By Shares in SoftwareOne Holding experienced a decline on Thursday following the release of lower-than-expected earnings and revenue for the first half of the year.
As of 1045 GMT, shares were down by 3.2% at CHF18.20.
The Swiss software and cloud-services provider reported weak results in the first half, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and net profit falling below consensus, according to analysts at Citi.
During the first six months, the company managed to swing to a profit of 33.8 million Swiss francs ($38.5 million) after incurring a loss of CHF63.3 million in the same period last year. This improvement was attributed to the reduction of integration and mergers and acquisitions expenses. It should be noted that last year’s performance was impacted by the exit from Russia and the financial loss from the company’s shareholding in Crayon.
Adjusted EBITDA dropped from CHF117.9 million to CHF111.7 million, while revenue showed a modest growth of 0.7% to CHF276.6 million. These figures were approximately 7% lower than the consensus estimates provided by Citi.
Stifel analysts added that revenue growth in the first half was 0.5% lower than expectations, and revenue missed by 4% due to a worse-than-anticipated currency-exchange drag.
Despite the disappointing results, the company maintained its full-year outlook, which includes double-digit revenue growth in constant currency and an EBITDA margin ranging between 24% and 25%.
However, the current outlook implies a significant growth rate in the second half compared to the second quarter. The Citi analysts emphasized that the company should provide more clarity on the contribution from mergers and acquisitions.
In conclusion, SoftwareOne Holding faces challenges after reporting below-par results for the first half. The company’s shares experienced a decline, and although it maintains its full-year outlook, further explanation is needed regarding the impact of mergers and acquisitions on future performance.
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