Sopheon plc, the InnovationOps software company, holds its Annual General Meeting (“AGM”) today. The Board takes this opportunity to give shareholders the following update and review of the business.
2022 in review
Sopheon exited 2022 with two successful acquisitions and grew from a single product company to a family of four products, tripling Sopheon’s addressable market to almost $3 billion. Sopheon’s combined family of InnovationOps solutions offer a compelling and unique value proposition for companies: automate and provide a single source of truth to eliminate the innovation stalls, stumbles and failures that are completely avoidable in even the most chaotic of times. Each of our offerings are focused on specific innovation tasks that, when brought together with the people and processes across the organization, make InnovationOps a reality.
Our financial performance in 2022 illustrates the initial success of our efforts. ARR1 increased 17.4% to $24.3m (2022) compared to $20.7m (2021). Top line revenue rose to $36.8m compared to $34.4m in 2021. At constant currency, revenue would have exceeded $38m, representing 10% organic growth. Total contract value (TCV) of all sales closed in the year exceeded $30m up 35% year over year – with the exceptional outperformance attributable to signing the largest single deal in our history with the US Navy. Adjusted EBITDA2 improved by almost 12%, rising to $6.9m (2022: $6.2m) while taking a $1.6m write down in respect of technology investments superseded by the acquisitions.
2023 update and outlook
Following the impressive conclusion to 2022, in the first part of the current year we have maintained our drive on embedding our execution priorities as outlined in last year’s annual report:
- Focus on SaaS/cloud sales
- Broadening our product offerings
- Introducing new pricing models
- Embed new leadership structures
- Continued customer centricity
These efforts have been accompanied by continued commercial progress. Since the start of the year, we have closed five new customer wins for Accolade, all SaaS, alongside several extension orders from existing customers. ARR has risen 18% to $25.7m compared to $21.7m a year ago, and year-to-date gross retention has held above 99%. Full year revenue visibility3 for recognizable 2023 revenue is currently at $31m, compared to $28m at this time last year. Management’s confidence in our expected full year outturn is underpinned by a sales pipeline that includes major extensions with existing customers, alongside new prospects. Net cash at the end of May stood over $22m.
Sopheon has an incredible team of employees, our SaaS solution revenue continues to grow, and the balance sheet remains very strong to fuel additional acquisition and investment. The recent appointment of Barney Kent, former COO of Ideagen plc, as a non-executive Director underlines our commitment to both organic growth and M&A activities.
Sopheon’s Chairman Andy Michuda said: “As I stated previously, we are now working to deliver rising velocity to our business, with an ambition to double run-rate revenue every four years alongside world class margin and retention metrics. In the early part of 2023, we have been very focused on further refining the three new products introduced in 2022 and are exploring further M&A opportunities. In parallel, both major new account wins and client expansion sales have delivered a further boost to visibility; and we remain busy with a number of sales opportunities as we approach the traditionally stronger second half of the year.”
For further information contact:
|Andy Michuda (Executive Chairman)
Arif Karimjee (CFO)
|Sopheon plc||+ 44 (0) 1276 919 560|
|Carl Holmes/ George Dollemore (Corporate Finance)
Alice Lane / Sunila de Silva (ECM)
|finnCap||+ 44 (0) 20 7220 0500|
Sopheon (LSE: SPE) empowers organizations to change the world while achieving exceptional long-term revenue growth and profitability. By operationalizing the entire innovation life cycle, Accolade® and Acclaim™ software and expertise enable innovation, product and project professionals to accomplish the full range of InnovationOps tasks to drive innovation at scale. Sopheon’s industry leadership was highlighted in the comprehensive MarketsandMarkets™ report on the Innovation Management market, in which Sopheon was listed in the “Stars” category, the highest recognition. Sopheon’s solutions have been implemented by hundreds of blue-chip customers with over 137,000 users in 50 countries. Sopheon is listed on the AIM Market of the London Stock Exchange.
1 ARR is the annual value of all ongoing contracts for SaaS, hosting and maintenance in force at the measurement date including pending renewals and starts, including those which are contracted but conditional on acceptance decisions scheduled later in the year, but excluding confirmed terminations.
2Adjusted EBITDA is defined and reconciled in Note 5 of Sopheon’s 2022 annual report which is available from the investor section of www.sopheon.com.
3 Revenue visibility comprises revenue expected from (i) closed license orders, including those which are contracted but conditional on acceptance decisions scheduled later in the year; (ii) contracted services business delivered or expected to be delivered in the year; and (iii) recurring maintenance, hosting, SaaS and rental streams. The visibility calculation does not include revenues from new sales opportunities expected to close during the remainder of the year.
Sopheon®, Accolade® and Acclaim™ are trademarks of Sopheon plc. All other trademarks are the property of their respective owners.
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").