SoftwareONE (SWON) H1 2024 earnings summary

Executive summary

• Revenue grew 7.0% year-over-year in constant currency to CHF 529.9 million for H1 2024, with adjusted EBITDA up 11.3% to CHF 121.9 million and margin improving to 23.0%, reflecting successful execution of Vision 2026 and operational excellence initiatives.

• Vision 2026 implementation is on track, with a new go-to-market model launched in key markets, boosting sales productivity and SME segment reach.

• Board is evaluating potential going-private transaction, with discussions ongoing following receipt of indicative offers.

• Copilot 365 user base exceeded 600,000 by June 2024, with 240 additional services engagements in Q2.

• Operational excellence program completed, delivering CHF 76 million in annualized cost savings, exceeding the CHF 70 million target.

Financial highlights

• H1 2024 revenue reached CHF 529.9 million, up 7.0% year-over-year in constant currency; Q2 2024 revenue CHF 283.0 million, up 6.7%.

• Adjusted EBITDA for H1 2024 was CHF 121.9 million (+11.3% YoY ccy), with margin at 23.0% (+1.0pp); Q2 2024 adjusted EBITDA CHF 76.5 million, margin 27.0%.

• Contribution margin improved to 67.8% in H1 2024 (+3.0pp YoY); marketplace contribution margin at 88.4%, services at 43.7%.

• Adjusted EPS (diluted) rose 20.1% YoY to CHF 0.39; adjusted profit for H1 2024 was CHF 41.6 million.

• Net debt at CHF 208.7 million as of June 30, 2024; net working capital at CHF 182.6 million.

Outlook and guidance

• Full-year 2024 revenue growth guidance revised to 7-9% in constant currency (from 8-10%) due to macro headwinds and Colombia public sector impact.

• Adjusted EBITDA margin guidance maintained at 24.5-25.5%.

• Vision 2026 targets mid-teen revenue growth and margin approaching 28%.

• Dividend payout policy remains at 30-50% of adjusted profit.

• Expect acceleration in H2 growth as new sales organization becomes fully operational.