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SUSE S.A.: Q2 Results Demonstrate the Strength of SUSE’s Mission-Critical Subscription Business

·5-min read

DGAP-News: SUSE S.A. / Key word(s): Quarter Results/Half Year Results
SUSE S.A.: Q2 Results Demonstrate the Strength of SUSE’s Mission-Critical Subscription Business
07.07.2022 / 07:30
The issuer is solely responsible for the content of this announcement.

Q2 Results Demonstrate the Strength of SUSE’s Mission-Critical Subscription Business

  • SUSE demonstrated the strength of its mission-critical business in Q2 with total ACV of $139.4 million, up 28%, 32% at constant currency

  • Core ACV growth was 20%, 23% at constant currency, supported by pricing improvements, and Emerging ACV growth was 79%, 84% at constant currency

  • Adjusted Revenue growth was 18%, 19% at constant currency

  • Group ARR was $619.1 million, up 15%, underlining continued growth in SUSE’s subscription business

  • Adjusted EBITDA margin was 36%, with investments in sales teams across all regions and product development partly offset by favorable realized FX and timing differences

  • Adjusted Unlevered Free Cash Flow was $37.7 million, with Cash Conversion of 64%, impacted by the timing of billings and customer payments reflecting normal cash cycles

  • Change in Deferred Revenue was $17.3 million, up from $6.2 million in the prior year, as customers continued to sign significant long-term contracts and pay up front

  • Significant enhancements to SUSE Rancher, NeuVector and Linux products highlight SUSE’s commitment to cloud-native security and support a strong order pipeline for future growth

  • SUSE expects the results for the full year to be broadly in line with previous guidance. The wider macro-economic environment is having some impact on our business, primarily in our Emerging segment - while Emerging ACV growth remains strong, we now expect growth of around 50% in 2022. FX rate movements are also impacting reported financials

 

3 Months ended
30 April 2022
Actual FX
USD $M

3 Months ended
30 April 2021
Actual FX
 USD $M

Year on
Year
Movement %
Actual FX

Year on
Year
Movement %
CCY FX

 

6 Months ended
30 April 2022
Actual FX
USD $M

6 Months ended
30 April 2021
Actual FX
 USD $M

Year on
Year
Movement %
Actual FX

Year on
Year
Movement %
CCY FX

 

 

 

 

 

 

 

 

 

 

ACV

139.4

109.0

28%

32%

 

283.2

246.6

15%

18%

ARR (three months in arrears)

619.1

539.6

15%

 

 

619.1

539.6

15%

 

Adjusted Revenue 

161.3

136.8

18%

19%

 

316.3

270.9

17%

18%

Adjusted EBITDA

58.6

48.2

22%

16%

 

110.9

108.9

2%

-1%

Adjusted EBITDA Margin

36%

35%

 

 

 

35%

40%

 

 

Adjusted Cash EBITDA

75.9

54.4

40%

 

 

169.0

161.5

5%

 

Adjusted Cash EBITDA Margin

47%

40%

 

 

 

53%

60%

 

 

Adjusted uFCF

37.7

67.6

-44%

 

 

82.3

106.4

-23%

 

Cash conversion

64%

140%

 

 

 

74%

98%

 

 

Note: This table contains Alternative Performance Measures as defined in Appendix 3 of this document. The presentation is based on pro forma numbers including Rancher on a coterminous basis in 2021 as if acquired on November 1, 2020. NeuVector is included from November 1, 2021, in all APMs, and no prior year numbers are included, being immaterial to the group.

Constant Currency movement has been provided for ACV, Adjusted Revenue and Adjusted EBITDA. The definition of constant currency is included within Appendix 3.

Statutory data for the financial period is reported in SUSE’s separate interim report. Reconciliations to IFRS measures are shown in Appendix 1.

Luxembourg – July 7, 2022 – SUSE S.A. (the “Company” or “SUSE”), an independent leader in open source software specializing in Enterprise Linux operating systems, Enterprise Container Management and Edge software solutions, today announced its results for the second quarter of financial year 2022, which ended April 30, 2022.

“Our strong Q2 performance demonstrates the momentum of our business and our ability to grow with existing customers while attracting new customers,” said Melissa Di Donato, CEO of SUSE. “With the new General Managers and Sales structure, we will continue to serve our customers and innovate with our product offerings. Our renewed focus on security puts us in a leading position to provide the sustainable solutions our customers depend upon for their continued growth. We remain confident in the resilience of our business as we look to increase our share in the cloud, edge and container management markets.”

"Q2 has again demonstrated the strength of our business model, with high growth, profitability and cash conversion," said Andy Myers, CFO of SUSE. "Our ARR growth of 15% demonstrates strong progress and we continue to invest in new staff to drive further sales and product development. The current economic environment has created some concerns in the business community and we are experiencing FX headwinds, but we still expect to deliver FY 2022 results broadly in line with guidance as we continue to invest for the future."

 

Summary KPIs and Adjusted Profit and Loss Account for Q2 2022

 

3 Months ended
30 April 2022
Actual FX
USD $M

3 Months ended
30 April 2021
Actual FX
 USD $M

Year on
Year
Movement %
Actual FX

Year on
Year
Movement %
CCY FX

 

6 Months ended
30 April 2022
Actual FX
USD $M

6 Months ended
30 April 2021
Actual FX
 USD $M

Year on
Year
Movement %
Actual FX

Year on
Year
Movement %
CCY FX

 

 

 

 

 

 

 

 

 

 

ACV by Solution

 

 

 

 

 

 

 

 

 

Core 

113.6

94.6

20%

23%

 

233.5

205.9

13%

17%

Emerging

25.8

14.4

79%

84%

 

49.7

40.7

22%

25%

Total ACV   

139.4

109.0

28%

32%

 

283.2

246.6

15%

18%

 

 

 

 

 

 

 

 

 

 

ARR - Total (as at January)

619.1

539.6

15%

 

 

619.1

539.6

15%

 

NRR - Total as % (as at January)

109.4%

109.4%

0.0%

 

 

109.4%

109.4%

0.0%

 

 

 

 

 

 

 

 

 

 

 

Adjusted Revenue by Solution

 

 

 

 

 

 

 

 

 

Core

133.9

121.4

10%

11%

 

264.1

240.0

10%

11%

Emerging

27.4

15.4

78%

78%

 

52.2

30.9

69%

69%

Total Adjusted Revenue

161.3

136.8

18%

19%

 

316.3

270.9

17%

18%

Cost of Sales

13.1

10.5

25%

28%

 

24.9

18.6

34%

38%

Adjusted Gross Profit

148.2

126.3

17%

18%

 

291.4

252.3

15%

16%

Adjusted Gross Profit Margin

92%

92%

 

 

 

92%

93%

 

 

 

 

 

 

 

 

 

 

 

 

Sales, Marketing & Operations

46.3

35.9

29%

32%

 

89.3

67.4

32%

36%

Research & Development

27.1

22.4

21%

24%

 

54.1

44.4

22%

25%

General & Administrative

16.2

19.8

-18%

-10%

 

37.1

31.6

17%

26%

Total Operating Expenses

89.6

78.1

15%

19%

 

180.5

143.4

26%

30%

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

58.6

48.2

22%

16%

 

110.9

108.9

2%

-1%

Adjusted EBITDA Margin

36%

35%

 

 

 

35%

40%

 

 

Depreciation & Amortization

6.2

4.9

27%

 

 

11.2

10.1

11%

 

Adjusted EBIT

52.4

43.3

21%

 

 

99.7

98.8

1%

 

 

 

 

 

 

 

 

 

 

 

Net Finance Costs

10.0

23.4

-57%

 

 

21.6

30.0

-28%

 

 

 

 

 

 

 

 

 

 

 

Adjusted Profit before Tax

42.4

19.9

113%

 

 

78.1

68.8

13%

 

 

 

 

 

 

 

 

 

 

 

Notional Tax

12.9

Not Reported

 

 

 

23.0

Not Reported

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings

29.5

Not Reported

 

 

 

55.1

...