TEAMVIEWER SE Results Q2 / H1 2023
GOPPINGEN, GERMANY, 1 August 2023
Q2 2023: TeamViewer reports 12% Revenue growth and strong
Adjusted EBITDA margin of 41% - well on track to reach
full year guidance
- Double-digittopline growth with Q2 revenue up 12% to EUR 154.2 million and Q2 billings up 13% on constant currency to EUR 150.6 million
- Strong SMB performance with billings up 14% on constant currency; increased momentum after successful launch of TeamViewer Remote
- Good Enterprise execution with billings up 9% on constant currency despite difficult market environment
- Adjusted EBITDA margin of 41% well in line with guidance; consistently high cash conversion
- High Net Retention Rate of 109%, evidence of sustained high customer satisfaction levels
- New members in Management Board and Senior Leadership Team
Oliver Steil, TeamViewer CEO
-
Our Q2 financials show that our recent investments into people, product capabilities and marketing are paying off. We are pleased that the SMB business remains a strong driver of our success. With the launch of TeamViewer Remote we improved our core offering even further and strengthened our leadership position.
Additionally, we executed well on our Enterprise growth plan despite a difficult market environment. »
______
Michael Wilkens, TeamViewer CFO
« We closed Q2 with double-digit revenue growth of 12% and continued strong profitability with an
Adjusted EBITDA margin of 41%. Hence, we are well on track to reach our full year guidance.
With new experienced leaders joining our team, we are doubling down on our strategic initiatives and
innovation capabilities to achieve the next milestones on our growth path. »
TeamViewer | 1 |
Results Q2 / H1 2023
Key Figures (consolidated, unaudited)
Q2 2023 | Q2 2022 | Δ yoy | H1 2023 | H1 2022 | Δ yoy | ||||||||||
Sales | |||||||||||||||
Revenue (in EUR m) | 154.2 | 137.5 | +12% | 305.5 | 272.0 | +12% | |||||||||
Billings (in EUR m) | 150.6 | 136.1 | +11% | 327.3 | 299.6 | +9%/ | |||||||||
(+13% cc1) | (10% cc1) | ||||||||||||||
Number of subscribers2 (LTM) (in thousands) | 633 | 619 | +2% | 633 | 619 | +2% | |||||||||
Net retention rate (NRR LTM) | 109% | 101% | +8pp | 109% | 101% | +8pp | |||||||||
Profits and Margins | |||||||||||||||
Adjusted (Revenue) EBITDA3 (in EUR m) | 63.8 | 59.4 | +7% | 127.9 | 113.7 | +12% | |||||||||
Adjusted (Revenue) EBITDA3 margin | 41% | 43% | -2pp | 42% | 42% | +0pp | |||||||||
EBITDA (in EUR m) | 53.4 | 47.1 | +13% | 107.5 | 88.4 | +22% | |||||||||
EBITDA margin (EBITDA in % of revenue) | 35% | 34% | +1pp | 35% | 32% | +3pp | |||||||||
EBIT (in EUR m) | 39.4 | 33.8 | +17% | 79.8 | 61.9 | +29% | |||||||||
EBIT margin (EBIT in % of revenue) | 26% | 25% | +1pp | 26% | 23% | +3pp | |||||||||
Cashflows | |||||||||||||||
Cash flows from operating activities (in EUR m) | 52.6 | 36.6 | +44% | 111.5 | 65.8 | +70% | |||||||||
Cash flows from investing activities (in EUR m) | (3.8) | (2.4) | +61% | (12.7) | (5.6) | +125% | |||||||||
Levered Free Cashflow (FCFE) | 47.3 | 28.2 | +68% | 98,7 | 50.1 | +97% | |||||||||
Cash Conversion (FCFE / Adjusted EBITDA) | 74% | 47% | +27pp | 77% | 44% | +33pp | |||||||||
Cash and cash equivalents (in EUR m) | 71.9 | 383.4 | -81% | 71.9 | 383.4 | -81% | |||||||||
Other | |||||||||||||||
R&D Expenses (in EUR m) | (19.9) | (18.3) | +9% | (38.8) | (35.0) | +11% | |||||||||
Employees full-time equivalents (end of period) | 1,421 | 1,322 | +7% | 1,421 | 1,322 | +7% | |||||||||
Basic earnings per share (in EUR) | 0.20 | 0.06 | +212% | 0.33 | 0.14 | +137% | |||||||||
Adjusted basic earnings per share (in EUR) | 0.22 | 0.17 | +26% |
0.44 0.33 +32%
- cc = constant currency
- Adjusted for Russia and Belarus
- 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.
Business Highlights
In Q2 2023 TeamViewer successfully launched TeamViewer Remote, the next generation of its iconic remote access and support product for SMB and non-commercial usage. A few weeks later and building on very constructive user feedback, a significant portion of the active TeamViewer Remote global user base is using the continuously enhanced product with its new user interface. With the launch, the company was able to generate increased awareness for its core SMB offering and to strengthen its leadership position in that space.
Looking at the Enterprise business, TeamViewer was able to close some larger deals in Q2 despite a difficult market environment. For example, one of the four largest banks in Australia and New Zealand chose TeamViewer's enterprise connectivity solution Tensor to remotely support their more than 40,000 employees in case of IT problems. Their most important decision criterion was the product's compliance with all relevant security and privacy requirements in the highly regulated banking and financial services industry. This proves that TeamViewer's leading security posture is a convincing sales argument, especially when approaching new customers.
Additionally, TeamViewer was able to replicate successful Frontline projects such as a logistics use case in the bottling industry in AMS, and a food preparation use case at a fast-food chain in APAC. This is part of
TeamViewer | 2 |
Results Q2 / H1 2023
TeamViewer's strengthened verticalization approach, which includes a dedicated go-to-market strategy for its vision picking offering. TeamViewer also continued to drive Frontline projects together with its strategic industry partner SAP. Since the end of last year, Nadro, the largest Mexican wholesaler for the healthcare industry, is using TeamViewer's Frontline picking solution integrated with SAP's extended warehouse management software. Similar projects are underway across all regions. These recent developments show that TeamViewer is well positioned to capitalize on the increased adoption of Industrial Metaverse technologies such as AR, MR and AI over time.
During the quarter, TeamViewer hired two experienced executives for its Senior Leadership Team. Mei Dent will join the management board of the company as Chief Product & Technology Officer at the end of August 2023. In this role, she will drive the company's product vision and overall innovation strategy and bring TeamViewer's global product management, solution delivery and R&D teams closer together. Constanze Backhaus, who started as new Chief Human Resources Officer mid-July, will drive the company's people strategy and recruit, develop, and retain the right talent. At the Annual General Meeting in May, TeamViewer's Supervisory Board was expanded to eight members with the election of Swantje Conrad and Christina Stercken.
On the back of the above-mentioned business events, TeamViewer delivered double-digit topline growth (with Revenue up 12% and billings up 13% in constant currency) in Q2 2023 and high profitability, reflected in a 41% adjusted (Revenue) EBITDA margin. With these Q2 2023 financials, adding to a solid Q1, TeamViewer is well on track to reach its full year guidance. The successful growth path is underlined by the high Net Retention Rate (NRR, LTM) of 109% (+2 pp compared to Q1 2023, +8 pp compared to Q2 2022). This figure is evidence of the sustained high customer satisfaction levels and the quality of TeamViewer's solution portfolio. In Q2 2023, TeamViewer's global customer base continued to increase, by 2% yoy to a total of 633k customers at the end of the period.
SMB and Enterprise Development
Revenue and Billings by customer
EUR m | Q2 2023 | Q2 2022 | Δ yoy | H1 2023 | H1 2022 | Δ yoy |
SMB | ||||||
Revenue2 | 124.7 | 114.0 | +9% | 247.2 | 226.2 | +9% |
Billings | 121.9 | 109.3 | +12% (+14% cc1) | 264.6 | 237.5 | +11% (+12% cc1) |
Enterprise | ||||||
Revenue2 | 29.4 | 23.5 | +25% | 58.3 | 45.7 | +27% |
Billings | 28.7 | 26.9 | +7% (+9% cc1) | 62.7 | 62.1 | +1% (+2% cc1) |
Total Revenue | 154.2 | 137.5 | +12% | 305.5 | 272.0 | +12% |
Total Billings | 150.6 | 136.1 +11% (+13% cc1) |
327.3 299.6 +9% (+10% cc1)
- cc = constant currency
- Since FY 2023, the effects of multi-year deals are considered more precisely in the revenue split calculation. Prior year's comparable figures (Q2 2022 reported: SMB EUR 111.7m; Enterprise EUR 25.8m; H1 2022 reported: SMB EUR 222.3m; Enterprise EUR 49.7m) were adjusted accordingly.
During Q2 2023, TeamViewer further enhanced the e-commerce customer experience and continued with targeted up- and cross-selling measures, monetization campaigns, and its price change motion. On the back of this, TeamViewer delivered a strong Q2 SMB performance, across revenue (+9% yoy), billings (+12%, +14% cc yoy) and subscribers (+2% yoy to 629k at the end of Q2 2023). With the introduction of TeamViewer Remote and corresponding marketing measures, additional awareness was created for its core SMB offering.
TeamViewer | 3 |
Results Q2 / H1 2023
Despite a challenging market environment, total Enterprise billings grew by 7% (+9%cc) yoy in Q2 2023, also fueled by some larger deals coming through. Revenue grew by 25% yoy, driven by successful up- and cross- selling measures and the release of multi-year billings to revenues. The Enterprise customer base increased nicely by 894 customers (or 29% yoy) to 3,956 at the end of Q2 2023.
Regional Development
Revenue and Billings by region
EUR m | Q2 2023 | Q2 2022 | Δ yoy | H1 2023 | H1 2022 | Δ yoy |
EMEA | ||||||
Revenue | 81.5 | 73.9 | +10% | 161.2 | 146.7 | +10% |
Billings | 78.6 | 69.2 | +14% (+14% cc1) | 180.0 | 162.9 | +10% (+11% cc1) |
AMERICAS | ||||||
Revenue | 55.0 | 47.4 | +16% | 109.0 | 93.3 | +17% |
Billings | 50.2 | 47.6 | +6% (+8% cc1) | 106.6 | 100.7 | +6% (+5% cc1) |
APAC | ||||||
Revenue | 17.7 | 16.2 | +9% | 35.3 | 31.9 | +10% |
Billings | 21.8 | 19.4 | +12% (+20% cc1) | 40.7 | 36.0 | +13% (+19% cc1) |
Total Revenue | 154.2 | 137.5 | +12% | 305.5 | 272.0 | +12% |
Total Billings | 150.6 | 136.1 +11% (+13% cc1) |
327.3 299.6 +9% (+10% cc1)
1 cc = constant currency
Billings and revenue increased across all regions in Q2 2023, with the strongest regional performance in APAC (+20% constant currency billings growth yoy). The AMERICAS region, where a reorganization of the sales teams has been initiated in Q1 2023, showed the lowest billings growth rates. This also leads back to longer procurement cycles in the current macroeconomic environment. Revenue-wise, the AMERICAS region showed the strongest growth rate (+16% yoy), still benefiting from previous periods' billings converting into revenue. In addition, all regional revenues benefited from successful up- and cross-selling measures, targeted monetization campaigns and an increasing number of multi-year deals stemming from a well-developed and loyal customer base.
Earnings Development
On the back of the strong operating performance, and following planned investments into people, product and marketing, the recurring cost base grew by 16% in Q2 2023. This led to a yoy increase of the Adjusted (Revenue) EBITDA by 7% to EUR 63.8m, which translates into an Adjusted (Revenue) EBITDA margin of 41%.
Recurring cost (adjusted for non-recurring items and D&A)
EUR m | Q2 2023 | Q2 2022 | Δ yoy | H2 2023 | H1 2022 | Δ yoy | ||||||
Cost of Sales | (10.7) | (9.2) | +16% | (21.4) | (19.1) | +12% | ||||||
Sales | (21.7) | (20.5) | +6% | (43.4) | (37.6) | +15% | ||||||
Marketing | (34.1) | (29.1) | +17% | (65.9) | (58.0) | +14% | ||||||
R&D | (15.8) | (13.4) | +18% | (30.8) | (26.3) | +17% | ||||||
G&A | (8.4) | (5.4) | +55% | (16.4) | (12.5) | +31% | ||||||
Other1 | 0.2 | (0.5) | -143% | 0.3 | (4.8) | -107% | ||||||
Total COGS and OpEx | (90.4) | (78.1) | +16% | (177.6) | (158.3) | +12% | ||||||
1 Incl. other income/expenses and bad debt expenses of EUR 1.6m in Q2 2023 and EUR 1.1m in Q2 2022 / EUR 4.0m in H1 2023 and EUR 5.6m in H1 2022.
TeamViewer | 4 |
Results Q2 / H1 2023
Like in Q2 2022, the largest portion of the marketing expense was made up of sponsorships. In Q2 2023, the item also comprises expenses for targeted marketing measures in connection with the launch of TeamViewer Remote. The increase in sales expense was partly offset by currency effects.
With a decreasing non-recurring cost base, the (unadjusted) EBITDA increased by 13% to EUR 53.4m in Q2 2023. Mainly due to a significantly improved financial result and positive tax effects, the Net Income grew by 191% yoy to EUR 34.0m in Q2 2023. The EPS grew even stronger due to continued share buybacks, by 212% to EUR 0.20, and the Adjusted EPS increased by 26% to EUR 0.22.
Financial position
TeamViewer operates a highly cash-generative business, where growing operations, supported by positive working capital effects, are positively mirrored in its cash flow development. In Q2 2023, the (pre-tax)Unlevered Free Cash Flow grew by 37% to EUR 59.2m and the Levered Free Cash Flow (FCFE) by 68% to EUR 47.3m. The latter benefited in addition from lower tax payments due to tax refunds and lower interest payments due to a decreased debt position. The resulting cash conversion metrics in relation to the Adjusted (Revenue) EBITDA were 93% (+20 pp) and 74% (+27 pp).
Cash and cash equivalents were at EUR 71.9m at the end of Q2 2023. The reduction by EUR 89.1m compared to the end of 2022 was mainly driven by the 2023 share buyback program (EUR 77.4m counter value of shares acquired in H1 2023) and a debt repayment of EUR 100m, offset by net cash inflows.
The first tranche of the up to EUR 150 million share buyback program 2023 was completed on 15 June 2023 with a volume of EUR 75 million. The second tranche was launched on 20 June 2023 under the new buyback authorization granted by the 2023 Annual General Meeting. Effective 26 June 2023, the Company cancelled 6,515,856 treasury shares resulting in a reduction of the share capital to EUR 180,000,000.
The EUR 100m debt repayment led to a decreased debt volume of EUR 533.7m (incl. lease liabilities) at the end of Q2 2023 (632.6m end of 2022), of which EUR 300m promissory notes and EUR 200m bank loans.
The net leverage ratio (net financial liabilities of EUR 461.8m at the end of Q2 2023 in relation to the LTM Adjusted (Revenue) EBITDA of EUR 244.0m) was at 1.9x at the end of Q2 2023 (31 December 2022: 2.1x). This corresponds to a ratio of 1.5 x as of 30 June 2023 (31 December 2022: 1.6 x) when comparing net financial liabilities in relation to adjusted (billings) EBITDA of the last twelve months.
Outlook
Despite ongoing geopolitical and economic challenges, in Q2 2023 TeamViewer continued to work on a number of different organizational and operational measures to position the company even better for the future. Particular focus was placed on strengthening the SMB product offering (especially through the global launch of TeamViewer Remote), the organizational realignment of the AMERICAS region, and targeted measures to expand existing and acquire new business relationships, especially in the enterprise space.
This, combined with the high relevance of TeamViewer's product portfolio in times of ongoing skills shortages, the digital transformation in the industrial environment, and generally more challenging sustainability goals, leaves the Management Board confident for the second half of the year. TeamViewer therefore confirms its guidance for the full year 2023.
###
TeamViewer | 5 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
TeamViewer AG published this content on 01 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 August 2023 05:07:07 UTC.
