TEAMVIEWER SE Preliminary Results Q4 | FY 2022
(unaudited, IFRS)
GOPPINGEN, GERMANY, 7 February 2022
TeamViewer delivers on 2022 targets and increases earnings per share by 46%
- FY 2022: Billings up 16% yoy to EUR 634.8m; revenue up 13% to EUR 565.9m; Adjusted (Billings) EBITDA margin of 47%
- Q4 2022: Billings up 24% yoy to EUR 190.6m; revenue up 14% to EUR 150.5m; Adjusted (Billings) EBITDA margin of 51%
- Continuous shift towards Enterprise business underlined by growing ticket sizes and prominent customer wins across regions
- EMEA and APAC with significantly accelerated growth dynamics
- Reiteration of capital allocation strategy; new share buyback program of up to EUR 150m
- Double-digitrevenue growth to continue in 2023
Oliver Steil, TeamViewer CEO
- Our solutions are highly relevant for customers as they help them to securely manage remote operations, increase efficiency and sustainability and to overcome labor shortage. We were able to
successfully upsell customers into significantly higher value tiers. The EMEA region was particularly strong, and we saw a clear acceleration in APAC. In 2023, we will continue our journey to become a more enterprise-focused software provider, leveraging our large customer base and our partnerships to win new business and deliver double-digit revenue growth. »
______
Michael Wilkens, TeamViewer CFO
- We closed the year 2022 successfully and delivered in line with our guidance, even after discontinuing business in Russia and Belarus. TeamViewer is a highly profitable and cash-generative business. With a 46% EPS increase in 2022 we created significant value for our shareholders. Going forward, we expect continued high cash conversion. Therefore, in line with our existing capital allocation strategy, we announced a new share buyback program of up to EUR 150m. »
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Preliminary Results Q4 | FY 2022
Key Figures Q4 and FY 2022
Q4 22 | Q4 21 | Δ yoy | FY 22 | FY 21 | Δ yoy | ||
Sales | |||||||
Billings1 (in EUR m) | 190.6 | 153.7 | +24% | 634.8 | 547.6 | +16% | |
+20%cc2 | +11%cc2 | ||||||
Revenue1 (in EUR m) | 150.5 | 132.3 | +14% | 565.9 | 501.1 | +13% | |
Number of subscribers3 (LTM) (in thousands) | 626 | 617 | +1% | 626 | 617 | +1% | |
Net retention rate (NRR LTM) | 107% | 98% | +9pp | 107% | 98% | +9pp | |
Profits and Margins | |||||||
Adjusted (Billings) EBITDA1 (in EUR m) | 97.4 | 67.7 | +44% | 298.7 | 257.0 | +16% | |
Adjusted (Billings) EBITDA1 margin | 51% | 44% | +7pp | 47% | 47% | +0pp | |
Adjusted (Revenue) EBITDA1 (in EUR m) | 57.3 | 46.2 | +24% | 229.8 | 210.5 | +9% | |
Adjusted (Revenue) EBITDA1 margin | 38% | 35% | +3pp | 41% | 42% | -1pp | |
EBITDA (in EUR m) | 63.1 | 54.5 | +16% | 197.5 | 168.3 | +17% | |
EBITDA margin (in % of revenue) | 42% | 41% | +1pp | 35% | 34% | +1pp | |
EBIT (in EUR m) | 49.5 | 41.3 | +20% | 143.7 | 117.4 | +22% | |
EBIT (in % of revenue) | 33% | 31% | +2pp | 25% | 23% | +2pp | |
Cashflows | |||||||
Cash flows from operating activities (in EUR m) | 80.6 | 76.4 | +5% | 204.3 | 194.0 | +5% | |
Cash flows from investing activities (in EUR m) | (2.0) | (3.4) | -42% | (10.8) | (38.9) | -72% | |
Levered Free Cashflow (FCFE) | 73.3 | 68.0 | +8% | 171.8 | 157.8 | +9% | |
Cash Conversion | 128% | 147% | -19pp | 75% | 75% | -0pp | |
(FCFE / Adjusted (Revenue) EBITDA) | |||||||
Cash and cash equivalents (in EUR m) | 161.0 | 550.5 | -71% | 161.0 | 550.5 | -71% | |
Other | |||||||
R&D Expenses (in EUR m) | (19.3) | (17.3) | +12% | (69.5) | (62.1) | +12% | |
Employees full-time equivalents (end of period) | 1,386 | 1,477 | -6% | 1,386 | 1,477 | -6% | |
Basic earnings per share (in EUR) | 0.14 | 0.14 | -1% | 0.37 | 0.25 | +46% | |
Diluted earnings per share (in EUR) | 0.14 | 0.14 | -1% | 0.37 | 0.25 | +46% | |
- Starting in 2023, TeamViewer's financial performance will be reflected in an updated KPI framework, whereby Billings change from a primary into a secondary KPI, and Revenue (IFRS) moves more into focus. On the back of this, the definition of the Adjusted EBITDA will change from a Billings to a Revenue perspective. The focus of the full year 2023 guidance also shifts towards Revenue (IFRS) and the corresponding Adjusted (Revenue) EBITDA margin.
- cc = constant currency
- Adjusted for Russia and Belarus
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Preliminary Results Q4 | FY 2022
Business Highlights 2022
In 2022 and particularly in Q4, TeamViewer again demonstrated the high relevance of its connectivity solutions and proved its strong resilience in a volatile economic environment. The company won new blue- chip customers and upgraded existing accounts into significantly higher value segments, emphasizing strong customer satisfaction. For example, global consumer goods and adhesives provider Henkel chose TeamViewer's enterprise connectivity solution Tensor to streamline their IT support for 60,000 devices worldwide running on various operating systems. Decisive factors for Henkel were the easy integration of TeamViewer in their existing IT landscape and the leading security standards. This also applies to industrial multinational ABB who expanded their existing Tensor subscription to remotely support their clients across the world with connected devices such as robots and industrial machines.
Additionally, with its industry-leading Augmented Reality workflow platform Frontline, TeamViewer has established itself as a major player in the Industrial Metaverse space. The existing SAP partnership was broadened by more integrations into SAP solutions. This led to first pipeline conversions in Q4 with, for example, a large TeamViewer Frontline deal for a Mexican logistics supplier for the healthcare industry. Other significant AR-related partnerships include a Mixed Reality collaboration with Siemens for their product lifecycle management software as well as a strategic partnership and a first billings tranche with Hyundai Motor Company supporting their automotive smart factory in Singapore.
On the organizational side, TeamViewer's leadership has been strengthened with Michael Wilkens as new CFO and Peter Turner as new CCO. New country heads in Korea, Japan, and India have joined the leadership team in APAC. The newly opened R&D Hub in Portugal has complemented the company's global software engineering setup. TeamViewer reinforced employee retention by granting tax-free energy cost bonuses and by implementing an attractive employee share program.
Moreover, TeamViewer has structured its ESG activities by bundling them under the roof of its sustainability program c-a-r-e. Focusing on climate neutrality, access to technology, reduced emissions and equality topics, the increased transparency has been acknowledged by Sustainalytics and MSCI and resulted in improved ESG ratings.
At the end of 2022, TeamViewer and Manchester United reached a mutual agreement under which Manchester United has the option to buy back the rights to the club's shirt front sponsorship. This allowed Manchester United to commence a focused sales process for a new long-term shirt front partner with the expectation for TeamViewer to transition out of this role as soon as practicably possible. TeamViewer would then step down into the role of a global partner at the cost of a single-digit million USD amount per year, resulting in a significant positive impact on TeamViewer's profitability.
On the back of this operational development, TeamViewer delivered strong 2022 financials in line with its guidance. Billings grew by 16% (11% cc) yoy to EUR 634.8m in FY 2022, and revenue was up 13% to EUR 565.9m. Profitability even reached the upper end of the guided range with an Adjusted (Billings) EBITDA margin of 47%. Despite the discontinuation of its Russian and Belarusian operations, TeamViewer's subscriber base increased yoy, amounting to 626k at the end of Q4 2022 (Q4 2021: 617k). A growing Net Retention Rate ("NRR") is proof of a large and loyal customer base.
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Preliminary Results Q4 | FY 2022
SMB and Enterprise Development
Customer Billings Split
EUR m | Q4 22 | Q4 21 | Δ yoy | Δ yoy cc | FY 22 | FY 21 | Δ yoy | Δ yoy cc |
SMB | 147.3 | 124.4 | +18% | +14% | 502.8 | 454.6 | +11% | +6% |
Enterprise | 43.3 | 29.4 | +47% | +43% | 132.0 | 93.0 | +42% | +35% |
Total Billings | 190.6 | 153.7 | +24% | +20% |
634.8 547.6 +16% +11%
TeamViewer's SMB business improved by 18% yoy (14% cc) in Q4, supported by targeted cross- and upselling, successful price increases, as well as continued USD exchange rate tailwinds. On the back of this strong year-end finish, full-year SMB billings were 11% (6% cc) higher yoy at EUR 502.8m. The SMB subscriber base increased from 614k (adjusted for discontinued business in Russia and Belarus) at the end of Q4 2021 to 622k at the end of Q4 2022.
With an increase by 47% (43% cc) in Q4 2022, Enterprise business growth remained at a high level despite the uncertain macroeconomic environment. Growth was particularly driven by the EMEA region, an improved pipeline conversion, customers committing to growing ticket sizes (including migrations from SMB) and a higher share of multi-year deals. Full year 2022 Enterprise billings amounted to EUR 132.0m, corresponding to an increase of 42% (35% cc) yoy. The Enterprise subscriber base increased by 954 customers to 3,666 at the end of 2022.
Regional Developments
Regional Billings Split
EUR m | Q4 22 | Q4 21 | Δ yoy | Δ yoy cc | FY 22 | FY 21 | Δ yoy | Δ yoy cc |
EMEA | 109.2 | 85.5 | +28% | +28% | 340.1 | 296.0 | +15% | +14% |
AMERICAS | 63.7 | 54.9 | +16% | +4% | 222.9 | 188.4 | +18% | +6% |
APAC | 17.7 | 13.3 | +32% | +34% | 71.8 | 63.1 | +14% | +11% |
Total Billings | 190.6 | 153.7 | +24% | +20% |
634.8 547.6 +16% +11%
From a regional perspective, with a yoy billings growth of 28% (same in cc) in Q4 2022, EMEA significantly outgrew its already strong performance shown in Q3. Reasons being the above-mentioned campaigns, and an increasing number of multi-year deals, combined with a well-developed and loyal customer base. On a full-year basis, with an increase of 15% (14% cc), EMEA reached the strongest fundamental growth of all three regions.
In the AMERICAS, TeamViewer achieved a billings growth of 16% in Q4 and 18% for the full year. On a currency-adjusted basis, billings grew slower, at 4% and 6% respectively. As in Q3, this can be explained by temporarily longer procurement cycles in the current environment. However, TeamViewer remains
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Preliminary Results Q4 | FY 2022
confident in the resilience of its product portfolio and customers' IT spend for automation and digitalization in the AMERICAS going forward.
APAC delivered another strong quarter in Q4 with the new organizational structures settling in. On a yoy comparison, billings were up 32% (34% cc) in Q4, and 14% (11% cc) for the full year. The lifting of COVID restrictions towards the year end generally allowed for more events translating into a strong enterprise momentum.
Earnings Development
While billings grew by a strong 24% in Q4 yoy, recurring costs increased by 8%, which resulted in a significant Adjusted (Billings) EBITDA margin improvement by 7pp, from 44% in Q4 2021 to 51% in Q4 2022. In a full-year comparison, with seasonality effects balanced-out, recurring costs increased largely in line with billings. As a result, the full year Adjusted (Billings) EBITDA margin remained stable at 47% despite the full effect of sports sponsorships and increasing inflationary cost pressure. In relation to revenue, the (same) recurring cost base increased stronger in a full-year comparison, resulting in an Adjusted (Revenue) EBITDA margin of 41% in FY 2022.
Recurring cost (adjusted for non-recurring items and D&A)
EUR m | Q4 22 | Q4 21 | Δ yoy | FY 22 | FY 21 | Δ yoy |
Cost of Sales | (12.3) | (10.0) | +23% | (41.6) | (38.3) | +9% |
Sales | (22.8) | (17.3) | +32% | (79.1) | (69.2) | +14% |
Marketing | (31.4) | (31.3) | +0% | (120.1) | (92.9) | +29% |
R&D | (15.7) | (14.9) | +6% | (54.4) | (46.0) | +18% |
G&A | (9.5) | (8.2) | +16% | (31.3) | (30.8) | +2% |
Other1 | (1.6) | (4.3) | -64% | (9.5) | (13.6) | -30% |
Total COGS and OpEx | (93.2) | (86.0) | +8% | (336.0) | (290.6) | +16% |
1 Incl. other income/expenses and bad debt expenses of € 3.2m in Q4 2022 and € 3.7m in Q4 2021 / € 12.4m in FY 2022 and € 16m in FY 2021.
With cost of sales largely growing in line with billings, the gross profit margin remained stable at 94% in a Q4 comparison, and 93% on a full year comparison. Main reasons for the yoy increase in sales expenses were the expansion of the enterprise sales force, higher bonus payments and currency effects. The growth in marketing expenses on a full-year basis was due to the first-time full consideration of sports sponsorships in 2022. This increase was partly compensated by scaling effects in G&A costs on a full-year comparison. Full-yearR&D costs increased largely in line with billings. The main R&D focus was on enriching the core technology platform and enhancing the digital workflow offering. The strong yoy decrease of "other" operating expenses in Q4 and FY 2022 was mainly driven by lower bad debt expenses due to a higher share of the Enterprise business with better payment behavior.
The described cost development led to a yoy increase of the Adjusted (Billings) EBITDA by 44% to EUR 97.4m in Q4 2022. On a full-year comparison, the Adjusted (Billings) EBITDA increased by 16% to EUR
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TeamViewer AG published this content on 07 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 February 2023 09:41:38 UTC.
