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Investing.com -- German software company Nemetschek reported strong second-quarter results, prompting an increase in its full-year growth guidance.
The company posted Q2 revenues of €290 million and EBITDA of €89 million, representing a 30.5% margin. These figures were previously preannounced on July 24.
In the detailed report released Thursday, Nemetschek revealed its Design segment grew by 17%, accelerating from 11% growth in the same period last year. The Build segment showed the strongest performance with 31% organic growth, up significantly from 10% in Q2 2024, while Media expanded by 6%, matching its year-ago growth rate. The Manage segment declined by 1%, an improvement from the 2% drop in Q2 2024, as the company deliberately reduced consultancy work.
The Build segment was the largest contributor to the €27 million year-over-year EBITDA increase, adding €14.4 million, which included €5.0 million from the GoCanvas acquisition. The Design segment contributed €13.3 million, while Media saw a €0.6 million decline.
Despite being primarily based in the U.S. and affected by a weaker dollar, GoCanvas contributed €20.2 million to Build sales, up from €17.0 million in Q1, with its margin improving to 25% from 19% in the first quarter.
Annual recurring revenue grew by 29% organically to €1,078 million, exceeding analyst expectations of €1,052 million. The share of recurring revenue increased to 93% from 92% in Q1. Subscription and SaaS revenues grew by 58% year-over-year, while license sales fell by 44% and support revenues declined by 18%.
Free cash flow reached €55 million compared to €54 million last year, with multi-year subscription deals in the Design segment having an impact. The company’s headcount increased by just 47 employees, or 1.2%, quarter-over-quarter.
Nemetschek has raised its full-year growth guidance to 20-22%, up from the previous 17-19%, while maintaining its EBITDA margin target at 31%. The company now expects GoCanvas to contribute 450 basis points to growth, up from the previously estimated 350 basis points.
The updated guidance assumes that "macroeconomic and industry-specific environments do not materially deteriorate" for the remainder of 2024.
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