74software · EURONEXT:74SW
74software — Axway — H1 2024 Earnings Presentation
38 slides from 74software's earnings presentation, Jul 19, 2024
Slide 1: 2024 Half-Year Results Analyst Conference
2024 Half-Year Results Analyst Conference July 19, 2024 1
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS This presentation contains forecasts that may be subject to various risks and uncertainties concerning the Company’s future growth and profitability. The Company highlights that contract signatures, which represent investments for customers, are historically mor
Slide 3: Agenda
Agenda 1 Operational Commentary on H1 2024 2 H1 2024 Business Update 3 H1 2024 Financial Results Patrick Donovan Chief Executive Officer 4 Looking to H2 2024 and Beyond Roland Royer Chief Customer Officer 5 Q&A Session 3
Slide 4: Operational Commentary on H1 2024
Operational Commentary on H1 2024 Patrick Donovan Chief Executive Officer 4
Slide 5: Axway's Why
Axway’s Why Our Purpose An independent technology provider that sustainably grows enduring value, based upon trust, for our Customers, Employees, and Shareholders. 5
Slide 6: With Always The Same Ambitions…
With Always The Same Ambitions… OUR CUSTOMERS OUR EMPLOYEES OUR SHAREHOLDERS Delivering brilliant Axway, Building a predictable, Customer experience the place to be profitable model An independent technology provider that sustainably grows enduring value 6
Slide 7: H1 Performance In Line With Annual Targets
H1 Performance In Line With Annual Targets STRONG SUBSCRIPTION REVENUE & ARR GROWTH MAINTAINED GROWTH, PROFITABILITY & FREE CASH FLOW AMBITIONS SUCCESS OF AXWAY MANAGED CONTRACTS CUSTOMER SATISFACTION SUPPORTING NEW LOGO ACQUISITION 7
Slide 8: Key Figures
H1 2024 148.7m € Revenue compared to €145.5m in H1 2023, an organic growth of 1.9% Key €17.1m Profit on Operating Activities or 11.5% of revenue vs. 12.2% in H1 2023 Figures +18.0% Subscription Growth or €93.2m revenue vs. €78.7m in H1 2023 +7.2% ARR Growth or €229.9m vs. €214.5m at the end of H1 20
Slide 9: H1 2024 Business Update
H1 2024 Business Update Roland Royer Chief Customer Officer 9
Slide 10: Customer events: North America, LATAM, Europe
NORTH AMERICA April 16-18 Denver, CO, USA, LATAM April 23 ‘Sao Paulo, Brazil EUROPE June 5-7 Lyon, France 10
Slide 11: Customer Success as a Company Value
Customer Success as a Company Value AVERAGE NET PROMOTER SCORE* NEW CUSTOMERS MIGRATION MULTIPLIER 51 2 6X 28% . COMPARED WITH 42 COMPARED TO 1.9x OF BOOKINGS AT END-JUNE 2023 IN H1 2023 VS. 16% IN H1 2023 * Restated to include support surveys in both periods 11
Slide 12: Axway Managed Goes Mainstream
Axway Managed Goes Mainstream AXWAY MANAGED AXWAY MANAGED NEW CUSTOMERS BOOKING GROWTH BOOKING SHARE PREFERENCE + 38% 42% 60% COMPARED OF BOOKINGS AXWAY MANAGED TO H1 2023 VS. 25% IN H1 2023 VS. 48% IN H1 2023 12
Slide 13: We're a Leader
We’re a Leader The Forrester Wave : API Management Software G2 2024 Summer Reports for MFT, B2B, APIM for MFT for APIM & Marketplace & B2B & Marketplace The Forrester Wave : API Management Software, Q3 2024, Forrester Research, Inc., July 1, 2024. To learn more click here To learn more about Axway’s
Slide 14: H1 2024 Product Lines & Market Trends
H1 2024 Product Lines & Market Trends MFT APIM B2B AFAH ▪ Security ▪ Volumes Growth ▪ Managed ▪ Financial ▪ Cloud Leverage ▪ API Governance Services System & Monetization ▪ eInvoicing & Modernization Modernization 14
Slide 15: Looking Ahead…
Looking Ahead… PIPELINE ▪ Positive trend on MFT and Amplify APIM ▪ 40% of pipeline on Axway Managed CUSTOMERS ▪ Expanding Customer base ▪ New customer demand ORGANIZATION ▪ Strong and hyper focus team worldwide 15
Slide 16: H1 2024 Financial Results
H1 2024 Financial Results Patrick Donovan Chief Executive Officer
Slide 17: 2024 Half-Year Results: Key Figures Income Statement
2024 Half-Year Results KEY FIGURES INCOME STATEMENT H1 2024 H1 2023 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 148.7 145.5 19 22 Cost of sales 43.9 42.9 Gross Profit 104.7 70.5% 102.6 70.5% + . % + . % Operating expenses of which Sales and marketing 87.6 41.8
Slide 18: Revenue by Activity
2024 Half-Year Results REVENUE BY ACTIVITY H1 2023 H1 2023 Total Organic [€m] H1 2024 Services 12% Subscription Restated* Reported Growth Growth* 63% License 2% Subscription 93.2 79.0 78.7 +18.5% +18.0% of which Axway Managed 25.9 22.6 22.3 +16.5% +14.8% of which Customer Managed 67.3 56.4 56.4 +19.
Slide 19: Subscription Activity
2024 Half-Year Results SUBSCRIPTION ACTIVITY H1 2023 H1 2023 Total Organic [€m] H1 2024 Restated* Reported Growth Growth* Subscription 93.2 79.0 78.7 +18.5% +18.0% of which Q1 49.4 37.9 37.8 +30.9% +30.3% of which Q2 43.8 41.1 40.9 +7.1% +6.6% * Alternative performance measures are defined in the gl
Slide 20: Main Balance Sheet Items at 30/06/2024
2024 Half-Year Results MAIN BALANCE SHEET ITEMS AT 30/06/2024 Cash & cash equivalents DSO Total assets €16.9m 169 days €591.1m vs. €16.7m at 31/12/2023 vs. 137 days at 30/06/2023 vs. €594.6m at 31/12/2023 Net debt Current deferred revenues Total equity €70.8m €60.1m €355.9m vs. €75.6m at 31/12/2023
Slide 21: Cash Flows and Covenants
2024 Half-Year Results CASH FLOWS In millions of euros H1 2024 H1 2023 Net profit for the period 2.8 3.7 Change in operating working capital requirements 2.6 4.5 Net cash from operating activities 15.0 23.1 Free cash flow 6.7 16.5 Net cash used in investing activities -2.7 -8.6 Net cash used in fina
Slide 22: Progressive Normalization of Free Cash Flow
Progressive Normalization of Free Cash Flow 90 26% Profit on Operating Activities (€m) FCF as a % of revenue BUSINESS MODEL 80 TRANSITION 22% 70 18% Profit on Operating Activities (€m) 60 Free Cash Flow / Revenue (%) First Customer Managed Subscription Offer 50 14% 40 10% 30 6% 20 2% 10 0 -2% 2011 2
Slide 23: Looking to H2 2024 and Beyond
Looking to H2 2024 and Beyond Patrick Donovan Chief Executive Officer 23
Slide 24: Robust Building Blocks as Foundations for our Software House
Robust Building Blocks as Foundations for our Software House VISION MISSION To be a leading, trusted technology provider Empowering customers with secure, mission-critical software and empowering customers with secure digital business interactions to services to successfully operate and simplify the
Slide 25: Confirmed Guidance and Mid-term Ambition
Confirmed Guidance and Mid-term Ambition Mid-term Ambition 2024 Guidance Profit on Operating Activities ≥ 20% Organic Revenue Growth Normalized FCF as a % Revenue between 1% and 3% Profit on Operating Activities Revenue ≥ €500 million around 20% of total revenue (including M&A) 25
Slide 26: Axway x SBS
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Slide 27: Building a Robust Enterprise Software House
Building a Robust Enterprise Software House INTEGRATION BANKING APP BANKING MFT APIM PLATFORM FINANCING B2B AFAH PLATFORM 27
Slide 28: Several Key Milestones Have Been Reached
Several Key Milestones Have Been Reached OVERVIEW OF ACQUISITION TIMELINE AND PROCESS ✓ End of employee representative ✓ Regulatory approvals bodies consultation (antitrust / FDI clearance) CLOSING Feb 21, 2024 May 23, 2024 May 31, 2024 Rights Issue May 17, 2024 July 5, 2024 Q3 2024 Announcement of
Slide 29: Q&A Session
Q&A Session Call +44 (0) 33 0551 0200 or use the chat to ask a question Next Event Thursday, October 24, 2024, before market opening: Publication of Q3 2024 Revenue 29
Slide 30: Thank you
Thank you ©2024 Axway
Slide 31: Appendices
axway >= Appendices
Slide 32: Revenue by Geography
2024 Half-Year Results REVENUE BY GEOGRAPHY Asia /Pacific 5% H1 2023 H1 2023 Total Organic France [€m] H1 2024 Restated* Reported Growth Growth* 28% France 41.7 45.6 45.5 -8.3% -8.4% 40% H1 2024 Rest of Europe 38.6 36.1 35.6 +8.4% +7.0% Americas breakdown by ACTIVITY Americas 60.2 57.2 57.2 +5.2% +5
Slide 33: Change in Revenue
2024 Half-Year Results CHANGE IN REVENUE €+2.8m €148.7m 149 +1.9% 148 147 146 €+0.4m €+0.0m €145.5m 145 144 143 H1 2023 Scope Exchange Rate Organic H1 2024 Revenue Effect Effect Growth Revenue 33
Slide 34: Simplified Balance Sheet
2024 Half-Year Results SIMPLIFIED BALANCE SHEET In millions of euros 30/06/2024 30/06/2023 Assets Goodwill 302.7 299.3 Non-current assets 369.1 362.1 Trade receivables 166.3 135.2 Other current assets 38.8 34.0 Cash and cash equivalents 16.9 14.2 Current assets 222.0 183.4 ▪ Cash and cash equivalent
Slide 35: Changes in Equity & Earnings per Share
2024 Half-Year Results CHANGES IN EQUITY & EARNINGS PER SHARE AT 30/06/2024 In millions of euros 30/06/2024 30/06/2023 31/12/2023 Equity at Beginning of Period 346.3 327.8 327.8 Profit for the period 2.8 3.7 35.8 Dividends 0.0 -8.4 -8.4 Capital increase 0.0 0.0 0.0 Other 0.4 -3.3 -1.9 Foreign exchan
Slide 36: Headcount
2024 Half-Year Results HEADCOUNT 30/06/2024 31/12/2023 France 430 432 Rest of Europe 622 612 Americas 355 357 Asia/Pacific 64 64 Axway 1 471 1 465 36
Slide 37: Shareholding Structure at 30/06/2024
Shareholding Structure at 30/06/2024 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.12% 1.34% 1.42% 41.45% 2.90% Voting rights 38.26% 24.93% 0.13% 1.42% 1.41% 33.84% Shareholders’ agreement 21,633,597 Shares outstanding 55.7% of shares outstanding / 66
Slide 38: Alternative Performance Measures
Alternative Performance Measures ACV: Annual Contract Value – Annual contract value of a subscription agreement. ARR: Annual Recurring Revenue – Expected annual billing amounts from all active maintenance and subscription agreements. Growth at constant exchange rates: Growth in revenue between the p