Trading Update
25/01/2022 07:00
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RNS Number : 4473Z Sopheon PLC 25 January 2022
SOPHEON PLC
("Sopheon", the "Company" or the "Group")
TRADING UPDATE
Sopheon, the international provider of software and services for Enterprise
Innovation Management solutions, is pleased to provide the following trading
update for the year ended 31 December 2021.
On 20 December 2021 we reported our acquisition of the ROI Blueprints ("ROIB")
business, along with a statement that financial performance would be
comfortably in line with market expectations. We are now delighted to report
that we expect that revenue for the year ended 31 December 2021 will exceed
$34m (2020: $30m). Annual Recurring Revenue ("ARR") at the end of 2021 is
expected to exceed $20.5m (2020: $18m), a performance we are pleased with.
This, coupled with contracted consulting services, means that revenue
visibility(1) for 2022 has grown to approximately $23.4m (2020: $22.0m).
Adjusted EBITDA is expected to exceed $6m (2020: $5.9m). Net cash on 31
December 2021 was $24.1m (2020: $21.6m) after funding the initial payment on
the ROI Blueprints acquisition, demonstrating the cash generative nature and
resilient cash performance of the business and underlining our robust balance
sheet. In addition to the revenue out-performance, the profit result was
assisted by the deferral of some of our anticipated investment plans, in
particular in the staffing of product development. Like many other software
businesses, we face ongoing challenges in recruiting technical staff. However,
as noted in previous announcements, along with the appointment of Greg
Coticchia as CEO in April, we have added new leadership in sales, marketing
and product areas and expanded resources in 2021. We have increased the pace
of Accolade product releases, and also expanded a number of marketing
initiatives to build the Sopheon profile, and grow the pipeline. This
includes programs to introduce the ROIB solution to our customer base later
this month. Several cross-sell opportunities have been identified, and the
ROIB team is already fully integrated at Sopheon. Our growth initiatives will
continue and accelerate in 2022.
The improvement in ARR underlines continued traction in our migration to a
Software as a Service ("SaaS") recurring revenue model, giving both enhanced
revenue visibility to future periods and improved quality of earnings.
Approximately 50% of more than 70 license transactions signed during 2021 were
for SaaS contracts. Moreover, the value of SaaS bookings was more than double
that of perpetual contracts. This includes another six existing customers
converting from the perpetual model to a SaaS model. Gross retention of ARR
returned to our normal strong levels, at 95% compared to 91.5% during the
challenging conditions of 2020.
Financial expectations noted above are preliminary, and subject to year-end
financial close and audit review processes. In line with our normal reporting
schedule, Sopheon plans to issue its results for the year ended 31 December
2021 on 24 March 2022.
Sopheon's Chairman, Andy Michuda said: "As I noted in our December
announcement, it was great to end the year with our first acquisition for some
time, coupled with strong execution in the core business. We continue to
explore and evaluate further M&A opportunities. In parallel, we are also
advancing nicely on our stated transition towards a SaaS business, both
operationally as well as financially, intended to enhance predictability,
quality of earnings and overall shareholder return. I am encouraged with
the foundational progress Greg and the team have made in 2021 and look forward
to further positive developments as the new year progresses."
For further information contact:
Andy Michuda (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 de Silva (ECM)
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's
Accolade solution 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) .
(1 )Revenue visibility is defined on page 7 of Sopheon's 2020 annual report
which is available from the investor section of www.sopheon.com
(http://www.sopheon.com) .
The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014 as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 (as amended) ("UK MAR").
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