REG - Sopheon PLC - AGM Statement

SopheonAnnouncement

09/06/2022 07:00

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RNS Number : 2258O  Sopheon PLC  09 June 2022

SOPHEON PLC

 

("Sopheon" or the "Company")

 

AGM Statement

 

Sopheon, the international provider of software, expertise, and best practices
for enterprise innovation management
(https://www.sopheon.com/software/?utm_source=PressRelease&utm_medium=Press&utm_campaign=PR-Gen)
solutions, holds its Annual General Meeting ("AGM") today. The Board takes
this opportunity to give shareholders the following update and review of the
business.

 

2021 in review

 

Our 2021 performance was gratifying both for the strategic progress we made
and for exceeding our financial market expectations despite the continued
market uncertainty. Both recognized revenues and annual recurring revenues
("ARR") grew by approximately 15% to $34.4m and $20.7m respectively. We remind
shareholders that we are on a journey of transition from a traditional
perpetual software license business to a higher-quality recurring revenue
business. The goal is to deliver more predictable and reliable growth over the
medium term; in the shorter term, this transition naturally weighs on profits
as we accelerate go-to-market investment while simultaneously shifting
software revenue recognition from an up-front to a rateable model. It was
therefore very encouraging to also show continued profitability with both
EBITDA and net cash growing. In addition to our financial results, 2021 was a
year of unusually high activity and change for Sopheon.  We appointed a new
CEO, Greg Coticchia, and also strengthened our leadership team with
appointments in key marketing, sales, and product areas. We have introduced
and driven three key programs to support our strategic direction to:

 

·      Transition our customer base and new sales engine to
Software-as-a-Service ("SaaS"). By year end, 90 percent of the new customer
pipeline by value was SaaS focused.

 

·      Embrace a multi-product future by introducing new cloud-based
applications. These new applications are intended to drive lead generation for
our Accolade enterprise solution, as well as being stand-alone solutions that
solve individual and workgroup productivity needs. At year end we completed
the acquisition of ROI Blueprints, which is already playing a material role in
both existing and new customer opportunities.

 

·      Extend market reach beyond the very largest customers and thereby
improve scalability and predictability. We made significant investments in
marketing which are already increasing our metrics for market reach, prospect
engagement and ultimately lead generation.

 

2022 update and outlook

 

Our most recent acquisition of Solverboard, announced in May 2022, accelerates
our SaaS strategy from both functional and go-to-market perspectives.
Solverboard's multi-tenant, SaaS product is used by both individual innovators
and product professionals, and is sold using an online, product-led model.
Solverboard brings the innovation and product needs of professionals together
so that they can focus on addressing front-end innovation challenges, by
helping companies dynamically find, align, test and deliver the best
innovation and product ideas from employees and customers. We expect to
further develop Solverboard's product sales led distribution capabilities and
introduce additional Sopheon products to be sold through the Solverboard
channel by the end of the year.

 

In parallel with our strategic progress, we have continued delivering growth
in our core business. Since the start of the year, we have closed six new
customer wins - compared to ten in the whole of 2021. All six were SaaS. ARR
has risen to $21.7m compared to $19m a year ago, and gross retention has held
above 98% on a year-to-date basis. These metrics demonstrate continued success
with our transition towards a more recurring revenue model - which in turn
improves our multi-year visibility and predictability. A lower share of
one-off revenue contributions from perpetual and consulting sales year to date
means that full year visibility for recognizable 2022 revenue is currently at
$28m, a similar level to this time last year. Confidence in our full year
performance is sustained by a sales pipeline that includes several major
extensions with existing customers, alongside a growing list of new prospects.
Net cash at the end of May stood at $25m compared to $23m at this time last
year, underlining our cash generative nature and our ability to execute.

 

Sopheon's Chairman Andy Michuda said: "Sopheon's shift towards a pure play
SaaS model and associated ARR growth is moving forward as planned, supported
by delivery of two key acquisitions in ROI Blueprints and most recently
Solverboard. We see growing commercial traction on both sides of the Atlantic,
responding to our broader product offering and our more assertive marketing
investment, and we remain focused on exploring other additive M&A
opportunities."

 

For further information contact:

 

 Andy Michuda (Executive Chairman)              Sopheon plc  + 44 (0) 1276 919 560

Arif Karimjee (CFO)
 Carl Holmes/Edward Whiley (Corporate Finance)  finnCap Ltd  + 44 (0) 20 7220 0500

Alice Lane/Sunila da Silva (ECM)

 

Sopheon, Accolade and Solverboard are trademarks of Sopheon plc. All other
trademarks are the property of their respective owners.

About Sopheon. Sopheon (LSE: SPE) partners with customers to provide complete
enterprise innovation management
(https://www.sopheon.com/?utm_source=PressRelease&utm_medium=Press&utm_campaign=PR-Gen)
solutions including software, expertise, and best practices, that enable them
to achieve exceptional long-term revenue growth and profitability. Sopheon
provides unique, fully-integrated coverage for the entire innovation
management and new product development lifecycle, including strategic
innovation planning, roadmapping, idea and concept development, process and
project management, portfolio management and resource planning. Sopheon's
solutions have been implemented by over 200 customers with over 60,000 users
in over 50 countries. Sopheon is listed on AIM, operated by the London Stock
Exchange. For more information, please visit www.sopheon.com
(http://www.sopheon.com) .

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