74Software (74SW) H2 2024 earnings summary

Executive summary

• 2024 marked the first year of operations for the newly combined entity, 74Software, following the merger of Axway and SBS, with a successful rebranding and Euronext listing under ticker 74SW.

• Proforma revenue reached €690 million, up 5.6% organically year-over-year, with both Axway and SBS delivering strong growth and record profitability.

• Strategic pivot to a software-centric model, with recurring revenue at 72% of total and strong ARR gains for both Axway and SBS.

• Acquisition of SBS was financed by capital increase and new bank loans, reflecting strong shareholder and lender confidence.

• Focus on deleveraging, cash generation, and building a scalable global platform.

Financial highlights

• Proforma 2024 revenue reached €690 million (+5.6% organic growth); proforma operating profit was €94 million (13.6% margin).

• Net profit was €24.6 million (3.6% margin); earnings per share (IFRS consolidated) at €1.67.

• Unlevered free cash flow was €26.3 million (5.7% of revenue); cash reserves at €41.4 million; net debt at €250.3 million.

• Axway standalone achieved 3.4% organic growth and a 20.9% operating margin; SBS delivered 7.8% organic growth and a 6.9% margin.

• Annual Recurring Revenue: Axway €246 million (+7.4%), SBS €225 million (+11.8%).

Outlook and guidance

• 2025 revenue guidance is €700 million, with profit on operating activities targeted between 14% and 16%.

• Unlevered free cash flow is expected to improve to 10% of revenue, with leverage ratio targeted below 2x by year-end.

• Medium-term goals include reaching €1 billion revenue and 20% operating margin by 2028.

• Organic growth guidance remains at 2% to 4% annually.

• Dividend and share buybacks planned once leverage target is met.