→ Total revenue growth of 0.9%, organic1 decline of 2.4%
→ Subscription activity up a further 8.2% despite a high
comparison base → Annual Recurring Revenue (ARR) of €182.3
million, up 2.7% compared to Q1 2021
Regulatory News:
In Q1 2022, Axway (Euronext: AXW.PA) (Paris:AXW) made a good
start to the year by continuing to accelerate its move towards a
business model based primarily on subscription contracts. Over the
period, new contract signatures exceeded internal forecasts and
revenue was above analysts' expectations. While the performance of
Q1 2021 established a high comparison base, the company did not
anticipate a particular increase in its activity level and is
therefore satisfied with the dynamics observed in the first 3
months of the year.
The decrease in revenue compared to Q1 2021 is mainly due to the
success of the subscription contracts managed by Axway in the cloud
on behalf of its customers, which, unlike subscription contracts
managed by the customers themselves, do not result in the early
recognition of upfront revenue. As a result, several of the most
important subscription deals signed during the period will only
have an impact on revenue growth in the coming quarters.
On the product side, the company continued to see strong
interest in its 4 key offerings:
- the Amplify platform has been chosen by
several major clients in Latin America, Asia/Pacific and Europe
thanks to the relevance of its development roadmap,
- in addition to the closing of a significant
customer managed subscription contract with a TCV of €3.5 million,
over the quarter, the MFT solution was reinforced by a new public
cloud offering that quickly resulted in several contract
signatures,
- the B2B offering generated the most
important Axway managed subscription contract of the quarter thanks
to a cloud project with a TCV of €3.1 million,
- the Digital Finance offer has convinced new
key business partners in Europe, including, among others,
Accenture.
The entire portfolio of offers continues to evolve to always
better meet the needs of customers. In addition, during the first
quarter of the year, Axway continued to invest in supporting its
strategy, particularly in the area of marketing, and observed a
growth of nearly 185% in the value of new customers’ contracts
compared to Q1 2021.
Patrick Donovan, Axway's Chief Executive Officer, said:
"We started 2022 with good cadence on all our major projects. By
successfully signing major contracts in each of our four regions of
operation, we have been able to exceed our internal quarterly
forecasts. This dynamic gives us momentum for the second quarter as
we continue to evolve our Amplify platform, which marks our
differentiation in the market. While the trend towards subscription
offerings accelerates and confirms our vision, we continue to offer
a very flexible engagement method to our customers to allow them to
move at their own pace, according to their needs. In the first
quarter we also began the rationalization of our product portfolio,
as announced at the time of the publication of our annual results.
We will continue our efforts in this area throughout the year, with
the objective of focusing on our core offerings to improve our
growth and profitability. Finally, it should be noted that during
the first three months of the year, the persistent economic and
geopolitical uncertainties did not affect the building of our
pipeline, which is a good sign for the rest of the year."
Comments on Q1 2022 activity
Axway Software: Consolidated revenue 1st Quarter 2022
(€m) Q1 2022 Q1 2021Restated* Q1
2021Reported TotalGrowth Organic Growth
Constant CurrencyGrowth Revenue
66.9
68.6
66.3
0.9%
-2.4%
-2.4%
* Revenue at 2022 scope and exchange rates
Axway's revenue for Q1 2022 was €66.9 million, representing
total growth of 0.9% and an organic decline of 2.4%. Currency
fluctuations had a positive impact of €2.2 million on quarterly
revenue, mainly due to the appreciation of the US dollar and the
Brazilian real against the euro.
Axway Software: Revenue by business
line 1st Quarter 2022 (€m)
Q1 2022 Q1 2021Restated* Q1 2021Reported
TotalGrowth OrganicGrowth License
3.7
4.0
3.8
-3.2%
-7.4%
Subscription
26.4
24.4
23.7
11.4%
8.2%
Maintenance
27.9
30.8
29.8
-6.3%
-9.5%
Services
9.0
9.3
9.0
-1.0%
-4.0%
Axway Software
66.9
68.6
66.3
0.9%
-2.4%
* Revenue at 2022 scope and exchange
rates
License activity generated revenue of €3.7 million in Q1
2022 (6% of total revenue), an organic decline of 7.4 % compared to
the previous year. Despite heterogeneous regional situations,
overall activity was down on the solid commercial performance of Q1
2021. As for more than 2 years, the flexibility of the
subscription-based offerings continues to convince a majority of
customers. However, Axway anticipates a clear slowdown in License
activity revenue decline over the full year compared to 2021.
In spite of a very high comparison base due to the recognition
of significant upfront revenue in Q1 2021, 2022 bookings and
deferred revenue from previous quarters enabled the
Subscription activity to continue its growth. The latter has
continued to develop at a satisfactory pace, with organic growth of
8.2% over the period, reaching €26.4 million in revenue (39% of
total revenue). Thanks to several major successes of the MFT and
B2B offerings, in the quarter, the annual contract value (ACV) of
new subscription contracts signed reached €7.0 million, up 22.3%
compared to Q1 2021.
Revenue from the Maintenance activity amounted to €27.9
million in Q1 2022 (42% of total revenue), an organic decrease of
9.5%. In line with previous quarters, the decline in activity is
due to lower demand for licenses, which is explained by a confirmed
preference of new customers for subscription-based contracts and
the accelerated migration of existing customers to these more
flexible offerings.
In Q1 2022, Axway's ARR, which is a key indicator of the future
revenue growth potential, was €182.3 million, up 2.7% compared to
Q1 2021. Recurring revenue for the quarter which includes
Subscription and Maintenance activities, represented 81% of total
revenue or €54.3million, of which €8.2 million of upfront revenue
recognized on the signature of customer managed subscription
contracts.
Services revenue decreased organically by 4.0% in the
quarter, to €9.0 million, or 13% of total revenue. This decrease is
explained by the continued rise of subscription contracts which
generally require a lower level of services.
Axway Software: Revenue by geographic
area 1st Quarter 2022 (€m)
Q1 2022 Q1 2021Restated* Q1 2021Reported
TotalGrowth OrganicGrowth France
18.1
18.8
18.8
-3.4%
-3.4%
Rest of Europe
13.2
16.7
16.7
-20.7%
-21.0%
Americas
30.3
28.5
26.5
14.3%
6.2%
Asia/Pacific
5.3
4.5
4.4
21.0%
16.2%
Axway Software
66.9
68.6
66.3
0.9%
-2.4%
* Revenue at 2022 scope and exchange
rates
France reported revenue of €18.1 million (27% of total
revenue) in Q1 2021, an organic decrease of 3.4%. The growth of the
License and Subscription activities in the country was not
sufficient to compensate for the decline in Maintenance and
Services over the period.
With revenue of €13.2 million (20% of total revenue), the
Rest of Europe region experienced an organic decline of
21.0% in Q1 2022. Whereas at the beginning of last year, several
significant migrations to subscription-based offerings had been
signed, establishing a high comparison base, this year the
commercial trend proved more buoyant for Axway managed subscription
contracts which, by nature, do not generate upfront revenue
recognition.
The Americas (USA & Latin America) generated revenue
of €30.3 million (45% of total revenue) in Q1 2022, representing
organic growth of 6.2%. This good performance reflects the dynamism
of the Subscription and License activities, both of which showed
significant growth (> 20%) over the first 3 months of the
year.
The Asia/Pacific region saw its revenues grow by 16.2%
organically to reach €5.3 million (8% of total revenue) for the
quarter. As in 2021, the region was buoyed by the success of the
Subscription activity, which grew by nearly 170% in the
quarter.
Financial position at March 31, 2022
At March 31, 2022, Axway had cash of €34.6 million and net debt
of €27.0 million.
Axway highlights that, if necessary, it has access to unutilized
financing capacity under its existing revolving credit
facility.
2022 Targets & Outlook
For 2022, Axway’s objective is to achieve organic revenue growth
of between 1% and 3%. The company also aims to improve its
profitability, with a margin on operating activities of between 12%
and 14% of revenue for the year.
In the medium term, Axway's ambition remain:
→ to achieve revenue of €500m through
organic growth in sales and through acquisitions, → to return to
operating margin on business activity rates above 15%, → to
sustainably increase earnings per share to above €1.
Financial calendar
Tuesday, May 24, 2022, 2:30 p.m. (UTC+2): Annual Shareholders'
Meeting
Tuesday, July 26, 2022, after market closing: Publication of
2022 Half-Year Results
Tuesday, July 26, 2022, 6:30 pm (UTC+2): 2022 Half-Year Results
Virtual Analyst Conference
Thursday, October 20, 2022, before market opening: Publication
of Q3 2022 Revenue
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.
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.
ARR: Annual Recurring Revenue –
Expected annual billing amounts from all active maintenance and
subscription agreements.
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 2021 Universal
Registration Document filed with the French Financial Markets
Authority (Autorité des Marchés Financiers, AMF) on March 24, 2022,
under number D.22-0145. 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
Axway Software: Impact on revenue of changes in scope and
exchange rates 1st Quarter 2022 (€m) Q1 2022
Q1 2021 Growth Revenue
66.9
66.3
0.9%
Changes in exchange rates +2.2
Revenue at constant
exchange rates
66.9
68.6
-2.4%
Changes in scope +0.0
Revenue at constant scope
and exchange rates
66.9
68.6
-2.4%
Axway Software: Changes in exchange rates 1st Quarter
2022For 1€ Average rateQ1 2022 Average rateQ1
2021 Change US Dollar
1.122
1.205
+ 7.4% Brazilian Real
5.870
6.599
+ 12.4%
1 See Glossary and Alternative Performance Measures
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427005874/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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