TeamViewer shares jump in double digits: TeamViewer earns a little more operationally than promised
The software provider TeamViewer closed the year 2021, which was dominated by severe setbacks, on a slightly positive note.
Thanks to cost savings in the final quarter, the MDAX company earned a little more operationally than last promised, as it announced on Wednesday in Göppingen on the basis of preliminary figures. Although demand did not gain much more momentum in the final quarter than in the two weak previous quarters, given the recently significantly reduced expectations on the market and the recent price decline, the share on XETRA has risen significantly.
One trader spoke of a better than expected report.
However, this should be little consolation for many investors, because in 2021 alone the price lost almost three quarters of its value due to the problems surrounding growth and high costs. In the summer of 2020, the title was worth almost five times at a record high at almost 55 euros. Even the issue price for the IPO in September 2019 of EUR 26.25 is currently a long way off. At the beginning of the corona pandemic, TeamViewer benefited from special demand for remote maintenance and video conferencing software, but was not able to keep the growth rate at a high level as a result.
The management around boss Oliver Steil and CFO Stefan Gaiser rated the results from the final quarter as a success. “We ended the fiscal year with a strong fourth quarter,” said Gaiser. “This is particularly reflected in the high number of contract extensions and strong billings growth in the enterprise segment.” TeamViewer expects good business in the coming years, especially with large customers, in the enterprise sector.
The billings are the sales invoiced in a period for the next twelve months. Since the turnover itself has to be distributed over the term of the contract in the balance sheet, the management is of the opinion that it does not adequately reflect the current demand. TeamViewer has had to struggle with many cancellations and expiring subscriptions in the recent past, as many companies returned to a more regulated workflow after the peak of the pandemic.
The earnings before interest, taxes, depreciation and amortization adjusted for special effects will probably be between 254 and 257 million euros in 2021, according to the company. That is around 47 percent margin based on the invoiced sales (billings) and thus a little more than the last estimate of up to 46 percent. In 2020 the company had achieved a margin of almost 57 percent – in the past year TeamViewer invested a lot of money in expensive advertising contracts and the planned growth.
Billings rose by 19 percent to around 548 million euros for the full year in 2021 and thus met the forecast. In the fourth quarter, the billings increased by 20 percent, adjusted for currency effects by 17 percent. The number of subscribers rose to 627,000 at the end of the year, compared with 584,000 a year earlier.
The company plans to present details of the annual figures and an updated outlook on investment and capital planning on February 2nd.
TeamViewer can regain some investor confidence
A solid final quarter for the software provider TeamViewer caused more confidence among shareholders on Wednesday. With a premium of almost 16 percent to 13.37 euros, the paper rose to its highest level in more than seven weeks. From a technical chart point of view, however, there was no escape: Despite the gains, the price remained in the trading range of the past few months, which still seems to be capped at around 15 euros.
The company from Göppingen closed the year 2021, which was dominated by severe setbacks, with a slightly positive grade. Thanks to cost savings in the final quarter, TeamViewer earned a little more operationally than last promised. The profitability in relation to the invoiced sales (billings) was slightly higher than last estimated.
“Fourth quarter growth should satisfy investors,” JPMorgan’s Stacy Pollard wrote in an initial assessment. The currency-adjusted growth of Billings is well above market expectations. “For a thorough recovery, however, investors will want to see a similar development consistently in the coming quarters.”
After several unexpectedly weak quarters in the fall, management harshly cut the growth prospects – not only for 2021, but also for the medium term. That had caused the share price to crash because the costs for the already heavily criticized expensive sports sponsorship at the English football club Manchester United and the Mercedes Formula 1 team, but also the expenses for the increased workforce, suddenly contrasted with drastically lower expected revenues.
The company plans to present details of the annual figures and an updated outlook on investment and capital planning on February 2nd. With a view to the latter, analyst Hannes Leitner from the bank UBS does not rule out capital repayments to the shareholders. These could amount to 100 to 200 million euros. The expert justifies this assumption with a significantly lower debt ratio of the company at the end of 2022. JPMorgan analyst Pollard also wrote of “possible share buybacks”.