Verimatrix H1: “Covid-19 continues to impact business”
July 30, 2021
Verimatrix, a global provider of security and analytics solutions that protect devices, services and applications, has reported its IFRS unaudited consolidated results and unaudited adjusted results, for the six-month period ended June 30th 2021.
Highlights include:
- $52.2 million revenue (up 18 per cent year-on-year)
- $16.6 million revenue from the NFC patent licensing programme with major OEMs
- Core software business down 20 per cent year-on-year, at $35.5 million, with weaker second quarter
- Non-recurring revenues of licenses and royalties down 19 per cent year-on-year as Covid-19 continues to impact BtoB spending and ability to launch new infrastructure projects
- Recurring revenues of maintenance and subscription down 20 per cent year-on-year at $12.4 million due to the decrease in new perpetual and term licenses as well as delays in launching services
- Continuous progress in deploying SaaS and subscription-based offerings with ARR of $5.7 million as of June 30th, up 40 per cent year-on-year
Amedeo D’Angelo, chairman and chief executive officer of Verimatrix, stated: “We have faced a particularly difficult second quarter, notably as Covid-19 continues to impact BtoB spending and much of our business is located in regions hit particularly hard by the pandemic. Despite tight controls on spending, the disappointing revenue slowdown impacted our profitability in the first half of 2021, when looking at profitability net of the positive NFC patent licensing programme impact.”
“The core value of our offerings remains intact, but the deeper impact of the pandemic has showed us we need to adapt faster. Recent customer trends and the behaviour pattern of our historical customer base continue to shift, with an accelerated swing towards mobile use, streaming media, OTT entertainment consumption and cloud-based systems, in a context where our clients face more stringent controls on costs. Consequently, we need to respond more quickly to those changes and accelerate our own transformation into a provider of more flexible and recurring offerings that better serve the content protection needs of today. Our shift to a subscription-based business, including through SaaS offerings, needs to be more radical, even if this will affect short-term recognition of revenues. Stepping up this transformation towards a more recurring revenue model will also require a sharper commercial approach. I have asked Asaf Ashkenazi, in addition to his current responsibilities as chief operating officer, to redesign and lead the commercial organisation to respond to this pressing need.”
“We remain committed to providing shareholder value and we will do so thanks to our unique positioning. This ongoing shift to a recurring revenue model stands as an opportunity to significantly expand the combined use of our core technologies and subscription-based services that offer unmatched security, speed, scalability and efficiency. While this will impact the recognition of revenue for the rest of 2021 and in 2022, it puts us, in the mid-term, on the right path towards an improved ability to generate recurring revenues and sound profitability. This is why we are setting ourselves on an ambitious path towards 2024 where we expect to see recurring revenue represent 70 per cent of total revenues, compared with 33 per cent today,” he concluded.