Axway (Paris:AXW) announces revenue of €65.3 million for Q1 2016, an increase of 4.3% (+2.3% organic growth) compared to Q1 2015, which was also positive.
The key event at the start of the year was Axway's transformation plan, which is progressing on target with the Company's roadmap. The transformation was announced last year and impacts many of the Company's business areas including:
In addition, the acquisition of Appcelerator in January 2016 is looking extremely promising. Customer feedback has been very positive and the synergies between mobile technology and the existing digital offering (notably APIs) show the potential for rapid sales growth.
Comments on Q1 activity
Activity in Q1 2016 was satisfactory, with organic growth of +2.3% compared to Q1 2015, which in turn saw organic growth of 2.5%.
Revenue by business line (€M)
| 1st Quarter | 2016 |
2015 |
2015 |
Total Growth |
Organic |
|||||
| Licenses | 12.4 | 13.6 | 13.6 | -8.6% | -8.6% | |||||
| Maintenance | 34.7 | 33.5 | 33.6 | 3.7% | 3.5% | |||||
| Services | 18.2 | 15.5 | 16.7 | 17.1% | 8.8% | |||||
| 65.3 | 62.6 | 63.9 | 4.3% | 2.3% |
(1) at constant exchange rates and scope of consolidation
Product revenue (Licenses + Maintenance) is stable over the quarter, whereas Services grew significantly. The latter included growth in revenue from Cloud subscriptions of over 20%.
Licenses amounted to €12.4 million for the quarter, with strong growth in the Americas (+24%). The slight decline of €1.2 million compared to Q1/2015 reflects the fact that the signature of a very small number of contracts was delayed and this was added to an unfavourable comparison basis in France.
Revenue by region (€M)
| 1st Quarter | 2016 |
2015 |
2015 |
Total |
Organic |
|||||
| France | 20.1 | 22.1 | 22.1 | -9.2% | -9.2% | |||||
| Rest of Europe | 14.6 | 14.3 | 14.2 | 1.6% | 2.3% | |||||
| America's | 27.5 | 23.2 | 24.6 | 18.5% | 11.6% | |||||
| Asia/Pacific | 3.3 | 3.0 | 2.9 | 7.8% | 11.0% | |||||
| Axway | 65.3 | 62.6 | 63.9 | 4.3% | 2.3% |
(1) at constant exchange rates and scope of consolidation
The Americas region confirmed the positive turnaround trend begun in Q4 2015. This growth, at more than 10%, in total revenue in the leading Axway geographical area allows us to be very confident about overall performance for the 2016 financial year. Performance in France remained conditional on the signature - or otherwise - of several licences that determined the final performance for the quarter. Axway's positioning on digital transformation and the expansion of its product and services portfolio should enable it to renew its growth in this region, as has been the case for the other regions.
Financial position and outlook
Axway's financial position was extremely solid at the end of March 2016, with €43.1 million in cash and bank debt of €27.5 million, enabling the Company to pursue its strategy of external growth.
The Group is paying very close attention to the progress of its transformation plan within the context of the transition begun just six months ago, and it has full confidence in the strategy taken.