factors used in assessing the fair value of the earnout is forecast of probability, cashflow and discount rate. The discount rate applied for Whiteboard.fi was 12.8%.
The amounts recognized at the date of acquisition in respect of identifiable assets acquired and liabilities assumed are set out in the table below, using the exchange rate as of 23 February 2021 for Whiteboard.fi.
Goodwill from the acquisition of Whiteboard.fi is attributable to synergies and will lead to additional value for the Group's subscription-based product offering when combined with the Kahoot! products.
Acquisition costs of \$241 thousand arose as a result of the transaction. These have been recognized as part of other operating expenses in the statement of statement of profit or loss.
Since the acquisition date 23 February 2021, Whiteboard.fi has contributed with \$503 thousand to the Group's revenue and negative net income contribution of \$155 thousand to the Group's total profit. If the acquisition of Whiteboard.fi had occurred on 1 January 2021, the revenue for the Group would have been \$58,362 thousand and the Group's profit would have been \$523 thousand.
| USD in thousands | Whiteboard.fi |
|---|---|
| Purchase consideration | |
| Cash consideration | 3,600 |
| Shares issued | 2,402 |
| Contingent liability / earn-out | 4,314 |
| Total purchase consideration | 10,316 |
| Brand | 219 |
| Technology | 3,563 |
| Property, plant and equipment | 12 |
| Trade and other receivables | 68 |
| Cash and cash equivalents | 293 |
| Deferred tax liability | (756) |
| Trade payables and other current liabilities | (312) |
| Total net identifiable assets acquired at fair value | 3,086 |
| Total purchase consideration | 10,316 |
| Goodwill | 7,230 |
| Net cash outflow arising on acquisition | |
| Cash consideration | 3,600 |
| Less: cash and cash equivalents acquired | 293 |
The Kahoot! Group has one segment: software to make learning awesome. The market for Kahoot!'s software is global. The chief decision maker will therefore follow up revenue and profitability on a global basis. This is consistent with the internal reporting submitted to the chief operating decision maker responsible for allocating resources and assessing performance as well as making strategic decisions.
| Restated | Restated | Restated | |||
|---|---|---|---|---|---|
| USD in thousands | Q3 2021 | 03 2020 | YTD 2021 YTD 2020 | FY 2020 | |
| Subscription revenue - recognized over time | 23,114 | 6,726 | 57,155 | 15,103 | 26,215 |
| Sale to schools - recognized over time * | 416 | 416 | |||
| Sale to schools - recognized at point in time * | 2,120 | 2,120 | 2,235 | ||
| Other revenue - recognized at point in time | 120 | 184 | 423 | ees | 878 |
| Total revenue from contracts with customers | 23,650 | 9,030 | 57,994 | 17,888 | 29,328 |
| Other operating income | 0 | 249 | 144 | 175 | |
| Total revenue and other operating income | 23,650 | 9,031 | 58,244 | 18,032 | 29,502 |
1 See note 1 for description of the change in revenue recognition principles for sale to schools. The 2020 license revenues for sale to schools are recognized at point in time.
Kahoot! ASA only has one class of shares, and all shares have the same voting rights. The shareholders are entitled to receive dividends as and when declared and are entitled to one vote per share at General Meetings of the Company.
| shares | Number of Share capital Share capital (NOK) |
(USD) | |
|---|---|---|---|
| Balance at 1 January 2021 | 446,091,967 | 44,609,197 | 5,228,090 |
| Issued during the year | 37,093,408 | 3,709,341 | 441,320 |
| Balance at 30 September 2021 | 483,185,375 | 48,318,538 | 5,669,410 |
The share capital is fully paid and has a par value of NOK 0.10.
At the Annual General Meeting of Kahoot! ASA on 8 June 2021, the Board of Directors were authorized to increase the share capital by up to NOK 9.63 million through the issuance of up to 96.3 million new shares in connection with (i) mergers, acquisitions, equity raises and (ii) exercise of share options. The Board of Directors were authorized to acquire treasury shares with a total nominal value of up to NOK 1,418 thousand.
Information relating to the Group's Employee Option Plan, including details of options issued, exercised, and lapsed during the financial year and options outstanding at the end of each reporting period, is set out in note 17 in the 2020 Annual Report. The table below shows the development in the Company's share capital in 2021.
| Change in | New | Nominal | ||||
|---|---|---|---|---|---|---|
| Date of | share capital | share capital | value | Number of total | Subscription price per | |
| registration | Type of change | (NOK) | (NOK) | (NOK) | issued shares | share (NOK) |
| 24 Feb 21 | Share capital increase | 12,162 | 44,621,359 | 0.10 | 446,213,585 | 116.30 |
| 9 Mar 21 | Share capital increase | 18,489 | 44,639,848 | 0.10 | 446,398,477 | 110.39 |
| 27 Apr 21 | Share capital increase | 110,499 | 44,750,347 | 0.10 | 447,503,471 | 93.90 |
| 3 May 21 | Share capital increase | 18,604 | 44,768,951 | 0.10 | 447,689,510 | 86.62 |
| 20 May 21 | Share capital increase | 2,500,000 | 47,268,951 | 0.10 | 472,689,510 | 68.00 |
| 10 Sep 21 | Share capital increase | 319,510 | 47,588,461 | 0.10 | 475,884,610 | 1) |
| 17 Sep 21 | Share capital increase | 730,077 | 48,318,538 | 0.10 | 483,185,375 | 64.77 |
1) Share option exercise with NOK strike price: 31/20/17.13/16.06/16/13.3333/10/8.3333/6.6667/1.6667
| Shareholders per 1 November 2021 | Shares (m) | % | |
|---|---|---|---|
| 1 | Glitrafjord AS | 41.2 | 8.5 % |
| 2 | Datum AS | 28.0 | 5.8 % |
| 3 State Street Bank and Trust Comp | 20.6 | 4.3 % | |
| ব | BNP Paribas | 20.0 | 4.1 % |
| 5 | Creandum III LP | 20.0 | 4.1 % |
| 6 J.P. Morgan Securities Plc | 20.0 | 4.1 % | |
| 7 Goldman Sachs International | 18.0 | 3.7% | |
| 8 The Bank of New York Mellon SA/NV | 13.9 | 2.9 % | |
| 9 Citigroup Global Markets Inc. | 13.5 | 2.8% | |
| 10 State Street Bank and Trust Comp | 12.8 | 2.6 % | |
| 11 | Versvik Invest AS | 11.3 | 2.3 % |
| 12 | Folketrygdfondet | ਰੇ | 2.0 % |
| 13 | Newbrott AS | 7.6 | 1.6 % |
| 14 The Northern Trust Comp, London | 7.5 | 1.5 % | |
| 15 | Datum Invest AS | 73 | 1.5 % |
| 16 Euroclear Bank S.A./N.V. | 6.1 | 1.3 % | |
| 17 | Nordnet Bank AB | 5.7 | 1.2 % |
| 18 J.P. Morgan Chase Bank, N.A. | 5.5 | 1.1 % | |
| 19 J.P. Morgan Bank Luxembourg S.A. | 5.4 | 1.1 % | |
| 20 | Gamification AS | 5.2 | 1.1 % |
| Other | 203.8 | 42.2 % | |
| Total outstanding shares | 483.2 | 100.0 % | |
| Outstanding share options | 24.8 | ||
| Total no. of shares (fully diluted) | 507.9 |
Investors with shareholding exceeding 5%: SoftBank, Glitrafjord (CEO, Eilert Hanoa), Datum Group and BlackRock.
There have not been any changes or transactions with any related parties that significantly impact the Group's financial position or results for the period.
No events that have significantly affected or may significantly affect the operations of the Group have occurred after 30 September 2021.
During the third quarter, the Group has updated the model for estimating the recognition of revenue over time (deferred revenue). The effect of the change in accounting estimates results in an increase in the balance of contract liabilities (deferred revenue), offset by lower recognized revenue for previously reported periods.
The effect of the change in accounting estimates can be summarized as follows:
See note 1 break-down of which quarters the restated revenues are attributed to.
Below is restated comparative figures for 2020.
| As reported | Kahoot! | Drops | Restated | |
|---|---|---|---|---|
| USD in thousands | 2020 | Adj. 2020 | Adj. 2020 | 2020 |
| Revenue from contracts with customers | 30,859 | (1,535) | 4 | 29,328 |
| Other operating income | 175 | 175 | ||
| Total revenue and other operating income | 31,034 | (1,535) | A | 29,502 |
| Cost of sales | 3,790 | 3,790 | ||
| Employee benefit expenses | 31,625 | 31,625 | ||
| Other operating expenses | 11,553 | 11,553 | ||
| Operating profit/(loss) before deprec. and amortiz. (EBITDA) | (15,936) | (1,535) | 4 | (17,467) |
| Amortization of intangible assets | 1,897 | 1,897 | ||
| Depreciation | 685 | 685 | ||
| Operating profit/(loss) (EBIT) | (18,517) | (1,535) | 4 | (20,048) |
| Financial income | 372 | 372 | ||
| Financial expenses | (329) | (329) | ||
| Net change in fair value of financial instruments | 848 | 848 | ||
| Net foreign exchange gains (losses) | (17,510) | (17,510) | ||
| Net financial income (expenses) | (16,619) | (16,619) | ||
| Profit/(loss) before income tax | (35,136) | (1,535) | 4 | (36,668) |
| Income tax | (656) | (656) | ||
| Profit/(loss) for the period | (34,481) | (1,535) | 4 | (36,012) |
| As reported | Kahoot! | Kahoot! | Drops | Restated | |
|---|---|---|---|---|---|
| USD in thousands | 31.12.2020 Adj OB 2020 | Adj. 2020 | Adj. 2020 | 31.12.2020 | |
| ASSETS | |||||
| Goodwill | 77,745 | 12 | 77,757 | ||
| Intangible assets | 34,373 | 34,373 | |||
| Property, plant and equipment | 409 | 409 | |||
| Right-of-use assets | 3,165 | 3,165 | |||
| Deferred tax asset | |||||
| Total non-current assets | 115,692 | 12 | 115,704 | ||
| Trade receivables | 2,671 | 486 | 3,157 | ||
| Other current assets | 3,316 | (143) | 3,173 | ||
| Cash and cash equivalents | 256,120 | 256,120 | |||
| Total current assets | 262,108 | 343 | 262,451 | ||
| TOTAL ASSETS | 377,800 | 355 | 378,155 | ||
| EQUITY AND LIABILITIES | |||||
| Share capital | 5,228 | 5,228 | |||
| Share premium | 357,383 | 357,383 | |||
| Share-based payments reserves | 5,542 | 5,542 | |||
| Foreign currency translation reserves | (375) | (375) | |||
| Accumulated deficit | (79,373) | (716) | (1,535) | 4 | (81,620) |
| Total equity | 288,406 | (716) | (1,535) | 4 | 286,159 |
| Lease liabilities | 2,312 | 2,312 | |||
| Deferred tax liability | 5,843 | 5,843 | |||
| Other non-current liabilities | 15,447 | 15,447 | |||
| Total non-current liabilities | 23,602 | - | - | - | 23,602 |
| Lease liabilities | ਰੇਦਕ | ਰੇਦਿੱ | |||
| Trade payables | 1,817 | 1,817 | |||
| Contract liabilities (deferred revenue) | 27,899 | 716 | 1,535 | 351 | 30,501 |
| Other current liabilities | 35,111 | 35,111 | |||
| Total current liabilities | 65,791 | 716 | 1,535 | 351 | 68,393 |
| Total liabilities | 89,393 | 716 | 1,535 | 351 | 91,996 |
| TOTAL EQUITY AND LIABILITIES | 377,800 | 355 | 378,155 |
| As reported | Kahoot! | Drops | Restated | |
|---|---|---|---|---|
| USD in thousands | 2020 | Adj. 2020 | Adj. 2020 | 2020 |
| Cash flows from operating activities | ||||
| Profit/(loss) before income tax | (35,136) | (1,535) | 4 | (36,668) |
| Adjustments for: | ||||
| Paid taxes | ||||
| Depreciation and amortization | 2,582 | 2,582 | ||
| Net interest income | (329) | (329) | ||
| Share-based payments expense | 3,069 | 3,069 | ||
| Change in trade and other receivables | 279 | (486) | (207) | |
| Change in contract liabilities (deferred revenue) | 13,807 | 1,535 | 351 | 15,694 |
| Change in trade payables | 591 | 591 | ||
| Change in other current assets and other liabilities | 32,191 | 131 | 32,322 | |
| Interest received | 372 | 372 | ||
| Net cash flow from operating activities | 17,426 | 17,426 | ||
| Cash flows from investing activities | ||||
| Payment for acquisition of subsidiary, net of cash acquired | (34,227) | (34,227) | ||
| Payment for intangible assets | ||||
| Payment for property, plant and equipment | (214) | (214) | ||
| Net cash from investing activities | (34,441) | (34,441) | ||
| Cash flows from financing activities | ||||
| Proceeds from issuance of ordinary shares | 241,931 | 241,931 | ||
| Transaction costs on issuance of ordinary shares | (10,237) | (10,237) | ||
| Repayments of lease liabilities | (537) | (537) | ||
| Paid interest on lease liabilities | (78) | (78) | ||
| Net cash from financing activities | 231,079 | 231,079 | ||
| Net increase/(decrease) in cash and cash equivalents | 214,064 | 214,064 | ||
| Cash and cash equivalents beginning of the period | 40,851 | 40,851 | ||
| Effects of exchange rate changes on cash and cash equiv. | 1,205 | 1,205 | ||
| Cash and cash equivalents as of end of period | 256,120 | 256,120 |
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