Esker achieves a new record quarter with sales exceeding 32% growth
Record quarter, record half year
Esker Q2 2021 sales revenue amounted to 33.4 million euros, a 32% increase over Q2 2020 based on constant exchange rates (+28% based on current rates). Half-year sales revenue grew 22% based on constant exchange rate (19% based on current rates) to 64.4 million euros. Esker has, once again, experienced its most successful quarter and half year in company history.
Growth continued to be driven by the development of cloud solutions, which grew 37% in Q2, representing 93% of the company business. In addition to its usual growth, the company’s cloud-based activities also benefitted from a favourable base effect in Q2. In the second quarter of 2020, the variable share of cloud-based activities was impacted by the COVID-19-driven economic slowdown in numerous countries.
Activity was strong in all geographies, with all posting solid growth as a result of sales success recorded over the last six months. Implementation services grew significantly (+13%) due to the large number of continued bookings since the end of 2020. The performance of traditional licence-based products and legacy products increased considerably in Q2 thanks to an unexpected sale in the U.S.
Significant number of new contracts signed
Esker signed a high amount of new contracts over the quarter. More than ever, businesses have shown a strong interest in automation solutions that deliver significant productivity gains to finance and customer service functions and allow them to continue to operate when employees are working remotely.
The Annual Recurring Value (ARR) of new contracts signed during Q2 2021 increased by 92% compared to Q2 2020, to reach 3.3 million euros (10.6 million euros in subscriptions over the total duration of the contracts). The pace of signatures was dynamic in all regions of the world and particularly intense in the U.S. and France. Since the beginning of the year, the ARR of contracts signed amounts to 6.6 million euros, an increase of 64% (21.3 million euros in subscriptions over the total duration of the contracts).
Maintained profitability and financial structure for future growth
As of June 30, 2021, company cash rests at 35.2 million euros after dividend payment and reimbursement of a government-guaranteed loan of 11.5 million euros. With 33.6 million euros in net cash (versus 22.9 million euros on June 30, 2020) and close to 140,000 treasury shares immediately available, Esker has the financial resources necessary to pursue its strategy focused on accelerating organic growth. This will eventually be completed by external growth operations designed to integrate related solutions to increase the value delivered to our customers.
Outlook for 2021
Esker’s growth should continue to accelerate over Q3 due to the significant sales success achieved since Q4 2020, the strong economic recovery worldwide and a continued favourable base effect. Esker has raised its organic growth forecast for the full year from 16% to 17%, which should bring sales revenue to around 131 million euros if the EUR/USD exchange rate remains unchanged. At this level of growth, profitability is expected to be between 12-15%.