EQS-News: TeamViewer SE
/ Key word(s): Quarterly / Interim Statement/9 Month figures
GOPPINGEN, GERMANY, 31 October 2023
TeamViewer with high 44% margin and 10% revenue growth in Q3 2023; on track to reach full year guidance
Oliver Steil, TeamViewer CEO
« While we remained highly profitable in Q3, we further enhanced our product portfolio and improved our go-to-market approach. Thanks to a new partnership with Ivanti we took our mobile device management offering to the next level. In addition, Tensor received an SAP endorsement, which leads to an increased visibility in the SAP ecosystem. These are two valuable credentials that demonstrate our successful strategy to partnering with other leading tech companies. »
Michael Wilkens, TeamViewer CFO
« With 10%, we again delivered a double-digit revenue growth in Q3, at a high 44% margin. These results are testament to our ongoing strive for operational excellence while we navigate the difficult macro environment. We remain on track to reach our full year guidance. With further improvement to our profitability in sight for 2024, we stay committed to bolstering TeamViewer’s unique financial profile and to create shareholder value. »
Key Figures (consolidated, unaudited)
1 cc = constant currency
2 Adjusted for Russia and Belarus
3 Since beginning of FY 2023, TeamViewer uses an updated KPI framework, with Revenue (IFRS) moving more into focus. On the back of this, the definition of the Adjusted EBITDA changed from a Billings to a Revenue perspective.
In Q3 2023, TeamViewer’s new CPTO Mei Dent joined the management board. During the quarter, the company made good progress with product enhancements and tech collaborations. For example, a new partnership with unified endpoint management provider Ivanti integrates their industry-leading mobile device management (MDM) capabilities into TeamViewer’s remote connectivity offering. This enhances TeamViewer’s remote monitoring and management (RMM) functionality and provides customers with a holistic tool to efficiently and securely manage all their desktop and mobile IT devices out of one unified platform.
Moreover, TeamViewer’s enterprise connectivity solution Tensor has successfully undergone the certification process to become an SAP® Endorsed App. Together with Frontline, which is already available in the SAP App Center, the Tensor certification now rounds up TeamViewer’s offering within the SAP certified ecosystem.
During Q3, TeamViewer has worked on a major update of the Tensor solution, which was released end of October. It entails increased security features as well as a redesigned interface and an improved user experience.
TeamViewer Tensor was also a major driver for the closure of relevant large deals in the third quarter. For example, t’order, a leading South Korean tablet ordering system provider for the hospitality industry, has selected TeamViewer to strengthen its customer support, making it possible to remotely access 120,000 devices currently deployed across the country. In the US, TeamViewer was able to significantly upgrade the existing licenses of one of the largest telecommunications equipment companies into one comprehensive high-value Tensor contract.
In general, the business saw more sales traction in Q3 from channel and tech partnerships. More Frontline deals were sold together with SAP across the regions. The most relevant Frontline project was the further rollout of TeamViewer’s picking solution to more warehouses of Nadro, Mexico’s largest wholesaler for the healthcare industry.
On the back of the above-mentioned business highlights, TeamViewer continued its strong financial performance in Q3 2023. The company delivered a solid 10% revenue growth in Q3 2023 while the Adjusted (Revenue) EBITDA grew even stronger, by 19%, resulting in a high 44% margin. Total billings increased by 8% on constant currency. This growth path is underlined by a solid Net Retention Rate (NRR, LTM) of 107% (+4pp compared to Q3 2022). TeamViewer's global customer base totaled 626k at the end of Q3 2023 and remained largely stable on a sequential quarter (-1% vs. Q2 2023) and yoy quarter (+1% vs. Q3 2022) view.
On 25 October 2023, the Supervisory Board of TeamViewer SE extended the appointment of Oliver Steil as the company’s CEO and Chairman of the Management Board for another five years. His third term as TeamViewer’s CEO began with immediate effect and runs until October 2028. The early extension of his contract will allow him to focus on further developing and executing TeamViewer’s growth strategy.
SMB and Enterprise Development
Revenue and Billings by customer
1 cc = constant currency
2 Since FY 2023, the effects of multi-year deals are considered more precisely in the revenue split calculation. Prior year's comparable figures (Q3 2022 reported: SMB EUR 115.7m; Enterprise EUR 27.7m; 9M 2022 reported: SMB EUR 338.0m; Enterprise EUR 77.4m) were adjusted accordingly.
With an 8% yoy revenue growth and a 9% yoy billings growth on constant currency, TeamViewer’s SMB business again delivered a strong performance in Q3 2023. While this was the last quarter of a 12-months price change motion, TeamViewer is confident about its SMB pricing potential going forward, especially on the back of a continuously improved product offering. Besides pricing, the SMB billings growth was driven by monetization campaigns, a constantly improved webshop experience, and by targeted up- and cross-selling measures. On a year-on-year basis, the SMB customer base increased by 1% to 622k.
Despite the current macroeconomic environment, Enterprise billings grew by 6% yoy on constant currency with relevant new deal closures in Q3 2023. Revenue grew by 22% yoy, driven by successful previous period up- and cross-selling measures and the release of multi-year billings to revenues. The Enterprise customer base increased by 738 customers (or 22% yoy) to 4,034 at the end of Q3 2023.
Revenue and Billings by region
1 cc = constant currency
Both, revenue and billings on constant currency, increased across all regions in Q3 2023, with the strongest regional performance again in APAC (+15% cc billings). Revenue-wise, the EMEA region showed the strongest growth rate (+11% yoy). All regions saw more sales traction from channel and tech partnerships.
Under a continued cost discipline, combined with favourable currency and phasing effects, the recurring cost base increased by only 4% in Q3 2023. This led to a strong yoy increase of the Adjusted (Revenue) EBITDA by 19% to EUR 70.3m, which translates into a high Adjusted (Revenue) EBITDA margin of 44%.
Higher growth in cost of sales and R&D expenses, mainly due to more Frontline deployments and accelerated product enhancements, were more than offset by temporary lower growth in marketing cost, improved G&A and other income / expenses.
Recurring cost (adjusted for non-recurring items and D&A)
1 Incl. other income/expenses and bad debt expenses of EUR 1.3m in Q3 2023 and EUR 3.7m in Q3 2022 / EUR 5.2m in 9M 2023 and EUR 9.2m in 9M 2022.
With a decreasing non-recurring cost base, the (unadjusted) EBITDA increased by 29% to EUR 59.4m in Q3 2023. The Net Income grew by 61% to EUR 26.5m and the EPS grew even stronger, by 70% to EUR 0.16, due to continued share buybacks. The Adjusted EPS increased by 24% to EUR 0.22.
TeamViewer operates a highly cash-generative business, where customers generally pay their subscriptions upfront. In Q3 2023, both the pre-tax Unlevered Free Cash Flow (pre-tax UFCF) and the Levered Free Cash Flow (FCFE) decreased in a yoy comparison, by 3% and 6%, to still strong EUR 63.4m and EUR 45.7m respectively. This was mainly due to a lower Q3 billings growth and a higher cash outflow from sponsorships including a one-time effect from reducing the scope of the Manchester United partnership. On a nine-month basis, pre-tax UFCF and FCFE grew by 29% and 47%. The resulting cash conversion, FCFE in relation to the Adjusted (Revenue) EBITDA, was at 65% for Q3 2023 and 73% for 9M 2023. Therefore, the Cash Flow development is fully in line with expectations.
Cash and cash equivalents were at EUR 79.9m as of 30 September 2023. The reduction by EUR 81.1m compared to 31 December 2022 was mainly driven by the 2023 share buyback program (EUR 115.2m counter value of shares acquired in 9M 2023) and a debt repayment of EUR 100m, partly offset by net cash inflows.
The EUR 100m debt repayment led to a decreased debt volume of EUR 531.7m (incl. lease liabilities) as of 30 September 2023 (632.6m as of 31 December 2022), of which EUR 300m promissory notes and EUR 200m bank loans.
The net leverage ratio (net financial liabilities of EUR 451.8m as of 30 September 2023 in relation to the LTM Adjusted (Revenue) EBITDA of EUR 255.4m) was at 1.8x at the end of Q3 2023 (31 December 2022: 2.1x). This corresponds to a ratio of 1.5x as of 30 September 2023 (31 December 2022: 1.6 x) when comparing net financial liabilities in relation to adjusted (Billings) EBITDA of the last twelve months.
With the operational development for the remainder of the year on track, TeamViewer confirms its guidance for FY 2023. Based on fixed foreign exchange rates, the company expects FY 2023 revenues in a range between EUR 620m and EUR 645m at growth rates between 10% to 14%. The Adjusted (Revenue) EBITDA margin for FY 2023 is targeted at around 40%.
Oliver Steil (CEO) and Michael Wilkens (CFO) will speak at an analyst and investor conference call at 9:00am CET on 31 October 2023 to discuss the Q3/9M 2023 results. The audio webcast can be followed via https://www.webcast-eqs.com/teamviewer-2023-q3. A recording will be available on the Investor Relations website at ir.teamviewer.com. The accompanying presentation is also available for download there.
TeamViewer is a leading global technology company that provides a connectivity platform to remotely access, control, manage, monitor, and repair devices of any kind – from laptops and mobile phones to industrial machines and robots. Although TeamViewer is free of charge for private use, it has around 630,000 subscribers and enables companies of all sizes and from all industries to digitalize their business-critical processes through seamless connectivity. Against the backdrop of global megatrends like device proliferation, automation and new work, TeamViewer proactively shapes digital transformation and continuously innovates in the fields of Augmented Reality, Internet of Things and Artificial Intelligence. Since the company’s foundation in 2005, TeamViewer’s software has been installed on more than 2.5 billion devices around the world. The company is headquartered in Goppingen, Germany, and employs more than 1,400 people globally. In 2022, TeamViewer achieved a revenue of around EUR 566m. TeamViewer SE (TMV) is listed at Frankfurt Stock Exchange and is a member of the MDAX. Further information can be found at www.teamviewer.com.
Certain statements in this communication may constitute forward looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties, including, but not limited to, those risks and uncertainties described in TeamViewer's disclosures. You should not rely on these forward-looking statements as predictions of future events, and TeamViewer’s actual results may differ materially and adversely from any forward-looking statements discussed in these statements due to several factors, including without limitation, risks from macroeconomic developments, external fraud, lack of innovation capabilities, inadequate data security and changes in competition levels. TeamViewer undertakes no obligation, and does not expect to publicly update, or publicly revise, any forward-looking statement, whether as a result of new information, future events or otherwise.
All stated figures are unaudited.
Percentage change data and totals presented in tables throughout this document are generally calculated on unrounded numbers. Therefore, numbers in tables may not add up precisely to the totals indicated and percentage change data may not precisely reflect the change data of the rounded figures for the same reason.
This document contains alternative performance measures (APM) that are not defined under IFRS. The APMs (non-IFRS) can be reconciled to the key performance indicators included in the IFRS consolidated financial statements and should not be viewed in isolation, but only as supplementary information for assessing the operating performance. TeamViewer believes that these APMs provide an additional, deeper understanding of the Company's performance.
TeamViewer has defined each of the following APMs as follows:
Consolidated Profit & Loss Statement (unaudited)
Consolidated Balance Sheet Total Assets (unaudited)
Consolidated Balance Sheet Liabilities and Equity (unaudited)
Consolidated Cash Flow Statement (unaudited)
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|EQS News ID:||1760871|
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