74Software: Axway and SBS Deliver Strong 2024
--
Group revenue of EUR461.9m in 2024, with organic growth of 4.0%
--
Proforma Group revenue of EUR690.0m in 2024, with organic growth of
5.6%
--
Axway 2024 revenue of EUR329.8m, with 3.4% organic growth at the top
end of the guidance
--
SBS 2024 proforma revenue with organic growth of 7.8% to EUR362.0m
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Proforma profit on operating activities up 57 basis points to 13.6% of
revenue (EUR94.0m), with Axway stand-alone reaching an all-time high of
20.9% of revenue
--
Positive ARR growth of 7.4% in Axway and 11.8% in SBS, building a
strong foundation for the Group's future
PARIS--(BUSINESS WIRE)--February 26, 2025--
Regulatory News:
74Software's (Paris:74SW) Board of Directors, chaired by Pierre Pasquier, today conducted an in-depth review of the consolidated and annual financial statements for the year ended December 31, 2024. Consequently, 74Software announces:
Key Income Statement Items
2024 2024 2023
Proforma IFRS Consolidated Reported
12m AXW + 12m SBS 12m AXW + 4m SBS Axway Standalone
% of
EURm Rev. EURm % of Rev. EURm % of Rev.
----------- -------- -------- -------- --------- -------- ---------
TOTAL
REVENUE 690.0 461.9 319.0
------------ -------- -------- -------- --------- -------- ---------
GROSS PROFIT 448.8 65.0% 320.2 69.3% 231.8 72.7%
------------ -------- -------- -------- --------- -------- ---------
PROFIT ON
OPERATING
ACTIVITIES 94.0 13.6% 87.7 19.0% 62.8 19.7%
------------ -------- -------- -------- --------- -------- ---------
OPERATING
PROFIT 51.1 7.4% 61.4 13.3% 47.6 14.9%
------------ -------- -------- -------- --------- -------- ---------
NET PROFIT 24.6 3.6% 39.3 8.5% 35.8 11.2%
------------ -------- -------- -------- --------- -------- ---------
EARNINGS PER
SHARE 0.85 EUR 1.67 EUR 1.71 EUR
------------ -------- -------- -------- --------- -------- ---------
Patrick Donovan, Chief Executive Officer, stated:
"In 2024, our Group achieved significant milestones, including the acquisition of most of SBS's activities, which doubled our size and expanded our expertise into banking applications. This acquisition was financed through a successful capital increase and new bank loans, reflecting strong confidence from our shareholders and financing partners. The combination of Axway and SBS led to the creation of 74Software in December, marking a new era.
Despite the potential disruption due to the transaction, the group's core businesses both delivered strong years. The Axway business finished 2024 with record-high customer NPS, excellent employee engagement, and its most profitable year at the top of its financial targets. The SBS business also grew strongly, continued its transformation towards the software operating model, and signed the first customers for its composable, modular SaaS banking platform. In 2024 SBS saw record Customer NPS and improved profitability as planned.
74Software envisions a future of dynamic growth, driven by both organic expansion and strategic acquisitions. Our approach, rooted in disciplined management and a focused software publisher mindset, will be crucial to our success. We remain dedicated to our core mission: to be an independent enterprise software provider that consistently delivers sustainable value, built on trust, for our Customers, Employees, and Shareholders.
Finally, on a more personal note, we have communicated for a while now our mid-term ambitions of growing the group to a run rate above EUR500m in revenue, at a good level of profitability, to build a strong platform for the long term. This ambition is now clearly achieved. Now, I am setting my personal mid-term ambition to build 74Software to above EUR1 billion in revenue, highly profitable, and to carry forward the great company we are continuing to build to serve all our customers well, provide employees with a rewarding place to work and deliver value for our shareholders".
Comments on business activity in 2024
2024 was a transformative year for the Group, culminating in the creation of 74Software in December. 74Software aims to centralize support functions and services for its enterprise software brands, Axway and SBS, positioning itself as a major player in the European enterprise software market with expertise spanning data management, infrastructure and banking applications.
Since the closing of the transaction, the two businesses have continued to ensure the expected results were achieved. SBS had a dynamic first four months under its new banner, and Axway performed strongly, leading to a robust year-end for 74Software. While business teams remained focused on their respective projects, 74Software began uniting efforts to support operations and drive future organic and external growth.
The new Group achieved its annual revenue target and exceeded profitability forecasts, benefiting from the combined strengths of Axway and SBS, setting a strong momentum for 2025. Over the year, several important developments have taken place:
- In 2024, Axway achieved significant milestones, surpassing sales targets and gaining 121 new customers. The company saw exceptional growth in North America and strong multi-year renewals, particularly in API Management and B2B Integration. With its products and offers recognized by the most influential market analysts, Axway has maintained its commitment to customer excellence, achieving an NPS of 52. The year was marked by strategic initiatives to attract new customers, retain existing ones, and expand within the current customer base, all while fostering a culture of continuous improvement and innovation.
- SBS performed well during 2024 despite changes in its environment and shareholder structure following its sale. Before the sale, SBS's service-focused business (around 20% of its business activities, including more than 1000 employees) was transferred to Sopra Steria. The business in scope of the transaction continued to advance the software-as-a-service (SaaS) transformation started in 2021, focusing its investments on its composable, modular banking platform. The first three customers were signed for this market-leading offer, with over 20 rolling out its first single component around instant payments in 2024. Overall, SBS added 24 new clients in 2024, ending the year with over 700 customers.
Comments on operational performance in 2024 (proforma basis)
Revenue Breakdown by Portfolio Company
2024 2023 2023 Total Organic
EURm / % Proforma Proforma Restated Growth Growth
------------------------ --------- --------- --------- ------- -------
Axway Scope (12 Months) 329.8 319.0 319.0 3.4% 3.4%
------------------------ --------- --------- --------- ------- -------
SBS Scope (12 Months) 362.0 333.9 335.7 8.4% 7.8%
------------------------ --------- --------- --------- ------- -------
Consolidation -1.7 -1.5 -1.5
------------------------ --------- --------- --------- ------- -------
74Software 690.0 651.4 653.2 5.9% 5.6%
------------------------ --------- --------- --------- ------- -------
In 2024, 74Software's proforma revenue reached EUR690.0m, with 5.6% organic growth and a 5.9% overall increase from 2023. The annual organic growth was 3.4% for Axway and 7.8% for SBS.
Revenue Breakdown by Type
2024 2023 2023 Total Organic
EURm / % Proforma Proforma Restated Growth Growth
--------------------------- --------- --------- --------- ------- -------
Product revenue 544.1 517.4 518.7 5.2% 4.9%
--------------------------- --------- --------- --------- ------- -------
Recurring revenue 496.8 464.3 465.5 7.0% 6.7%
--------------------------- --------- --------- --------- ------- -------
o/w Maintenance & Support 194.8 218.4 218.8 -10.8% -11.0%
--------------------------- --------- --------- --------- ------- -------
o/w Customer-managed
Subscription 183.4 143.7 143.7 27.6% 27.6%
--------------------------- --------- --------- --------- ------- -------
o/w Own-managed
Subscription 118.6 102.2 103.0 16.1% 15.2%
--------------------------- --------- --------- --------- ------- -------
License revenue 47.3 53.1 53.3 -10.9% -11.2%
--------------------------- --------- --------- --------- ------- -------
Services revenue 146.0 134.1 134.5 8.9% 8.5%
--------------------------- --------- --------- --------- ------- -------
Total revenue 690.0 651.4 653.2 5.9% 5.6%
--------------------------- --------- --------- --------- ------- -------
Product revenue saw an organic increase of 4.9%, driven by both Axway (+4.0%) and SBS (+5.9%), highlighting the robust demand for the Group's software products. In line with 74Software's strategy, license revenue as well as maintenance & support revenue continue to drop, whilst customer- and own-managed subscriptions increase strongly. Product revenues accounted for 79% of total revenues, with most of it being recurring revenue (91% of product revenue).
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