→ Year to date revenue of €208.2 million up 2.0%
organically1, Q3 revenue down 3.8% to €69.8 million →
Subscription activity up 27.2% organically in the quarter →
New subscription ACV up 5.2% to €8.5 million in Q3 2021 →
Signature metric up 13.1% year to date → Continued
recognition of Axway's global leadership in the API management
market
Regulatory News:
In Q3 2021, Axway (Euronext: AXW.PA) (Paris:AXW) saw its
business slow down slightly compared to the previous year. While
the company achieved its planned sales performance for the quarter,
it suffered from the high basis of comparison established in Q3
2020. The new growth in Subscription activity over Q3 2021 was not
sufficient to offset the contraction in License, Maintenance and
Service activities. This forecasted slowdown in quarterly activity
just confirms the company's annual growth and profitability
targets.
Axway continued to deploy its new strategy based on two pillars:
its core products (MFT, B2B, AIS and other specialized solutions)
and its API management offering, Amplify. During the quarter, the
company was able to maintain a historically high level of
satisfaction among its existing customers while continuing to make
progress in winning new Amplify customers. At the same time,
Amplify’s pipeline continued to strengthen. While major investments
in marketing are still underway, Axway's ambition is to achieve
normative growth above market levels for its most buoyant activity,
API management.
At the end of September, the excellence of Axway's products and
practices in this field was once again recognized by one of the
industry's leading research firms2. For the sixth time in its
history, Axway has been named one of the global market leaders in
API management. This recognition, which is of significant business
importance, recognizes the company's execution and vision through
its Amplify offering. With the Amplify platform, Axway supports its
customers' digital transformation objectives by helping them
securely open their systems and data to enable the creation of new
experiences and access to new markets.
Patrick Donovan, Axway's Chief Executive Officer, said:
“As previously communicated, following a robust H1 2021, we were
anticipating a soft Q3 compared to the strong performance of the
previous year. The rebound observed in Q3 2020, when the global
health situation was gradually improving, represented a high
comparison basis for Axway. I am nevertheless satisfied with the
reliability of our sales forecasts, which are improving year after
year and enable us to better anticipate this type of situation by
providing us with greater visibility. As often in the software
industry, our performance in the fourth quarter will be important
in achieving our annual objectives. We are confidently moving
towards this deadline, with a stronger pipeline and a sales
organization aligned with our new strategy. Over 9 months, the
number of new customers convinced by the Amplify offer is already
up by 37% compared to fiscal year 2020, while signatures are up
49%. These trends and the new recognition from market analysts
confirm the relevance of our efforts to consolidate our leadership
in the API space and reinforce our vision to open everything in our
customers' information systems to turn their data into a real
competitive advantage."
Comments on Q3 2021 activity
Axway Software: Consolidated revenue
3rd Quarter 2021 (€m) Q3 2021 Q3
2020Restated* Q3 2020Reported TotalGrowth
OrganicGrowth Constant CurrencyGrowth Revenue
69.8
72.6
72.8
-4.1%
-3.8%
-3.8%
* Revenue at 2021 scope and exchange rates
Axway's revenue for Q3 2021 was €69.8 million, representing an
organic decline of 3.8%. Currency fluctuations had a negative
impact of €0.2 million on quarterly revenue, mainly due to the
depreciation of the Brazilian real against the euro over the
period. Overall, the company's revenue was down 4.1% for the
quarter.
Axway Software: Revenue by business line
3rd Quarter 2021 (€m)
Q3 2021 Q3 2020Restated* Q3 2020Reported
TotalGrowth Organic Growth License
4.7
8.1
8.3
-42.8%
-41.3%
Subscription
27.8
21.9
21.9
26.9%
27.2%
Maintenance
29.5
33.7
33.6
-12.2%
-12.5%
Services
7.7
8.9
8.9
-13.5%
-13.4%
Axway Software
69.8
72.6
72.8
-4.1%
-3.8%
* Revenue at 2021 scope and exchange rates
Revenue from the License activity amounted to €4.7
million in Q3 2021 (7% of total revenue), an organic decrease of
41.3%. The decline during the quarter is explained by a significant
slowdown in order intake for certain Axway security offerings in
the US federal market. As a result of the general transition to
subscription-based contracts, Axway anticipates a decline in
License revenue over 10% for the full year.
Subscription activity once again posted significant
growth in Q3 2021, with organic growth of 27.2% thanks to revenue
of €27.8 million (40% of total revenue). The total growth of the
activity amounted to 26.9% over the period. During the quarter, the
annual contract value (ACV) of new subscription contracts signed
reached €8.5 million, up 5.2% compared to Q3 2020.
Given these factors, the Signature Metric was down 6.4% in Q3
2021. However, over the first nine months of the year, it grew by
13.1%. The Net Signature Metric, adjusted for Maintenance
attrition, was up 8.7% for the first 9 months of the year.
Maintenance activity generated revenue of €29.5 million
in Q3 2021 (42% of total revenue), an organic decline of 12.5%
compared to the previous year. In line with the company's forecasts
and in continuity with the first six months of the year, this trend
is explained by the decrease in license sales and the migration of
part of the revenue to the Subscription activity. As a reminder,
Axway expects annual revenue of this activity to decline just over
10%.
In Q3 2021, Axway's recurring revenue, which includes
Subscription and Maintenance activities, represented 82% of total
revenue, or €57.3 million. This includes €11.5 million of upfront
revenue recognized on the signature of subscription contracts.
Services revenue decreased organically by 13.4% in the
quarter, to €7.7 million, or 11% of total revenue. While the
situation remains very heterogeneous depending on the country,
overall, the activity suffered from the decrease in new license
sales to which it is directly linked.
Axway Software: Revenue by geographic area
3rd
Quarter 2021 (€m) Q3 2021 Q3 2020Restated* Q3
2020Reported TotalGrowth Organic Growth France
19.3
20.3
20.3
-4.9%
-4.9%
Rest of Europe
14.0
14.3
14.2
-0.9%
-2.1%
Americas
32.2
32.8
33.2
-2.9%
-1.7%
Asia/Pacific
4.3
5.2
5.2
-17.1%
-17.9%
Axway Software
69.8
72.6
72.8
-4.1%
-3.8%
* Revenue at 2021 scope and exchange rates
France reported revenue of €19.3 million (28% of total
revenue) in Q3 2021, an organic decrease of 4.9%. While the country
showed sustained growth over the same period a year earlier, this
year, the increase in Subscription activity was not sufficient to
compensate for the decline in Maintenance and Services.
With revenue of €14.0 million (21% of total revenue), the
Rest of Europe region experienced an organic decline of 2.1%
in Q3 2021. Over the period, a significant lengthening of sales
cycles was observed, in particular due to post-crisis
reorganizations at several major clients and prospects whose
markets were severely disrupted. Operationally, in Germany, the
United Kingdom and Southern Europe, Axway continued to improve its
positioning by concluding new partnerships with specialized
distributors and by strengthening its sales teams.
The Americas (USA & Latin America) generated revenue
of €32.2 million (46% of total revenue) in Q3 2021, a slight
organic decline (-1.7%). While in Brazil the Open Banking
initiatives are bearing fruit and have significantly accelerated
Amplify signatures, in the USA, where the sales team has now
stabilized, activity has remained largely sustained by the
migration of major clients to Subscription models.
After a dynamic start to the year, the Asia/Pacific
region, and more particularly Australia, suffered from new strict
lockdown measures in Q3 2021. These measures largely affected the
signing of new contracts and the building of the business pipeline.
As a result, Axway's revenue for the period totaled €4.3 million
(6% of total revenue), representing an organic decline of
17.9%.
Financial position at September 30, 2021
At September 30, 2021, Axway had cash of €18.5 million and net
debt of €29.7 million.
Axway highlights that, if necessary, it has access to unutilized
financing capacity under its existing revolving credit
facility.
2021 Targets & Outlook
For 2021, Axway confirms its objective of achieving organic
revenue growth of between 2% and 4%. The company also confirms that
it is aiming to improve its profitability with an operating margin
of between 11% and 13% of revenue for the year.
In the medium term, Axway's ambitions remain:
→ to achieve revenue of €500 million through
organic growth in sales and acquisitions → to return to operating
margin on business activity rates above 15% and gradually move
towards 20% → to sustainably increase earnings per share to above
€1
Financial calendar
Tuesday, February 22, 2022, after close of trading: Publication
of 2021 Full-Year Results.
Tuesday, February 22, 2022, 6.30 p.m. (UTC+1): 2021 Full-Year
Results Virtual Analyst Conference.
Glossary and Alternative Performance Measures
Restated revenue: Revenue for the
prior year, adjusted for the consolidation scope and exchange rates
of the current year.
Organic growth: Growth in revenue
between the period under review and the prior period, restated for
consolidation scope and exchange rate impacts.
Growth at constant exchange rates:
Growth in revenue between the period under review and the prior
period restated for exchange rate impacts.
ACV: Annual Contract Value – Annual
contract value of a subscription agreement.
TCV: Total Contract Value – Full
contracted value of a subscription agreement over the contract
term.
Signature metric: Amount of license
sales plus three times the annual contract value (3xACV) of new
subscription contracts signed over a given period.
Net Signature metric: Signature
metric net of the maintenance attrition by migration to new
subscription contracts
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.
NPS: Net Promoter Score – Customer
satisfaction and recommendation indicator for a company.
Employee Engagement Score:
Measurement of employee engagement through an independent annual
survey.
Disclaimer
This press release contains forward-looking statements that may
be subject to various risks and uncertainties concerning the
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 2020 Universal
Registration Document filed with the French Financial Markets
Authority (Autorité des Marchés Financiers, AMF) on March 18, 2021,
under number D.21-0147. 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 (Euronext: AXW.PA) empowers customers to succeed using
hybrid integration to connect people, systems, businesses, and
digital ecosystems. Axway’s hybrid integration platform, Amplify,
helps enterprise power users, IT specialists, developers, and
partners accelerate digital transformation, create captivating
experiences, and innovate new services. Amplify speeds integrations
by combining traditional integration patterns with API Management
and Application Integration (providing over 150 prebuilt
connectors). Over 11,000 organizations in 100 countries rely on
Axway for their data integration challenges. To learn more, visit
www.investors.axway.com/en
Appendices
Axway Software: Revenue by business line
YTD - 9 Months 2021 (€m)
9M 2021
9M 2020Restated* 9M 2020Reported TotalGrowth
Organic Growth License
14.0
18.1
18.8
-25.4%
-22.6%
Subscription
79.6
57.6
59.2
34.6%
38.2%
Maintenance
89.5
101.9
104.3
-14.2%
-12.2%
Services
25.1
26.5
27.1
-7.5%
-5.5%
Axway Software
208.2
204.2
209.4
-0.5%
2.0%
* Revenue at 2021 scope and exchange rates
Axway
Software: Revenue by geographic area
YTD - 9
Months 2021 (€m)
9M 2021
9M 2020Restated* 9M 2020Reported TotalGrowth
Organic Growth France
58.6
61.1
61.1
-4.1%
-4.1%
Rest of Europe
48.0
44.1
43.7
9.7%
8.9%
Americas
89.3
86.8
92.5
-3.4%
2.8%
Asia/Pacific
12.3
12.1
12.0
2.2%
1.5%
Axway Software
208.2
204.2
209.4
-0.5%
2.0%
* Revenue at 2021 scope and exchange rates
Axway
Software: Impact on revenue of changes in scope and exchange
rates YTD - 9 months 2021 (€m)
9M 2021
9M 2020
Growth Revenue
208.2
209.4
-0.5%
Changes in exchange rates
-5.2
Revenue at constant exchange rates
208.2
204.2
2.0%
Changes in scope +0.0
Revenue at constant scope
and exchange rates
208.2
204.2
2.0%
Axway Software: Changes in exchange rates
YTD - 9
months 2021For 1€ Average rate9M 2021 Average rate9M
2020 Change US Dollar
1.196
1.125
- 6.0%
Brazilian Real
6.376
5.710
- 10.5%
1 See Glossary and Alternative Performance Measures
2 Gartner, Magic Quadrant for Full Life Cycle API Management,
Shameen Pillai | Kimihiko Iijima | Mark O'Neill | John Santoro |
Akash Jain | Fintan Ryan, September 28, 2021. To learn more and access the study click here
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211020005829/en/
Investor Relations: Arthur Carli – +33 (0)1 47 17 24 65 –
acarli@axway.com Press Relations: Sylvie Podetti – +33 (0)1 47 17
22 40 – spodetti@axway.com
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