Double-digit growth in SaaS recurring revenue, up 16%
| Sidetrade (million euros) |
Q3 2021 | Q3 2020 | Variation (%) |
|---|---|---|---|
| SaaS revenue | 6.8 | 5.9 | + 16% |
| Overall income | 8.2 | 7.3 | + 13% |
2021 information is from consolidated, unaudited data.
Despite the third quarter traditionally being the weakest period of the year, we saw continued double-digit growth in Q3 2021 – a trend sustained from FY21 Q1 and Q2. In fact, overall income rose €8.2m in 2021 Q3, up 13% against 2020 Q3.
Bookings intake leaps 22%
Q3 saw a sharp rise in new bookings which are expected to generate €0.95m in annual recurring revenue (ARR) vs. €0.78m in 2020 Q3; a 22% increase. The total contract value (TCV) of these new subscriptions amounts to €2.42m for the firm contract period (not counting renewals).
Beyond SaaS orders, Sidetrade earned €0.63m via its services offerings (e.g., implementation, set-up, training) vs. €0.38m in 2020 Q3. All in all, total 2021 Q3 order intake represents an annual contract value (ACV) of €1.58m against €1.16m in 2020 Q3 (i.e., a 36% increase).
Nearly 60% of orders are international
With new deals penned in North America including Bunzl US, Trescal US (cross-sell), as well as Expedia and Kal Tire (upsell), new North American contracts represent 24% of the total this quarter, clearly sustaining the momentum developed earlier in the year.
Also notable was Sidetrade’s continued international expansion with prestigious groups such as Veolia (Veolia España and Veolia Water Technologies UK), as well as the Page Group with the roll-out of Sidetrade technology in Asia-Pacific. Overall, international SaaS orders represented 58% of the total this quarter, indicating Sidetrade’s enormous growth potential for the years to come.
Olivier Novasque, CEO and founder of Sidetrade, commented:
The first half of 2021 marked a clear turning point for Sidetrade. Firstly, multiple top global research and advisory firms recognized Sidetrade as one of the world leaders in the Order-to-Cash market, due to its undeniable edge in AI. Secondly, multinational groups such as TechData and Veolia brought on Sidetrade as a strategic partner to support the digital transformation of their finance departments worldwide.
Our growing success in the United States, which has been faster than anticipated, is a further sign of the exciting changes within our business. In just a few short months, we have onboarded an experienced local sales team, signed our first contracts there, and secured forty North American key accounts through the acquisition of Amalto. Early feedback from the field suggests a huge demand for Sidetrade’s solutions in large American firms.
Opportunities for revolutionizing the O2C cycle are immense, and this market is still in its infancy. Beyond our record 2021 H1 earnings, we are convinced that we have a long-term opportunity to build a business model combining growth and profitability, even while investing significantly to conquer a buoyant global market.
Growth continues to soar in H1, with a 17% jump in SaaS business
| Sidetrade (million euros) |
H1 2021 | H1 2020 | VARIATION (%) |
|---|---|---|---|
| SaaS revenue | 13.4 | 11.4 | + 17% |
| Overall income | 16.1 | 14.4 | + 12% |
| Operating profit | 2.2 | 1.3 | + 70% |
| Net profit | 2.1 | 1.1 | + 89% |
2021 information is from consolidated, unaudited data.
Strong bookings momentum in H1
Sidetrade gains worldwide recognition
In the first half of the year, Sidetrade was recognized as a technological leader by Quadrant Knowledge Solutions, in its report “SPARK Matrix™: Account Receivable Application, 2021”. This was the first of three times in 2021 that Sidetrade earned special recognition in global surveys on O2C management solutions. In June, Sidetrade was included in the “2021 Gartner Market Guide for Integrated Invoice-to-Cash Applications Report”; and in January 2021, it was cited by IDC as a major player in “Worldwide SaaS and Cloud-Enabled Accounts Receivable Automation Applications”.
Market research and advisory firms have been showing growing interest in O2C management technology, because of the enormous potential of such solutions, and because the Covid-19 crisis has heightened awareness of the need to secure cashflow; a need that buoys Sidetrade sales.
Double-digit growth in SaaS bookings
The first half of the year saw very strong growth in new bookings, representing annual recurring revenue (ARR) of €2.14m, vs. €1.85m in 2020 H1, an impressive 16% increase. Over the last six months, Sidetrade customers also purchased €1.9m in extra services (e.g. implementation, set-up, training), amounting to €4.05m in annual contract value (ACV).
During the period, Sidetrade accelerated its market penetration by winning over some of the biggest names in their respective industries: Klépierre (Real estate), Konica Minolta (IT equipment), Antargaz (Energy), Tarkett (Construction materials), MIQ (Media-advertisement), and Distrupol (Chemistry). Leading companies chose Sidetrade not only for its cutting-edge AI, but also for its proven capacity to carry out large-scale multinational projects. For example, XPO Logistics, XPO Transport, Sodexo (Catering and facilities management services) and Veolia (Water and waste management) concluded exclusive global framework agreements with Sidetrade across all of their entities.
For SaaS subscriptions, the proportion of new business remains stable, at 47% of total bookings. Cross-selling to affiliates of Sidetrade customers represents 27%; whereas upselling (subscription to additional modules) amounts to 26%. The combined contribution of cross-sell and upsell (53%) demonstrates the satisfaction and loyalty of Sidetrade customers looking to increase their use of Sidetrade technology to generate added value in financial management and accounts payable.
In H1, mean ARR per new customer (excluding up-sell) reached €84k, up 17% vs. 2020 H1. Moreover, mean firm initial commitment for these new customers’ SaaS subscriptions is 39.7 months, amounting to a total contract value of €6.39m (excluding extra services and contract renewals).
Attrition is well under control: a mere 5.38% as of June 2021 for key accounts vs. 13.1% for the entire industry (source: KeyBanc Capital Markets® (KBCM) Annual SaaS Survey, May 2021). Net Retention (gross retention plus additional subscriptions from existing customers) was 103.2% on 30 June 2021.
Rapid ramp-up in the US
On February 8 of this year, Sidetrade announced the official launch of its US operations. By June 30, Sidetrade had 22 members of staff there, including a nine-person local sales team, two Sales VPs, a Pre-sales manager, and 6 KAM – all seasoned professionals. Despite a tight recruitment market, Sidetrade chose to focus on talent with several years’ experience in O2C, who could hit the ground running. Also joining the team were 13 staff from Amalto (subsequent to the acquisition in April of last year). Highly skilled in project management and customer support, Amalto employees are a great addition to the Sidetrade team. Under Sidetrade’s strategic plan dubbed Fusion100, two goals have been outlined: firstly, to double the US salesforce in coming months, and secondly, to see US business come up to speed at 35% to 50% of total bookings by the second half of 2022 and therefore constitute a significant growth driver.
The North American market looks to be a significant growth factor for Sidetrade. Q2 was the first quarter of real business for the new US Sales team, who surpassed expectations. They are already ahead of the game with impressive wins including Promach, Imperative Chemical Partners, Johnston Equipment (new business); Tarkett US and XPO Logistics US (cross-sell); and Tech Data US, Bunzl Canada, and Expedia (up-sell). These deals already represent over one third of 2021 Q2 orders. Business has taken off much faster than expected, especially considering the time it normally takes to ramp up a sales team, and the typically lengthy internal decision-making cycles within customer companies. This is indeed a promising start for Sidetrade in a tough market, and demonstrates that Sidetrade’s lead in advanced AI technology and the pertinence of its business solutions truly make it stand out from the competition.
SaaS business jumps 17%
The first half of the year saw Sidetrade’s SaaS business jump 17%. Income for the period totaled €16.1m, up 12% against 2020 H1. This impressive growth is bolstered by vibrant international sales, which for the first time, represent 47% of total revenue, including 16% from Sidetrade’s North American business.
Record Net Profit up 89%, even during period of significant investment in US
In H1, Sidetrade’s operating profits rocketed 70% to €2.2m, due largely to increased revenue and the leverage of the SaaS model. Gross margin rose by €1.5m to €12.8m, vs. €11.3m for the same period last year; this amounts to 79% of revenue, comparable to the ratio for 2020 H1. SaaS subscriptions contribute to 96% of this gross margin, confirming the incremental profitability of Sidetrade’s pure SaaS model.
During this period, despite the Covid-19 situation, Sidetrade invested an additional €1.2m (+12%), mainly in the development of commercial operations in the US, in order to prepare for future growth in North America.
Also during the first half of the year, new ways of working resulting from COVID-19 restrictions generated savings of €0.5m, including a dramatic fall in travel expenses.
Operating profit includes French Research tax credit of €0.9m (same as in 2020 H1), as well as activation of R&D (same as in 2020 H1).
As a result of this momentum, Net profit reached €2.1m, up 89%, demonstrating that profitability is not incompatible with investing in the future.
Rock-solid financial position with enhanced liquidity
On 30 June 2021, Sidetrade’s liquidity position was stronger than ever, with cash standing at €20.3m, against €14.3m on 31 December 2020. Moreover, Sidetrade holds 66,000 of its own shares, for an estimated value of €10.1m, as of 30 June 2021. Sidetrade has a €13m line of credit, subsequent to the acquisition of Amalto in April 2021 for this amount.
Sidetrade management has every confidence in the firm’s ability to achieve double-digit growth for FY 2021.
The research titled ‘SPARK Matrix™: Account Receivable Application, 2021’, assessed the global industry intersection of providers’ customer impact and technology excellence, and categorised vendors into either aspirants, challengers, or technology leaders. Sidetrade was categorized into the most advanced category of ‘Technology leaders’.
This is the third instance in 2021 alone that Sidetrade has been recognised in global industry-wide analysis and research into the Accounts Receivable and Order-to-Cash market.
In June, Sidetrade was recognised in the 2021 Gartner Market Guide for Integrated Invoice-to-Cash Applications Report, and in January, Sidetrade was named as a “Major Player” in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Accounts Receivable Automation Applications for Enterprise 2020–2021 Vendor Assessment (Doc # US46791520, December 2020).
The Order-to-Cash market has been increasingly attracting attention from consultancies and industry analysts recently due to its significant potential: according to Midcap Partners, the global Order-to-Cash market is worth $10bn, but less than 5% of businesses that could benefit from Order-to-Cash technology are currently leveraging it.
Rob Harvey, Chief Product Officer of Sidetrade commented: We are delighted to be recognised once again as a global industry leader in the Order-to-Cash space; one that has significant high growth opportunities as businesses across all industries look to unlock customer value and secure cashflow.
We truly believe in the power of bringing together the very best of human and machine intelligence and enabling businesses to be more data driven with enhanced predictive capabilities: it is this approach that is revolutionising the traditional Order-to-Cash process. With over 20 years of expertise, and our unrivalled next generation AI and machine learning technology powered by an extensive data lake of invoices worth over +$4.5tn, Sidetrade is well-positioned to take full advantage of this opportunity as one of the leading providers worldwide.
First piloted in 2018, Sidetrade’s Code Academy has seen over 80 applicants to the programme since its inception, with 40 accepted on to the intensive month-long programme and eight offered a full-time job after graduation of the course.
The course is designed for adults with minimal to zero tech expertise to provide them with the opportunity not only to learn to code, but to gain valuable experience of the world of work, and insight into how a fast growth fintech business operates. The curriculum focuses heavily on offering hands on experience, in addition to theoretical training.
Mark Sheldon, CTO of Sidetrade commented: We are delighted to get Code Academy back up and running in 2021. We have had some fantastic candidates come through the programme since we first launched in 2018, and the majority of those that went on to be recruited at Sidetrade are still with us, demonstrating the strength of the programme and the calibre of individuals we receive interest from. I am excited to see what fresh talent this year will bring.
Previous Code Academy graduates reflected on their experience of the programme and subsequent career development:
Natasha Rollason, QA Engineer at Sidetrade and 2019 Code Academy graduate: My experience of coding prior to going through Sidetrade’s Code Academy was minimal. At the time I was working in a retail job and wanted to try something new. The Code Academy didn’t just teach me coding skills, it gave me valuable insight into the working world, collaboration with teams, and so much more. I have benefitted so much from my career here at Sidetrade, none of which would have been possible without Code Academy.
Kieran Raine, Application Engineer at Sidetrade and 2018 Code Academy graduate: The Code Academy was a real game-changer for me. Before I joined, I was selling Hi-Fi gear at a small indie shop, with no real career prospects, but Sidetrade gave me the opportunity to fix that. Now, after more than two years here, I’m a full-stack developer working alongside some great people and helping drive our solution to be the best on the market.
The re-launch of Code Academy comes as the UK focuses on its economic recovery out of the pandemic, with digital skills cited as a vital contributor to getting the nation back on track. However, the UK is currently grappling with an all-time high of digital skills shortages, including coding skills.
Mark Sheldon, Chief Technology Officer of Sidetrade added: One of the biggest challenges in the tech industry is not the shortage of skillsets readily available for open roles, but rather the common misconception that to get into a career in tech, you need to have all the technical and academic training under your belt already. This is simply not the case. Gone are the days that you need a university degree to get into technology or years of experience, in fact, some of the best talent that we have hired here at Sidetrade in the past have come through non-university routes.
The Code Academy was set up to send the message to anyone of any background that with the right attitude and desire to learn, a career in tech is entirely possible, even if you’re starting from scratch.
Applications are now open, with an intensive assessment day taking place in mid-August at Sidetrade’s Birmingham Tech Hub in the City Centre. For further information and to apply please visit here.
Strong bookings momentum
In Q2 2021, Sidetrade saw a jump in bookings representing an additional €1.2m in annual recurring revenue (ARR) vs €0.94m in Q1 2021. On top of this, it earned €1.05m from set-up and training services for new customers. Overall, Sidetrade gained the equivalent of €2.25m in annual contract value (ACV).
In Q2 2021, Sidetrade onboarded several new global customers due to its capacity to roll out solutions internationally such as XPO Logistics, Tarkett, Sodexo, and Veolia. In fact, Sidetrade is particularly well-positioned, both technologically and geographically, and has recently been selected by Veolia Group and its subsidiaries, as its exclusive global supplier for digital dunning and payment dispute resolution.
Promising US market kick-off
In other news, Sidetrade’s North America operations have had a strong start, representing over a third of new bookings this quarter. Sidetrade has gained a firm foothold in the North American market, through crossselling, bringing on new customers Tarkett US and XPO Logistics US (subsidiaries of European groups who are successful Sidetrade customers), or via upselling to existing customers, such as Tech Data US, Bunzl Canada, and Expedia.
Furthermore, the new Augmented Invoice module, a paperless billing solution developed by Texas-based firm Amalto, recently acquired by Sidetrade, contributed to clinching deals this quarter with US industrial leaders including ProMach (packaging machinery), Imperative Chemical Partners (specialty chemicals) and Johnston Equipment (material handling equipment).
As of February 2021, Sidetrade has 22 employees in North America (11 from Amalto), with a 9-person sales force consisting of 2 managers, 1 pre-sales, and 6 reps, all seasoned O2C experts. Under Sidetrade’s Fusion100 growth plan, this salesforce is expected to double by the end of the financial year.
SaaS recurring revenue up 19%; overall income up 14%
| Sidetrade (millions euros) |
2021 Q2 | 2020 Q2 | Variation |
| SaaS revenue | 7.1 | 6.0 | +19% |
| Overall income | 8.6 | 7.5 | +14% |
2021 information is from consolidated, unaudited data.
Q2 2021 saw strong growth, with SaaS subscription business up 19% and overall income up 14%.
This sustained progress is now backed by solid growth drivers outside Sidetrade’s home market, which now represent 47% of total revenues, including 16% for North America.
The April 2021 Acquisition of Amalto, a Texas based leader in paperless B2B transaction solutions, has enriched Sidetrade’s product offering, with Augmented Order and Augmented Invoice modules. These modules contributed to the success of Q2 2021, and are expected to dramatically increase sales in the years to come, since they enable companies to meet new requirements for paperless B2B transactions coming into force in Europe and the USA.
Moreover, in June 2021, Sidetrade was cited in a Gartner report on integrated Invoice-to-Cash solutions, yet another sign of Sidetrade’s leadership position in a global market estimated to be worth $10bn.
Given the strength of the first half of the year, Sidetrade’s management confidently projects double-digit growth for FY2021.