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As expected, the Q3 23 showed a further growth slowdown. Organic revenue was up by +2%. North America was still the weakest geographic area with lower revenue at constant currency (-4%) due to customer investments reduced in the TMT sector and financial services. Inversely, the Europe and the rest of world regions saw growth. In Q4 23, revenue should be in the range -1.5%/+0.5% at constant currency. Regarding the operating margin, the high-end of the guidance (13.2% of revenue) is now expected.
Companies: Capgemini (CAP:EPA)Capgemini SE (CAP:PAR)
AlphaValue
Organic revenue growth slowed in Q2 23 (+4.7%), slightly above expectations. Capgemini was affected by the stable revenue at constant currency in North America. Conversely, the improvement in the operating margin (+0.2pt to 12.4% of revenue) was a good achievement in H1 23. The positive price and project mix effect more than offset cost inflation. 2023 guidance was reiterated, the only change being revenue growth in the mid-point of the target range instead of in the mid-point or above the mid-p
In Q1 23, the slowdown in growth was weaker than expected. Organic revenue growth (+10.1%) was driven by Europe. Manufacturing and the Public sector were the most dynamic verticals. There were delays and cost cutting in Financial services which impacted revenue growth in North America. A further slowdown should occur in Q2 23 vs Q1 23 as expected. Guidance is unchanged and Capgemini now anticipates revenue growth at the least in the mid-point of the guidance range.
In Q4 22, organic revenue growth was strong (+12.8%) and above expectations despite a sequential slowdown in all geographic areas. In 2022, the operating margin was 13% of revenue (+0.1pt), in line with guidance. This was the combination of a positive project mix, price increases, higher travel and facilities costs and wage inflation. Given the uncertain macro-economics and persisting inflation, 2023 guidance includes revenue growth of +4-7% at constant currency (+3.5-6.0% organically) and an op
In Q3 22, organic revenue increased strongly (+14.3%) thanks to high demand in digital transformation. The book to bill ratio reached 98% (vs 109% in H1 22). Q3 is generally lower than Q4 and the order intake has been going well since the beginning of Q4 22. Capgemini is confident that it can reach the high end of the revenue growth guidance in 2022 suggesting c.+10% organically in Q4 22. Capgemini anticipates slower growth in 2023 given the tougher macroeconomic backdrop which is hardly a surpr
Capgemini had a very strong Q2 22 with an acceleration in organic revenue growth sequentially (+18.1% vs +16.3% in Q1 22) and high bookings (+18.8% on constant currency). Price increases and a favourable service mix offset wage inflation, higher hiring and training costs and the return of operating costs like travel expenses. The operating margin improved (+0.2pt to 12.2% of revenue). The Group revised substantially higher its revenue growth guidance on constant currency.
Capgemini had a buoyant Q1 22 with organic revenue growth of +16.3%, high order intake and increasing attrition rate (26.2%). The digital transformation is driving IT services. Capgemini benefited from high demand for cloud services, data & AI, digital solutions (intelligent industry, customer first, enterprise management, sustainability) and cyber security services. 2022 guidance is unchanged.
Capgemini had a very strong Q4 21 with organic revenue growth of +13.2% and high bookings. In 2021, Capgemini delivered organic revenue growth (+10.2%) slightly above the high-end of guidance, a significant improvement in the operating margin (+1pt to 12.9% of revenue vs guidance >12.7% of revenue) and organic free cash flow of €1.87bn vs guidance >€1.7bn. A positive trend is expected in 2022 despite the shortage of skilled IT people in the market and wage inflation.
Capgemini had a very good Q3 21. Organic revenue growth surged by +13.2% and even accelerated sequentially (+12.9% in Q2 21). Revenue growth was widespread geographically, by verticals and business line. Capgemini is benefiting from strong customer demand for innovation and digital transformation and the group’s large services portfolio meets demand. 2021 guidance is upgraded at the top line (+14.5-15% at constant currency, including acquisitions), of which +9-10% organically, and the operating
Organic revenue growth accelerated in Q2 21 (+12.9%) thanks to strong demand for the digital transformation. Capgemini posted growth in all verticals, all geographic areas and all businesses. In H1 21, the operating margin reached 12% of revenue (1.2pt) thanks to the strong top line (+7.1% organically), higher utilisation rate and the cost synergies related to Altran. Capgemini revised upwards 2021 revenue growth at constant currency, the operating margin and organic free cash flow.
The trend in organic revenue (+1.7%) was better than expected in Q1 21, while the return to organic growth was anticipated in Q2 21. An improvement in activities was seen in all sectors and all geographic areas. The group employs a strong portion of employees in India and Brazil where the COVID-19 pandemic is severe. Capgemini has not had operational disruption up to now and does not see any issue in the coming weeks. 2021 guidance is maintained.
In Q4 20, the decrease in organic revenue slowed sequentially. The commercial activity was strong with a book-to-bill ratio of 121%. In 2020, Capgemini beat expectations with an operating margin of 11.9% of revenue (-0.4pt), which is above the high range of guidance. Organic free cash flow was strong (above €1bn). The outlook is positive with the confirmation of organic revenue growth returning in Q2 21 and an operating margin at 2019’s level in 2021.
In Q3 20, the decrease in organic revenue slowed significantly (-3.6% vs -7.7% in Q2 20). This was attributable to all sectors, geographies and business lines. Digital and cloud services continued to grow by more than 10%. The integration of Altran is on track and the combined group launched three joint offerings in the market. For 2020, guidance was confirmed. Management is targeting a turnaround in organic revenue growth in Q2 21.
Companies: Capgemini SE
Capgemini had a rather good H1 20 given the significant decrease in organic revenue in Q2 20 (-7.7%) due to the lockdown. In H1 20, organic revenue decreased by 3.4% and the decline of the operating margin (-0.6pt to 10.8% of revenue) was limited thanks to lower selling expenses (mainly travel costs) and the control of G&A costs. The order intake was satisfactory in H1 20. 2020 guidance is globally a positive sign of the group’s adaptation.
The COVID-19 pandemic had a modest impact on the group’s activities in Q1 20. Organic revenue growth was +2%. This resulted from the ability of the group to implement remote working for 95% of its headcount worldwide in less than three weeks and a rather well-balanced revenue breakdown. Management believes that cost savings should enable an improvement in the operating margin by 100bp (12.3% of revenue in 2019) if the economic activity resumes gradually in Q3-Q4 20.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Capgemini SE. We currently have 215 research reports from 4 professional analysts.
Audioboom’s FY23 results and Q1 trading update show Q1 24 revenue growth of +11% yoy, $6.7m of March 2024 revenue marking the platform’s highest revenue month since May 2022, and a confident outlook that leads us to reiterate our FY24E forecasts. Following the focus on new initiatives through FY23, the platform is now in its strongest ever operational position, with a record 1.1bn monthly ad impressions created in March 2024, record global audience reach of 38.6m unique global listeners in Janua
Companies: Audioboom Group PLC
Cavendish
Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H
Companies: Alphawave IP Group PLC
Capital Access Group
Crimson Tide has reported FY23 results to December in line with expectations, with additional operating leverage benefitting updated FY24 and maiden FY25 and FY26 forecasts. FY23 delivered +15% revenue growth to £6.2m at 86% GM, of which over 90% is recurring, and maintained £5.8m ARR even after unexpected customer churn in the year as we previously noted. Crucially, the Group achieved milestone adj EBITDA profitability of £0.4m at 7% EBITDA margin, and edges closer to adj PBT profitability expe
Companies: Crimson Tide Plc
Companies: BILN ELCO NXQ CUSN ATG
Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce
Companies: Devolver Digital, Inc.
Zeus Capital
Companies: 88E RNO TRIN KRM EXR BOOM
Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.
Companies: Checkit plc
Edison
Companies: Kainos Group PLC
Canaccord Genuity
ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).
Companies: Auction Technology Group PLC
Companies: Crimson Tide Plc (TIDE:LON)Plant Health Care PLC (PHC:LON)
Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning's full year results reflect the outcome of a multi-year strategy coming to fruition for the group, with recurring revenue growth of 8.7% delivering overall revenue growth of 7.1% and in turn a 60% increase in PBT to £0.7m. Over the past few years, Touchstar has focused on enhancing the returns from their product offering through a shift towards recurring software licen
Companies: Touchstar plc
WHIreland
This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored. We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.
Companies: Idox plc
Progressive Equity Research
ENGAGE XR’s FY23 results show revenue and net cash in line with the February trading update, EBITDA ahead at -€4.0m vs -€4.5m due to the split of cash outflow between opex and working capital, and a confident outlook that leads us to reiterate our FY24E forecasts. FY23 revenue for the core ENGAGE platform was unchanged vs FY22 at €3.3m, as H2 23 revenue was impacted by the record seven-figure contract announced in February shifting to 2024, and several enterprise customers scaling back renewals
Companies: Engage XR Holdings PLC
Companies: Cirata Plc
Liberum
Companies: UTL ASC DNLM BWNG MONY DFS BOO
Shore Capital
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