Strong start to FY23 and unchanged guidance

Sage enjoyed strong organic recurring revenue growth in Q1 23 (+12%) thanks to buoyant activities in the US and the UK. The ARR (Annualized Recurring Revenue) trend remained positive in Q1 23 despite a sequential slowdown (December includes holidays). Price increases are expected to average +4-5% in FY23, as in FY22. To date, Sage has seen no impact from the economic situation on customer demand. The FY23 guidance of organic recurring revenue growth of above +9% was maintained.

Strong FY22, Sage confident for FY23

Sage had a strong FY22 with organic recurring revenue growth at the high end of the guidance (+9%). Small and medium-sized companies continued to invest in cloud solutions and Sage Business cloud revenue growth was substantial (+24%). The ARR was up +12% including an improvement in H2 22 vs H1 22. The renewal rate by value improved to 101% (+2pts). The organic operating margin increased to 19.9% of revenue (+0.4pt). Sage expects a growth acceleration and a higher operating margin in 23.

Good visibility for 2022

Q3 21/22 was strong with an acceleration in organic recurring revenue growth (+10% vs +8% in H1 21/22) thanks to demand for cloud software in small/medium-sized companies. Growth was the fastest in North America. Sage Business Cloud revenue surged by +20%. At present there is no impact from the uncertain economic environment on the activities. Sage is confident that it can achieve the high-end of the recurring revenue growth range in FY21/22 (+8-9%) and confirmed guidance of an improvement in th

New customer wins, renewal rate improvement

In H1 21/22, organic recurring revenue grew by +8% thanks to strong software subscription growth (+14%). The US was the best performer (+13%). The development of Sage Business Cloud was driven by the cloud native solutions with new customer wins and a good performance from the cloud connected solutions. The organic operating margin decreased to 19.9% of revenue (-0.3pts) due to investment in products and marketing. The 2022 guidance was unchanged.

In line with estimates and market-sanctioned

Organic recurring revenue grew by 8% in Q1 21/22. This is a positive achievement. It corresponds to the low-end of 2021/22 guidance (+8-9%). There is no slowdown in Annualised Recurring Revenue growth. During the quarter, organic recurring growth was driven by the migration of existing customers to subscription and the gain of new customers. North America and the UK/Ireland were the best performers. Sage Group confirmed guidance and that it is on track with its goal of organic operating margin i

Organic recurring revenue growth acceleration expected in 2022

In FY2020/21, organic recurring revenue grew by 5.4% thanks to the acquisition of new customers and the ongoing migration of existing customers to subscription contracts. The US was the best performer driven by Sage Intacct (+22%). Sage Business Cloud penetration reached 67% (+7pts). Lower organic operating margin (-2.7pts) was due to higher investments in marketing/sales and R&D. 2022 guidance includes organic recurring revenue growth of +8-9% (above expectations) and an improvement of the orga

Organic growth improvement

Q3 21 was a satisfactory quarter with organic recurring revenue up 6.1%. Cloud native revenue grew significantly (+37% vs +30% in H1 21) thanks to Sage Intacct, Sage Accounting in the UK, Sage People, AutoEntry and the migration from cloud connected software to cloud native solutions. Consequently, organic recurring revenue growth accelerated in 9m21 (+5%) vs H1 21 (+4.4%). By geography, North America was the best performer. 2021 guidance was revised upwards at the top line.

Good organic recurring revenue growth, investments in growth

H1 20/21 was good with organic recurring revenue growth of 4.4%. Growth was sustained by software subscriptions (+11%). Sage Business Cloud revenue increased to 65% of the total. The renewal rate by value stabilised (97%) vs Q1 20/21 and H2 19/20 and the churn was in line with pre-COVID-19 levels which are reassuring. The organic operating margin decreased to 20.2% of revenue (-3pts) due to higher spendings in sales & marketing and R&D as expected. 2020/21 guidance is unchanged.

Good start to FY2020/21

Sage Group released a good set of Q1 20/21 figures with organic recurring revenue growth of 4.7% in line with the full-year guidance (+3-5%). This performance was spread out across various cloud native software and essentially driven by the gain of new customers. Lastly, no deterioration in the churn rate is reassuring considering the continuing tough market conditions. All in all, Sage Group confirmed FY2020/21 guidance.

Disappointing operating margin guidance

In FY2019/20, organic recurring revenue growth (+8.5% despite a negative impact from COVID-19 in H2 19/20) and the organic operating margin (22.1% of revenue) were in line with guidance. The big disappointment was on 2020/21 guidance for the operating margin (up to 3pts below the FY2019/20 level depending on the amount of additional investments), the result of a significant slowdown in organic recurring revenue growth (+3-5% anticipated) and the acceleration in R&D to increase the cloud native g

Resilient organic recurring revenue

In Q3 19/20 (April-June 20), organic recurring revenue growth slowed significantly (+6.5% vs +10.3% in H1 19/20) but was less than expected. In particular, the customer churn was below the group’s anticipation. Conversely, the drop in SSRS & Processing revenue (-34.8% vs -19.6% in H1 19/20) was attributable to lower licence and services revenue. FY2019/20 guidance is favourable with organic recurring revenue growth of +7-8%, a decrease in SSRS & Processing revenue and an organic operating margin

Good H1 2019/20, now put to the test

Sage Group had a good H1 19/20 with a limited impact from the Coronavirus pandemic. Organic recurring revenue continued to grow rapidly (+10.3%) thanks to strong software subscription growth (+26% vs +27.7% in H1 18/19). The operating margin which was impacted by a provision for bad debt (£13m) represented 22.8% of revenue (-0.6pt), above the consensus (22%). H2 19/20 looks tricky. In April 2020, the gain of new customers was half the level expected and the churn rate increased slightly.

Q1 19/20 met expectations

Sage Group had a good start to FY2019/20. Total organic revenue increased by +6.7% while organic recurring revenue grew significantly (+10.7% vs +10.5% in Q1 18/19) thanks to the migration of existing customers to subscription and the cloud, the reactivation of customers and the gain of new clients. As in 2018/19, North America and the UK/Ireland were the most dynamic geographic areas. Guidance for FY2019/20 is confirmed.

ARR guidance lifted; IFRS15 revenue adjustment

FY'22 was a formative year, as Bango's compelling platform licensing revenue model achieved meaningful scale and the execution began on the transformational DoCoMo deal. Platform Licensing Exit ARR rose to $5.0m (FY'21: $1.1m), whilst a record number of new merchants landed in the year (44, inc. McAfee, HBO, Paramount and others). Valuation materially understates the synergistic potential available from the DoCoMo deal in our view, whilst also overlooking value in the rapidly growing licensing b

New Forecasts: breaking through

With FY22 in line and no changes to our existing FY23 forecasts, our focus is on the introduction of new forecasts for FY24 and FY25. We model Clareti recurring revenue growth of 17% and 18% resp. With Clareti having broken through to positive cash EBITDA for the first time in its history in FY22, we expect operating leverage to drive significant margin expansion over the next three years and beyond (Gresham guides to 40% of ARR dropping through to cash EBITDA). We model cash EBITDA margins of 1

Hybridan Small Cap Feast - 23 Mar 23

23 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 06 Mar 23

6 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objective

Altitude Group (ALT LN) - New major contracts and FY23 ahead of expectations

Altitude has announced multiple new contracts in its Adjacent Markets Programmes (AMP) that are expected to have a significant impact on Group revenue. Zeus adjusted EBITDA forecasts are upgraded 11.9% in FY24 and 24.2% in FY25 to reflect this. The Group has also guided that FY23 adjusted EBITDA is expected to be above expectations (£1.70m), so we upgrade by 8.8% to £1.85m. Today’s contract wins and confident outlook statement provide further positive momentum. Altitude shares trade below our up

Morning Note – 27 March 2023

Sopheon - Results: Introducing InnovationOps

FY results to December 2022 are in line with the January trading update indicating exciting prospects. The significant strategic shift to SaaS for all new customers will lead to greater visibility and quality of earnings, and forecasts are unchanged save for changes to US tax assumptions in FY24. $24.3m of ARR at FY22 (+17% vs FY21 ) represents 64% of FY23 revenue expectations; total visibility of FY23 revenue stands at $28.4m, equivalent to 75% of FY expectations (this time last year was $25.1m

Hybridan Small Cap Feast - 21 Mar 23

21 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Looking through the fog

Tribal has provided a useful NTU update, suggesting that the two parties are working towards winding the contract down, albeit negotiations are still ongoing. While this is clearly not an optimal outcome, it nevertheless reduces uncertainty surrounding the stock and so should enable investors to focus on the core business, which continues to perform strongly – delivering +10% u/l ARR growth (despite the NTU loss). With a strong and sticky core market position and an increasingly international pr

Hybridan Small Cap Feast - 24 Mar 23

24 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

NTU update and change of reporting date

We learn today that Tribal has received notification that NTU has terminated its contract and reserved its rights to claim damages. Tribal meanwhile rejects this right to terminate and is considering its next steps. Furthermore - to accommodate this update, the company now expects to report results on 24th March. We therefore consider it is most appropriate to temporarily withdraw forecasts until we regain clarity over this situation and the most likely financial impact.

Hybridan Small Cap Feast - 16 Mar 23

16 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 20 Mar 23

20 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Blackbird plc - Finals

Blackbird plc has reported strong full-year results, with record revenue growth driven by its first ‘Powered by Blackbird’ (PBB) licencing deal with EVS, a €300m market-cap media group. EVS launched IPD-VIA Create in December 2022, its new web application developed in collaboration with Blackbird, which has already been deployed by a US broadcaster on a major global sporting event. This, and the continued roll-out by EVS, will translate into additional revenue for Blackbird through its revenue-s

Hybridan Small Cap Feast - 27 Mar 23

27 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv