Axway: Q3 Group Revenue of EUR112.4m, with Organic Growth of 14.9%

-> Strong Axway performance and immediate SBS impact, reaffirming Group's full year targets

-> Successful launch of SBS integration, with first synergies and shared opportunities

-> Parent entity to centralize corporate functions & services for both Axway and SBS brands

PARIS--(BUSINESS WIRE)--October 24, 2024-- 

Regulatory News:

While the company reached a historic milestone in its development by adding the strengths of SBS to those of Axway (Paris:AXW) only a few weeks ago, Q3 2024 proved to be a dynamic quarter for the new combined entity. Contributions to this performance have been positive from both Axway and SBS in its first month within the consolidation scope.

Since the completion of the transaction in early September, the companies have continued to operate autonomously. While the business teams have remained focused on their respective projects, several departments began to collaborate, marking the start of a new corporate project aiming to generate synergies from joint initiatives.

Buoyed by a dynamic third quarter, the new Group posted 9-month revenue of EUR261.1m, up 7.1% organically and 21.5% overall. While Q4 will, as usual, be the most important and challenging period of the year, the Group today confirms its annual targets for growth and profitability.

Over the quarter, several important developments have taken place:

   -- On the Axway side, several deals were concluded with customers increasing 
      their usage and upscaling their entitlements for the company's core 
      solutions. The MFT offering in particular stood out by repositioning 
      itself as a benchmark in the North American market, thanks to repeated 
      contract wins against the best-known competing solutions. In addition, 
      Axway has, for the 9th time in its history in 2024, been named a leader 
      in the Gartner$(R)$ Magic Quadrant$(TM)$ for API Management. At the same time, 
      Axway's B2B e-invoicing offering also began to gain traction, with the 
      French government approving Axway's PDP1 registration. Finally, Axway's 
      NPS reached 52 at the end of the quarter, continuing its steady 
      improvement. 
 
   -- On the SBS side, milestone deals were signed in Q3 for 2 banks in the 
      Benelux region to adopt new SBP Digital Core product, an innovative and 
      future-oriented offering to migrate the banks onto SBS' fully 
      cloud-native, modular Core Banking Solution delivered in SaaS mode. This 
      milestone confirms SBS' leadership position in the Benelux market as well 
      as its ambition to become a pre-eminent player in the European 
      next-generation Core Banking Systems market. Furthermore, another 
      landmark deal was signed in France to migrate a bank onto a new 
      regulatory reporting product offered by SBS through its SBP Regulatory & 
      Reporting line. This deal highlights SBS clear leadership position in the 
      French market for risk and regulatory reporting solutions. These 
      achievements demonstrate the success of SBS in renovating its offerings 
      and in delivering new technological solutions to the market in line with 
      its strategy to gradually shift its product portfolio towards SaaS 
      solutions and cloud technology. 

Patrick Donovan, Axway's Chief Executive Officer, said:

"Having successfully completed the acquisition of SBS in early September, I am delighted to see that the teams of both companies have remained focused on their respective operations. Axway's year-to-date performance is fully in line with our expectations, and we are well on track to achieve our year-end targets. For SBS, the first month under our operations has shown impressive growth compared to last September, and the outlook for Q4 remains strong. Maintaining business momentum during such a significant project is often challenging, but leadership teams managed to stay on course in terms of business growth and customer satisfaction. Regarding the integration, we have initiated several workstreams over the past 6 weeks, bringing together leaders from various functions to create a new, cohesive organizational structure. Our goal is to streamline functions such as Finance, Legal, HR, IT, and Purchasing to optimize operations and support both Axway and SBS. This will enable us to provide better internal services at a lower cost. Additionally, we will leverage the expertise of both brands to learn from each other, develop the best operational practices, and create new offerings for our combined client base, ultimately delivering greater value to our customers."

_________________

(1) Partner Dematerialization Platform: E-invoicing platform registered with the French authorities. A PDP is authorized to provide all the functions required by the new legislation for e-invoicing and e-reporting.

Comments on Q3 2024 Group's Activity

 
Consolidated revenue 
 
                                          Q3 2023    Q3 2023    Total  Organic 
3(rd) Quarter 2024 (EURm)     Q3 2024   Restated*   Reported   Growth   Growth 
----------------------------  -------  ----------  ---------  -------  ------- 
Axway Scope                      78.3        69.0       69.4    12.8%    13.4% 
SBS Scope (1 month)              34.3        28.9          -        -    18.8% 
Intra-Group Operations           -0.1         0.0          -        -        - 
----------------------------  -------  ----------  ---------  -------  ------- 
Group's Revenue                 112.4        97.8       69.4    62.1%    14.9% 
----------------------------  -------  ----------  ---------  -------  ------- 
* Revenue at 2024 scope and 
 exchange rates 
 

In Q3 2024, the Group's total revenue reached EUR112.4m, reflecting an organic growth of 14.9% and a total growth of 62.1%. Within the restated Q3 2023 figures, currency fluctuations had a negative impact of EUR0.4m, while changes in the consolidation scope, mainly due to the integration of SBS activities from September 2024, had a positive impact of EUR28.9m. Intra-Group eliminations amounted to EUR0.1m for the period.

Comments on Axway Scope

 
Revenue by business line 
 
                                          Q3 2023    Q3 2023    Total  Organic 
3(rd) Quarter 2024 (EURm)     Q3 2024   Restated*   Reported   Growth   Growth 
----------------------------  -------  ----------  ---------  -------  ------- 
Subscription                     48.4        36.9       37.0    30.8%    31.2% 
  of which Axway Managed         12.8        11.8       11.9     7.7%     8.3% 
  of which Customer Managed      35.5        25.0       25.1    41.7%    42.1% 
Maintenance                      16.8        21.0       21.1   -20.4%   -19.9% 
Subtotal - Renewable 
 Contracts                       65.2        57.8       58.1    12.1%    12.7% 
License                           4.1         2.6        2.7    54.4%    55.5% 
Services                          9.0         8.5        8.6     4.6%     5.4% 
----------------------------  -------  ----------  ---------  -------  ------- 
Axway Scope                      78.3        69.0       69.4    12.8%    13.4% 
----------------------------  -------  ----------  ---------  -------  ------- 
* Revenue at 2024 scope and 
 exchange rates 
 

In Q3 2024, the Subscription activity continued to perform strongly, achieving organic growth of 31.2% and contributing EUR48.4m in revenue. Axway Managed offerings saw organic revenue growth of 8.3% and represented approximately one-third of total bookings. Meanwhile, Customer Managed offerings revenue grew over 42%, reflecting the continuous trust and reliance of customers. Upfront revenue from Customer Managed contracts signed in Q3 represented EUR20.1m. The annual value of new subscription contracts $(ACV)$ signed in Q3 2024 totaled EUR11.8m. Bookings for the quarter exceeded forecasts, with an increasingly high proportion of Axway Managed offerings, confirming the relevance of the strategic focus on cloud models to attract ever more new customers.

Maintenance experienced an organic decline of 19.9%, which resulted in EUR16.8m revenue. The decrease was once again attributable to the transition of customers to subscription models last year, reflecting a move towards more sustainable revenue streams for the company in the future. The Maintenance renewal rate held at 94% over the quarter.

At the end of September 2024, Axway's Annual Recurring Revenue $(ARR)$ reached EUR235.3m, up 9.4% on a like-for-like basis, compared to EUR215.1m at the end of September 2023. In Q3 2024, revenue from renewable contracts represented 83% of total revenue.

In Q3 2024, the License activity reached a total revenue of EUR4.1m, with an organic growth of 55.5%. This solid performance reflects strong demand for one of the specialized products in Axway's portfolio, not available through subscription, which generated a new major signing in the US public sector.

Services recorded a total revenue of EUR9.0m in Q3 2024, with an organic growth of 5.4%. This performance was driven by successes in large-scale cloud migration projects across all operating regions, reflecting the loyalty of our customers and their high level of satisfaction.

 
Revenue by geographic area 
 
                                          Q3 2023    Q3 2023    Total  Organic 
3(rd) Quarter 2024 (EURm)     Q3 2024   Restated*   Reported   Growth   Growth 
----------------------------  -------  ----------  ---------  -------  ------- 
France                           16.1        19.7       19.7   -18.2%   -18.2% 
Rest of Europe                   17.6        15.8       15.7    12.3%    11.8% 
Americas                         40.3        29.4       29.8    35.3%    37.4% 
Asia & Pacific                    4.2         4.2        4.2     0.8%     0.0% 
----------------------------  -------  ----------  ---------  -------  ------- 
Axway Scope                      78.3        69.0       69.4    12.8%    13.4% 

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