The technology company QuarticOn focused its Q3 2019 efforts on developing its SaaS channel and cutting down costs. QuarticOn worked on developing its Happy Cart app available on the global platform Shopify.com. Ultimately, the app was officially launched on Shopify on 7 November, providing the Company with access to 1 million prospective users worldwide. In addition to Shopify, QuarticOn is present on several shopping platforms, including Polish Shoper.pl, Czech Shoptet.cz, and Slovak Shoptet.sk and CreativeSites.sk, and all these bring together +30,000 online stores. Between July and September 2019, QuarticOn generated PLN 1.09 m in sales revenue, of which 35% were international sales. This was also another quarter when the Company’s EBITDA improved – by PLN 0.13 m Q/Q – thanks to its cost-optimisation programme.
In Q3 2019, QuarticOn focused on integrating its plug-ins with new SaaS-based e-commerce platforms. As a result, in September the Company had its debut on CreativeSites.sk and updated its portfolio on Shoper.pl. The Company also reviewed its first implementations on each platform and introduced some changes to further automate application deployment. In addition, selected customers could enjoy new functionalities, which will soon become available to everyone on CreativeSties.sk. Also, QuarticOn started a campaign to encourage shops on all current platforms to become more active. Its results are expected to be observed in the following months. In Q3, the Company also worked hard on its Happy Cart, a solution designed specifically for the international platform Shopify.com, where it was launched on 7 November. This is the first global platform to offer QuarticOn products.
“Looking at the outcomes of these actions now, we are convinced that this was a good decision. For instance, on Shoptet.cz, our QuarticOn app has a quarter-on-quarter conversion of over 20% between its Trial and Paid plans. By launching our plug-ins on e-commerce platforms in Poland, the Czech Republic and Slovakia, we gained access to more than 30,000 e-stores. And by debuting on the global platform Shopify.com, our app has been made available to more than a million e-stores which provide online shopping services worldwide, mainly in the USA, Canada and the UK. We aim to grow through SaaS platforms, the majority of which are self-service, and by offering large numbers of smaller clients, can create the economies of scale to boost our margin. In addition, over time such new clients grow and need more developed and personalised tools, which we will be happy to provide” said Paweł Wyborski, Founder and CEO at QuarticOn S.A.
QuarticOn is now analysing global and local platforms to plan its implementations over the next year. Its new products in the form of plug-in apps will be financed from a number of sources, including through the private placement of up to 20,000 F-series. The Company is also looking into potential acquisition targets, and with approval from the Extraordinary General Meeting of 8 November 2019 to issue no more than 150,000 G-series ordinary shares as authorised capital, it will have the funds to acquire such target companies in 2020.
QuarticOn is also heavily involved in R&D activities. Over the last quarter, for instance, the Company developed its new AI-based product designed to make online shopping more seamless and efficient. Its first implementations are expected to take place in Q4 2019. The Company is also looking forward to the final results of the EU calls to which it submitted its project proposals. The total value of these is about PLN 15 m.
Between July and September 2019, QuarticOn sales revenue was PLN 1.09 m, similar to the previous quarter (-4% Q/Q) and Q3 2018 (-3% YoY). And excluding VOD, during the reference period the Company recorded 7% higher sales than in the corresponding period the year before. In Q3, the Company completed the implementation of its new sales model, with a new product portfolio based on functionality packages. Q3 also saw the finalisation of cost optimisation. Its effects, while visible already during this reporting period, are expected to manifest themselves fully in Q4. Through cost optimisation, the Company brought costs down by PLN 0.18 m Q/Q, improving its EBITDA by PLN 0.13 m Q/Q to reach PLN -0.43 m. Its net result was PLN -1.07 m.
“Early Q4 2019 has shown that our new sales model is starting to produce our intended effects, accelerating client acquisition and allowing our current clients to benefit from the development of our new services. We can also observe the benefits of our cost optimisation programme completed in September. We expect our presence on new platforms and our redefined sales model, coupled with a careful assessment of our expenditures, to have beneficial effects on our performance in the following reporting periods. And we continue our commitment to deliver EBITDA break-even in Q4 2019” said Michał Giergielewicz, Board Member at QuarticOn S.A.