BERLIN (Reuters) – German software company TeamViewer (TMV.DE) reported a 75% jump in first-quarter billings on Tuesday as people around the world used its remote connectivity services to work from home during the coronavirus pandemic.
FILE PHOTO: The logo of software company TeamViewer AG is pictured during TeamViewer’s initial public offering (IPO) at the Frankfurt Stock Exchange in Frankfurt, Germany, September 25, 2019. REUTERS/Ralph Orlowski
That smashed its own guidance, which the company had raised in March, for billings growth of 60%. TeamViewer increased its target for billings in 2020 to 450 million euros ($486 million) and forecast a core profit margin of 56%.
“TeamViewer’s long-term growth drivers remain intact and have been accelerated by high demand for our solutions following the global quarantine measures to contain the COVID-19 pandemic,” CEO Oliver Steil said.
Shares in TeamViewer traded 2.7% higher, having gained more than 60% from the price at which they were marketed to investors last September by private equity investor Permira, which retains a controlling stake.
Since then, its leverage ratio has come down to 2.4 times core earnings from 3.7 times, putting the company in a position to finance small acquisitions from cash on its balance sheet or consider larger deals.
Steil told Reuters that TeamViewer would stay disciplined as it scans the market for opportunities. “We don’t need mergers and acquisitions to be a very fast-growing company,” he said in an interview.
TeamViewer, based in the small southwestern town of Goeppingen, offers “anytime, anywhere” connectivity that has been used to remotely operate snow cannons at ski resorts and transfer data to the International Space Station.
Its ‘freemium’ model aids quick adoption, with TeamViewer only billing users once it establishes they are working in a business setting. Its software has been installed 2.25 billion times and it now counts 514,000 paying users.
It is also marketing an enterprise product, and the number of customers with an annual contract value of more than 10,000 euros increased by 153% on a year earlier to 1,183 at the end of March.
Steil made it clear that TeamViewer would resist the temptation to expand aggressively into the fast-growing video-conferencing sector, despite offering its own TeamViewer Meeting and Blizz products to business customers.
“We are more on the sidelines here and focusing on other themes. These are different worlds,” said Steil, highlighting technologies such as using augmented reality and laser sensors in complex industrial settings.
TeamViewer, valued at 8.6 billion euros, is now worth more than three constituents of Germany’s 30-share DAX index, including struggling airline Lufthansa which is seeking a 9 billion euro state bailout.
Its guidance for 2020 billings – management’s preferred measure of sales performance – was increased from an earlier view of 430-440 million euros.
Its margin forecast implied a slight increase in adjusted earnings before interest, taxation, deprecation and amortization (EBITDA) from earlier expectations of 240-250 million euros.
Reporting by Douglas Busvine; Editing by Michelle Martin and Mark Potter