Olivier Novasque, CEO of Sidetrade commented on this release:
We have just delivered the best quarter in our history in terms of new bookings, including a major contract in the United States, where we were selected over our three direct US competitors. In addition to this unprecedented success, this performance once again demonstrates the technological edge of our Order-to-Cash solution, our real commercial delivery capacity and the strength of our SaaS model. The return of inflation and the multiple hikes in interest rates will only increase appetite among businesses for solutions that secure and accelerate cash flow generation.
This market performance will be further strengthened by the recognition of Sidetrade as a Leader in the first Gartner® Magic Quadrant™ for Integrated Invoice-to-Cash Applications. This provides tremendous potential for growth in our business in the United States and in our enterprise accounts in Europe. We are now, more than ever, in the best possible position to consolidate our initial success in the United States, accelerate our growth in all regions and take Sidetrade to the next level.
Sidetrade hits quarterly new bookings record, with a surge of +132% in Q1 2022
In Q1 2022, Sidetrade set a new record for Order-to-Cash SaaS bookings, which will generate an additional €2.17 million in annual recurring revenue (“ARR”), compared with €0.94 million in Q1 2021; a 132% increase. The former record for bookings (ARR of €1.67 million) had been set in the previous quarter (Q4 2021). The total value of these new subscription contracts over their initial contract periods (excluding renewals) represents €6.91 million of total contract value (“TCV“).
To these SaaS bookings should be added €1.09 million of services on an annual basis (implementation, configuration, training, recurring services, etc.), compared with €0.81 million in Q1 2021. As a result, the annual contract value (ACV) of these orders in Q1 2022 was €3.27 million, compared with €1.75 million in Q1 2021, an 87% increase.
The initial contract period for new customers (excluding renewals) rose to 40.8 months, compared with 36.2 months in the same quarter of the previous financial year.
81% of bookings were international, with 62% from the United States
In Q1 2022, international orders represented more than 81% of all bookings, driven by unprecedented momentum in sales with world-leading organizations. As a result of inflation and recruitment difficulties, businesses have been driven to invest in Order-to-Cash solutions to accelerate their cash flow generation in an environment of rising interest rates, thereby increasing their productivity.
Less than a year after operations were officially launched in North America, Sidetrade signed the largest contract in its history with a major Information Technology consultancy firm (see the press release issued on February 21, 2022 here). This contract, awarded to Sidetrade in preference over its three direct US competitors, provides it with an additional ARR of €1.36 million in this region, i.e., 62% of all bookings in Q1 2022.
As a reminder, Sidetrade had set itself the goal of achieving more than one-third of its bookings in the United States by the second half of 2022. Buoyed by this initial success and its recognition as a Leader in the first Gartner® Magic Quadrant™ for Integrated Invoice-to-Cash Applications, Sidetrade intends to ramp up its presence in North America by doubling its sales force in 2022.
In this quarter, New Business includes the record-breaking contract signed in the United States, representing 69% of total bookings. Cross-selling represents 15% of total new bookings, with the remaining 16% of bookings accounting for Upselling of additional modules to existing customers.
Growth in Order-to-Cash SaaS revenue, up +21%
| Sidetrade (€m) |
2022 Q1 | 2021 Q1 | Variation |
| ‘Order-to-Cash’ Activities | 8.1 | 6.8 | +19% |
| of which SaaS Subscriptions | 6.7 | 5.5 | +21% |
| ‘Sales & Marketing’ Activities | 0.3 | 0.7 | -57% |
| Revenue | 8.4 | 7.5 | +12% |
2022 Q1 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 to 19% in the first quarter of 2022, driven by 21% 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 96% of total revenue.
In addition, ‘Sales & Marketing’ Activities, which were launched in 2017 and were mainly focused on the French SME market, have become secondary to Sidetrade’s activities and have not been technologically integrated into the Order-to-Cash platform. They now account for only 4% of total revenue and will continue to play a less prominent role commercially, with estimated revenue of €0.9 million at the end of 2022.
Total revenue grew by 12% in Q1 2022, to €8.4 million. In addition to this performance, international revenue continued to grow substantially, reaching 49% of revenue for the very first time, with the United States representing 19% of the total.
A resilient economic model against inflationary pressures
Visibility of recurring revenue from subscriptions in a period of economic uncertainty
Sidetrade’s economic model provides its business with significant resilience, as 90% of its revenue is recurring, representing a significant advantage in the current environment. The robustness of its model is based on signing contracts that span multiple years. These comprise an average initial commitment period of 36.25 months (increasing to 40.8 months for new customers acquired in Q1 2022), followed by successive periods of the same length. With a controlled churn of between 5% and 6% on average for Order-to-Cash solutions, the average time a customer remains with Sidetrade is close to 20 years.
Resilience of the economic model in a period of high inflation
Due to the length of its subscription periods, Sidetrade systematically reindexes all its contracts to changes in consumer price indices (the Syntec for Southern Europe, the UK CPI for Northern Europe, and the US CPI for the United States), and alters the total price of subscriptions each year by reference to changes in these price indices. In addition to the fact that the rising cost of cash and salaries has made Order-to-Cash solutions more attractive to financial departments, the construction of Sidetrade’s economic model demonstrates robust pricing power that protects the Company’s future revenue against inflationary pressures.
Sidetrade recognized as a Leader in the first Gartner® Magic Quadrant™ for Integrated Invoice-to-Cash Applications, and unveils a global map of B2B payment trends
On April 11, 2022, Sidetrade was recognized as one of three Leaders in the Gartner® Magic Quadrant™ for Invoice-to-Cash applications.
Following this recognition, for the first time ever, Sidetrade made the move to reveal global B2B payment trends in an industry-first predictive payment intelligence map. This is extracted from its Data Lake, comprising of 593 million payment experiences, worth a total value of more than $4.6 trillion processed over the last three years from 20.7 million B2B buyers worldwide. This map offers users (businesses, governments, and analysts) unprecedented information on how buyers pay their suppliers, an invaluable resource in a climate of global uncertainty and inflationary pressures.
Developed by Sidetrade’s best-in-class engineers and leading data scientists since 2015, the Sidetrade Data Lake is the heart of Sidetrade’s innovative Order-to-Cash AI solutions to enhance cash optimization. It is used by data-driven companies (i.e. suppliers) to understand and predict buyer payment behaviors.
A unique tool within the Order-to-Cash market, it is a repository of data of past B2B payment transactions. It is comprised of more than 593 million payment experiences worth a total of $4.6 trillion processed over the last three years from 20.7 million buyers worldwide. Today’s launch provides users with a free and interactive map into aggregated and anonymized insights from the Sidetrade Data Lake.
A resource for companies, governments, and analysts
The publication of global payment trends from the Sidetrade Data Lake is an industry-first and comes as global uncertainties and increasing inflationary pressures place a greater emphasis on cash and credit management.
Updated on a quarterly basis, the global payment trends give users access to never-before-available insights into how buyers pay their suppliers depending on country and industry, enabling them to better monitor customers’ payment trends across the world, predict payment behavior and decrease collection time. This provides invaluable support for effective decision-making and payment negotiations, thereby cutting days sales outstanding (DSO).
Sidetrade CEO, Olivier Novasque, commented: Protecting and accelerating cash flow has never been so critical as bad debt risk and inflation are dramatically increasing everywhere. This can best be achieved if companies harness enough customer behavior data and become more forward-looking. Data science and artificial intelligence are essential to fighting against late payment. Since each buyer’s payment behavior is different, a dedicated and automated collection strategy is needed to be efficient.
We’re delighted today to offer a first look into the Sidetrade Data Lake and bring the power of true AI to companies at a time when they need it the most.
Innovation and digital transformation to support businesses
The Sidetrade Data Lake harnesses the power of Sidetrade’s next-generation AI technology (aka Aimie) to predict the likelihood that a customer will pay late. Aimie then recommends customer-specific collection strategy based on buyer payments patterns, and other data insights
Sidetrade Chief Product Officer, Rob Harvey, added: In B2B companies, every CFO wants industry benchmarking data on their customer payments; they thrive on data. But how well do finance teams actually know their customers? Do they know who is likely to pay them late? Which industries wait the longest to get paid? Now, CFOs can finally understand their customer behaviors, better understand their competition, and make smarter decisions; much like Tesla uses driver data to make innovative changes, enhancing and optimizing the driver experience.
With the Sidetrade Data Lake, we unlock enterprise data and simplify access to payment data management. At Sidetrade, we are committed to saving time for businesses, exploring smart efficient processes in the Order-to-Cash cycle, assisting in decision-making, and sharing information in real-time. Sidetrade is the Waze for business payments!
The Sidetrade Data Lake is the result of years of hard work of collecting, cleaning up, matching, and enriching huge volumes of data. Transactions between Sidetrade’s customers (the suppliers) and their buyers within the Sidetrade Data Lake are aggregated, anonymized, and layered with algorithms to determine a predictive payment metric for each analyzed buyer company. This is the engine behind Sidetrade’s AI technology. It takes decision-making support to the next level, providing data-based recommendations on the most effective collection, dispute resolution and risk control actions.
Mark Sheldon, Chief Technology Officer of Sidetrade: We are proud to offer a first look at our Data Lake today and showcase the depth of our data, technology and true AI capabilities.
What is particularly exciting about the Sidetrade Data Lake technology, is the fact we’ve not only succeeded in getting large amounts of data cleansed, matched and into one place, but that we’ve also layered that with next-generation AI and predictive capabilities, and are able to measure its value. This latter part in particular is something that many companies often struggle with, and why we’re proud to be able to clearly demonstrate the value to our customers.
Best and worst payment behaviors around the world revealed
Leveraging its Data Lake, Sidetrade reveals the best and worst markets and industries for late payments over the last three years.
A global snapshot
On average, companies around the world pay supplier invoices 21 days late – taking the length of time between an invoice being issued to getting paid, to a total of 53 days on average.
Scandinavian businesses tend to pay the quickest overall, in particular Sweden, with a delay of just 7 days, well below the global average.
Getting back to pre-pandemic unpaid invoice ratios
Over two years on from the start of the pandemic, the US, France, and Italy still haven’t fully reverted back to their pre-pandemic unpaid invoice rates according to the Sidetrade Unpaid Invoice Tracker. Conversely, Belgium, Spain, the UK, and the Netherlands now have better unpaid invoice ratios than before the start of the pandemic.
France holds the title for the worst amongst the seven countries tracked, with 25% of the value of all overdue invoices as of April 16, 2022.
Delays of 27 days in the US
US companies rank tenth globally for longest payment delays, with a mean of 27 days.
The industry with the shortest payment delays in the US is Manufacturing: 22 days. The worst industries are Financial Services & Insurance, and Leisure & Hospitality: 30 and 31 days, respectively.
Payment disparities in Europe
Across Europe, there are significant disparities in payment delays from country to country, ranging from 7 days (Sweden) to 26 days late (Ireland).
On average, it takes companies in Europe 45 days to collect payment – a mean delay of 16 days.
UK & Ireland exceeding European average for payment terms and delays
Companies in the UK and Ireland are among the top four worst in Europe for payment delays, with means of 21 and 26, respectively. This is despite both countries having higher payment terms (34 days in the UK, 31 days in Ireland) than the European average of 29 days.
In the UK, the industries with the shortest payment delays are Utilities & Energy at 19 days, and Retail & CPG at 20 days. Industries in the UK with the longest payment delays are Financial Services & Insurance at 25 days, and Public Services, HR Services and Transportation & Logistics at 24 days.
Looking at the Sidetrade Unpaid Invoice Tracker, almost all UK industries appear to have recovered from the pandemic in terms of late payments, most showing pre-pandemic unpaid invoice rates. The exceptions are, Public Services, Other Services and the Food industry. The latter has risen from 14% at pre pandemic levels, to 21% of invoice values being deemed late (10+ days after their due date) as of 16 April 2022.
France is amongst the worst performing European countries for late payments. Their sectors with the shortest payment delays are Retail & CPG, and Manufacturing, both at 17 days. The worst industries in France for late payments are Leisure & Hospitality, and Public Services at 24 days. France still hasn’t recovered from the Covid-19 crisis when it comes to late payments. The rate of unpaid invoices across every industry in France is still above pre-pandemic level, at 22.7%.
Josie Dent, Managing Economist at Centre for Economics and Business Research (Cebr): After the hit businesses took during the pandemic and lockdowns, which caused a significant rise in late payments, the global economy is now experiencing a new source of pressure. Across the world, inflation is accelerating, driven by energy prices and supply chain disruptions. While both of these factors were already at play at the start of the year, the conflict in Ukraine and sanctions on Russia, as well as recent lockdowns in key Chinese cities have further added to the inflationary environment and the outlook for price growth. These increasing costs for fuel, energy and raw materials add to businesses’ financial strain at a time when many are still recovering from the pandemic, making late payments more likely.
Therefore, as businesses’ bills come due, often at higher prices than previously, many will find themselves having to prioritize which they can afford to pay immediately, and which will need to wait.
In the US, consumer price inflation rose to 8.5% in March, up from just 2.6% a year earlier. In the meantime, the average share of unpaid invoices by value rose from 14.5% on 31 March 2021 to 17.5% on the same day in 2022. Businesses will also be affected by the Federal Reserve’s interest rate rises expected this year. In March, the Fed voted to increase interest rates for the first time since 2018, with projections pointing to a further six rate rises in 2022 alone, raising costs for those with debt.
Businesses in other countries are also facing rising costs and interest rates. The share of late payments by value stands at 24.7% in France in the latest data (16th April), compared to 21.0% at the start of the year, while inflation picked up to 5.1% in March.
This announcement comes shortly after Sidetrade’s recognition as a Leader in the first Gartner® Magic Quadrant™ for Integrated Invoice-to-Cash Applications.
Gartner describes the position of Leader as the strongest position to influence the market’s growth and direction. In addition, they demonstrate a market-defining vision of how integrated I2C applications can help CFOs achieve their business objectives of improving cash flow while enabling efficiencies and predictive capabilities within their AR operations.
Ten vendors were assessed on several critical solution capabilities including collections, customer invoicing, deductions & disputes, as well as wider factors including product innovation, strategy and efficiencies.
Sidetrade’s CEO and founder, Olivier Novasque, commented: Since our inception 22 years ago, Sidetrade has not stopped innovating or leading the way forward for the Order-to-Cash (O2C) industry: we were the first 100% SaaS platform on the O2C market; in the mid-2010s, we were ahead of the AI curve when we began aggregating billions of B2B transactions within our unrivalled data lake (which enabled us to make our “Augmented” capabilities a reality within our product); and again in 2015, we were the first to market with a true AI-powered O2C virtual assistant – also known as Aimie.
Today, this Gartner recognition – which positions Sidetrade as one of three Leaders – is, in our opinion, a testament to all our teams’ hard work, as well to all our customers who have supported us throughout our journey taking the O2C market to the next level.
This Leader positioning for Sidetrade is the latest in a long line of industry recognitions, including:
- The 2021 Gartner Market Guide for Integrated Invoice-to-Cash Applications Report2
- Quadrant Knowledge Solutions’ SPARK Matrix: Account Receivable Application Research, 2021
- The IDC MarketScape: Worldwide SaaS and Cloud-Enabled Accounts Receivable Automation Applications for Enterprise 2020–2021 Vendor Assessment.
In the fallout from the pandemic, cash culture has been positioned higher on business leaders’ agendas, as companies look to secure and accelerate cash flow generation and establish a 360° vision in the Order-to-Cash cycle.
Now that intelligent technologies support changing methods of delivering enterprise business capabilities, CFOs have a vested interest in including these intelligent technologies in their new roles and new challenges, or risk missing opportunities to optimize value and drive growth.
Sidetrade provides next-generation AI to companies worldwide and across all industries, including behemoths such as Micro Focus, Tech Data, XPO logistics, Expedia and many more. Its AI technology is powered by its unrivalled data lake of over $4.6 trillion B2B payment experiences and more than 593 million invoices.
Sidetrade’s Chief Product Officer, Rob Harvey added:With Aimie – our AI virtual assistant – Finance leaders can rely on a global and proven solution from Sidetrade, enabling them to do business with confidence and successfully streamline their Order-to-Cash processes to dramatically increase their efficiencies and accelerate cash flow generation.
From a corporate perspective, Sidetrade has seen impressive growth since its launch in 2000, most recently reporting on its 2021 annual results which saw a series of record-breaking announcements, including strong growth in SaaS revenue, a new bookings record set, and a promising year of continued growth ahead in 2022.
1 Gartner, Magic Quadrant for “Integrated Invoice-to-Cash Applications, Nisha Bhandare, Mark D. McDonald, Tamara Shipley, 6 April 2022
2 Gartner, Market Guide for Integrated Invoice-to-Cash Applications, By Nisha Bhandare, 17 May 2021
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