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Swedish software group Fortnox has restated key market share figures after the Financial Times challenged numbers it presented to investors at a capital markets day in May.
Chief financial officer Roger Hartelius told the FT his company’s use of numbers that understated its dominance of Sweden’s accounting software market this year, and at a similar event in 2021, was “a mistake”.
A listed company founded two decades ago, Fortnox portrays itself as a start-up, while its $3.7bn market capitalisation reflects the fact that it is viewed as one of the world’s fastest growing technology companies despite operating in only one country.
In the original presentation published 23 May, Fortnox reported the growth in the number of accounting firms it counts as customers since 2021, accompanied by figures for its market share among small, medium and large sized firms.
It has now clarified that the market share figures were for a specific product, Digital Agency, used by only around half its accounting firm customers, and that in fact 80 per cent of accountancy firms with five or more employees already use Fortnox.
Asked if Fortnox had misled investors about its growth prospects, Hartelius denied the presentation was “built from evil thoughts” and said it reflected how the company set its goals internally.
Its share of small accounting firms, those with zero to four employees, has been updated to 35 per cent, versus the previously disclosed 18 per cent figure that it now says represent Digital Agency customers only.
By Wednesday evening, Fortnox had not updated the January 2021 capital markets presentation on its website and Hartelius declined to disclose further historic market share figures to the FT.
“We are really hoping there is no more information lacking as in this case,” he said, adding: “we are trying to be more . . . transparent.”
Fortnox’s clarifications were made after the FT asked it to reconcile its figures on the accountancy market with those published by Sweden’s statistics agency.
While the company’s updated market share numbers now add up in line with the agency’s figures, a discrepancy remains because Fortnox’s numbers are based on their larger estimate of the total number of audit and accountancy firms in Sweden: 28,000, versus the 25,000 counted by Statistics Sweden in 2023.
Hartelius said he was unable to provide additional data to clarify the picture by a Wednesday deadline because he was busy after the announcement that Fortnox’s chief operating officer had stepped down.
After the FT published an article in March examining Fortnox’s metronomic growth and highlighting investor questions about its prospects and accounting methods, the company’s share price fell almost 15 per cent, wiping hundreds of millions of dollars off its then $4.6bn market capitalisation.
In response to questions about the FT analysis on a results call in April, chief executive Tommy Eklund said “we will become better and better at explaining the business, if it’s something that is hard to understand, of course”.
Departing COO Johan Lundgren said “it has been an exciting and educational journey working at Fortnox”, in a company press release on Wednesday, adding: “I wish everyone the best of luck.”
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