Olivier Novasque, CEO and founder of Sidetrade, commented:
This first half clearly validates our acceleration strategy kick-started in early 2021. In fact, we just achieved the best half year in our history, regarding both our bookings and our ability to deliver high profitability whilst implementing a substantial investment policy, particularly in North America. We can now confirm that the United States represents a robust growth driver for the years ahead. Buoyed by sustained commercial momentum and the recognition of Sidetrade by Gartner® as one of three global Leaders for Integrated Invoice-to-Cash applications, North America already accounts for more than half of our business successes. These initial wins with American multinational corporations, in preference over the two other Order-to-Cash leaders, serve to strengthen our ambition. Sidetrade has what it takes to become the leading player in terms of acquiring new customers in a booming market where the inflationary environment further incentivizes companies to accelerate their cash generation. Sidetrade will naturally pursue its robust growth strategy while remaining committed to its development model which is supported by a firm balance between investments, growth and profitability.
New bookings up considerably: +42%
In H1 2022, Sidetrade set a record for Order-to-Cash SaaS orders, which will generate an additional €3.04 million in Annual Recurring Revenue (“ARR”), compared with €2.14 million in H1 2021; a +42% increase. The total value of these new subscription contracts over their initial contract periods (excluding renewals and services) represents €9.95 million of Total Contract Value (“TCV”) in H1 2022 versus €6.32 million in H1 2021, a +57% increase.
To these SaaS bookings should be added €1.77 million of services on an annual basis (implementation, configuration, training, recurring services, etc.), compared with €1.37 million in H1 2021, a +29% increase. In total and considering that almost all of these services will be invoiced over the next twelve months, H1 2022 enables Sidetrade to add the equivalent of €4.81 million in Annual Contract Value (“ACV”) compared to €3.51 million in H1 2021, a +37% increase.
The initial contract period for new customers (excluding renewals) rose to 44 months, compared with 36 months in the previous fiscal year. This length of contract period further illustrates outsourcers’ trust in Sidetrade solutions and increases visibility over future revenue. It should be noted that as with all existing contracts, these new contracts include an annual automatic price re-indexation clause based on changes in price indices for the relevant country.
58% of new bookings in the United States, a new growth driver
In H1 2022, international orders represented more than 74% of all bookings.
Sidetrade outperformed its targets in North America (to achieve more than one-third of its bookings in the region by H2 2022) with 58% of bookings originating in the United States, just one year after operations were launched in this region. The Company signed significant contracts with large American corporations such as a strategic IT services giant in Q1 2022 (see press release here) and Insight Enterprises (see press release here) in Q2 2022.
Overall, in H1 2022, bookings by new customers (“New Business”) accounted for 68% of the total versus 55% on average in recent quarters. Cross-selling represented 13% of total bookings, with the remaining 19% of bookings accounted for Upselling of additional modules to existing customers.
The United States has also notably impacted the average size of new contracts (excluding Upselling). Whereas in H1 2021, the average totaled €81,000 per year of subscription (ARR), it will amount to €190,000 per year of subscription in H2 2022.
Businesses must be prepared to respond to the inflationary environment and face a twofold challenge: consolidate their cash reserves, and generate productivity gains to address salary increases and recruitment difficulties. This trend is expected to continue over the next 12 to 24 months with an increased risk of future recession, notably linked to multiple hikes in interest rates. In this context, the management of operating working capital, and particularly accounts receivable, is a major challenge for businesses.
Robust increase in Order-to-Cash SaaS subscriptions by +19% and revenue by +11%
| Sidetrade (m€) |
H1 2022 | H1 2021 | VARIATION (%) |
|---|---|---|---|
| ‘Order-to-Cash’ Activities | 17.3 | 14.8 | + 17% |
|
of which SaaS Subscriptions |
14.3 | 12.1 | + 19% |
| ‘Sales & Marketing’ Activities | 0.5 | 1.3 | – 61% |
| Revenue | 17.8 | 16.1 | + 11% |
| Operating profit | 2.4 | 2.2 | + 12% |
| Net profit | 2.3 | 2.1 | + 12% |
2022 accounts have been audited and will be certified after the finalization of procedures required for the annual financial report.
‘Order-to-Cash’ Activities grew very sharply by +17% in H1 2022, driven by 19% growth in SaaS subscriptions. The growth in this recurring revenue is the result of record bookings in the 2021 fiscal year, which will continue to impact revenue growth throughout the 2022 fiscal year.
‘Order-to-Cash’ Activities, a core business within the Company’s strategy since 2019, now represent 97% of total revenue in H1 2022.
The ‘Sales & Marketing’ Activities, which have become secondary to Sidetrade’s activities, now account for only 3% of total revenue in this half year and will continue to play a less prominent role commercially, with estimated revenue of €0.9 million at end-2022.
Total revenue grew by 11% in H1 2022, to €17.8 million. This performance is supported by solid growth drivers in international markets which now represent 51% of total revenue, including 21% for North America.
Sidetrade’s economic model provides its business with significant resilience, as 91% of its revenue is recurring, representing a significant advantage in the current and future environment.
All of these multi-year contracts are indexed to inflation (the Syntec for Southern Europe, the UK CPI for Northern Europe and the US CPI for the United States), which alters the total price of SaaS subscriptions each year by reference to changes in these price indices.
Sidetrade therefore has A robust pricing power that protects the Company’s future revenue against uncertainties and inflationary pressures. At present, Sidetrade perfectly combines its sound fundamentals with a highly favorable growth outlook.
Net profit up +12% with ongoing substantial investment in the United States
In H1 2022, Sidetrade’s operating profit increased by 12% to €2.4 million, due to increased revenue and the leverage of the SaaS model.
This excellent performance is owing to growth in the gross margin of €1.5 million to €14.2 million (vs. €12.8 million for the same period last year); this amounts to 80% of revenue (vs. 79% in H1 2021) with a rate of 93% on SaaS subscriptions alone.
During this period, Sidetrade increased its investments by 20% (i.e., an additional €2.3 million), mainly in the development of commercial operations in the US (€1.8 million).
In addition, operating profit includes a French Research tax credit of €1.3 million (vs. €0.9 million in H1 2021), an innovation subsidy of €0.5 million as well as activation of R&D for €0.17 million (vs. €0.1 million in H1 2021).
As a result of this momentum, net profit reached €2.3 million, up 12%, demonstrating that investing is not incompatible with growth and profitability.
Solid financial position with enhanced liquidity
On June 30, 2022, Sidetrade’s financial structure continued to strengthen with a high cash position at €22.4 million, versus €18 million on December 31, 2021. Moreover, Sidetrade holds 85,000 of its own shares, for an estimated value of €10.8 million, as of June 30, 2022.
Sidetrade has a €13 million line of credit, subsequent to the acquisition of Amalto in April 2021 for this amount (fixed rate at 1.1%).
On the back of its H1 2022 performance, the Group’s management is confident in Sidetrade’s ability to deliver double-digit growth in the 2022 fiscal year.
Insight Enterprises, a Fortune 500 solutions integrator helping organizations accelerate their digital journey, has chosen Sidetrade to support its rapid growth and complex financial challenges in a competitive global environment. The contract is signed for an initial five-year period.
Sidetrade will support our expanded growth, enabling us to effectively manage today while simultaneously transforming for the future. Knowing you have a team strengthened by years of experience and the right technical acumen gives you the confidence to forge ahead as we strive to be ambitious in our goals of becoming a globally recognized solutions integrator, stated Lynn Willden, SVP Finance – Treasury and Tax at Insight Enterprises.
Insight employs more than 12,000 teammates worldwide and helps businesses and organizations in the United States, Canada, Europe, Asia-Pacific, India, and Manila, Philippines. With $9.4 billion in 2021 sales and a track record in operational rigor and financial health, the Arizona-based publicly traded company has reinforced its commitment to provide a positive client experience, as well as to enhance team efficiency, reporting, and global visibility of the Order-to-Cash (O2C) cycle. Insight is optimizing manual O2C processes, ERP systems, and data privacy complexities in order to meet those expectations and deliver personalized experiences.
With 30+ years of technology experience across every industry and scale and recognized in the Gartner 2022 Magic Quadrant for Software Asset Management Managed Services, Insight did a full assessment of six O2C vendors and allowed their end-users to cast final votes on a system that delivered ease of use, account visibility, and AI-driven dynamic workflows. Sidetrade was selected as the best Order-to-Cash solution to empower Insight’s staff engagement, strengthen the client experience and expedite invoice payments.
We are in a data-driven world, and Sidetrade brings added expertise in the area of Order-to-Cash to grow our services ambition and global presence. Their solution is user-friendly and offers real-time visibility of cash flow. Now is the time for each company to build strategies that connect, automate, and personalize every client interaction across their finance departments. We are achieving this with Sidetrade’s help, added Willden.
Insight has consistently maximized its Order-to-Cash processes with 130+ professionals managing 10,000 invoices per day. Holistic visibility of cash flow is required for forward-looking and confident investing. Accurate cash flow forecasting is essential to support financial decision-making. The more accurately a firm can predict its cash flow, the more aggressively it drives down DSO, increases working capital, and scales for growth.
By analyzing billions of B2B transactions daily, Sidetrade’s Artificial Intelligence anticipates payment behavior and customer risk, recommends the best dunning strategies, and provides automatable actions, to improve productivity, and accelerate cash flow generation. This allows for faster decision-making and improved customer relationships. A growing number of companies want to unify their data across credit, collections, accounts receivables, and invoicing so they can deliver a truly connected customer experience. Sidetrade helps companies tap into the power of automation so they can focus on what matters most: driving productivity and building trusted relationships.
Bill North, Area Vice President Sales at Sidetrade, commented: We are pleased to add Insight as a Sidetrade customer. Insight selecting Sidetrade not only endorses our North American strategy but adds another strategic customer in the tech industry. We believe the Sidetrade platform, especially the Sidetrade Data Lake will enable Insight to not only meet but exceed their objectives for this project.
Insight joins more than 120 international players in the ICT sector who already rely on Sidetrade to simplify customer payments and provide continuous improvements to their Order-to-Cash efficiency – from digital editing of purchase orders and invoices to accelerated payment receipt.
Olivier Novasque, CEO of Sidetrade commented:
Sidetrade has just delivered the best half year in its history, surpassing all previous records in new bookings and revenue for our Order-to-Cash Activities.
The abrupt return of inflation, multiple hikes in interest rates and salary increases create a growing need among businesses worldwide for solutions that secure and accelerate cash flow generation. Parallel to this, the recognition of Sidetrade by Gartner® as one of three global Leaders for Integrated Invoice-to-Cash applications raises the Group’s international profile and confirms the relevance of investments in Artificial Intelligence. The recent commercial successes of Sidetrade clearly demonstrate this technological edge. This half-year also marks the one-year milestone since our successful arrival in the United States and validates our offensive strategy for North America. Less than a year after kick-starting our US operations, Sidetrade has already achieved more than half its new bookings in the region by winning large contracts in preference over its two main American competitors.
Now we know that we have what it takes to become firmly established in this region and the gradual ramp-up in our sales and marketing teams will quickly cement Sidetrade’s position as one of three leaders in the world’s number one market. The United States already represents a robust growth driver, and the start of a change in scale for Sidetrade is now underway.
New bookings up 42% and record half year with €3.04 million in new Annual Recurring Revenue
In H1 2022, Sidetrade set a record for Order-to-Cash SaaS orders, which will generate an additional €3.04 million in Annual Recurring Revenue (“ARR”), compared with €2.14 million in H1 2021; a +42% increase. The total value of these new subscription contracts over their initial contract periods (excluding renewals and services) represents €9.95 million of Total Contract Value (“TCV”) in H1 2022 versus €6.32 million in H1 2021, a +57% increase.
To these SaaS bookings should be added €1.77 million of services on an annual basis (implementation, configuration, training, recurring services, etc.), compared with €1.37 million in H1 2021, a +29% increase. In total and considering that almost all of these services will be invoiced over the next twelve months, H1 2022 enables Sidetrade to add the equivalent of €4.81 million in Annual Contract Value (“ACV”) compared to €3.51 million in H1 2021; a +37% increase.
The initial contract period for new customers (excluding renewals) rose to 44 months, compared with 36 months in the previous fiscal year. This length of contract period illustrates outsourcers’ trust in Sidetrade solutions and increases visibility over future revenue. It should be noted that as with all existing contracts, these new contracts include an annual automatic price reindexation clause based on changes in price indices for the relevant country.
United States – a new growth driver with 58% of total new bookings
In H1 2022, international orders represented more than 74% of all bookings, driven by unprecedented momentum in sales with world-leading organizations.
Sidetrade outperforms its targets in North America
One year after operations were launched in North America, Sidetrade is outperforming its targets (to achieve more than one-third of its bookings in the region by H2 2022) and already reports 58% of new bookings in the United States which include exceptional contracts signed with large American corporations such as a strategic IT services giant in Q1 2022 (see press release here) and Insight Enterprises in Q2 2022.
This faster-than-expected commercial success confirms three key observations:
1/ The Order-to-Cash market is extremely buoyant worldwide, particularly in the United States. The market is worth an estimated $10 billion the world over and is fast developing with less than 10% of companies supplied. It is boosted by the inflationary environment, the rising cost of cash, and recruitment difficulties. Order-to-Cash solutions, which aim to accelerate cash flow by reducing payment delays and generate productivity gains for back-office activities, are becoming a top priority for finance departments.
2/ Sidetrade’s technological edge in Artificial Intelligence has proved its worth versus its two main US competitors. The efficiency of Sidetrade’s algorithms is based on the Sidetrade Data Lake– never-before-seen in the market – which aggregates more than $4.6 trillion in B2B transactions with an analysis of 640 million payment experiences from 21 million buying companies worldwide (see press release here). As a result, Sidetrade provides customers with predictive payment models and collection strategies adapted to the end customer. In early April 2022, Sidetrade was recognized as one of three global Leaders in the Gartner® Magic Quadrant™ for Integrated Invoice-to-Cash applications, significantly expanding the Group’s reach among American key accounts and strengthening its presence in more tenders.
3/ Sidetrade is staying on the offensive with its strategy to quickly become a key player in Order-to-Cash solutions across North America. In less than a year, Sidetrade has built an experienced sales team (16 people to date), focusing on the recruitment of Order-to-Cash professionals. The US team is ramping up and will double its capacity over the next 12 months. To support this momentum, Sidetrade has implemented an ambitious strategy for recruitment and resources by deciding to:
- enroll two American recruiters exclusively focused on hiring sales profiles for this region;
- relocate the Company’s Marketing Department to the United States;
- create an American prospecting team in Canada (Calgary) from the start of H2 2022, eventually including some 15 operators.
This offensive strategy is already producing results which will be strengthened in the months ahead.
Overall, in H1 2022, bookings by new customers (“New Business”) benefited from the success in the United States and accounted for 68% of the total versus 55% on average in recent quarters.
Cross-selling represents 13% of total new bookings, with the remaining 19% of bookings accounting for Upselling of additional modules to existing customers.
The United States has also notably impacted the average size of new contracts (excluding Upselling). In H1 2021, the average totalled €81,000 per year of subscription (ARR) and will amount to €190,000 per year of subscription in H2 2022.
Strong increase in Order-to-Cash SaaS revenue to +19% and double-digit growth in revenue to +11%
| >Sidetrade (€m) |
H1 2022 | H1 2021 | Change |
| ‘Order-to-Cash’ Activities | 17.3 | 14.8 | +17% |
| of which SaaS Subscriptions | 14.3 | 12.1 | +19% |
| ‘Sales & Marketing’ Activities | 0.5 | 1.3 | -61% |
| Revenue | 17.8 | 16.1 | +11% |
2022 information is from consolidated, unaudited data.
‘Order-to-Cash’ Activities grew very sharply to +17% in H1 2022, driven by 19% growth in SaaS subscriptions. The growth in this recurring revenue is the result of record bookings in the 2021 fiscal year, which will continue to impact revenue growth throughout the 2022 fiscal year.
‘Order-to-Cash’ Activities, a core business within the Company’s strategy since 2019, now represent 97% of total revenue.
In addition, ‘Sales & Marketing’ Activities have become secondary to Sidetrade’s activities. They now account for only 3% of total revenue in this half year and will continue to play a less prominent role commercially, with estimated revenue of €0.9 million at end-2022.
Total revenue grew by 11% in H1 2022, to €17.8 million. This performance is supported by solid growth drivers in international markets which now represent 51% of total revenue, including 21% for North America.
Inflation generating solid pricing power for Order-to-Cash solutions
Businesses must be prepared to respond to the inflationary environment
Businesses face a twofold challenge: consolidate their cash reserves in an inflationary environment and generate productivity gains to address salary increases and recruitment difficulties. This trend is expected to continue over the next 12 to 24 months with an increased risk of future recession, notably linked to multiple hikes in interest rates. In this context, the management of operating working capital, and particularly accounts receivable, is a major challenge for businesses.
Sidetrade’s model meets the challenges of the global market
The return on investment for Sidetrade customers is directly proportional to the cost of cash made available by the “Augmented Cash” platform and the expected productivity gains.
Sidetrade’s economic model provides its business with significant resilience, as 90% of its revenue is recurring, representing a significant advantage in the current and future environment. All of these multi-year contracts are indexed to inflation (the Syntec for Southern Europe, the UK CPI for Northern Europe and the US CPI for the United States), which alters the total price of SaaS subscriptions each year by reference to changes in these price indices.
Sidetrade therefore has robust pricing power that protects the Company’s future revenue against uncertainties and inflationary pressures. At present, Sidetrade perfectly combines its sound fundamentals with a highly favorable growth outlook.
On the back of its H1 2022 performance, the Group’s management is confident in Sidetrade’s ability to deliver double-digit growth in the 2022 fiscal year.