SimCorp A/S

Q3 revenue grew 15.7% in reported currency and 10.2% in local currency. ARR was close to €310 million, up 15.2% year over year reported and 11.3% in local currency. Q3 order intake was €22.9 million, down €4.9 million year over year; EBIT was €20.2 million; and free cash flow was €14.5 million, down by close to €10 million versus Q3 last year. For the first nine months, revenue grew 5.6% reported and 1.6% in local currency, EBIT was €41.9 million, order intake was €65.9 million, order book was €84.3 million, and free cash flow was €44.7 million. Full-year 2022 guidance is now expected at the lower end of the prior ranges: revenue growth in local currency of 7% to 12%, ARR growth of 10% to 15%, and EBIT margin of 23% to 26%, excluding expected exceptional costs of €3 million to €5 million for Ukraine support and one-off restructuring costs of €8 million to €10 million. Management said it needs €98 million to €123 million of revenue signed in Q4 versus €68 million last year to reach guidance.

Christian Kromann said the quarter showed good momentum, especially in North America, where SimCorp signed a big win and is seeing more traction from a more targeted commercial strategy. He emphasized four strategic growth levers: platform leadership, SaaS acceleration, ecosystem scaling, and bolt-on acquisitions, and said the company is investing ahead of the ARR curve to capture SaaS opportunities. His tone was upbeat on the pipeline and more optimistic about North America, but he repeatedly stressed that Q4 timing risk remains high because deals are unsigned and customers are more cautious.

Michael Rosenvold said Q3 revenue growth was 16% reported and 10% organically, while EBIT margin was 16% versus 22.6% a year ago, mainly due to planned investments and exceptional Ukraine-related costs. For the first nine months, he said reported revenue growth was 6%, organic growth about 2%, and EBIT margin was 12% versus 23% last year; excluding one-off costs of €8.6 million, the EBIT margin would have been 14%. He also noted Q3 order intake was almost €5 million lower year over year mainly because data management had a weaker comparison base, and said free cash flow was only €45 million year to date, leading to a strong focus on cash management in Q4.

Analysts pressed management on why full-year guidance was only at the lower end despite a strong pipeline and a more optimistic tone on North America. Management said the volume of deals is higher, especially in North America, but timing is uncertain and some large deals may slip into 2023; they also said some wins are service-heavy and not fully revenue-accretive in Q4. On renewals, Michael said next year should be slightly higher than this year but not materially, with a more meaningful step-up expected in 2024. On geography, Christian said Continental Europe appears more affected by macro caution and the Ukraine situation, while North America is comparatively stronger.