74Software (74SW) H2 2024 earnings summary

Executive summary

• 2024 marked the first year of operations for the combined Axway and SBS businesses under the new 74Software brand, following a successful carve-out and integration process, doubling size and expanding into banking applications.

• The group achieved its financial and operational targets, with both legacy businesses performing at the higher end of expectations and delivering strong growth.

• Strategic focus remained on delivering value to customers, employees, and shareholders, emphasizing sustainable, predictable growth and a pivot to a software-centric, recurring revenue model.

• Axway delivered record-high profitability and NPS, while SBS accelerated transformation and growth, supported by strong performance in North America and new product launches.

• Acquisition of SBS was financed by capital increase and new bank loans, reflecting strong shareholder and lender confidence.

Financial highlights

• Pro forma 2024 revenue reached €690 million, with combined organic growth of 5.6%.

• Pro forma profit on operating activities was €94 million (13.6% margin); net profit was €24.6 million (3.6% margin).

• Axway achieved a record-high operating margin of 20.9%, while SBS posted 6.9%.

• Unlevered free cash flow was €26.3 million (5.7% of revenue); earnings per share were €1.67.

• Leverage ratio ended at 2.87x, gearing at 0.47x, both within covenant limits; net debt rose to €250.3 million.

Outlook and guidance

• 2025 revenue guidance is €700 million, with profit on operating activities targeted between 14% and 16%.

• Unlevered free cash flow is expected to improve to 10%, with leverage ratio targeted below 2x.

• Medium-term goals include reaching 20% operating profit by 2028 and €1 billion revenue in the midterm.

• Organic growth guidance remains at 2% to 4% per year.

• Dividend and share buyback programs to resume once leverage target is achieved.