Last close As at 05/08/2026
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Research: TMT
In Q121 Esker reported record revenue (+10% y-o-y) and 45% growth in bookings. Management has slightly increased its outlook for revenue growth in FY21 and more explicitly guided on profitability. We maintain our conservative forecasts, which are at the lower end of guidance.
Esker |
Q1 order intake supports more confident outlook |
Q121 revenue update |
Software & comp services |
16 April 2021 |
Share price performance
Business description
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Esker is a research client of Edison Investment Research Limited |
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In Q121 Esker reported record revenue (+10% y-o-y) and 45% growth in bookings. Management has slightly increased its outlook for revenue growth in FY21 and more explicitly guided on profitability. We maintain our conservative forecasts, which are at the lower end of guidance.
Year end |
Revenue (€m) |
PBT* |
Diluted EPS* |
DPS |
P/E |
Yield |
12/19 |
104.2 |
13.6 |
1.79 |
0.33 |
125.5 |
0.1 |
12/20 |
112.3 |
14.5 |
1.95 |
0.35 |
115.2 |
0.2 |
12/21e |
128.6 |
17.7 |
2.32 |
0.40 |
96.9 |
0.2 |
12/22e |
151.8 |
25.5 |
3.29 |
0.45 |
68.2 |
0.2 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q121 constant currency revenue growth of 14%
Q121 revenue of €31.0m was 10% higher year-on-year or 14% higher in constant currency. Esker has changed the way it reports revenue, splitting out SaaS-based revenues into SaaS (which includes subscription and transaction-based revenue) and Implementation Services. Licence-based software has now been incorporated into the Legacy Products line, reflecting the fact that this is no longer actively marketed. SaaS revenue (77% of total revenue) increased 13% y-o-y (16% constant currency) and Implementation Services revenue (17% of total revenue) increased 8% y-o-y (13% constant currency). Legacy products (6% of total revenue) declined 14% y-o-y (13% constant currency). The company noted that all geographies saw double-digit growth in SaaS revenue. Net cash was €34.9m at the end of Q121.
Bookings growth of 45% y-o-y
For the first time, Esker reported bookings in terms of annual recurring revenue (ARR). Q121 bookings ARR of €3.3m was 45% higher year-on-year and represents a lifetime value of €11m (this includes only contracted subscription revenue as the volume of transactions using the platform is unknown at this point). With the recent strong order intake, management has slightly increased its expectations for organic revenue growth in FY21 from 15% to 16%, to generate revenue of c €130m if exchange rates remain at the current level. Guidance is for an operating margin of 12–15%. We maintain our forecasts (€128.6m and 12.9% respectively).
Valuation: Reflects growth in recurring revenues
The stock trades at a premium to document processing automation software and French software peers but at a discount to US SaaS peers. Esker has re-rated over the last year (the stock is up 127% over the last 12 months), with its P/E multiple moving more towards the US SaaS software peer group. We believe this is due to the value placed on businesses with high levels of recurring revenue, providing visibility through a period of economic uncertainty. Esker has the added advantage of a strong balance sheet to fund growth. Successful execution of Esker’s partner strategy could be a trigger for earnings and share price upside.
Exhibit 1: Financial summary
€'000s |
2016 |
2017 |
2018 |
2019 |
2020 |
2021e |
2022e |
|||
Year end 31 December |
French GAAP |
French GAAP |
French GAAP |
French GAAP |
French GAAP |
French GAAP |
French GAAP |
|||
PROFIT & LOSS |
||||||||||
Revenue |
|
|
65,990 |
76,064 |
86,871 |
104,188 |
112,274 |
128,610 |
151,847 |
|
EBITDA |
|
|
14,871 |
16,399 |
18,279 |
20,054 |
21,927 |
25,837 |
34,171 |
|
Operating Profit (before amort and except) |
9,934 |
10,547 |
11,955 |
12,843 |
14,037 |
16,962 |
24,696 |
|||
Amortisation of acquired intangibles |
(200) |
(300) |
(344) |
(425) |
(425) |
(425) |
(425) |
|||
Exceptionals and other income |
(474) |
(456) |
(88) |
(62) |
0 |
0 |
0 |
|||
Other income |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|||
Operating Profit |
9,260 |
9,791 |
11,523 |
12,356 |
13,612 |
16,537 |
24,271 |
|||
Net Interest |
(108) |
(110) |
(57) |
268 |
(67) |
100 |
100 |
|||
Profit Before Tax (norm) |
|
|
9,949 |
10,669 |
12,215 |
13,634 |
14,462 |
17,662 |
25,496 |
|
Profit Before Tax (FRS 3) |
|
|
9,275 |
9,913 |
11,783 |
13,147 |
14,528 |
17,237 |
25,071 |
|
Tax |
(2,950) |
(3,148) |
(2,940) |
(3,402) |
(2,966) |
(3,792) |
(5,516) |
|||
Profit After Tax (norm) |
6,785 |
7,281 |
9,168 |
10,106 |
11,510 |
13,776 |
19,887 |
|||
Profit After Tax (FRS 3) |
6,325 |
6,765 |
8,843 |
9,745 |
11,562 |
13,445 |
19,555 |
|||
Ave. Number of Shares Outstanding (m) |
5.3 |
5.3 |
5.4 |
5.4 |
5.7 |
5.7 |
5.8 |
|||
EPS - normalised (c) |
|
|
128 |
138 |
170 |
186 |
203 |
240 |
340 |
|
EPS - normalised fully diluted (c) |
|
|
122 |
132 |
165 |
179 |
195 |
232 |
329 |
|
EPS - (GAAP) (c) |
|
|
120 |
128 |
164 |
180 |
204 |
234 |
335 |
|
Dividend per share (c) |
30 |
32 |
41 |
33 |
35 |
40 |
45 |
|||
Gross margin (%) |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
|||
EBITDA Margin (%) |
22.5 |
21.6 |
21.0 |
19.2 |
19.5 |
20.1 |
22.5 |
|||
Operating Margin (before GW and except) (%) |
15.1 |
13.9 |
13.8 |
12.3 |
12.5 |
13.2 |
16.3 |
|||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
28,324 |
37,912 |
39,635 |
47,201 |
48,987 |
51,587 |
54,587 |
|
Intangible Assets |
22,381 |
26,673 |
28,096 |
29,323 |
30,787 |
33,287 |
35,787 |
|||
Tangible Assets |
5,158 |
7,115 |
7,050 |
10,434 |
10,036 |
9,536 |
9,336 |
|||
Other |
785 |
4,124 |
4,489 |
7,444 |
8,164 |
8,764 |
9,464 |
|||
Current Assets |
|
|
42,024 |
42,823 |
49,016 |
52,022 |
72,918 |
69,208 |
86,190 |
|
Stocks |
101 |
176 |
147 |
185 |
257 |
257 |
257 |
|||
Debtors |
19,523 |
21,253 |
25,551 |
30,015 |
31,440 |
35,940 |
42,434 |
|||
Cash |
21,338 |
20,632 |
22,794 |
21,357 |
40,421 |
32,210 |
42,699 |
|||
Other |
1,062 |
762 |
524 |
465 |
800 |
800 |
800 |
|||
Current Liabilities |
|
|
(28,299) |
(26,206) |
(30,072) |
(34,300) |
(50,150) |
(41,466) |
(45,471) |
|
Creditors |
(28,299) |
(26,206) |
(30,072) |
(34,300) |
(38,650) |
(41,466) |
(45,471) |
|||
Short term borrowings |
0 |
0 |
0 |
0 |
(11,500) |
0 |
0 |
|||
Long Term Liabilities |
|
|
(7,657) |
(14,909) |
(10,810) |
(8,276) |
(6,342) |
(3,842) |
(2,698) |
|
Long term borrowings |
(7,657) |
(13,716) |
(9,318) |
(6,516) |
(3,644) |
(1,144) |
0 |
|||
Other long term liabilities |
0 |
(1,193) |
(1,492) |
(1,760) |
(2,698) |
(2,698) |
(2,698) |
|||
Net Assets |
|
|
34,392 |
39,620 |
47,769 |
56,647 |
65,413 |
75,487 |
92,609 |
|
CASH FLOW |
||||||||||
Operating Cash Flow |
|
|
15,944 |
17,311 |
18,366 |
20,290 |
24,389 |
24,152 |
31,682 |
|
Net Interest |
(127) |
(75) |
63 |
352 |
(30) |
100 |
100 |
|||
Tax |
(1,456) |
(2,053) |
(2,795) |
(3,329) |
(884) |
(3,792) |
(5,516) |
|||
Capex |
(7,021) |
(9,304) |
(7,789) |
(10,995) |
(10,223) |
(11,300) |
(12,200) |
|||
Acquisitions/disposals |
(935) |
(7,551) |
(225) |
(486) |
(492) |
0 |
0 |
|||
Financing |
467 |
(345) |
785 |
1,449 |
48 |
0 |
0 |
|||
Dividends |
(1,550) |
(1,633) |
(1,756) |
(2,237) |
(1,896) |
(2,093) |
(2,433) |
|||
Net Cash Flow |
5,322 |
(3,650) |
6,649 |
5,044 |
10,912 |
7,067 |
11,633 |
|||
Opening net debt/(cash) |
|
|
(8,978) |
(13,681) |
(10,016) |
(16,576) |
(21,018) |
(30,177) |
(37,243) |
|
HP finance leases initiated |
(645) |
0 |
0 |
0 |
0 |
0 |
0 |
|||
Other |
26 |
(15) |
(90) |
(602) |
(1,753) |
(0) |
0 |
|||
Closing net debt/(cash) |
|
|
(13,681) |
(10,016) |
(16,576) |
(21,018) |
(30,177) |
(37,243) |
(48,876) |
|
Source: Esker, Edison Investment Research
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Research: TMT
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