Software AG Continues Robust Revenue and Profit Performance; Updates Digital Business Bookings Guidance

Software AG announced preliminary financial results for the second quarter and first half of 2022.

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Sanjay Brahmawar, Software AG CEO, commented: “Our second quarter revenue and margin performance was underpinned by our continuing transition to subscription and SaaS. Following a softer Digital Business bookings performance and the emergence of a new macroeconomic environment, we have decided to revise our Digital Business bookings guidance for the full year. Our fast start to July reflects the ongoing strength of our demand environment and pipeline, and I’m confident we’ll deliver on both our revised Digital Business bookings guidance and our other unchanged full-year commitments.”

Dr. Matthias Heiden, Software AG CFO, commented: “Although we did not do justice to our Digital Business opportunity during the second quarter, this result does not undermine our ability to deliver consistently on profitable growth. The quality of our revenue also continues to improve, with ARR and recurring revenue maintaining their positive trends. We remain focused on managing cost effectively and will not compromise our commitment to strong profitability as we seek to accelerate our growth in the second half.”

Highlights

• Digital Business bookings organic growth of 7 percent and 27 percent including StreamSets in the second quarter and 11 percent and 22 percent in the first half respectively.
• Digital Business ARR grew 11 percent organic supported by the Group’s new business growth. Including StreamSets, Digital Business ARR grew 19 percent.
• Digital Business organic product revenue strength continues with second quarter growth of 8 percent and first half growth of 9 percent.
• StreamSets saw strong growth of more than 50 percent in the second quarter.
• Robust organic operating margin (EBITA, non-IFRS) performance at 24.6 percent in the second quarter and 22.3 percent in the first half.
• Management Board expansion with industry leader Joshua Husk appointed CRO to strengthen sales execution. Dr. Benno Quade appointed COO to drive operational excellence. Both will join Software AG’s Management Board effective August 1, 2022.
• Digital Business bookings guidance for full year 2022 revised to 12 to 18 percent growth.
• All other full year 2022 guidance metrics remain unchanged, as do Software AG’s organic and total Group ambitions for 2023.

[Unless otherwise stated, all figures are IFRS. Increases at constant currency and rounded. Organic results exclude contributions from StreamSets. Group results include StreamSets]

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Management Board changes

Software AG today announces changes to its Management Board that will strengthen its sales execution and bring end-to-end accountability to its operational excellence and simplification activities. The changes expand the Management Board to six members and will help the business drive the acceleration phase of its strategy more effectively. They will increase focus on profit expansion alongside continued growth, bring the Group’s leadership structure more into line with industry peers, and overall, better-enable it to drive sustainable, profitable growth.

Joshua Husk has been appointed Group CRO, replacing Scott Little, who has left the company. Joshua, who will join Software AG’s Management Board, has a skillset ideally suited to driving Software AG further into the acceleration phase of its transformation strategy. He is a proven sales leader who has built and scaled sales organizations in highly competitive markets and has held senior roles at companies including First Data Corporation, IBM, Intel, Oracle and most recently cloud company, Samba Nova. Joshua has experience covering all go-to-market functions including direct sales, alliances and channel, product management and inside sales.

Dr. Benno Quade has been appointed Group COO and will join Software AG’s Management Board. An outstanding internal candidate, Benno has been with Software AG for 10 years and knows its business and transformation strategy intimately. He has held the positions of Chief Legal Officer, Chief Operating Officer for the go-to-market organization and has most recently held the post of Chief Customer Success Officer.

Sanjay Brahmawar, Software AG CEO, added: “Joshua’s focus on razor-sharp execution, productivity and customer success aligns perfectly with the demands of this acceleration phase in our strategy, and as part of our Management Board, he will be able to start affecting positive change right away. I’m sure Benno will also make an enormous impact on our operational excellence activities and support our continued margin expansion. I’d like to welcome them both to their new roles and also thank Scott Little for his commitment and effort to Software AG in his time here. We wish him all the best in his next role outside of Software AG.”

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