A second quarter of growth
Strong growth in sales and annualised recurring revenue (ARR) from subscriptions
Subscription revenue growth targets revised up
Q2 2023 revenue
– Strong growth in subscription revenue, up 108% on Q2 2022
– Total recurring revenue growth of 22% to $7.48 million
– Total revenue of $16.6 million, up 3% on Q2 2022
– Non-recurring revenue down 9% compared with Q2 2022, in line with the Group’s transformation to a SaaS model
H1 2023 revenue
– Strong growth in subscription revenue of 107% compared with H1 2022
– Total recurring revenue growth of +22% to $15 million, now representing 50% of consolidated revenue
– Total revenue of $30.6 million, up 6% on H1 2022
– Growth in ARR from subscriptions of +67% vs. H1 2022
– Fall in non-recurring revenue of 6% to $15.6 million
H1 2023 financial results
– Positive EBITDA of $0.4 million compared with $0.2 million in the first half of 2022
– A solid cash position of $25.7 million compared with $19.5 million at 30 June 2022
Outlook for 2023
– Target for recurring revenue growth from subscriptions over the full year revised up to 60% from 40% previously
– Confirmation of target ARR from subscriptions of 40% for the full financial year
AIX-EN-PROVENCE, France & SAN DIEGO–(BUSINESS WIRE)–Regulatory News:
VERIMATRIX (Euronext Paris: VMX) has released its second-quarter revenue for 2023 and its financial results for H1-2023 to 30 June 2023.
“VERIMATRIX turned in a satisfactory first-half, with revenue growth driven by strong growth in revenue from subscriptions. These results reflect the quality of the ongoing transformation of VERIMATRIX to an economic model driven mainly by recurring revenues. A positioning underpinned by our offering of smart cybersecurity and content protection solutions tailored to the needs of our customers. Thanks to this favourable environment and the support of the sales teams for our strategic plan, we are raising our growth target for subscription revenue to 60% for 2023 versus 40% previously,” says Amedeo D’Angelo, Executive Chairman of VERIMATRIX.
Amedeo d’Angelo, Executive Chairman and Jean-François Labadie, Chief Financial Officer will hold an audio webcast today at 6:00pm to discuss the Company’s half-year results and outlook.
To join the webcast, click on the following link: Webcast – Résultats Verimatrix CA T2 – S1
To join the webcast, audio only, call the following number:
France: +33 (0) 4 88 80 09 30
Password: 405 098 907#
(in US$ million) |
 |
Q2 23 |
Q2 22 |
Var. |
 |
H1 23 |
H1 22 |
Var. |
Recurring turnover |
 |
7,5 |
6,1 |
22 % |
 |
15,0 |
12,3 |
22 % |
of which subscriptions |
 |
3,3 |
1,6 |
108 % |
 |
6,5 |
3,2 |
107 % |
of which maintenance |
 |
4,2 |
4,5 |
-8 % |
 |
8,5 |
9,1 |
-8 % |
Non-recurring turnover |
 |
9,1 |
10,0 |
-9 % |
 |
15,6 |
16,6 |
-6 % |
Total turnover |
 |
16,6 |
16,2 |
3 % |
 |
30,6 |
28,9 |
6 % |
 |
 |
 |
 |
 |
 |
 |
 |
 |
ARR1 |
 |
29,8 |
26,1 |
14% |
 |
29,8 |
26,1 |
14% |
of which subscriptions |
 |
13,4 |
8,0 |
67% |
 |
13,4 |
8,0 |
67% |
of which maintenance |
 |
16,4 |
18,1 |
-9% |
 |
16,4 |
18,1 |
-9% |
Q2 2023 revenue
VERIMATRIX reported total revenue of $16.6 million in Q2, up from $16.2 million in Q2 2022, an increase of 3%. This increase was mainly due to strong growth in recurring revenue from subscriptions.
Recurring revenue
Total recurring revenue in Q2 2023 came to $7.5 million, up 22% on Q2 2022, attributable to a sharp increase in subscriptions and an anticipated and controlled decrease in maintenance revenue.
Subscription sales rose by 108% in Q2 2023 to $3.3 million compared with $1.6 million in Q2 2022. On a trend basis, compared with the end of 2022, annualised recurring revenue (ARR) from subscriptions rose by 21% to $13.4 million, showing a steady sequential increase over the past three quarters.
Maintenance revenue fell by 8% to $4.2 million compared with $4.5 million in Q2 2022. This decline was expected and controlled by the Group. It can be attributed to the strategy in place to transform the business model into an approach involving the conversion of one-off licence sales into recurring revenue. ARR from maintenance has remained stable over the last three quarters, reaching $16.4 million in the second quarter.
Non-recurring revenue
Non-recurring revenue came to $9.1 million in Q2 2023, down 9% on Q2 2022. This decline, which is limited and does not hinder the group’s growth, is mainly linked to the resilience of the perpetual license market. In fact, the Asia-Pacific region showed particularly strong momentum in the second quarter, with the sale of perpetual licences to one of VERIMATRIX’s long-standing telecom operators.
H1 2023 revenue
H1 2023 revenue came to $30.6 million, up 6% on H1 2022, driven by a balanced mix of recurring and non-recurring revenue. Recurring revenue rose by 22% to $15 million, thanks to a sharp increase in subscriptions (+107% to $6.5 million) in H1 2023. Non-recurring revenue fell by 6% to $15.6 million.
This increase in revenue in the first half of 2023 compares with a decrease of 19% in H1 2022 compared with H1 2021. The sales momentum seen across the group throughout the first half of the year is in line with management’s business objective to generate growth in revenue and ARR from subscriptions and growth in total recurring revenue.
Recurring revenue accounted for 49% of total revenue compared with 42.5% in the same period in 2022. The share of subscription revenue continues to grow in line with the announced strategic plan. Recurring revenue from subscriptions accounted for 43% of total recurring revenues versus 26% in the first half of 2022.
H1 2023 results
Adjusted operating profit
(in US$ million) |
 |
H1 23 |
H1 22 |
Var. |
 |
 |
 |
 |
 |
Revenue |
 |
30,6 |
28,9 |
+6% |
Gross profit |
 |
22,1 |
20,8 |
+6% |
As a % of revenue |
 |
72,2% |
71,9% |
+0,3pt |
Research & development expenses |
 |
(10,0) |
(9,8) |
+2% |
Selling & marketing expenses |
 |
(8,5) |
(7,1) |
+20% |
General & administrative expenses |
 |
(6,1) |
(6,2) |
-2% |
Other gains / (losses), net |
 |
0,2 |
0,4 |
-49% |
Total operating expenses |
 |
(24,3) |
(22,6) |
+8% |
Adjusted operating income |
 |
(2,2) |
(1,8) |
-21% |
As a % of revenue |
 |
-7,5% |
-6,4% |
+1,1pt |
EBITDA |
 |
0,4 |
0,2 |
+61% |
As a % of revenue |
 |
1,2% |
0,8% |
+0,4pt |
In the first half of 2023, VERIMATRIX reported a gross profit of $22.1 million compared with $20.8 million in the first half of 2022, representing a gross profit of 72.2% versus 71.9%. This improvement in the gross profit is attributable to a volume effect from the increase in revenue combined with good cost control.
Adjusted operating expenses were held in check at $24.3 million, compared with $22.6 million, with a strong focus on investment in sales and marketing. After investing heavily in research and development to build its product offers, at the beginning of 2023 VERIMATRIX focused investment on sales and marketing to speed up its transformation. During the period, sales and marketing expenditure increased by 20% to $8.5 million, linked to specialised sales teams for new SaaS products and higher investment in marketing campaigns to boost VERIMATRIX’s visibility.
Overall, in the first half of the year, EBITDA increased to $0.4 million compared with $0.2 million in H1 2022.
There was an adjusted operating loss of $2.2 million (versus a loss of $1.8 million in H1 2022) due to an increase in depreciation expenses of $0.5 million related to the development of past R&D projects.
Reconciliation of adjusted operating income with operating income and net income in IFRS
(in US$ million) |
 |
H1 23 |
H1 22 |
 |
 |
 |
 |
Adjusted operating income |
 |
(2,2) |
(1,8) |
Amortization and depreciation of assets acquired through business combinations |
 |
(1,5) |
(2,6) |
Acquisition-related expenses |
 |
– |
(0,1) |
Non-recurring costs related to restructurations |
 |
(0,6) |
(0,8) |
Share-based payments |
 |
(0,3) |
(0,1) |
Operating income / (loss) |
 |
(4,7) |
(5,4) |
Financial income / (loss), net |
 |
(1,6) |
(1,6) |
Income tax expenses |
 |
(1,0) |
(0,2) |
Net income / (loss) from continuing operations |
 |
(7,3) |
(7,3) |
Depreciation and amortisation of assets acquired through business combinations decreased of $1.1 millio to $1.5 million, compared with $2.6 million in H1 2022. The depreciation period for part of Inside Secure’s acquisition of VERIMATRIX in 2019 is now complete.
During the period, restructuring costs amounted to $0.6 million versus $0.8 million the previous year.
VERIMATRIX recorded an operating loss of $4.7 million in the first half of 2023, compared with an operating loss of $5.4 million in the first half of 2022. Overall, after taking into account financial income and tax expense, the net loss from continuing operations remained level at $7.3 million.
Financial position and cash flows
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