→ Annual revenue of €319.0m in 2023, with organic growth of 5.8% compared to 2022
→ Solid ARR growth up 6.6% vs. end 2022, reaching €228.7m
→ Margin on operating activities up 500 basis points year-on-year to 19.7% of revenue, or €62.8m
→ Progressive increase in free cash flow, in line with forecasts, representing 6% of revenue over the year
PARIS–(BUSINESS WIRE)–Regulatory News:
Axway Software’s (Paris:AXW) Board of Directors today conducted an in-depth review of the consolidated and annual financial statements1 for the year ended December 31, 2023. As a consequence, Axway’s management team announces:
| Axway Software: 2023 Full-year results | Â | Â | Â | Â | Â | Â |
| Â | Â | Â | Â | Â | Â | Â |
| Key income statement items* | Â |
2023 |
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|
2022 |
||
| Â |
(€m) |
(% Rev) |
 |
(€m) |
(% Rev) |
|
| Revenue | Â |
319.0 |
 |
 |
314.0 |
 |
|
Organic growth |
 |
+ 5.8% |
 |
 |
 |
 |
|
Growth at constant exchange rates |
 |
+ 3.0% |
 |
 |
 |
 |
|
Total growth |
 |
+ 1.6% |
 |
 |
 |
 |
| Â | Â |
 |
 |
 |
 |
 |
| Profit on Operating Activities | Â |
62.8 |
19.7% |
 |
46.3 |
14.7% |
| Profit from Recurring Operations | Â |
55.4 |
17.4% |
 |
37.4 |
11.9% |
| Operating Profit | Â |
47.6 |
14.9% |
 |
-46.4 |
-14.8% |
| Net Profit attributable to the Group | Â |
35.8 |
11.2% |
 |
-40.0 |
-12.8% |
| Â | Â |
 |
 |
 |
 |
 |
| Basic earnings per share (in €) |  |
1.71 |
 |
 |
-1.85 |
 |
| * Alternative performance measures are defined in the glossary at the end of this document | Â | Â | Â | |||
 Patrick Donovan, Chief Executive Officer, declared:
“For Axway, 2023 marked the conclusion of a strategic plan that has focused the efforts of our teams over the last 3 years. Today, I can proudly say that together we have been successful in Axway’s development over this period. This positive dynamic is the fruit of several fundamental evolutions. We have built a high-performance, subscription-based business model focused on our main product lines. Around our products, we have put in place an aligned organization, by product and by region, which has not only improved customer satisfaction, but also strengthened the engagement of our employees. These elements are reflected in a significant improvement in our results, which not only exceed our commitments, but above all enable us to project ourselves towards the next stage of our enterprise project, supported by a strong financial situation. Although the comparison basis of Q4 2022 was not matched in Q4 2023, the company exceeded its internal forecasts at the end of the year. Bookings, in particular of Customer Managed subscription contracts, were higher than anticipated and accelerated our revenue recognition. While this accounting effect turned out to be favorable in 2023, on a like-for-like basis, Axway’s normative performance projections remain unchanged.”
Comments on business activity in 2023
In 2023, in a market that is steadily accelerating towards the cloud, Axway has taken advantage of its renewed business model to consolidate its position as a leading publisher in the management of critical data flows. The company has continued to offer large enterprises high-performance, secure software solutions capable of supporting their development over the long term.
Axway’s year was punctuated by several highlights, including :
– A new revenue and profitability high for the company, which for the year benefited from a record level of customer satisfaction, with a Net Promoter Score of 37, compared with 35 at the end of the prior year. This performance is a direct result of the day-to-day commitment of Axway’s employees who, in a context of major organizational evolution, have been focusing for several years on continuous improvement of customer experience with Axway’s products and services.
– The maximization of customer use of Axway’s products and the extension of contract durations were confirmed. These trends perfectly reflect the consistency of the matrix structure that the company has adopted, with management by product and by geography. Over the year, the total value of bookings increased by 5.1% compared with 2022, while more than 100 new customers chose Axway to accompany them in their digital transformation projects.
– Axway’s products and vision in its different technology markets have once again been awarded in 2023. For the 8th time in its history, Axway has been recognized among the world leaders in the API Management market in the 2023 edition of the Gartner Magic Quadrantâ„¢ for API Management. In parallel, the API Management, B2B Integration and MFT offerings, which make up 3 of Axway’s 4 main product lines, were each named leaders in their respective categories in the Winter 2024 reports of the G2 global evaluation platform for enterprise solutions.
– After refocusing its product portfolio in 2022 by disengaging from activities that were no longer aligned with its growth and profitability objectives, Axway adopted a more offensive strategy in 2023 by consolidating 2 new companies within its scope. In late March, Axway acquired Belgian company AdValvas, a European expert in electronic invoicing processes, whose offerings immediately strengthened the B2B product line. Over a 9-month period, the order book grew steadily, reflecting strong interest in certified expertise in the PEPPOL network. Then, in mid-October, Axway finalized the acquisition of French company Cycom Finances and its accounting mapping solution, PaE. This acquisition, which complements Axway’s Financial Accounting Hub (AFAH) offering, led to the establishment of a strategic partnership with KPMG in France, and generated, just a few weeks after its completion, a first significant signature with a leading European banking institution.
At a time when Axway has set itself ambitious external growth targets for the coming years, the company’s objective is to maintain an agile portfolio of high-performance products, capable of keeping pace with the rapid evolution of its industry.
Comments on operational performance in 2023
In 2023, Axway’s revenue totaled €319.0m, up 5.8% organically and 1.6% in total. Changes in the consolidation scope, mainly due to the rationalization of the product portfolio in 2022, had a negative impact of €8.2m for the year. Currency fluctuations, notably the depreciation of the US dollar against the euro, also had a negative impact of €4.4m on full-year revenue. Profit on operating activity rose once again, reaching €62.8m for the year, or 19.7% of revenues, compared with 14.7% in 2022.
| Axway Software: Revenue by business line | Â | Â | Â | Â | Â |
| Â | Â | Â | Â | Â | Â |
| Full-year 2023 (€m) |
2023 |
2022 Restated* |
2022 Reported |
Total Growth |
Organic Growth |
| License |
               8.8 |
             10.2 |
             11.6 |
– 23.8% |
– 13.7% |
| Subscription |
          186.6 |
          146.5 |
          154.0 |
+ 21.2% | + 27.4% |
| Maintenance |
             87.0 |
          107.9 |
          111.2 |
– 21.7% |
– 19.4% |
| Services |
             36.5 |
             36.8 |
             37.3 |
– 2.1% |
– 0.6% |
| Axway Software |
          319.0 |
          301.4 |
          314.0 |
+ 1.6% | + 5.8% |
| * Revenue at 2023 scope and exchange rates | Â | Â | Â | Â | Â |
License activity revenue totaled €8.8m for the year, down 13.7% organically. In line with expectations, after several years of contraction linked to the rise of subscription-based offers, license sales gradually stabilized during the year, and are now mainly driven by a specialized product. It is reported that revenue returned to growth in Q3 and Q4, although this was not enough to offset the decline recorded in H1. Nevertheless, the trend reversal observed points to a more balanced 2024 outlook.
The Subscription activity maintained a very solid momentum throughout 2023. With organic growth of over 50% in the first 9 months of the year, the activity was faced with a record comparison basis at the end of the year. This did not prevent further organic growth of 1.8% in Q4 2023, enabling the activity to achieve annual revenue of €186.6m, up 27.4% on 2022. Several major Customer Managed signatures enabled the company to exceed its revenue forecast in year-end. For the full year, upfront revenue from Customer Managed subscription contracts amounted to €93.4m, compared with €78.7m in 2022. The annual value of new subscription contracts (ACV) signed reached €49.9m in 2023, an increase of 1.4%.
Maintenance revenue reached €87.0m in 2023, down 21.7% overall and 19.4% organically. While the contract renewal rate reached 94%, the decline in activity was mainly due to lower license sales and the continued migration of customers to subscription-based offers.
At the end of December 2023, Axway’s ARR (Annual Recurring Revenue) which combines recurring revenues from all active Maintenance and Subscription contracts, including, where applicable, upfront subscription revenue recalculated monthly, was €228.7m, up 6.6%2 at constant scope and exchange rates. In addition, revenue from renewable contracts reached 86% of total revenue in 2023.
The Services activity was virtually stable compared with the previous year, with annual revenue of €36.5m (-0.6%). The activity was mainly supported by several major MFT migration projects across Europe. As expected, Services are now stabilizing at between 10 and 15% of Axway’s total revenue.
| Axway Software: Revenue by geographic area | Â | Â | Â | Â | Â |
| Â | Â Â Â | Â Â Â | Â Â Â | Â | Â |
| Full-year 2023 (€m) |
2023 |
2022 Restated* |
2022 Reported |
Total Growth |
Organic Growth |
| France |
             99.9 |
             90.9 |
             91.6 |
+ 9.0% | + 9.9% |
| Rest of Europe |
             76.1 |
             67.8 |
             68.4 |
+ 11.2% | + 12.1% |
| Americas |
          126.4 |
          123.1 |
          133.3 |
– 5.1% |
+ 2.7% |
| Asia/Pacific |
             16.6 |
             19.6 |
             20.8 |
– 20.0% |
– 15.3% |
| Axway Software |
          319.0 |
          301.4 |
          314.0 |
+ 1.6% | + 5.8% |
|
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