(Boursier.com) — Verimatrix corrected by more than 9% to 5.85 euros, while the group recorded 2022 revenue of $61 million, down 15% compared to 2021. Over the full year, the commercial mix between recurring revenues and direct sale of licenses has however evolved favorably and in accordance with the strategic plan. Subscription-related revenue showed strong and continuous growth with annual revenue up 45.9% and annualized recurring revenue at end-December up 47.3% ($11.1 million) . The share of recurring revenue now represents more than 43% of total revenue compared to 35% for the 2021 financial year. Total non-recurring revenue, linked to the direct sale of licenses, is down 26 %.
Verimatrix posted a gross margin of $43.6 million, compared to $54.9 million a year ago, representing a margin representing 71.4% of revenue (76.4% in 2021). This change is explained by the decrease in non-recurring income and the increase in amortization related to new products. These negative effects were partially offset by the optimization of the organization of support entities based in Mexico and Hungary.
Under pressure
Verimatrix reported an operating loss of $11.5 million in 2022compared to an operating income of $8 million in 2021. In total, after taking into account financial income and tax expense, the net loss from continuing operations amounted to $17.6 million, compared to profit of $3.7 million in 2021. Cash and cash equivalents were $30 million in December 2022.
Given the amount of annualized recurring revenue from subscriptions at the end of the fourth quarter of 2022, the group forecasts a minimum growth of 40% in its revenue from subscriptions for the year 2023. The commercial dynamic put in place allows the Group to expect growth in annualized recurring revenue from subscriptions of more than 40%.
Portzamparc comments: “After updating our scenario (revenue lowered from $70 M +12% to $58.2 M -4.6% for 2023 and from $93 M to $75 M for 2025) and our market, we lower our TP from 1.5 euro to 0.8 euro and go from buying to ‘holding'” concludes the analyst.
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