- Quarterly revenue up 11.3% organically1 and 2.7%
overall
- Annual Recurrent Revenue (ARR) of €202.5m, up 10.4% on
end-September 2022
- Subscription activity revenue up 50.7% over the
quarter
- Acquisition of French company Cycom Finances and its PaE
solution
- Full-year targets confirmed towards upper end in terms of
both growth and profitability
Regulatory News:
In Q3 2023, as in the first 9 months of the year, Axway
(Euronext: AXW.PA) recorded an excellent sales performance
characterized by the dynamism of its subscription offerings which
continued to grow at a sustained pace, both through the
strengthening of long-term partnerships between Axway and several
of its major customers, and through the acquisition of new
references. Bookings were up 22% as compared to Q3 2022, driven by
an increase in the number of transactions with new customers and a
major 5-year expansion contract with a leading international
financial institution on the Axway Financial Accounting Hub
offering.
This uninterrupted momentum translated into organic revenue
growth of 11.1% over the first 9 months of the year, validating the
effectiveness of the optimized sales organization and the relevance
of the more concentrated product portfolio. In recent months,
several major developments have taken place:
- The MFT product line, designed to meet the growing demand of
large organizations for a reliable, high-performance managed file
transfer solution, has seen a surge in adoption. The recognized
security and efficiency of Axway's offering was reflected in Q3 by
a 15% increase in the number of new customers worldwide, and a
remarkable 27% jump in North America. This trend perfectly
translates Axway's dedication to deliver a top-tier MFT solution to
meet its customers' critical security needs;
- Axway's B2B integration offering has continued to expand and is
firmly established as one of the most comprehensive on the market.
The product line now includes the VAN capabilities of the Axway
Business Network and the e-invoicing functionalities of Advalvas,
an acquisition finalized last March. With regard to e-invoicing,
the pipeline has grown strongly over the last 6 months, due in
particular to the interest shown by many service providers in
certified expertise around the PEPPOL network;
- Axway has, for the 8th time in its history, been recognized
among the world leaders in the APIM market in the Gartner Magic
Quadrant™ for API Management 2023 study. Axway stood out for the
completeness of its vision of the market, recognized as the most
advanced, thanks to an approach based on an open, vendor-agnostic
platform combined with a strategy that treats APIs as products.
Over the quarter, the recently launched Amplify Enterprise
Marketplace accounted for 75% of new APIM opportunities;
- Mid-October saw Axway's acquisition of Cycom Finances, a French
company and its PaE solution specialized in financial data
referencing and accounting mapping. Through this transaction, Axway
strengthens its Axway Financial Accounting Hub offering and has
entered into a strategic partnership with KPMG France to offer a
complete financial systems modernization solution to major banking
institutions.
Patrick Donovan, Axway's Chief Executive Officer, said:
“I am proud to observe that Axway's activity grew for the 4th
consecutive quarter in Q3 2023. We are achieving good progress on
our most important product lines, and customer satisfaction is once
again high. As we enter the final stretch of our 3-year strategic
plan, we are well positioned to continue moving forward based on a
sustainable, growing and profitable business model. At this stage
of the year, I can reconfirm that we should achieve the upper end
of our annual targets, both in terms of organic revenue growth and
margin. This performance will recognize the remarkable work of
Axway's teams, once again rewarded by the recognition of the
quality of our solutions and our vision of the market by leading
analysts, as well as by our renewed ability to regularly enrich our
product portfolio and our offering catalog. Full-year results to be
published next February will enable us to assess our progress and
project the future development of our strategy in more detail, but
in the meantime, a year-end full of challenges and opportunities
awaits us!”
Comments on Q3 2023 activity
Axway Software: Consolidated revenue
3rd Quarter 2023 (€m)
Q3 2023
Q3 2022 Restated*
Q3 2022 Reported
Total Growth
Organic Growth
Revenue
69.4
62.3
67.5
2.7%
11.3%
* Revenue at 2023 scope and exchange rates
In Q3 2023, Axway's revenue was €69.4m, up 11.3% organically and
2.7% in total. Currency fluctuations had a negative impact of €2.9m
on quarterly revenue, mainly due to the depreciation of the US
Dollar against the Euro. The scope effect for the quarter was
negative by €2.3m following the different product portfolio
rationalization operations finalized in H2 2022.
Axway Software: Revenue by business line
3rd Quarter 2023 (€m)
Q3 2023
Q3 2022 Restated*
Q3 2022 Reported
Total Growth
Organic Growth
License
2.7
1.9
2.3
16.2%
41.8%
Subscription
37.0
24.6
27.4
35.2%
50.7%
Maintenance
21.1
26.6
28.3
-25.3%
-20.7%
Services
8.6
9.2
9.6
-10.4%
-7.2%
Axway Software
69.4
62.3
67.5
2.7%
11.3%
* Revenue at 2023 scope and exchange rates
The License activity generated revenue of €2.7m in Q3
2023 (4% of total revenue), up 41.8% organically on the same period
last year. Over the quarter, sales were boosted by the success of a
license-only specialized product, aimed at a specific customer
base, and by several upsells on existing license contracts.
Subscription revenue came to €37.0m over the quarter,
representing organic growth of 50.7% compared with Q3 2022. While
the activity accounted for 53% of the company's total revenue in
the period, bookings continued to grow at a sustained pace, in line
with the first 6 months of the year. Revenue from Axway Managed
contracts continued to rise at a steady and strong rate of over 15%
versus Q3 2022, while Customer Managed sales once again increased
sharply. Over the quarter, the annual value of new subscription
contracts signed (ACV) reached €8.8m, up 18% year-on-year. Upfront
revenue from new and renewed Customer Managed contracts amounted to
€13.1m for the quarter.
Maintenance revenue totaled €21.1m in Q3 2023 (30% of
total revenue), down 20.7% organically. Customers continued to
accelerate their migration to new subscription offers, particularly
when extending their contracts to meet additional usage or
functionality needs.
At the end of September 2023, Axway's ARR (Annual Recurring
Revenue) was €202.5m, up 10.4% on a like-for-like basis compared to
the end of September 2022. During the quarter, revenue from
renewable contracts represented 83% of total revenue.
Services activity saw an organic decline of 7.2% over the
quarter, with revenue of €8.6m (13% of total revenue). Several
major contracts launched in Asia/Pacific and Latin America in Q3
2022 established a high comparison basis. For the full year, Axway
anticipates a slight decline in the Services activity, but an
improvement of its profitability.
Axway Software: Revenue by geographic area
3rd Quarter 2023 (€m)
Q3 2023
Q3 2022 Restated*
Q3 2022 Reported
Total Growth
Organic Growth
France
19.7
14.8
15.1
30.4%
32.4%
Rest of Europe
15.7
14.6
14.7
7.0%
7.9%
Americas
29.8
28.7
32.8
-9.1%
4.0%
Asia/Pacific
4.2
4.2
5.0
-15.9%
-0.7%
Axway Software
69.4
62.3
67.5
2.7%
11.3%
* Revenue at 2023 scope and exchange rates
In France, Axway's revenue reached €19.7m over the
quarter, representing 28% of total revenue. The activity continued
to progress strongly, with quarterly organic growth of 32.4%,
driven by the buoyancy of the Subscription business, up almost 130%
compared with Q3 2022, on the back of significant Customer Managed
bookings over the period.
The Rest of Europe zone generated organic growth of 7.9%
in Q3 2023, with revenues of €15.7m, representing 23% of total
revenue. The region saw strong growth in Subscription and Services
activities, particularly in Germany, offsetting a contraction in
business in the UK.
The Americas (USA and Latin America) posted revenue of
€29.8m between July and September 2023 (43% of total revenue),
thanks to organic growth of 4.0%. While the region benefited from
historic contracts that kept License sales stable year on year, the
Subscription activity stood out with organic growth of around 30%
over the quarter.
In Asia/Pacific, Axway recorded revenue of €4.2m in Q3
2023 (6% of total revenue), virtually stable organically compared
to the previous year (-0.7%). In this geographic zone, customers
largely favored Axway Managed Subscription contracts thus limiting
revenue growth despite good sales momentum.
Financial position at September 30, 2023
At September 30, 2023, Axway had cash of €15.1m and net debt of
€76.6m.
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.
2023 Targets & Outlook
For the full year, Axway expects to achieve the upper end of its
targets for both organic revenue growth (between 0 and 3%) and
profit on operating activities (15 to 18% of revenue).
Axway's medium-term ambitions remain:
- to achieve revenue of €500m through organic growth and
acquisitions;
- to deliver an operating margin on business activity approaching
20% of revenue.
Financial Calendar
Wednesday, February 21, 2024, after market closing: Publication
of 2023 Full-Year Results Wednesday, February 21, 2024, 6:30 pm
(UTC+1): 2023 Full-Year Results Virtual Analyst Conference
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 2022 Universal
Registration Document filed with the French Financial Markets
Authority (Autorité des Marchés Financiers, AMF) on March 24, 2023.
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: Revenue by business line
YTD - 9 Months 2023 (€m)
9M 2023
9M 2022 Restated*
9M 2022 Reported
Total Growth
Organic Growth
License
5.7
7.3
8.6
-34.3%
-22.7%
Subscription
115.7
76.8
83.2
38.9%
50.6%
Maintenance
65.7
81.8
84.3
-22.0%
-19.6%
Services
27.8
27.4
27.8
-0.1%
1.4%
Axway Software
214.8
193.3
203.9
5.3%
11.1%
* Revenue at 2023 scope and exchange rates
Axway Software:
Revenue by geographic area
YTD - 9 Months 2023 (€m)
9M 2023
9M 2022 Restated*
9M 2022 Reported
Total Growth
Organic Growth
France
65.1
52.1
52.8
23.4%
25.1%
Rest of Europe
51.3
41.1
41.9
22.6%
24.9%
Americas
87.1
85.4
93.6
-7.0%
2.0%
Asia/Pacific
11.3
14.7
15.6
-28.0%
-23.5%
Axway Software
214.8
193.3
203.9
5.3%
11.1%
* Revenue at 2023 scope and exchange rates
Axway Software:
Impact on revenue of changes in scope and exchange rates
YTD - 9 months 2023 (€m)
9M 2023
9M 2022
Growth
Revenue
214.8
203.9
5.3%
Changes in exchange rates
-2.5
Revenue at constant exchange rates
214.8
201.4
6.6%
Changes in scope
-8.1
Revenue at constant scope and exchange rates
214.8
193.3
11.1%
Axway Software: Changes in exchange rates
YTD - 9 months 2023For 1€
Average rate 9M 2023
Average rate 9M 2022
Change
US Dollar
1.083
1.064
- 1.8%
___________________________ 1 See Glossary and Alternative
Performance Measures
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231025731549/en/
Investor Relations: Arthur Carli – +33 (0)1 47 17 24 65 –
acarli@axway.com
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