Bookings remain very strong
In Q1 2021, Sidetrade saw a very sharp rise in new bookings, representing additional Annual Recurring Revenue of €0.94m vs €0.27m in Q1 2020 (period hit hard by the sudden halt in the economy due to the first lockdown).
This sharp rise follows up on the record bookings posted in the last three quarters of 2020.
New customers represent 74% of these bookings, against an annual mean of 55% in 2020. In Q1 2021, Sidetrade signed on prestigious firms in a range of industries, such as Konica Minolta (IT equipment), Antargaz (Energy), Tarkett (Construction materials), MIQ (Media-advertisement), Distrupol (Chemistry) and Klépierre (Property).
The mean commitment period for these new subscribers is 36.2 months, representing €2.46m in SaaS contracts (vs. €0.83m in 2020), as well as €0.81m worth of new bookings for professional services.
14% rise in SaaS recurring revenue, 10% rise in income
| Sidetrade (millions euros) |
2021 Q1 | 2020 Q1 | Variation |
| Revenue | 7,5 | 6,8 | +10% |
2021 information is from consolidated, unaudited data.
SaaS subscriptions have maintained momentum with 14% growth in Q1 2021.
Sidetrade posted revenue of €7.5m in the period, up 10%. Beyond strong growth in SaaS subscriptions, overall growth was slightly impacted by less dynamism in services, due to delays in project implementation stemming from the lockdown situation in some countries.
That Sidetrade is riding out the crisis so well can be explained by the resilience of its SaaS business model- 89% of Sidetrade’s income is Annual Recurring Revenue.
As a reminder, on 12 April 2021, Sidetrade announced the definitive acquisition of Amalto, a Texas-based leader in paperless Order-to-Cash operations. Amalto will be consolidated into Sidetrade’s accounts as of 1 April 2021.
Olivier Novasque, Chairman and CEO of Sidetrade, comments:
2020 will be remembered as the year when an unprecedented crisis put the resilience of business models to a grueling test. To ride out the crisis, two requirements became urgent as never before: accelerate digital transition, and safeguard cash flow. For Sidetrade, 2020 was a banner year, with outstanding performance in sales and net earnings, along with overall strengthening of our financial structure. Never have we been so strong, and so ready to play a major role in the Order-to-Cash (O2C) market, which represents a potential of $10bn, given that less than 5% of businesses which would benefit from O2C technology are actually equipped with it.
For Sidetrade, the particular conditions of the year acted as a powerful catalyst for carrying out our Fusion100 strategic growth plan. Sidetrade has an undeniable technological lead in AI-powered O2C solutions, based on over $2,400bn in B2B transactions in our cloud. Moreover, now that we are integrating the unmatched performance of Amalto’s paperless B2B exchange solutions, Sidetrade is well-positioned as the partner of choice for world-class businesses.
More than ever, we are absolutely confident in the pursuit of our profitable growth trajectory. We will not stray from our Fusion100 plan of reaching sales of $100m by the year 2025. We have what it takes to be a global champion in a booming market.
Another year of double-digit growth: revenue up 14% and results up 55%
| Sidetrade (millions euros) |
2020 | 2019 | Variation |
| Annual Revenue | 29.2 | 25.7 | +14% |
| Operating Profit | 3.6 | 2.3 | +55% |
| Net Profit | 3.4 | 2.2 | +55% |
2020 accounts have been audited and will be certified after finalization of procedures required for the annual financial report.
Record backlog once again in 2020
Over the whole of fiscal year 2020, Sidetrade broke its record for enterprise account customers, with the addition of 45 subscribers joining the Sidetrade Cloud (vs. 37 in 2019). Enterprise accounts now represent 97% of bookings. The company is repeating its 2019 record performance in terms of bookings, with annual recurring revenue (ARR) from new enterprise accounts totaling €4.03 million (vs. €4.16 million in 2019), despite 2020 Q1 being hugely impacted by the sudden halt in economic activity. These new enterprise accounts have committed to average initial contract periods of 38.1 months (vs. 33.8 months in 2019), with a total value of new contracts signed of €11.95m (vs. €11.1 million in 2019).
Attrition remains under control for enterprise accounts with a churn rate of 5.6% as of 31 December, 2020, which represents an excellent result for the SaaS industry, whose average was 13.9% according to the “2020 SaaS survey results – Covid edition” by KeyBank Capital Markets (31 May, 2020).
Annual Income up an impressive 14%
Sidetrade posted annual revenue of €29.2m for 2020, up 14%. This steady growth, quarter after quarter, is purely organic, and demonstrates the attractiveness of Sidetrade’s offering in a business environment where cash collection has literally been a vital issue for companies. Sidetrade’s SaaS model, where 89% of revenue is recurring, has proven its resilience in the face of an economic crisis.
Dramatic increase in operating profit (+55%) and net profit (+55%)
Operating profit reached €3.6m in 2020, up 55% against 2019 (€2.3m).
This great performance can be explained by a €3.1m rise in gross margin, reaching €23.1m, i.e. 79% of revenue. SaaS subscriptions contributed 92% of this gross margin, confirming the incremental profitability of Sidetrade’s pure SaaS model.
Sidetrade achieved outstanding results in 2020, while continuing to invest heavily in sales and marketing (€2.6m, up 15%) to support future business development. At the same time, the unprecedented context of the COVID-19 pandemic actually generated savings of €0.8m, linked mainly to the fall in expenses such as travel and event marketing.
2020 operating profit includes a French Research tax credit of €1.8m (vs €2.0m in 2019), as well as activation of €0.2m in marginal R&D costs (virtually identical to 2019).
Corporate income tax is estimated at €0.05m in 2020 vs -€0.03m in 2019.
Finally, 2020 net profit was €3.4m, up 55%.
Reinforced financial structure
Sidetrade further strengthened their financial structure, with €14.3m in gross cash at year end (vs €5.3m in 2019). Financial debt remains virtually nil at €0.3m.
Sidetrade also holds 66,000 of its own shares with a value of €7.8 million as of 31 December 2020.
Unlike many firms, Sidetrade has had no need for emergency financial measures to withstand the COVID economy: there has been zero need for French government financial support, and jobs have been maintained without short time working.
A leap forward in Sidetrade’s Fusion100 plan with Amalto’s acquisition and confirmation of the ambition to reach a turnover of $100M by 2025
Sidetrade’s strategy is guided by a growth plan, dubbed Fusion100, to reach $100M in revenue by 2025, with a compound annual growth rate between 20% and 25% (vs. a mean of 15% for the last two years).
This Fusion100 plan has three key drivers:
Innovation: maintain the Sidetrade substantial lead in AI, and add further features to its platform, to provide the most comprehensive solution on the market. To accomplish this, €14m will be invested in R&D in the next 24 months.
Expansion: Sidetrade is doubling its European sales force to power up its leadership position, and also accelerating its international growth with the ramp up of North American operations.
External growth: On 12 April 2021, Sidetrade announced the definitive acquisition of Amalto, a North American specialist in SaaS for paperless B2B financial exchanges. With Amalto’s cutting-edge technology, and solid North American client base, this acquisition is a huge leap forward, both in terms of innovation and expansion. Amalto will be consolidated into Sidetrade’s accounts as from 1 April 2021.
This is an extraordinary opportunity. As the offerings of the two companies are very complementary, the mutual potential for sales development is fabulous. Amalto will enrich the Sidetrade platform with new features, such as paperless order processing and e-billing. This technology will be all the more important in Europe as e-invoicing becomes mandatory under EU regulations. Furthermore, Amalto’s strong client base, with around 40 large American companies gives Sidetrade prime access to the North American Order-to-Cash market, which is hyper-strategic for Sidetrade’s global development.
Sidetrade acquires 100% of Amalto for $16m
Sidetrade has acquired 100% of Amalto for a firm price of $16m in cash upon signature. In addition managers may receive an earn-out payment at the end of 2024, depending on revenue growth at that time. Sidetrade will finance this transaction via bank debt, to retain cash for possible further acquisitions. At the time of the transaction, Sidetrade’s cash position was €24m ($28.6m), including treasury shares.
Sidetrade’s Fusion100 growth plan picks up speed
This acquisition is a major milestone in Sidetrade’s Fusion100 strategic plan, which aims to reach $100m in revenue by 2025. With Amalto now on board, cumulative revenue could approach $43m in 2021, including nearly $7m in North America.
Amalto’s excellence in electronic invoicing- particularly in North America- fits in perfectly with Sidetrade’s global comprehensive O2C offering. The acquisition strengthens Sidetrade’s footprint in a rapidly expanding global market. Furthermore, Sidetrade’s and Amalto’s joint expertise will help their customers comply with changing regulations, as e-invoicing is becoming mandatory in many EU countries, including France.
The new organization detailed in the press release of 6 April 2021 is being implemented to integrate Amalto’s teams and product offerings into the Sidetrade family, and strengthen Sidetrade’s presence in the North American market. Sidetrade will make Amalto’s Houston offices its US headquarters.
As a result of this operation, Sidetrade could be generating nearly 20% of its revenues in North America, as early as this year.
Sidetrade’s offer is at $16m in cash for 100% of Amalto’s equity. In addition, the directors could receive an earn-out at the end of 2024 depending on the growth of Amalto’s revenues at that date. Two months after the launch of its Fusion 100 plan aiming for revenue of $100m by 2025, acquiring Amalto allows Sidetrade to reach an important milestone in the execution of its plan with a cumulative revenue that could approach $43m in 2021, including $7m in North America.
Sidetrade plans to finance the operation through bank debt in order to preserve cash for other possible acquisitions. The current cash position is €24m ($28.6m), including treasury stock.
Amalto has offices in Houston (USA), Calgary (Canada) and Paris (France), and is the North American integration specialist for the exchange and automation of O2C documents in the Oil and Gas industry. The business helps companies in a variety of industries where companies face a very high Day Sales Outstanding (DSO); and Environmental, where vertical markets present different business processes. Amalto does 90 percent of its business sales in North America and employs 21 people, including 15 in North America.
Each year, millions of transactions, representing billions of dollars, are made via Amalto cloud technology. Amalto’s customers include multinational giants such as Chevron, General Electric, and Schlumberger. The company has been able to build sustainable partnerships with its customers who renew their trust over the long term with an attrition rate below 2.5%. It has been rated by global IT advisory firm Gartner as one of three ‘Cool Vendors of Platform and Integration Middleware’.
In 2020 Amalto had revenues of $4.3m and recorded high growth and profitability with EBITDA above 20%. As of 31st December 2020, Amalto had a net cash position of over $1.2m.
Olivier Novasque, Founder, Chairman and CEO of Sidetrade, comments:
The Amalto deal is a powerful gas pedal for Sidetrade’s international business growth. Amalto’s innovative solutions will enrich our B2B AI platform, and the intention is this will be rapidly available to all Sidetrade customers. Sidetrade’s Cloud has recorded more than $2.4 trillion in business-to-business transactions over the past three years. Combining the technologies and talents of Sidetrade and Amalto will support our mission to be positioned as a true world-class leader in the O2C market.
We have been incredibly impressed by Amalto’s expertise in the dematerialization of financial flows. Their solution has a considerable technological lead, with a unique capacity to automatically integrate invoices in the main accounting systems and purchasing portals. Amalto is a champion of electronic B2B document exchange, with a unique position, focused on management of the entire O2C cycle. Amalto’s experienced teams in Houston and Calgary, and their loyal US and Canadian customer base, made up of large industrial and business service groups, will give Sidetrade great leverage in the North American market.
Amalto’s shareholder-directors are fully supportive of this operation and expect to pursue the adventure with Sidetrade until at least 2024. To facilitate synergy and carry out the strategic plan, Sidetrade intends to set up a new organization from day one, resulting in:
- Emmanuel Thiriez, Co-Founder and CEO of the Amalto group, joining the Sidetrade Executive committee as Chief Customer Officer, and being fully involved in the implementation of the Fusion 100 strategic plan
- Bryan Pederson, CEO of Amalto Corp, becoming AVP Customer Success, responsible for customer loyalty in North America and reporting to Emmanuel Thiriez
- The Amalto sales team immediately joining Sidetrade’s US salesforce
- Sidetrade establishing their US headquarters at Amalto’s Houston office
- Sidetrade expanding their Canadian business, and setting up their third Tech Hub in Calgary (after those in Birmingham, UK and Boulogne-Billancourt, France)
- Sidetrade counting on Amalto’s current senior management team to ensure the continuity of product development and customer service.
Amalto shareholder-directors can expect an earn-out by the end of 2024, based on revenue growth of Amalto solutions.
Emmanuel Thiriez, Co-Founder and CEO of Amalto, adds:
We are very pleased with the prospect of pursuing our adventure with Sidetrade. Being part of the Sidetrade family will allow us to realize our ambition of integrating the best of AI in our solutions and reaching the greatest numbers of businesses. By joining forces, we will strongly accelerate sales development in a buoyant market.
Sidetrade presents an impressive value proposition, built on innovation, customer value and growth. Our two firms are perfectly complementary in terms of solutions and geographic coverage. Our clients and products will benefit from synergy very easily due to seamless integration. Together, we will develop innovative solutions to meet the needs of businesses across the globe.
Digital transformation is gaining momentum in global businesses. The number of organizations looking to invest in O2C platforms and paperless transactions has been growing exponentially, and yet, only 5% of businesses have already found the solution they need. The market is ripe, and the potential for international sales is enormous.
The acquisition of Amalto permits Sidetrade to expand its footprint in a booming global market and fits perfectly with its Fusion 100 strategic plan in three ways:
1. Innovation
Sidetrade will enrich its augmented cash platform for the entire O2C cycle, with two new, high valued added modules:
- Augmented Order dematerializes all incoming customer orders and automatically integrates them into information systems, regardless of format (e.g. PDF, XML, EDIFACT). This significantly saves time, and increases reliability in revenue management
- Augmented Invoicing dematerializes, manages and strengthens the reliability of all customer invoices, automatically integrating them into accounting and purchasing systems. The solution enhances customer relations and ensures that billing fully conforms with the customer’s requirements to avoid payment disputes and reduce DSO.
The market launch of these two new modules in Sidetrade’s Augmented Cash platform will give Sidetrade a real competitive edge, with a multitude of new sales opportunities throughout their customer base.
2. Regulatory environment
A growing number of countries are expected to make e-invoicing mandatory, as is now the case in the EU, where member countries must adapt their legislation to Directives 2010/45/EU and 2014/55/EU, which seek to facilitate cross-border business transactions through common invoicing standards. Several EU countries have already been e-invoicing obligatory in public sector transactions to simplify tax compliance and cut costs.
3. Geographic expansion
Sidetrade already has a toehold in North America, working with big-name firms such as Expedia, Tech Data, Hearst Magazines and Talend. Now it is time for their North American business to really take off! For Sidetrade, conquering the North American market is fundamental to their ambitious development plan, called Fusion 100. The kick-off operations on North American soil, with sales management recruitment starting in February 2021, is the first step in this plan. Onboarding the members of Amalto’s Houston and Calgary teams is a tremendous opportunity. The Houston operation is a chance for both to raise Sidetrade’s position in the US, and to promote other Sidetrade solutions to Amalto customers. The American market for O2C platforms is estimated at $5bn, which represents 50 percent of the global market, according to Midcap Partners.
With the operation, Sidetrade could be earning 20 percent of their income in North America, as early as next year.
Final completion of this acquisition will take place before 18th April, 2021.
For further information, visit: https://www.sidetrade.com/amalto/