Preliminary calculations show that USU Software AG and its subsidiaries (hereinafter also referred to as the “USU Group” or “USU”) generated further growth in the second quarter of 2023 despite the strategic transition from one-time license business to software-as-a-service (SaaS) business. However, earnings declined temporarily due to the higher share of new customers attributable to SaaS and a perceptible reluctance to invest on the part of interested parties on account of the economic situation.
The USU Group increased its consolidated sales by 2.8% year-on-year in the second quarter of 2023 to EUR 31.6 million (Q2 2022: EUR 30.7 million). Positive factors included record orders on hand and higher SaaS revenue in connection with this, which climbed by 25.1% year on year to EUR 4.2 million (Q2 2022: EUR 3.4 million). At the same time, however, the USU Group’s license business declined by about three quarters in the reporting quarter to EUR 0.8 million after enjoying significant growth in the previous year (Q2 2022: EUR 3.2 million). Consulting revenues increased by 13.8% year-on-year to 19.7 million euros (Q2/2022: 17.3 million euros).
The decline in high-margin license revenue and a simultaneous rise in costs due to investment projects in the area of artificial intelligence, in the market for cloud management and in the new central product platform, caused EBITDA to fall by 43.7% in the reporting quarter to EUR 2.1 million, according to provisional figures (Q2 2022: EUR 3.8 million), with EBIT also decreasing by about two thirds to EUR 0.9 million (Q2 2022: EUR 2.6 million).
On a positive note, demand for USU products and solutions remains high and only longer sales cycles in license business are reflected in the USU Group’s earnings. Although it is not yet possible to accurately predict the timing of investment decisions by potential new customers and the related decision to choose a one-time license or an SaaS project, the Management Board does not expect the earnings effect of the Q2 2023 reporting quarter to be fully offset over the rest of the year, which is taken into account in the new guidance as follows: USU now expects sales growth to EUR 132 - 139 million in 2023 as a whole (previously: EUR 134 -139 million), with targeted further significant growth in SaaS business and EBITDA of EUR 13 - 15 million (previously: EUR 16.5 -18.0 million).
The Management Board is also confirming the current medium-term planning, which includes average organic sales growth of 10% in the next few years and, in view of the continued growth in SaaS business, an increase in the EBITDA margin to between 17% and 19% by 2026.