Strong company growth with 18% increase in sales revenue
Esker Q1 2022 sales revenue amounted to 36.5 million euros, an 18% increase over Q1 2021 based on current exchange rates (+14% based on constant rates). Once again, Esker has achieved its best quarter ever.
Despite a slight decrease in volumes processed at the beginning of the year due to another pandemic wave, cloud activities (+23% based on current rates and +20% based on constant rates) are driving growth, representing 84% of the company’s business. This excellent performance is the result of the many customer contracts signed during 2021 that are now progressively entering production.
Implementation services grew more gradually (+8% based on current rates and +4% on constant rates). This moderate growth is mostly linked to a pandemic resurgence in early Q1 and the resulting shortfalls of resources and personnel for both Esker’s teams and its customers.
The performance of traditional licensed and legacy products declined sharply, which is common when economic conditions tighten or become uncertain. These products represent only 4% of company business.
Second best quarter in terms of bookings
Esker once again recorded a high number of signed projects in the beginning of the year. The Annual Recurring Value (ARR) of new contracts signed during Q1 2022 increased 11% over Q1 2021 to 3.64 million
euros (13.3 million euros or +23% over the total duration of the contracts). The dynamic pace of signed contracts in Q1, primarily in France, the United States and Australia, makes it the second best quarter in terms of bookings (after Q4 2020).
Strengthened financial structure for future growth
As of March 31, 2022, company cash rests at 46.2 million euros, after taking out a 5 million euro loan. With
41.2 million euros in net cash (versus 34.9 million euros on March 31, 2021) and close to 140,000 treasury
shares immediately available, Esker has the financial resources necessary to pursue a strategy that is focused primarily on accelerating organic growth. Targeted acquisitions could also be envisioned in order to accelerate coverage of adjacent markets and enhance value delivered to customers.
Outlook for 2022
Given the strong Q1 2022 performance and despite the accumulation of economic uncertainties, Esker maintains its full-year organic growth forecast of 15-16%. At this level of growth, profitability is expected to stand at around 12-15%.