Olivier Novasque, CEO of Sidetrade commented:
The third quarter, which is traditionally the weakest period of the year, posted record bookings of close to €1.4 million in new ARR during Q3 2022. With a +46% increase in new bookings, this quarter is in line with our first half year 2022 performance of +42%. These business results are mainly driven by international markets, notably our successes in North America which already represents 41% of total bookings for the period. In addition to this, and for the first time in its history, Sidetrade has achieved more than half of its revenue, 53%, internationally with 23% generated in North America. The ramp-up in our North American salesforce, supported by our new business hub in Calgary (Canada), will further accelerate this momentum in the quarters ahead. Sidetrade is definitively taking an important step in its development.
Record new bookings in Q3 2022 with a +46% increase
After reporting a +42% increase for SaaS orders in the first half of 2022, Sidetrade delivered a record-high third-quarter performance, generating €1.38 million in Annual Recurring Revenue (“ARR”) in Q3 2022, compared with €0.95 million in Q3 2021; a +46% increase. The total value of these new subscription contracts over their initial contract periods (excluding renewals and services) represents €3.87 million of Total Contract Value (“TCV”) in Q3 2022 versus €2.42 million in Q3 2021; a +60% increase.
68% of total bookings were international, and 41% from North America
In Q3 2022, international orders represented more than 68% of all bookings with significant business successes in Europe, Latin America and North America.
Just over one year after the Company launched operations in North America, this market has become a major growth driver, accounting for 41% of total bookings in Q3 2022 (58% in the first half of 2022). Note that this performance surpassed the Company’s initial target of achieving more than one-third of its bookings in North America by the second half of 2022.
To these SaaS bookings should be added €0.89 million of services on an annual basis (implementation, configuration, training, recurring services, etc.), compared with €0.63 million in Q3 2021, a +41% increase. In total and considering that almost all of these services will be invoiced over the next twelve months, Q3 2022 enables Sidetrade to add the equivalent of €2.27 million in Annual Contract Value (“ACV”) compared to €1.58 million in Q3 2021, a +44% increase.
Overall, in Q3 2022, bookings by new customers (“New Business”) and Cross-selling represented 81% of the total versus 75% on average in recent quarters, with the remaining 19% of bookings accounting for Upselling of additional modules to existing customers.
Lastly, it should be noted that as with all existing contracts, the new contracts include an annual automatic price re-indexation clause based on changes in price indices for the relevant country.
In an inflationary market environment, now more than ever, businesses must deploy efficient solutions to manage their Order-to-Cash process as they face a twofold challenge: to consolidate cash reserves with multiple hikes in interest rates while generating productivity gains to address salary increases and recruitment difficulties. This trend is expected to continue over the next 12 to 24 months with an additional increased future risk of future recession in certain countries. In this disrupted context, the management of operating working capital, and particularly accounts receivable, is a major challenge for all finance departments.
Acceleration in Order-to-Cash SaaS subscription revenue by 23% and revenue by 12%, driven by international orders
| Sidetrade (€m) |
Q3 2022 | Q3 2021 | VARIATION (%) |
|---|---|---|---|
| ‘Order-to-Cash’ Activities | 9.1 | 7.7 | + 19% |
| of which SaaS Subscriptions | 7.7 | 6.2 | + 23% |
| ‘Sales & Marketing’ Activities | 0.2 | 0.6 | – 72% |
| Revenue | 9.2 | 8.2 | + 12% |
2022 information is from consolidated, unaudited data.
‘Order-to-Cash’ Activities grew very sharply by +19% in Q3 2022, driven by +23% 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 98% of total revenue as of Q3 2022.
The ‘Sales & Marketing’ Activities, which have become secondary to Sidetrade’s activities, now account for only 2% of total revenue in this quarter, and will continue to decline, with estimated revenue of €0.9 million at end-2022.
Total revenue grew by +12% in Q3 2022, to €9.2 million. This performance is supported by solid growth drivers in international markets which, for the first time in the Company’s history, represent 53% of total revenue, including 23% for North America.
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 Tuesday October 11, 2022 during a ceremony at the World Credit Congress & Exhibition in Dublin, Sidetrade was named the winner of the “Shared Service Credit Team of the Year” category at the Irish Credit Team Awards. Sidetrade bagged twice this award for the second year in a row.
The annual Irish Credit Team Awards are dedicated to celebrating excellence in the industry and providing an opportunity for members to meet and learn from other credit teams around the country.
Commenting on the award win, Sidetrade’s Chief Services Officer, Frédéric Dupont-Aldiolan, said: It is an honor to be recognized by our peers for the second consecutive year and this award testifies to Sidetrade’s exceptional focus on customer centricity.
We are committed to driving value for our customers and delivering excellence in the Order-to-Cash space. This award is further proof of how we are leveraging technology and highly skilled people to support our customers in their everyday challenges. We believe that it’s the combination of Aimie, our AI solution, and human touch that truly builds exceptional customer performance.
This follows on from Sidetrade’s success at the Cloud Excellence Awards previous month where Aimie, its AI-powered technology was revealed “Best Cloud Automation Solution” out of a list of 10 finalists.
The Cloud Excellence Awards celebrated annually recognize the best of the UK’s cloud industry, from the most innovative and compelling products and vendors, through to the top use cases from end-user firms.
Mark Sheldon, CTO of Sidetrade, commented: We believe our key differentiator is Sidetrade’s unique cloud-based Data Lake which is made up of more than $4.5trillion B2B payment experiences from 21 million companies worldwide. Thanks to our Data Lake, Aimie is able to deliver cutting-edge AI technology to help businesses secure and accelerate cash flow.
Aimie is loved by everyone at Sidetrade and across our customers, and this award is further recognition of her strengths and abilities in securing and accelerating cash flow.