→ Quarterly revenue of €66.3m, representing organic growth1
of 7.5% → Subscription activity with organic growth of 59.6%
to €23.7 million, i.e., 36% of total revenue → ACV of new
subscription contracts up by 71.6% → Signature metric up
45.2% for the quarter
Regulatory News:
In Q1 2021, despite a global health and economic context that
remained uncertain, Axway’s (Euronext: AXW.PA) business greatly
accelerated compared to the previous year. While the quarter
enabled the company to initiate internal reorganisations useful to
its new strategic projections, it was above all a period of
significant commercial momentum. In line with the company's
ambitions and market trends, the Subscription business continued to
grow at a very strong pace.
In line with 2020, a significant portion of business in Q1 2021
stemmed from Axway's broad existing customer base, but there was
also a marked improvement in the acquisition of new logos. This was
particularly true for the Amplify platform, which was adopted by
three times as many customers in Q1 2021 as in the previous year
over the same period.
With the Amplify API management platform set to be Axway's main
growth driver for the coming years, an organisation specifically
dedicated to capturing API market share was created. This new
structure, which has led to a reorganisation of teams and targeted
recruitment in the different regions where Axway operates, is part
of a global initiative by the company to specialise its operational
teams by product and customer portfolio. While there is no doubt
that Axway plans to maintain a leadership position in its
historical markets (MFT, B2Bi, AI Suite and others) by offering an
exceptional customer experience and reliable, innovative solutions
to its 11,000 customers, the company also seeks to continue
accelerating its development and recognition in the API market,
where it enjoys a particularly robust technological leadership
status.
The company has continued to invest in marketing. Its Open
Everything campaign has been effective in feeding the business
pipeline, which has grown steadily over the first three months of
the year. While in many countries it is still not possible to bring
together the various market stakeholders under good conditions,
Axway continues to evolve its business practices, marketing
approach and engagement methods to better meet its customers’
needs. A key event of the year, the Axway Summit 2021, during which
the company traditionally brings together its customers and
partners, will therefore be held virtually in May for the second
year in a row. This event will feature a series of regionalized
virtual meetings that will allow Axway to showcase its
customer-focused strategy and the value created by its various
offerings.
Patrick Donovan, Axway Chief Executive Officer, declared:
“Following a successful 2020, during which we were able to
complete Axway’s transformation cycle focused on business model and
product development, the company delivered an excellent business
performance in Q1 2021, which is very encouraging for the rest of
the year. Furthermore, we have started making our first important
strategic moves for the next stage in the company’s development. We
will soon be able to present more detailed medium-term objectives
and a clearer roadmap, but Axway's focus is now on strengthening
its position in its fastest-growing market, that of the Amplify
platform. We want to continue to be the trusted partner that we
have been for our customers for over 20 years now, and we also wish
to set Axway on a path of sustainable and ambitious growth."
Comments on Q1 2021 activity
Axway Software: Consolidated revenue
1st Quarter 2021 (€m)
Q1 2021
Q1 2020 Restated*
Q1 2020 Reported
Total Growth
Organic Growth
Constant Currency
Growth
Revenue
66.3
61.7
64.4
3.1%
7.5%
7.5%
* Revenue at 2021 scope and exchange rates
In Q1 2021, Axway's revenue amounted to €66.3 million,
reflecting organic growth of 7.5%. Currency fluctuations had a
negative impact of €2.7 million on revenue, mainly due to the
depreciation of the US dollar against the euro during the period
(-8.5%). Thus, total revenue growth was 3.1% for the first 3 months
of the year.
Axway Software: Revenue by business line
1st Quarter 2021 (€m)
Q1 2021
Q1 2020 Restated*
Q1 2020 Reported
Total Growth
Organic Growth
License
3.8
3.7
3.9
-2.0%
2.8%
Subscription
23.7
14.8
15.7
50.9%
59.6%
Maintenance
29.8
34.1
35.4
-15.9%
-12.7%
Services
9.0
9.0
9.3
-3.1%
0.1%
Axway Software
66.3
61.7
64.4
3.1%
7.5%
* Revenue at 2021 scope and exchange rates
License activity revenue was €3.8 million in Q1 2021 (6%
of total revenue), representing organic growth of 2.8%. Despite the
continued positive market dynamics for subscription models, the
activity benefited from a more favourable comparison basis in
regions already severely impacted by the COVID-19 epidemic in Q1
2020. While the company does not expect growth in license sales for
the full year, the coming quarters will confirm whether or not the
business has reached a low point, as its offerings are still in
demand from certain major customers operating in highly regulated
markets.
With organic growth of 59.6%, Subscription revenue
reached €23.7 million in Q1 2021. In total, over the period, the
business grew by 50.9%. While business had already improved
significantly in Q1 2020, sales once again reached a record level
in Q1 2021, during which the activity represented 36% of Axway's
total revenue. This better-than-expected performance reflects the
success of Axway's strategy to offer its customers flexible and,
technology-agnostic solutions that can meet their operational needs
quickly and efficiently. In addition to revenue growth, the
business trend was also very positive, as demonstrated by the
signing of new subscription contracts for an Annual Contract Value
(ACV) of € 5.4 million, up 71.6% compared to Q1 2020.
Given these factors, the Signature Metric was up 45.2%, while
the Net Signature Metric, restated for maintenance attrition, grew
41.3%.
Maintenance activity generated revenue of €29.8 million
(45% of total revenue) in Q1 2021, an organic decline of 12.7%
compared to the previous year. Although the activity has been
relatively resilient, the slight growth in license sales during the
quarter was not sufficient to compensate for the migration of a
portion of revenues to Subscription, where customers take out
"all-inclusive" offers. While these migrations, ultimately
beneficial to Axway, are accelerating, Maintenance should, as
anticipated, remain under strong pressure throughout 2021.
In Q1 2021, Axway's recurring revenue, which includes
Subscription and Maintenance activities, represented 81% of total
revenue, or €53.4 million. This includes upfront revenues of €8.8
million recognized on the signature of subscription contracts.
Still impacted by the travel restrictions imposed by the health
crisis, Services nevertheless generated revenue of €9.0
million (14% of total revenue), stable organically compared to the
previous year. In some regions where remote services are standard
practice, the activity grew significantly, and the company noted a
remarkable increase in business value through additional
achievements with several major customers.
Axway Software: Revenue by geographic area
1st Quarter 2021 (€m)
Q1 2021 Q1 2020Restated* Q1
2020Reported TotalGrowth
OrganicGrowth France
18.8
17.9
17.9
5.1%
5.1%
Rest of Europe
16.7
13.6
13.5
23.2%
22.9%
Americas
26.5
27.4
30.1
-11.8%
-3.1%
Asia/Pacific
4.4
2.9
2.9
50.7%
50.8%
Axway Software
66.3
61.7
64.4
3.1%
7.5%
* Revenue at 2021 scope and exchange rates
Revenue in France was €18.8 million (28% of total
revenue) in Q1 2021, up 5.1% organically. In addition to the return
to growth in license sales, the country once again reported a very
strong ramp-up in Subscription activity (+126%).
Rest of Europe, with revenue of €16.7 million (25% of
total revenue), reported strong growth over the quarter. The 22.9%
increase in sales was mainly due to the significant growth in
Subscription activity in all countries. Belgium, the Netherlands,
the Nordics, and Southern Europe all posted triple-digit organic
growth in subscription sales. This excellent performance
compensated for the decline in License and Maintenance activities
over the period.
The Americas (USA & Latin America) generated revenue
of €26.5 million (40% of total revenue) in Q1 2021, an organic
decrease of 3.1% compared to the same period last year. Except for
Services, which were very dynamic (+18%), business was down overall
in the region. Following major operational changes at the end of
last year, Subscription activity should accelerate as from Q2
2021.
In Asia/Pacific, Axway's revenue amounted to €4.4 million
(7% of total revenue) in Q1 2021, representing organic growth of
50.8%. Thanks to very strong growth in License and Subscription,
and more generally to a return to normal business levels compared
to the previous year, Axway made a very good start to the year in
the region.
Financial position at March 31, 2021
At March 31, 2021, Axway had cash of €26.3 million and net debt
of €13.3 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's objective is to achieve organic revenue growth
of between 2% and 4%. The company also aims to improve its
profitability and has a target of achieving an operating margin on
business activity rate between 11% and 13% of revenues in 2021.
Axway confirms its previously announced mid-term ambitions:
- 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
The company will set-out its 2021-2023 strategic plan at its
first Capital Market Meeting, scheduled for June 2, 2021 at 3.30pm
CEST.
Financial calendar
Tuesday, May 25, 2021, 2.30 p.m. (CEST): 2021 Combined General
Meeting
- Due to the health context, the 2021 Combined General Meeting
will be held in closed session, without the physical presence of
shareholders, and streamed live. Shareholders will be able to
follow the meeting and ask questions via the internet or by phone.
All practical guidance on streaming the meeting will shortly be
available on Axway's website: https://investors.axway.com/en/shareholders-and-investors/shareholders-meeting
Wednesday, June 2, 2021, 3.30 p.m. (CEST): Capital Market
Meeting – Details to come
Tuesday, July 27, 2021, after close of trading: Publication of
2021 Half-Year Results
Tuesday, July 27, 2021, 6.30 p.m. (CEST): 2021 Half-Year Results
Virtual Analyst Conference
Glossary – 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.
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 signatures of license
contracts, which often represent investments for customers, are
more significant in the second half of the year and may therefore
have a more or less favourable 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: Impact on revenue of changes in scope and
exchange rates 1st Quarter 2021
(€m) Q1 2021 Q1 2020
Growth Revenue
66.3
64.4
3.1%
Changes in exchange rates
-2.7
Revenue at constant exchange rates
66.3
61.7
7.5%
Changes in scope +0.0
Revenue
at constant scope and exchange rates
66.3
61.7
7.5%
Axway Software: Changes in exchange rates
1st Quarter 2021For 1€
Average rate Q1 2021
Average rate Q1 2020
Change
US Dollar
1.205
1.103
- 8.5%
Brazilian Real
6.599
4.917
- 25.5%
1 See Glossary – Alternative Performance Measures
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210421005800/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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