Starting 2022 on the right foot

Software AG reported Q1 figures that were above consensus and our expectations. The Digital Business again drove the revenue increase with another quarter of consecutive growth. The bookings growth within both the Digital Business and Adabas & Natural was in line with the company’s ambitions. The company also registered growth in ARR. Operating profit, too, was better than our estimates due to higher sales and lower costs. Following this release, the group confirmed its FY22 targets. Its FY23 ta

2022 should see Digital Business's acceleration

Software’s FY21 numbers were broadly in line with consensus on revenues but much higher on profitability. Bookings targets for A&N were met even though slippage caused DB’s bookings to be below guidance. Regardless, there was a good transition of bookings into revenues and DB did show some acceleration in the last quarter. The company’s guidance for FY22 is slightly above expectations and the confirmation of FY23 targets is a reassuring factor.

Q3 brings lower bookings outlook for 2021

With its Q3 results, Software AG reported another consecutive quarter of total revenue growth. This was mainly driven by Digital Business. Bookings growth in Digital Business was affected by deal slippages. The shift to SaaS though, remained strong and annual recurring revenue also grew yoy. A&N bookings were better than expected. Operating margins were in line with expectations. The group, however, revised its bookings outlook for the year, which was a tad negative in our view.

Q2 exceeded expectations but FY21 guidance unchanged

As opposed to Q1, Q2 was above expectations both in terms of financials and bookings. This quarter showed an increased shift to subscriptions which supported the strong product revenue growth. Margins, too, improved due to lower than expected costs. The group signed various new logos and saw growth across all deal types. However, the company kept its guidance unchanged which implies that the second half will see more investments as part of the Helix programme.

Bookings grow, financials decline

Software AG’s Q1 results were broadly in line with management’s guidance, where Q1 saw growth in bookings and profitability subsided as a result of increased investment related to the Helix programme. Recurring revenues also grew yoy. Management confirmed FY21 targets and reiterated FY23 ambitions. All in all, 2021 indeed looks set to be a year of transformation and would, hopefully, lead to the anticipated growth and profitability over the medium term.

Q4 as expected but with good growth in bookings

Software AG’s Q4 results beat our expectations in terms of bookings but were broadly in line with regards to other financial metrics. Q4 showed a brisk pace in subscription & SaaS bookings. Annual recurring revenue also increased qoq as well as yoy. The group also put forward its FY21 guidance and re-confirmed its FY23 ambitions mentioned in the previous quarter.

No surprises here, transformation going well

Software AG’s Q3 results were broadly in line with our expectations. The transformation of the group continues with a transition to a subscription-based model. Overall, H2 seems to be developing positively compared to H1 and this can be seen in the group’s updated guidance for FY20. The targets for FY23 remain unchanged.

Helix wants further investments in 2020

Software AG ended 2019 with mixed results: positive development for the ARR metric, but missed the street’s expectations on cloud and IoT. DBP licence revenue stayed in negative territory, while Cloud and IoT have not taken off yet. Further investments are needed to support the Helix strategy and growth momentum in 2020, which should impact margins by 700-900bps. Although the transformation looks as though it is on track, this remains a risky bet.

Better-than-expected, Helix is on track

Software AG released a very encouraging set of Q3 results, which clearly showed a strong improvement sequentially. Although there is still a mixed performance among divisions, with DBP (excluding IoT) back in positive territories and DBP Cloud & IoT declining, we have started to see the early benefits of the Helix strategy. Buy rating confirmed.

Weak DBP

Software AG released a mixed set of results. Q2 revenue and profit were in line with the street’s expectations, which is very good news, while the DBP 2019 outlook was reduced. With both a new CEO and strategy announced in FY18 (Helix), upside is likely but it will take time.

Shrinking and not growing!!

In Q1 18, total revenues declined 9.4% to €186.6m but EBIT remained stable at around €42.1m (company definition) Revenues of the Business line IoT/Cloud jumped 115% from €3m to €6.4m Management raised its outlook for IoT/Cloud from 70-100% to 100-135% Revenues of DBP licences plummeted 36% to €23.4m and including IoT/Cloud 24% Stable operating performance driven by a strong A&N licence business

Old products still drive the performance

The company reported preliminary Q2 17 results. Final results will be reported on 20 July. Revenues increased 2% to €207.4m. EBIT improved 10.6% to €46.2m and the EBIT margin increased from 20.5% to 22.3%. The operating performance was driven by the two divisions Adabas & Natural and Digital Business Platform (DBP). Both divisions increased operating segment results. The EBIT margin of A&N improved from 66.9% to 69.6% and of the DBP division from 28.4% to 29.4%. Management confirmed the revenue

Strong licence growth in DBP

The company reported first quarter results. Revenues declined marginally by 0.1% to €205.9m. Total licence revenues dropped 21.7% to €46.3m, maintenance revenues increased 8.4% to €107.2m and service revenues grew by 8.7% to €52.1m. The gross margin increased from 72.8% to 73.3%. Real EBIT, however, dropped 19.1% to €39.6m and the EBIT margin declined from 21.3% to 19.2%. The non-IFRS EBITA margin, according to the company, declined from 28.7% to 27.4%. Based on real numbers, the EBITA margin de

Unfriendly investors at the gate?

The agenda of the AGM, which will be held on 17 May 2017, is quite interesting. Management is proposing to convert bearer shares into registered shares. The reason according to management is to address better and contact directly the shareholders. To become a new shareholder, the company has to agree before being registered in the share registry.

Accelerator needs a complete overhaul

The company released Q4 16 results. Management was excited about the performance but it must have been a different company they were talking about. In Q4 16, total revenues increased 2.5% to €264m. EBIT declined by 6.4% to €73.6m. The EBIT margin reached 27.9% compared to 30.5% in Q4 15. The real EBITA remained nearly stable at €89.2m and the EBITA margin declined from 34.9% to 33.8%. According to management, the non-IFRS EBITA margin declined from 35.8% to 34.2%. In the financial year 2016, re

Audioboom Group - Q1 24 revenue growth of +11%, FY24E forecasts reiterated

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

Soft growth patch

Checkit - New product launch and contract wins

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.

Morning Note – 15 April 2024

Morning Note – 16 April 2024

Auction Technology Group - H1/24 Trading update

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).

Engage XR Holdings - Expanding from FY23, FY24E forecasts reiterated

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

FY23 results in line – and a flying start to FY24

ENGAGE XR has published its FY23 full year results, the headlines of which reflect the details provided in February’s post close trading update in terms of revenue, EBITDA loss and net cash. ENGAGE XR has signed a rapidly growing number of strategic and commercial partnership agreements with companies invested in promoting the VR medium and the development of corporate metaverses.

It’s not what you sell, it’s the way that you sell it

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.

Hybridan Small Cap Feast - 15 April 24

15th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: Change of Market: TheWorks (WRKS.L) a multi-channel value retailers of books, arts and crafts, stationery, toys and games, offering customers a differentiated propositio

CML Microsystems+ (CML, House Stock at 395p) - Board & Senior Management Appointments

PROGRESSIVE: CML Microsystems: Ripples not waves – still on growth course

The trading update confirms revenues in line with our expectations. Excess inventory flow through and market softness in China have impacted CML’s core business, but Microwave Technologies Inc (MwT) is performing ahead of expectations. The net effect, along with MwT acquisition related costs, is that Reported PBT and EBITDA are to be lower than expectations, but not substantially so. The long-term investment case is founded upon the opportunity in next-generation wireless and, with £18m cash and

Morning Note – 8 April 2024

iomart - FY24 trading update

The March FY24 trading update reports revenue broadly in line, and adj EBITDA in-line, with consensus. Revenue of £127m at +10% yoy (Cav: £129mE; consensus range £128.4m- £130.7mE) delivered adj EBITDA of £37.5m (Cav: £38.7mE, cons £37.4m-£38.7mE) and adj PBT of £15.0m (Cav: £16.0m, cons £14.3m-£16.0m). £25m net debt (Cav est after excluding IFRS16) was slightly better than our £26.2mE, with typically strong cash generation a feature of the model but consensus mangled by IFRS16 inclusion/exclusi

Trustpilot - FY23 trading update – Another beat, £20m SBB

Trustpilot has announced another beat to expectations and the implementation of a £20m share buyback programme. The company has guided to full year revenue of US$176m, with annual recurring revenue of US$197m and total bookings of US$195m. Trustpilot expects to report adjusted EBITDA above the US$14.1m top end of the range of market expectations. This was another strong performance from Trustpilot with revenue growth coming in a little better than guidance at the interims and further operational