Heeros’ scalable and resilient SaaS business model proved its flexibility and ability to adapt in a changing market environment.
This release is an unofficial translation of the summary of Heeros Plc’s half-year report 2023. The complete half-year report in Finnish, including tables, is available on the company’s website at www.heeros.com/sijoittajille/tiedotteet.
April –
- The combined EBITDA margin and revenue growth percentage (Rule of 40, adjusted) was 17% (4–6/2022: 43%).
- Revenue increased by 2% year-on-year to
EUR 2,859 (2,815) thousand. - Recurring revenue (contract and transaction revenue) increased by 5% to
EUR 2,722 (2,584) thousand. Contract revenue increased by 10% toEUR 2,148 (1,951) thousand. Transaction volumes decreased by 5% and transaction revenue declined by 9% toEUR 574 (633) thousand. In addition to the fall in transaction volumes, the fall in transaction revenue was also due to the conversion of transaction volumes into contract revenue in connection of contract reform. - At the end of
June 2023 , contract revenue (MRR, Monthly Recurring Revenue) amounted toEUR 714 (662) thousand, representing a year-on-year increase of 8%. - EBITDA declined by 14% to
EUR 397 (461) thousand, which was 14% (16%) of revenue. Adjusted EBITDA declined by 6% toEUR 454 (483) thousand, which was 16% (17%) of revenue. - New customer order intake in terms of Annual Recurring Revenue (ARR) was approximately
EUR 150 (290) thousand.
January –
- The combined EBITDA margin and revenue growth percentage (Rule of 40, adjusted) was 18% (1-6/2022: 39%).
- Revenue increased by 2% year-on-year to
EUR 5,666 (5,549) thousand. - Recurring revenue increased by 5% to
EUR 5,367 (5,124) thousand. Contract revenue increased by 9% toEUR 4,237 (3,883) thousand. Transaction volumes decreased by 3% and transaction revenue declined by 9% toEUR 1,130 (1,240) thousand. - EBITDA increased by 15% to
EUR 825 (715) thousand, which was 15% (13%) of revenue. Adjusted EBITDA increased by 15% toEUR 882 (764) thousand, which was 16% (14%) of revenue. - Operational cash flow increased by 25% to
EUR 898 (719) thousand. - New customer order intake in terms of Annual Recurring Revenue (ARR) was approximately
EUR 360 (530) thousand. - Financial outlook for the full year 2023 remains unchanged:
Heeros estimates that its combined EBITDA margin (EBITDA, % of revenue) and revenue growth percentage (Rule of 40) will be at the level of 30% during the 2023 financial period.
In addition,Heeros provides more detail regarding the outlook for the second half of the financial year, as follows: We will focus on securing profitable growth during 2023, and we expect the EBITDA margin to increase in the second half of 2023 compared to the second half of 2022.
EUR thousand | Q2/2023 | Q2/2022 | Change, % | H1/2023 | H1/2022 | Change, % | 2022 |
Rule of 40, % (adjusted) 1 | 17% | 43% | 18% | 39% | 39% | ||
Revenue | 2,859 | 2,815 | 2% | 5,666 | 5,549 | 2% | 11,083 |
Recurring revenue 2 | 2,722 | 2,584 | 5% | 5,367 | 5,124 | 5% | 10,332 |
Contract revenue | 2,148 | 1,951 | 10% | 4,237 | 3,883 | 9% | 7,854 |
Transaction revenue | 574 | 633 | -9% | 1,130 | 1,240 | -9% | 2,478 |
EBITDA | 397 | 461 | -14% | 825 | 715 | 15% | 1,997 |
EBITDA, % of revenue | 14% | 16% | 15% | 13% | 18% | ||
Adjusted EBITDA1 | 454 | 483 | -6% | 882 | 764 | 15% | 2,061 |
Adjusted EBITDA, % of revenue | 16% | 17% | 16% | 14% | 19% | ||
EBIT | -151 | -91 | -269 | -409 | -230 | ||
EBIT, % of revenue | -5% | -3% | -5% | -7% | -2% | ||
Adjusted EBIT 1 | -94 | -70 | -212 | -360 | -166 | ||
Adjusted EBIT, % of revenue | -3% | -2% | -4% | -6% | -1% | ||
Profit for the period | -170 | -118 | -323 | -464 | -405 | ||
Profit for the period, % of revenue | -6% | -4% | -6% | -8% | -4% | ||
Operational cash flow (adjusted) 3 | 516 | 475 | 9% | 898 | 719 | 25% | 1,642 |
Equity ratio, % | 58% | 57% | 58% | ||||
Return on Equity (ROE), % | -5% | -11% | -9% |
1 The revenue growth rate for 2022 includes the inorganic growth derived from the
an adjustment of
2 Recurring revenue is divided into two parts: contract revenue (fixed usage fees and service agreements) and transaction revenue.
3 The adjusted figures for H1/2023 include an adjustment of
“Heeros made positive progress during the second quarter of 2023 despite persisting challenges in the Finnish macroeconomic environment. Our scalable and profitable business model, and our commitment to improving profitability and focus on improving the quality of our solutions, yielded positive results.
Continued focus on profitability improvements
During the first half of 2023 our focus was on continuing to increase profitability. EBITDA (adjusted) increased in the first half of 2023 by 15% to
Revenue continued to grow, although at a slower pace compared to the same period last year, driven by good development in recurring revenue. At the end of
The prevailing economic situation put pressure on revenue growth. Transaction revenue, which is about 20% of monthly recurring revenue, was negatively impacted (-9%) and Annual Recurring Revenue (ARR) intake also continued to slow down in the first half of the year to
Co-operation negotiations were completed on
Despite the acceleration in cost inflation the cost level in the first half of the year is at the same level as in the previous year. In addition, we invested more in our personnel than in previous years, as we extended the
Customer relationships remain long-term
Contract revenue, our most important metric, grew by 10% during the second quarter. Net revenue retention was strong at 107% (109%). Churn was lower than expected. All these three metrics illustrate that whilst our topline might be affected by short-term macroeconomic pressure, our services are sticky and our customer relationships remain long-term.
In terms of major project deliveries, we were already well on track for 2022. Improvements in the Adoption Services’ delivery process enabled us to work and communicate more efficiently, better and ensure timely delivery to our customers.
Customer satisfaction remained strong supported by our highly respected support organization based in Jyväskylä. In customer service, we continued to invest in data-driven solutions to further improve customer satisfaction and increase profitability in the coming years.
Modular product suite – always the best possible service package for our customers
What differentiates
The first half of 2023 saw continued sales successes with integration of the acquired PSA product suite into the existing
To support local customers in their international expansion, we signed a key co-operation agreement with Enable Banking. This will help our customers establish a modern and automated connection with banks across
We see good demand for a combined offering including our PSA and our financial management solutions. By combining Heeros PSA, purchase invoices, new sales invoices and future open banking functionality, we are able to offer a unique one-stop-shop solution to professional services companies operating in Europe.
In general, our focus in the next quarters will be on improving the scalability of our services, rather than on developing many new products or features. Partly for this reason, we agreed to outsource one of our products, scanning services, to Posti. We will continue to streamline the product suite in the future, focus on our core customer profile and ensure our core product suite remains competitive in the market.
FINANCIAL OUTLOOK FOR 2023
Financial outlook for the full year 2023 remains unchanged:
In addition,
FINANCIAL REPORTING IN 2023
Financial reports are available on the company website at https://www.heeros.com/sijoittajille/raportit-ja-esitykset
RESULTS PRESENTATION FOR INVESTORS ON
A link to the Teams meeting has been sent to everyone who has registered for the event in advance.
You can access the event materials after the event on the company’s website at https://www.heeros.com/en/for-investors.
Board of Directors
More information:
Certified Advisor:
Distribution:
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Essential media outlets
www.heeros.com/sijoittajille
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