- Organic revenue growth1 of 6.9% over Q1 2024, reaching
€76.9m revenue
- Annual Recurring Revenue (ARR) at €227.8m, up 8.4% compared
with end-March 2023
- Buoyant Subscription activity with organic growth of over
30% for the quarter
- Sopra Banking Software acquisition project well on
track
Regulatory News:
Axway (Euronext: AXW.PA) made a solid start to 2024 thanks to
sustained sales activity, driven in particular by the Americas and
Rest of Europe regions, which recorded important revenue growth. As
large companies continue to accelerate their move to cloud
infrastructures, Axway is benefiting from its optimized
organization by regions and main products to accelerate new
customer acquisition. Over the period, thanks to 3 large deals, the
value of new customer bookings more than doubled compared with
2023. This trend was accompanied by quarterly organic revenue
growth of 6.9%, underpinned by the go-live of contracts signed in
the second half of 2023.
In terms of the main product lines, several major developments
took place since the beginning of the year:
- In the MFT and B2B markets, Axway is capitalizing on its
historical expertise and strong leading positions to fuel new
customers signings. In addition to the security and reliability of
products, decision-makers are looking to Axway's Managed Cloud
infrastructures to help them get up and running quickly. Both
product lines, which have very large installed bases worldwide, are
also seeing major customers accelerate their migration to the
cloud, with strong demands for containerization of their
applications.
- The Amplify API Management offering got off to a successful
sales start in 2024, supported by growth in key customer usage and
the gain of several new logos. Signings and pipeline were
particularly boosted by the new Amplify Marketplace offering
success, which addresses the aggregation, security and consumption
management of all APIs for the largest enterprises.
- The Axway Financial Accounting Hub (AFAH) offering, recently
reinforced with new functionalities from the acquisition of Cycom
Finances, has been boosted by strategic partnerships, including the
one signed with KPMG France at the end of 2023, which are beginning
to bear fruit and feed business pipeline growth. Axway's value
proposition of offering consistency, agility and auditability to
the company's main financial departments through a single hub is
very positively perceived, making Axway a preferred partner for
customers rationalizing their existing configurations or
implementing new projects accelerated by the involvement of
business teams.
Patrick Donovan, Axway's Chief Executive Officer, said:
“I am delighted to see that the Axway team has launched 2024 on
a promising note, building upon the momentum of our recent years'
achievements. As we progress, it is imperative for Axway to
maintain unwavering focus on delivering value and results to its
customers. To do so, we'll need the energy and enthusiasm I've seen
in all the events that have kicked off our year. This was once
again the case a few days ago when I attended our annual North
American Summit, which was a great success thanks to the strong
engagement of each participating Customers, Partners and
Collaborators. As Axway enters a new chapter, building a reference
player in the world of enterprise software solutions through
renowned products and brands, offering crucial business benefits to
our customers will remain our steadfast commitment. This is the
cornerstone of our day-to-day activities, and we look forward to
welcoming Sopra Banking Software teams to share this mission. The
consistency of this strategic approach is reflected in the strength
of our portfolio of market-leading products. Exciting times lie
ahead as we steer Axway towards the next stage of its development,
and we'll be sure to keep everyone informed of our ongoing
progress.”
Comments on Q1 2024 activity
Axway Software: Consolidated revenue 1st Quarter
2024 (€m) Q1 2024 Q1 2023Restated* Q1
2023Reported TotalGrowth OrganicGrowth
Revenue
76.9
71.9
71.8
7.1%
6.9%
* Revenue at 2024 scope and exchange rates
Axway's revenue amounted to €76.9m in Q1 2024, representing
organic growth of 6.9% and total growth of 7.1%. Within the Q1 2023
restated figures, currency fluctuations had a negative impact of
€0.3m due to the slight depreciation of the US dollar against the
euro while changes in the consolidation scope, resulting from the
2023 acquisitions, had a positive impact of €0.4m.
Axway Software: Revenue by business line 1st
Quarter 2024 (€m) Q1 2024 Q1 2023Restated* Q1
2023Reported TotalGrowth OrganicGrowth
Subscription
49.4
37.9
37.8
30.9%
30.3%
of which Axway Managed
12.4
11.0
10.7
15.3%
12.5%
of which Customer Managed
37.0
26.9
27.0
37.1%
37.6%
Maintenance
17.1
22.3
22.5
-23.8%
-23.4%
Subtotal - Renewable Contracts
66.5
60.3
60.2
10.5%
10.4%
License
1.4
2.1
2.1
-36.3%
-35.8%
Services
9.0
9.5
9.5
-5.2%
-5.5%
Axway Software
76.9
71.9
71.8
7.1%
6.9%
* Revenue at 2024 scope and exchange rates
The Subscription activity posted quarterly revenue of
€49.4m, with strong organic growth of 30.3%. Revenue was boosted by
the signing or renewal of several major Customer Managed deals,
giving rise to immediate recognition of around half their total
value. Upfront revenue from new or renewed Customer Managed
contracts represented €24.7m in Q1 2024. At the same time, Axway
Managed offerings continued to gain ground, accounting for 45% of
new contracts signed during the period, with booking growth of
almost 65%. The annual value of new subscription contracts signed
(ACV) during the quarter reached €7.8m.
Maintenance generated €17.1m in revenue during Q1 2024,
representing 22% of Axway's total revenue. The activity experienced
an organic decline of 23.4%. With a high renewal rate of around 91%
over the quarter, the decline in revenue, in line with forecasts,
was due to the continuous migration of customers to
subscription-based contracts.
At the end of March 2024, Axway's ARR (Annual Recurring Revenue)
stood at €227.8m, increasing by 8.4% on a like-for-like basis
compared with €210.2m at the end of March 2023. In Q1 2024, revenue
from renewable contracts represented 86% of total revenue.
License revenue was €1.4m in the first 3 months of the
year, representing less than 2% of Axway's total revenue. Activity
was down 35.8% compared with Q1 2023.
Stabilized at around 12% of Axway's total revenue, the
Services activity experienced a slight organic decline, with
revenue of €9.0m (-5.5%) over the period. On a full-year basis,
revenue should be stable compared with 2023.
Axway Software: Revenue by geographic area 1st
Quarter 2024 (€m) Q1 2024 Q1 2023Restated* Q1
2023Reported TotalGrowth OrganicGrowth France
23.9
24.8
24.7
-3.2%
-3.5%
Rest of Europe
17.4
13.8
13.5
29.5%
25.9%
Americas
32.1
30.6
30.9
4.2%
5.2%
Asia/Pacific
3.4
2.7
2.8
21.5%
25.1%
Axway Software
76.9
71.9
71.8
7.1%
6.9%
* Revenue at 2024 scope and exchange rates
In France, Axway reported first-quarter revenue of
€23.9m, down 3.5% organically on the very high comparison basis
achieved in early 2023. Despite the signing of large deals at the
end of the quarter, the exceptional performance recorded in Q1 2023
prevented business from growing. Nevertheless, the strong pipeline
enables Axway to anticipate full-year growth in the country.
In the Rest of Europe, Axway maintained its growth
trajectory with revenue of €17.4m, up 25.9% on the previous year.
Activity was supported by solid performances in Germany and
Benelux, driven by MFT and B2B offerings.
In the Americas (USA and Latin America), revenue reached
€32.1m in Q1 2024, or 42% of total revenue. With organic growth of
5.2% and total growth of 4.2%, Axway's business benefited from
improved sales momentum across the continent. In both the United
States and Brazil, Axway's MFT and Amplify (APIM) offerings met
with great success, winning new customers.
In Asia/Pacific, revenue for the quarter came to €3.4m
representing strong organic growth (25.1%), driven by earnings from
Axway Managed contracts signed in 2023.
Update on Sopra Banking Software acquisition project
On February 21, 2024, Axway announced that it had entered into
exclusive discussions with Sopra Steria regarding the acquisition
of a significant part of the activities of Sopra Banking Software.
Axway would acquire the concerned Sopra Banking Software activities
for an enterprise value of around €330m by combining a capital
increase of around €130m with preferential subscription rights2,
with new credit facilities.
At this stage, all steps described in the project announcement
are in motion and well underway. Assuming parties involved secure
the necessary approvals and clearances, and complete the different
requirements, Axway reaffirms its objective of finalizing the
acquisition of Sopra Banking Software by the end of Q2 2024, or at
the latest during Q3 2024.
Financial position at March 31, 2024
At March 31, 2024, Axway had cash of €23.7m and net debt of
€60.4m.
Axway’s bank lines, in place through 2027, provide financing of
up to €125.0m. Axway highlights that, if necessary, it has access
to additional financing capacity under its existing revolving
credit facility. However, in the context of the proposed
acquisition of Sopra Banking Software, Axway's credit facility will
be reviewed in the light of the debt mechanisms chosen to help
finance the deal.
2024 Targets
For 2024, Axway anticipates organic growth of between 1% and 3%,
and a profit on operating activity of around 20% of revenue.
Financial Calendar
Thursday, May 16, 2024, 2:30 p.m. (UTC+2): Annual Shareholders'
Meeting Tuesday, July 23, 2024, after market closing: Publication
of 2024 Half-Year Results Tuesday, July 23, 2024, 6:30 p.m.
(UTC+2): 2024 Half-Year Results Virtual Analyst Conference
Thursday, October 24, 2024, before market opening: Publication of
Q3 2024 Revenue
Glossary and 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.
Employee Engagement Score:
Measurement of employee engagement through an independent annual
survey.
Growth at constant exchange rates:
Growth in revenue between the period under review and the prior
period restated for exchange rate impacts.
NPS: Net Promoter Score – Customer
satisfaction and recommendation indicator for a company.
Organic growth: Growth in revenue
between the period under review and the prior period, restated for
consolidation scope and exchange rate impacts.
Profit on operating activities:
Profit from recurring operations adjusted for the non-cash
share-based payment expense, as well as the amortization of
allocated intangible assets.
Restated revenue: Revenue for the
prior year, adjusted for the consolidation scope and exchange rates
of the current year.
TCV: Total Contract Value – Full
contracted value of a subscription agreement over the contract
term.
Disclaimer
This press release contains forward-looking statements that may
be subject to various risks and uncertainties concerning Axway’s
growth and profitability, notably in the event of future
acquisitions. Axway highlights that signature of contracts, which
represent investments for customers, are more significant in the
second half of the year and may therefore have a more or less
favorable impact on full-year performance. In addition, Axway notes
that potential acquisition(s) could also impact this financial
data. Furthermore, activity during the year and/or actual results
may differ from those described in this document as a result of a
number of risks and uncertainties set out in the 2023 Universal
Registration Document filed with the French Financial Markets
Authority (Autorité des Marchés Financiers, AMF) on March 25, 2024.
The distribution of this document in certain countries may be
subject to prevailing laws and regulations. Natural persons present
in these countries and in which this document is disseminated,
published, or distributed, should obtain information about such
restrictions, and comply with them.
About Axway
Axway enables enterprises to securely open everything by
integrating and moving data across a complex world of new and old
technologies. Axway’s API-driven B2B integration and MFT software,
refined over 20 years, complements Axway Amplify, an open API
management platform that makes APIs easier to discover and reuse
across multiple teams, vendors, and cloud environments. Axway has
helped over 11,000 businesses unlock the full value of their
existing digital ecosystems to create brilliant experiences,
innovate new services, and reach new markets. Learn more at
axway.com
Appendices (1/1)
Axway Software: Impact on revenue of changes in scope and
exchange rates 1st Quarter 2024 (€m) Q1
2024 Q1 2023 Growth Revenue
76.9
71.8
7.1%
Changes in exchange rates
-0.3
Revenue at constant exchange rates
76.9
71.5
7.6%
Changes in scope +0.4
Revenue at constant scope and exchange
rates
76.9
71.9
7.0%
Axway Software: Changes in exchange rates
1st Quarter 2024For 1€ Average rateQ1 2024
Average rateQ1 2023 Change US Dollar
1.086
1.073
- 1.2%
1 See Glossary and Alternative Performance Measures 2 The
subscription price per new Axway share will be determined at the
time of launch of the rights issue, according to standard market
practice, and will include a customary discount to the Theoretical
Ex-Rights Price (TERP). Taking into account the discount to TERP,
the subscription price will be not higher than 26.5€.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424934013/en/
Investor Relations: Arthur Carli – +33 (0)1 47 17 24 65 –
acarli@axway.com
Axway Software (EU:AXW)
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