30 SEPTEMBER 2012
Interim Results for the six months ended 30 June 2012. Summary: Bookings increased by 57%
|Six Mths to 30 June 2012||Six Mths to 30 June 2011||Change|
|Adjusted EBITDA (i)||$0.35m||$(0.02)m|
(i) Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and share based payments
- PO successfully completed raising $26m in significantly oversubscribed placing
- 21 new customer wins including McAfee; Cisco; Huawei; Honeywell; FINRA; Nokia Siemens Networks; Pitney Bowes; Huntington Bank; and Ricoh
- Up-sell to 21 existing customers who purchased additional subscription licenses such as Hewlett Packard, John Deere; Fiserv; Sherwin Williams; Emerson; EMC; Syniverse; Prudential; Wells Fargo; and Wal-Mart
- 41 subscription renewals, representing a renewal rate of 114% including customers such as Juniper Networks; Cisco Systems; Vanguard; McGraw Hill; and Disney
- Plans to expand into new geographic markets underway with Huawei signed as maiden customer in China
- Launch of the new UberSVN product with enterprise class access control
Post period end
- Strengthened the sales team with the appointment of two highly experienced managers
- Opening of new development centre in Belfast, Northern Ireland to accelerate delivery of enhanced and new products, including products for Big Data market
- Purchased leading user interface SmartSVN for $1m from Syntevo GmbH
Commenting on the results, David Richards, Chairman and Chief Executive Officer, said:
"We are extremely pleased with the progress seen in this first half, as is reflected in these results. We laid out clear objectives when we listed on AIM including sales growth and product expansion. I am delighted that we are meeting and exceeding those goals so rapidly following flotation. We now intend to take our unique replication technology into the fast growing Big Data market, having had confirmation of our compelling solution for enterprises implementing Big Data systems. Our expedited investment timetable reflects our heightened confidence in the proximity of these significant opportunities. By doing this we aim to accelerate our growth trajectory both within our existing markets and in the new, high-growth areas such as Big Data."
"The Directors remain confident that the Company continues on track to achieve its commercial and bookings targets for the current year."
All Group announcements and news can be found on http://www.wandisco.com
For further information please contact:
David Richards, Chairman and Chief Executive Officer
Nick Parker, Chief Financial Officer
+44 (0)20 7831 3113
Matt Dixon / Sophie McMillan / Jon Snowball
Panmure Gordon & Co.:
+44 (0)20 7886 2500
Fred Walsh / Giles Stewart (Corporate Finance)
On 1 June 2012, the Group reached an important milestone in its development with the admission of its shares to AIM. Today the Board is pleased to report the Group's results for the six months to 30 June 2012, which themselves very much reflect the manner in which the Company has been run since its formation in 2005.
Due to the absence of any external financing for the Group until its flotation on AIM this year, the focus has always rested upon delivering products that can generate cash in the relatively short term. In consequence, the results for the first half show positive underlying EBITDA of $0.35 million on the back of a 57 per cent rise in customer bookings. In addition, cash bookings have remained in line with the quarterly utilisation of cash by operations.
The IPO ensured that at the half year end the Company had $22.0 million of cash available to invest in its existing products for the software development industry and to develop new, complementary products over the medium term for adjacent industries, such as the Big Data market.
The Board has considered these opportunities, together with the likelihood of further growth in cash bookings for its existing products, and it is clear that by accelerating investment in a focused manner over the next eighteen months it should be possible to enhance the Group's growth prospects going forward. In consequence, the combined impact of an enhanced sales force together with accelerated investment in new product development provides a compelling rationale for initially investing up to $7 million over the next eighteen months out of the $26 million raised from AIM. As a result of this investment the Group will significantly expand its base of experienced employees, enabling a rapid execution of the Board's strategy.
Within the sales team, the focus will be to enhance the expertise across the department, with a particular focus on Enterprise Sales. Within product development we also intend to invest in high quality engineers, notably to realise our ambitions in the Big Data market. This would still leave the Group with substantial resources to take advantage of any future opportunities that may arise and is in line with the Board's strategy at the time of the IPO.
Sales and Marketing
WANdisco's differentiated patent-pending technology provides a cost-effective solution to the problems faced by organisations with globally distributed software engineering teams. By using WANdisco's technology in conjunction with Apache Subversion ("Subversion"), an open source version control system, software developers at globally distributed sites are able to access the same data program at all times which helps improve productivity, and prevent downtime and data loss.
During the period, the business continued to attract blue chip customers with 21 new customer signings including McAfee; Nokia Siemens Networks; Pitney Bowes; Huntington Bank; and Ricoh helping to drive bookings over the period.
The performance was also helped by existing customers purchasing additional subscription licenses including Hewlett Packard, EMC, Syniverse, Prudential, Wells Fargo and Wal-Mart. The strong uptake from existing customers is reflected in the robust renewal rate of 114% with approximately 50 per cent of bookings driven by renewals, demonstrating the strength of the business model.
Delivering on its IPO commitment of bolstering the sales team to help drive growth, the Group appointed two highly experienced sales executives, Paul Hewitt and Scott Rudenstein. Formerly of IBM, both executives have joined the team to support the Group's rapid expansion, focusing particularly on opportunities for large enterprise software deployments and also driving for further growth within Europe.
The Group also achieved its maiden customer win in China, a key future growth market, signing a deal with Huawei who purchased Subversion MultiSite to solve network latency issues between China and Canada.
As outlined at the time of the IPO, WANdisco intends to continue expanding into the ALM market by developing its uberSVN product suite, which is designed to be deployed by customers in-house or as a cloud application.
During the period, the Group launched Subversion MultiSite 4.1, incorporating a significantly updated access control product, and WANdisco's new uberSVN product, also incorporating embedded, enterprise-class, access control.
The Company also launched a new online training subscription product and sold two significant deals to existing customers: John Deere and Syniverse.
In addition to product enhancements in the software development industry, the Group has made progress towards expanding its offering with complementary products for adjacent industries, such as the Big Data market. It has become very clear in recent weeks that the opportunity for our technology in the Big Data market is even greater than previously envisaged and thus it is anticipated that significant resources will be focused in the next few months towards delivering a commercially viable proto-type of the Big Data product. We have successfully completed our technical evaluation in conjunction with some of the leading experts in the Big Data field, with particular emphasis on applications in association with Apache Hadoop. It is clear that the Group's core technology can be leveraged within this exciting and high value market. With these opportunities in mind, subsequent to the period end, the Group has opened an office in Belfast, Northern Ireland to accelerate the delivery of enhanced and new products.
WANdisco completed the purchase of SmartSVN for $1.0m from German software company, Syntevo GmbH following the end of the period. The SmartSVN technology has been adopted by software developers across more than 2,500 companies, including many in the Fortune Global 500 index and it achieves more than 10,000 downloads a month.
A major key to SmartSVN's success has been its platform independence, with versions available for Windows, Linux, Unix and Mac OS X operating systems. SmartSVN will afford WANdisco a number of potentially significant opportunities, including offering a more complete solution that complements WANdisco's server-centric product with a client application. It is also expected to provide cross-selling potential for our existing enterprise products, allowing WANdisco to implement an e-commerce sales model with a proven product and install base and providing a low cost end-user product that can be leveraged to drive sales in the SME market, an area of focus for the Group.
The Group has delivered a strong first half financial performance driven by substantial growth in subscriptions.
Cash bookings for the half year were $3.4 million representing a 57 per cent increase over the same number in the prior year of $2.1 million. During this period of rapid growth, the revenue numbers are more a reflection of historic performance rather than future results, but even so, revenues rose from $1.9 million to $2.9 million thus reflecting the growth that was achieved in earlier periods. The focus in the half year has been upon increasing deferred revenue and a number of multi-year deals have also been signed resulting in a balance on the deferred revenue account of $4.94 million, which compares with $3.98 million on the same date in the previous year.
Renewal rates have continued to be in excess of 100 per cent, with additional licenses being sold to customers for further seats and nodes at each renewal date. This again gives confidence in the continued underlying growth of the business going forward.
In terms of underlying EBITDA, this was positive at $0.35 million being a significant increase over the neutral EBITDA position achieved in the prior period, the Group having become EBITDA positive for the first time in Q2 of 2011.
Cash balances at the half year were $22.0 million reflecting the funds raised as part of the IPO and, as mentioned elsewhere, the Board is actively pursuing the investment of a small proportion of these funds in order to accelerate the future growth of the business.
Current Trading and Outlook
During the first half, the Board has laid solid foundations to support long term, sustainable growth. We have invested in our sales team, begun to roll out new products and retained our focus on driving the subscription model on which our business runs. We are pleased with early progress and will continue to focus on these areas in the months ahead.
Historically, the second half of WANdisco's financial year is its strongest, due to the higher levels of renewals that typically arise. As a consequence, the Directors remain confident that the Company continues on track to achieve its commercial and bookings targets for the current year.
WANdisco is the world leader in Active Data Replication™. Its patented WANdisco Fusion technology enables the replication of continuously changing data to the cloud and on-premises data centers with guaranteed consistency, no downtime and no business disruption. It also allows distributed development teams to collaborate as if they are all working in one location. WANdisco has an OEM with IBM as well as partnerships with Amazon Web Services, Cisco, Google Cloud, Hewlett Packard Enterprise, Microsoft Azure, and Oracle to resell its patented technology. WANdisco also works directly with Fortune 1000 companies around the world to ensure their data can give them the real insight they need.
For additional information, please visit www.wandisco.com.
VP Marketing & Communications