Continued strong growth in subscription
sales
- Q3 2023 revenue:
- Growth in subscription-based sales (+59%)
- Growth in annualised recurring revenue (ARR) from
subscriptions (+54%)
- Decrease in non-recurring revenue, as expected, linked to
the decline in perpetual license sales
- Revenue for the first nine months of 2023:
- Consolidated revenue stable
- Substantial increase in subscription-based sales
(+85%)
- 2023 guidance confirmed:
- 60% growth in recurring revenue from subscriptions
- 40% growth in ARR from subscriptions
Regulatory News:
Verimatrix (Euronext Paris: VMX) is
reporting its revenue for third-quarter 2023, ended 30 September
2023.
“The third quarter results bear out our strategy geared towards
the systematisation of subscription-based sales and recurring
revenue. This strategy has proved a success and promises much for
the future growth of VERIMATRIX. Over the period, the Group
continued to grow its business portfolio, attesting to the quality
and relevance of our products for the cybersecurity market. This is
reflected in continued growth in recurring subscription-based
revenue, enabling us to maintain our growth targets for 2023,” said
Amedeo D’Angelo, Executive Chairman of VERIMATRIX.
Jean-François Labadie, Chief Financial Officer
will hold an audio webcast today at 6:00pm to discuss the Company’s
Q3 Revenue
To join the webcast, click on the following
link: Webcast - Résultats Verimatrix du CA T3 To join the webcast,
audio only, call the following number: France : +33 (0) 4 88 80 09
30 Password : 333 001 822 #
(in US$ million)
Q3 23
Q3 22
Chg.
YTD 23
YTD 22
Chg.
Recurring revenue
8.0
6.8
16.8%
23.0
19.1
20.1%
of which subscriptions
3.6
2.2
59.4%
10.1
5.4
85.1%
of which maintenance
4.4
4.6
-3.9%
12.9
13.7
-5.7%
Non-recurring revenue
6.0
9.2
-34.6%
21.6
25.8
-16.2%
Total revenue
14.0
16.0
-12.7%
44.6
44.9
-0.7%
ARR
29.9
26.5
12.8%
of which subscriptions
13.9
9.0
54.4%
of which maintenance
16.0
17.5
-8.6%
Q3 2023 revenue
VERIMATRIX posted consolidated revenue of $14 million in Q3
2023, compared with $16 million in Q3 2022, down 12.7%. The company
posted strong growth in revenue from subscriptions, on which the
sales teams are currently fully focused. However, this level of
activity includes the planned and structural decline in
non-recurring revenue corresponding to perpetual licence sales and
royalties on the production of set-top boxes.
- Recurring revenue
Recurring revenue came out at $8 million overall in Q3 2023, up
16.8% from Q3 2022. This growth was driven by the continued
increase in subscriptions as well as a limited decrease in
maintenance-based revenue.
Subscription sales grew 59.4% in Q3 2023 to $3.57 million,
compared with $2.24 million in Q3 2022. Annualised revenue (ARR)
from subscriptions increased 54.4% to $13.9 million. ARR has risen
in steady and linear fashion over the last nine quarters, driven by
the activation of new customers in the last few quarters.
Maintenance-based revenue dipped 3.9% to $4.43 million from
$4.61 million in Q3 2022. Having slowed slightly over the past
three quarters, annualised revenue from maintenance totalled $16
million in Q3 2023, compared with $17.5 million in Q3 2022. The
decrease in maintenance sales was fully expected by the Group as
they are linked to non-recurring revenue.
- Non-recurring revenue
Non-recurring revenue amounted to $6 million in Q3 2023, down
34.6% from Q3 2022. The performance resulted primarily from fewer
royalties from set-top boxes, the production of which is currently
at a low level. Perpetual license sales were also down over the
quarter, consistent with the Group’s strategy to transform the
business model in favour of embedded recurring revenue and to the
detriment of one-off license sales.
Nine-month revenue
VERIMATRIX posted stable growth of $44.6 million in the first
nine months of the year, down 0.7%.
Recurring revenue growth was driven by subscription-based sales,
which rose 85.1% over the period to $10.07 million. Despite the
slight decrease in maintenance revenue (-5.7% to $12.93 million),
recurring revenue increased 20.1% to $23 million.
Non-recurring revenue for the first 9 months fell 16.2% to $21.6
million. The decline in fees on set-top boxes over the period has
adversely impacted non-recurring revenues since the beginning of
the year and has not been fully offset by perpetual license
sales.
For the year as a whole, the Group’s sales momentum is in line
with its development objectives, i.e. growth in revenue and ARR
from subscriptions and growth in total recurring revenue. A number
of deals were activated during the period. Major contracts since
the beginning of the year include those with Swisscom, Little
Cinema Digital, Telus, Agama, GTPL Hathway, United Cloud and
Scalstrm. VERIMATRIX recently won “Best Security Solution of the
Year for Application Protection” at the Cybersecurity Breakthrough
Awards. VERIMATRIX was also ranked as a technology leader in the
2023 SPARK Matrix™: In-App Protection report by Quadrant Knowledge
Solutions.
Annual growth targets confirmed
The Group is confident for the rest of the financial year,
largely thanks to its solid financial structure and
revenue-generating business model. Following a third quarter in
line with the Group’s forecasts, with a positive performance on
recurring revenue and strong growth in subscription-based revenue,
VERIMATRIX is confirming its growth targets for 2023.
Given the decrease in royalties – the impact of which may linger
in the coming months – and based on a normal level of perpetual
license sales, VERIMATRIX expects overall revenue to be stable for
full-year 2023.
The Group expects subscription-based recurring revenue to grow
60% and subscription-based ARR to grow 40%. VERIMATRIX is
forecasting double-digit growth in recurring revenue, from
subscriptions and maintenance alike, for the financial year as a
whole.
About VERIMATRIX
VERIMATRIX (Euronext Paris: VMX) helps make today's connected
world safer by offering user-centred security solutions. VERIMATRIX
protects digital content, applications and devices with intuitive,
people-centred and frictionless security. Leading brands turn to
VERIMATRIX to protect their content, from premium films and
live-streaming sports to sensitive financial and medical data and
mission-critical mobile applications. We enable the trusted
connections our customers depend on to deliver quality content and
services to millions of consumers around the world. VERIMATRIX
helps partners get to market faster, scale easily, protect valuable
revenue streams, and win new business. For more information, visit
www.verimatrix.com.
Supplementary non-IFRS financial information
In this press release, VERIMATRIX uses financial aggregates and
performance indicators which are not accounting metrics strictly
defined by IFRS standards. They are defined in Appendix 2 of this
press release. They must be considered supplemental information
which is not a substitute for any operational and financial metric
of a strictly accounting nature, as presented in the company’s
consolidated financial statements, particularly in the profit and
loss statement contained in Appendix 1 of this press release.
Forward-looking statements
This press release contains certain forward-looking statements
concerning VERIMATRIX. Although VERIMATRIX believes its
expectations to be based on reasonable assumptions, they do not
constitute guarantees of future performance. Accordingly, the
company’s actual results may differ materially from those
anticipated in these forward-looking statements owing to a number
of risks and uncertainties.
Appendix 1 - Supplementary non-IFRS
financial information - Reconciliation of IFRS results with
adjusted results
The performance indicators presented in this press release that
are not strictly accounting metrics are defined below. These
indicators are not aggregates defined under IFRS and do not
constitute accounting metrics used to measure the company’s
financial performance. They must be considered supplemental
information which is not a substitute for any operational and
financial metric of a strictly accounting nature, as presented in
the company’s consolidated financial statements and accompanying
notes. The company uses these indicators because it believes they
are relevant measures of its current operating profitability and
operating cash flow generation. Although generally used by
companies in the same sector around the world, these indicators may
not be strictly comparable to those of other companies as they may
be defined or calculated differently even though similarly
labelled.
Adjusted gross profit is defined as gross profit before
(i) the amortisation of intangible assets related to business
combinations, (ii) any potential goodwill impairment, (iii)
share-based payment expenses and (iv) non-recurring costs
associated with restructuring and acquisitions and disposals
carried out by the company.
Adjusted operating profit is defined as operating profit
before (i) the amortisation of intangible assets related to
business combinations, (ii) any potential goodwill impairment,
(iii) share-based payment expenses and (iv) non-recurring costs
associated with restructuring and acquisitions and disposals
carried out by the company.
EBITDA is defined as adjusted operating profit before
depreciation, amortisation and impairment expenses not related to
business combinations.
Annual recurring revenue (ARR) corresponds to the
annualised value of all recurring revenue from contracts in place
at the time of measurement. ARR includes all types of contracts
that generate recurring revenue and for which revenue is currently
recognised. ARR is a rolling number that accumulates over time
whereas the total contract value (TCV) metric also used by the
company is typically used to measure (new or incremental) orders
made within a period. The company computes an ARR for SaaS and
non-SaaS subscriptions and ARR combining subscriptions and
maintenance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231019304202/en/
Investor and media
Investor Relations Jean-François Labadie Chief Financial
Officer +33 (0)4 42 905 905 finance@verimatrix.com
Investor Relations Lucie Morlot +33 (0)1 80 18 26 33
lucie.morlot@actifin.fr
Financial Press Michael Scholze +33 (0)1 56 88 11 14
michael.scholze@actifin.fr
Media: Matthew Zintel +1 281 444 1590
matthew.zintel@zintelpr.com
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