DGAP-News: TeamViewer AG
/ Key word(s): Quarter Results
Quarterly Statement Q1 2020
TeamViewer accelerates growth due to high demand for remote access and working from home solutions
- Billings up 75% to record level of EUR 119.7m in Q1 2020
- Adjusted EBITDA up 96% to EUR 73.9m; Adjusted EBITDA margin of 62%
- Number of subscribers grown to more than 514 thousand
- Deleveraging ahead of plan with net leverage falling to 2.4x Adjusted EBITDA
- Raising full-year guidance after strong first months: targeting billings of around EUR 450m and an Adjusted EBITDA margin of around 56% in FY 2020
TeamViewer continued its strong growth in the first quarter of 2020 due to a good performance in the first two months and significant extra demand for remote access and home working solutions since the aggravation of the COVID-19 outbreak to a pandemic in March. In the first three months of 2020, billings were up 75% at a record level of EUR 119.7m (Q1 2019: EUR 68.6m). Adjusted EBITDA grew by 96% year-over-year to EUR 73.9m (Q1 2019: EUR 37.7m) resulting in an Adjusted EBITDA margin of 62% (Q1 2019: 55%).
Oliver Steil, CEO of TeamViewer, said: "TeamViewer's long-term growth drivers remain intact and have been accelerated by high demand for our solutions following the global quarantine measures to contain the COVID-19 pandemic. The strong results confirm our strategy and show that TeamViewer offers a key technology for the modern workplace and the digitized business processes of the future."
Stefan Gaiser, CFO of TeamViewer, said: "We got off to a very good start during the first quarter and are particularly pleased with the traction in the enterprise segment. While this makes us optimistic for the full year, the continued macro-economic uncertainty reduces visibility into the remainder of the year."
The global quarantine measures to fight the COVID-19 pandemic have accelerated TeamViewer's underlying growth trends as remote working becomes the new norm and reliable solutions to remotely control infrastructure and devices are required. Reduced mobility makes remote management and expert collaboration business critical while a general underinvestment in digitization in the public and private sector is being addressed.
Driven by this acceleration, TeamViewer expanded its subscriber base to more than 514 thousand paying subscribers as of 31 March 2020 (31 December 2019: 464 thousand), thereby further diversifying across customer verticals and segments. At the same time, global quarantine measures led to an expansion of TeamViewer's free user base, pushing the number of installations to more than 2.25bn by the end of March.
In anticipation of significantly higher traffic, partly driven by allowing more free usage, router capacity has been added to ensure platform performance and a continued seamless user experience. Moreover, TeamViewer supports its users during the COVID-19 crisis by means of a more lenient claims management and free licenses for blizz, the company's online collaboration solution enabling video and audio conferencing, for the education sector.
Despite the global lockdowns to fight the COVID-19 pandemic, TeamViewer's operations have been largely unaffected due to effective contingency planning, virtual sales processes, and fast and remote deployment of products. This enabled the company to continue to execute on its three strategic growth initiatives - strengthening customer segment coverage, use case innovation, and geographical expansion - without interruption.
Notably, TeamViewer has significantly enlarged its enterprise footprint in the first quarter 2020 by selling over 300 Tensor licenses across all regions and client verticals. Customers with an annual contract value of above EUR 10,000 increased to 1,183 as of 31 March 2020, representing 153% growth year-over-year (31 March 2019: 468) and 69% since 31 December 2019 (698). At the same time, the accumulated contract value of the top 50 deals reached EUR 5.5m, 142% more than a year earlier (31 March 2019: EUR 2.3m) and up 63% compared to year end 2019 (31 December 2019: EUR 3.4m). As part of the enterprise initiative, TeamViewer has also established further partnerships and integrations with tech giants such as Microsoft and IBM as well as leaders in their specific fields including elo, Synology and Q-loud.
TeamViewer continuously improves its products and puts the customer at the center of innovation. By bundling Tensor with Remote Access licenses, TeamViewer provided existing and new customers a fast to implement and cost-effective working from home solution while benefiting from the comprehensive Tensor feature set. Other improvements include an update of Pilot, TeamViewer's augmented reality product, that is now among the first applications to leverage the new iPad Pro LiDAR scanner for enhanced accuracy of distance and measurement. Strengthening the innovation and development capacity to drive use case expansion is a key priority for 2020. The company continues to screen the market for attractive technology acquisition opportunities while at the same time investing significantly in its own R&D resources. At the end of Q1 2020 TeamViewer had 286 full-time R&D employees (31 December 2019: 254). Further additions have been made in sales, particularly in the US, where the enterprise sales team has been significantly ramped to strengthen TeamViewer's presence in its largest market.
TeamViewer's billings in the first quarter 2020 were up 75% year-over-year at EUR 119.7m (Q1 2019: EUR 68.6m) with the largest increase in Americas, followed by EMEA and APAC. Across all regions, the development was significantly driven by additional demand for remote access and working from home solutions from new and existing subscribers resulting in high organic growth as well as in an increased net retention rate of 106%. With EUR 102.7m, first quarter 2020 revenue were less than billings due to a EUR 17.0m net addition of deferred revenue from the sale of software subscriptions which cannot yet be booked as revenue under IFRS. First quarter 2019 revenue of EUR 86.7m were EUR 18.2m higher than billings because of a net release of deferred revenue. Due to the addition of deferred revenue in Q1 2020 and further accounting effects(), reported EBITDA decreased by 11% year-over-year to EUR 46.7m (Q1 2019: EUR 52.2m), while the Adjusted EBITDA as a key performance indicator for TeamViewer, which is based on the actual billings, increased 96% year-over-year to EUR 73.9m (Q1 2019: EUR 37.7m). Due to scale effects across all functions, costs grew slower than billings, yielding a 7-percentage point Adjusted EBITDA margin increase to 62% compared to the prior year quarter. Billings from the first quarter 2020 will be released over the next 12 months and have a positive impact on both reported revenue and EBITDA. Therefore, the company has increased its revenue target for 2020.
Because of the very high cash conversion, cash and cash equivalents increased to EUR 105.8m (31 December 2019: EUR 71.2m) which accelerated the deleveraging process. As a result, net leverage has fallen from 3.0x at the end of last year to 2.4x. TeamViewer will continue to reduce its net leverage while investing in its growth initiatives including potential technology-focused M&A transactions.
Raising Full Year Guidance
TeamViewer's strategic positioning resulted in a very strong performance in the first quarter of 2020. April continued to be strong, albeit the COVID-19 driven demand softened later in the month. The strong trading during the first four months supports the company's confidence in overachieving its original full year guidance, however, the continued macro-economic uncertainty reduces visibility for the remainder of the year. On this basis and provided that the general economic conditions recover, the company has raised its outlook for FY 2020. The new targets are the following:
- billings of around EUR 450m (previously EUR 430 - 440m),
- revenue of at least EUR 450m (previously EUR 420 - 430m) due to significant first quarter 2020 billings and higher subscription deferred revenue releases before year end.
Furthermore, TeamViewer expects an Adjusted EBITDA margin of around 56% (previously Adjusted EBITDA of EUR 240 and 250m) and slightly increased capital expenditure of EUR 25-30m due to COVID-19 related delays to the new ERP roll-out as well as new headquarters refurbishments.
As a leading global remote connectivity platform, TeamViewer empowers users to connect anyone, anything, anywhere, anytime. The company offers secure remote access, support, control and collaboration capabilities for online endpoints of any kind and supports businesses of all sizes to tap into their full digital potential. TeamViewer has been activated on more than 2.25 billion devices; up to 45 million devices are online concurrently. Founded in 2005 in Göppingen, Germany, the company employs more than 900 people in offices across Europe, the US, and Asia Pacific. For more information, go to www.teamviewer.com and follow us on social media.
Göppingen, 12 May 2020
Alternative performance measures (APMs)
TeamViewer has defined each of the following APMs as follows:
Operational metrics and other financial measures for information purposes
TeamViewer has defined these operational metrics and other financial measures for information purposes as follows:
Consolidated Profit & Loss Statement
Consolidated Balance Sheet
Head of Investor Relations and Capital Markets
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|EQS News ID:||1041803|
|End of News||DGAP News Service|