The first half of 2024’s financial year proved successful for the Nemetschek Group, with substantial growth recorded in both subscription and SaaS
The business development and growth seen in the second quarter of 2024 was in line with the Nemetschek Group’s plans.
Subscription and SaaS revenue growth accelerated by over 80%, meaning that by the end of the first half of the year, the share of recurring sales had already surpassed 85%.
Key findings from the report:
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- +82.9% growth in subscription and SaaS to EUR 124.6m in Q2
- +26.5% ARR growth to EUR 797.9m in Q2
- +9.7% growth in Group revenues to EUR 227.7m in Q2
- EBITDA margin in Q2 at 27.0%, adjusted for acquisition-related one-off costs at 29.4%
- +27.7% growth in quarterly earnings per share to EUR 0.36
- Organic outlook for financial year 2024 confirmed
- Outlook for 2024 expanded following acquisition of GoCanvas
“We are very pleased with the development of the first half of the year. In addition, the very high growth momentum in Subscription and SaaS in the second quarter shows that the transition of our business model continues to be very successful,” says Yves Padrines, CEO of the Nemetschek Group.
“We are also focusing on our strategic focus areas such as increased internationalization and new technologies as well as the acquisition of GoCanvas, which will contribute to our future growth. With GoCanvas, the largest acquisition in the over 60-years history of our company, we are expanding our portfolio with unique SaaS solutions in Field Management to increase the safety and efficiency on the construction site while simultaneously accelerating our transition to recurring revenues. We expect that the acquisition will generate significant synergies for the Group and especially for our Build segment”.
Key Group Performance Indicators in greater depth
In the second quarter, the primary catalyst for growth was the revenue generated from subscription and SaaS services, which surged by 82.9% year-on-year (currency-adjusted: 82.2%), reaching a record EUR 124.6m, thereby significantly exceeding total revenue figures. For the first half of the year, these revenues experienced a substantial increase of 74.9% (currency-adjusted: 75.3%), totaling EUR 230.9m, compared to EUR 132.0m in the prior-year period.
Annual recurring revenue (ARR) rose by 26.5% (currency-adjusted: 26.2%) to EUR 797.9m, indicating a growth rate that surpasses overall revenue growth, suggesting considerable potential for expansion in the upcoming 12 months.
The proportion of recurring revenues relative to total revenues saw a notable increase, aligning with the Group’s strategic objectives, rising by 10 percentage points year-on-year to 85.3% by the end of the first half of 2024 (previous year: 74.5%). Group revenue in Q2 2024 grew by 9.7% (currency-adjusted: 9.7%) to EUR 227.7m.
In the first half of 2024, Group revenue experienced a 9.6% increase (currency-adjusted: 10.0%) to EUR 451.6m
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q2 rose by 9.5% year-on-year to EUR 61.4m, which includes one-off costs related to mergers and acquisitions in the mid-single-digit million euro range. The EBITDA margin stood at 27.0%, consistent with the previous year (Q2 2023: 27.0%). When adjusted for these acquisition-related one-off costs, the EBITDA margin for Q2 was 29.4%. For the first half of the year, EBITDA increased by 10.8% to EUR 129.7m, resulting in a margin of 28.7% (prior-year period: 28.4%). Excluding one-off costs, the EBITDA margin of 30.0% in H1 2024 aligns with the financial outlook communicated in March 2024.
Net income for the quarter increased significantly by 27.7% to EUR 41.9m, translating to earnings per share of EUR 0.36 (compared to EUR 0.28 in Q2 2023). In the first half of the year, net income rose by 22.3% to EUR 84.5m, resulting in earnings per share of EUR 0.73 (compared to EUR 0.60 in the previous year).
Recent acquisition GoCanvas is set to bolster Nemetschek’s growth
The transition to subscription and SaaS across the Group continues to make successful progress according to plan.
The Bluebeam brand in the Build segment and the Design segment were the primary drivers of growth in the first half of 2024. Nemetschek’s internationalization efforts in H1 2024 remained strong, with growth of +12.4% in North America and +16.2% in Asia-Pacific, outpacing growth in Germany.
The company sees significant potential in India, one of the largest and fastest-growing markets for the construction industry. To better capitalize on this growth, a second location with a local go-to-market office was opened in Mumbai, in addition to the existing shared service and development & research center in Hyderabad.
The acquisition of GoCanvas Holdings, Inc., a leading software provider for construction site collaboration, was successfully completed on July 1. GoCanvas has the ability to digitalise traditionally paper-based processes, streamline inspections, enhance safety, and ensure regulatory compliance. The complementary technologies, customer bases, and regional sales structures of GoCanvas and the Nemetschek Group offer substantial synergy potential and growth opportunities. Additionally, the acquisition strengthens the Nemetschek Group’s market position in North America, while providing GoCanvas with an attractive base for expansion in Europe and the Asia-Pacific region.
