Earnings call transcript: TeamViewer’s Q2 2025 revenue rises, stock surges

TeamViewer AG, with a market capitalization of $188 million, reported a 6% year-over-year increase in pro forma revenue for the second quarter of 2025, reaching €191 million. The company’s adjusted EBITDA rose by 17% to €84 million, expanding the EBITDA margin from 40% to 44%. Following the earnings announcement, TeamViewer’s stock rose by 5.59%, reflecting investor optimism about the company’s performance and future prospects. According to InvestingPro data, the company maintains impressive gross profit margins and has been profitable over the last twelve months.

Key Takeaways

• TeamViewer’s Q2 2025 revenue increased by 6% year-over-year.
• Adjusted EBITDA grew by 17%, with a margin expansion to 44%.
• Stock price increased by 5.59% following the earnings announcement.
• Strong growth in enterprise revenue, up 15% year-over-year.
• New product launches and AI integrations bolster market position.

Company Performance

TeamViewer demonstrated robust performance in Q2 2025, driven by growth in both its enterprise and small-to-medium business (SMB) segments. The company’s enterprise revenue saw a significant increase of 15% year-over-year, while SMB revenue grew by 3%. This performance is notable in a challenging macroeconomic environment, particularly in the U.S. market.

Financial Highlights

• Pro forma revenue: €191 million (+6% YoY)
• Adjusted EBITDA: €84 million (+17% YoY)
• EBITDA margin: 44% (up from 40% YoY)
• Annual Recurring Revenue (ARR): €759 million (+4% YoY)
• Enterprise revenue: €59 million (+15% YoY)
• SMB revenue: €132 million (+3% YoY)

Earnings vs. Forecast

TeamViewer’s Q2 2025 earnings per share (EPS) and revenue exceeded market expectations. The company reported pro forma revenue of €191 million against a forecast of €191.17 million. The slight deviation from the expected revenue did not negatively impact investor sentiment, as evidenced by the stock’s positive movement.

Market Reaction

Following the earnings release, TeamViewer’s stock price surged by 5.59%, closing at €9.74, up from the previous close of €9.22. This increase is attributed to the company’s strong financial performance and positive outlook for the remainder of 2025. InvestingPro analysis shows the stock is trading at a low P/E ratio relative to near-term earnings growth, suggesting potential upside. The stock’s current price sits comfortably between its 52-week range of $26.16 to $44.30, with an overall Financial Health score of "FAIR" according to InvestingPro metrics.

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Outlook & Guidance

TeamViewer has provided full-year 2025 guidance, projecting ARR between €815 million and €840 million, representing growth of 7.5% to 10.8%. The company expects pro forma revenue to range from €778 million to €797 million, with anticipated growth acceleration in the second half of the year. Key strategic focuses include cross-selling opportunities and platform consolidation.

Executive Commentary

CEO Oliver Stael expressed optimism about the company’s future, stating, "We expect clear growth acceleration in the second half of the year." Chief Commercial Officer Mark highlighted the innovative pricing strategy for the new DEX Essentials product, noting, "With DEX Essentials, we are introducing a different pricing logic to TeamViewer customers."

Risks and Challenges

• Macroeconomic uncertainties, particularly in the U.S. market, could impact growth.
• Federal public sector spending remains uncertain, posing potential challenges.
• Competitive pressures in the digital workplace management space could affect market share.
• Dependence on successful integration of AI capabilities into existing products.
• Seasonal nature of enterprise deal closings may affect revenue predictability.

Q&A

During the earnings call, analysts inquired about the challenges in the U.S. federal market and the company’s pricing strategy for DEX Essentials. TeamViewer executives confirmed their confidence in the current sales pipeline and conversion rates, emphasizing the seasonal nature of enterprise deal closings and the potential for contract duration and pricing modifications.

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Full transcript - TeamViewer AG (TMV) Q2 2025:

Youssef, Chorus Call Operator: Morning, ladies and gentlemen, and welcome to TDDIORE’s twenty twenty five Q2 Earnings Call. My name is Youssef, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and that this conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast.

At this time, it’s my pleasure to hand over to Bizira Grubezic, Vice President, Investor Relations. Please go ahead.

Bisera Grubesic, Head of Investor Relations, TeamViewer: Thank you, operator, and good morning, everybody. Welcome to TeamViewer’s Q2 earnings call. I am Bisera Grubesic, Head of IR, and I am joined today by our CEO, Oliver CFO, Michael and CCO, Mark. Oliver will run you through the quarterly business highlights, Mark will talk about our new product launches in the DEX and digital workplace space, and Michael will present the financials. The presentation will be concluded by a Q and A session.

Same as in Q1, we will present non IFRS pro form a top line and adjusted EBITDA performance. And please note that you can find the important notice and the APM disclosure on Slides two and three. And with this, I hand it over to Oliver to kick off our presentation.

Oliver Stael, CEO, TeamViewer: Thank you, Bidira. Good morning, everyone. Also, welcome from me. Thank you for joining our call today. As always, let me begin with the highlights of the last quarter.

Think in the second quarter, we made really good strategic progress with our enterprise business as an important driver of our performance, With a strong double digit increase of 15%, it contributed a lot to our solid pro form a revenue growth of 6%, both numbers in constant currency and year over year. And as you know, second quarter is rather not our strongest as we are really in pipeline build mode for the Enterprise business for the second half of the year. We really believe that these are good results. The pro form a AI increased by 4% in constant currency. We would say that our performance in the last quarter was somewhat impacted by the difficult macro environment in The U.

S. Market, which I will talk about a bit more in a few minutes. It’s important to mention that we already see very promising pipeline for the second half of the year, as we would expect, obviously, for the Enterprise business. Profitability continued to be very strong in Q2, with adjusted EBITDA up 17% year over year and a really strong margin of 44%. This is a significant increase of four percentage points year over year.

We also made very good progress with the integration of 1E technology into our product portfolio. During the last month, we delivered several platform enhancements as we announced first DEX Essentials and then TeamViewer one as the platform proposition. Mark will go deeper into these product updates later, but I think I can already say that we are seeing promising early momentum in the digital workplace offering, so DEX Essentials and TIM UO-one, very pleased with this. Obviously, we know that we continue to operate in a pretty volatile global economic environment, and we’re trying to be prudent and cautious. But we do expect clear growth acceleration in the second half of the year.

And based on our strategic progress, we are really confident to reach our targets, and therefore, we reiterate our pro form a full year 2025 guidance. Let’s now look at the regions and customer categories and how they developed in the quarters. Revenue grew across all regions in Q2, strong growth in EMEA and also really encouraging development in APAC. I think both underscore the resilience and the adaptability of our business, while the headwinds in The U. S.

Impacted our performance in The Americas to some extent. EMEA was our strongest region in Q2, delivering almost €100,000,000 in revenue, which is up 8% year over year. And that’s despite the global macroeconomic uncertainties. I think EMEA really proved to be a reliable growth engine. The region benefited from robust enterprise growth, underlying the value and the relevance of our offering.

In The Americas, second largest region, we generated €72,700,000 in revenue, which is a 3% reported growth and 5% in constant currency. Obviously, the political environment in The U. S. Resulted in overall uncertainty that affected customer decision making. In addition, it really led to some budget cuts in the federal public sector, and this impacted 1E, as 1E is traditionally relatively strong, in the government space with large customers there.

So that was a bit, a worry going into q two. But that said, we actually did retain, the key federal clients, like, for example, the US Department of Veteran Affairs, which is a huge deal for us, which in our view really demonstrates the critical value of our solutions to such organizations. SMB sentiment was also a bit subdued, but we did see encouraging early traction with our new offering, which is targeted towards SMB, which is the DEX Essentials, which we launched a few weeks ago, which is going to have general availability actually starting today. So far, it was a limited go to market. If we come to APAC, APAC delivered €18,200,000 in revenue, which is up 3% reported and 4% in constant currency.

Clearly, we know there’s ongoing macro challenges with China, not an easy market. But given that, the region showed pretty solid growth, particularly again in the Enterprise segment. And interestingly, we also saw positive uptake of the DEX solutions in the region. So we did win three promising paid POVs in South Korea, which, from our perspective, really reinforces the strategic rationale. DEX will be an important proposition for the Asian market for some key countries like South Korea, Japan, and others.

And we’re really pleased to see that we leveraged our office and team infrastructure over there to already win customers. So that’s a very nice development, which gives us confidence for the cross sell pipeline also towards the second half of the year. Across our customer categories, the Enterprise business continued to demonstrate strength resilience. Enterprise revenue grew 15% year over year in constant currency, reaching €58,700,000,000 in Q2. And this performance reflects the consistent demand for our high value solutions and their strategic relevance for large organizations.

Enterprise ARR grew double digit year over year, mainly driven by the continued strength of the TeamViewer enterprise business. This was partially offset by softer performance from 1E, which, as I discussed before, faced few headwinds due to the challenges in The U. S. And the recent budget cuts in U. S.

Federal customers. And in addition, please don’t forget 1E was affected by really a quite tough year over year comparison and then the general seasonal effects of larger deals in this category coming through mostly in the second half of calendar year. If we come to SMB, revenue growth improved a bit compared to Q1 by one percentage point, representing 3% year over year increase in constant currency. ARR growth was modest at 1%, which I think is reflecting also the broader macroeconomic pressure that smaller businesses face actually globally. And while sentiment in most markets remained cautious, we actually are happy to see the early traction of our DEX essential offerings that I mentioned before already, which I think is a very promising sign of that strategic expansion and that we will have a very interesting offering for the SMB space that we can use to cross sell.

Let’s now look at the ARR value ranges as user in enterprise and SMB. So looking at the development of our ARR value ranges, we see continued strength in enterprise and a more mixed picture in SMB on this page. In enterprise, value ranges up to below €100,000 delivered continued strong double digit year over year growth, highlighting the healthy demand for our solutions across a wide range of customer profiles. The largest enterprise ARR value range above €200,000 was up 8% year over year in constant currency. That’s reflecting the effect of tougher comps 4NE, the macro difficulties in The U.

S. That I mentioned and their impact on larger enterprise customers, particularly on 1E side. We anticipate a recovery in this segment as we really see the macroeconomic conditions stabilizing now. And we see very good momentum in the pipeline development for the second half of the year with larger pipelines in 1E and TMUA and cross sell, bigger deal sizes in January towards the second half of the year and also improved conversion rates. In SMB, new customer inflow was more muted, and ARR growth was primarily driven by the highest value range, as you can see here.

This is always reflecting the very successful upselling into higher tiers as more customers adopt richer product packages. This is also further supported by our continued net upsell to the Enterprise segment of 16,800,000 in this quarter. Let’s now have a quick look at the progress of our integration with 1E on the next slide, please, before Marc then elaborates on the expanded Dex and digital workplace offerings. So integration of 1E is progressing fully in line with our expectations, very positive, continues to unfold as planned. I think, actually, even a bit faster than we had originally thought on the product side.

We did achieve major milestones already with new products, and, also developed the corresponding go to market strategy. Again, all of this will be explained by Mark in a bit. But we are all very proud, of the team delivering such significant steps forward in a relatively short amount of time. Remember, we only closed the transaction January, and we already have integrated product offerings out there in the market, which DEX Essentials being on GA actually today. If we look at process and infrastructure, as you would expect, we’ve begun consolidating key systems, including R and D tools, CRM, and other core infrastructure.

This does not only support operational alignment, but it really opens up further opportunities for some efficiency gains as well. As we move forward with our transition plan, we will continue to assess and capture synergy potential wherever possible in this post merger integration as well. With this, let me hand it over to Marc, who will give you an update on our combined product offering. Mark, please.

Mark, CCO, TeamViewer: Thank you, Oliver, and a warm welcome from me also to everyone. I’m very excited to guide everyone through the enhanced decks capabilities Oliver mentioned briefly several times today and explained the strategy behind them and what will drive, significant growth acceleration in the second half this year. Our second quarter saw significant progress regarding the ongoing integration of decks technology into TeamViewer’s portfolio and platform. In May, as you already know, we introduced Dex Essentials, a new offering designed to make Dex capabilities available to a much larger market, specifically the SMB businesses. It is available as an add on to our commercial remote connectivity solutions.

So a very easy way for customers to add this to their current products. DEXA Sensors is based upon one e technology, which was originally intended for very large enterprise organizations. We have adapted it to meet the needs of both smaller IT teams. We already see good momentum even though we introduced it into a curated sales motion through inside sales and to selective customer groups only, we will make it available to the entire custom base and through more sales channels from this week onwards. Strategically, DEX Essentials is laying a very important foundation for further development.

Firstly, we are significantly expanding the potential customer base for Dex products, and we are looking at a substantial upselling potential with our existing TeamViewer client base of more than 600,000 customers. Secondly, this is a very import this is this is very important. With DEX Essentials, we are introducing a different pricing logic to TeamViewer customers, namely a per, endpoint price. This brings me to team b o one, the unified digital workplace management platform that we also announced in May. With this, we are meeting the significant demand of IT buyers for tool consolidation with a complete IT management suite from a single vendor.

Team v o one brings together endpoint management, remote connectivity, AI, and decks into a single platform. This is where the market is heading, and we are already delivering this to capture the latent demand for an integrated single platform. And clearly with DEX Essentials, we are strategically paving the way for ultimately upselling DEX Essential customers to TeamViewer one. On top of that, we are proud that the strength of the TeamViewer’s tech DEX technology was confirmed by an independent source at the May. As you can see on the right hand side, we were recognized as a leader in Gartner’s Magic Quadrant for decks management tools.

This is the first time since the one e acquisition that the TeamViewer brand shows up in this relevant industry analyst report. Important customer wins in the debt space since the closing include one of the world’s largest law firms amongst many others. As Oliver outlined, The US related political uncertainties impacted the OneE sales motion given that One e has significant exposure in The US, particularly in the public sector where efficiency programs and budget cuts are affecting IT spend. However, despite these setbacks, we have managed to retain key customers. Equally importantly, we are in a good conversations with potential new customers, and the decks cross sell pipeline to TeamViewer’s existing customer base is very promising.

Almost all mid to large enterprises today are looking to deploy decks technology. These cross selling opportunities from a key from a key part of our go to market strategy, and it is great to see that we are moving forward and as anticipated. We expect a lot more traction and higher win rates now that sales enablement for the new integrated products has progressed significantly across all sales teams and in all regions. Integrating two teams, systems, and infrastructures has made significant progress so that we can expect expect focused execution in the second half of the year. In summary, we are receiving excellent feedback from the market regarding our new decks and digital workplace offerings despite the challenging macro.

Everybody understands the beauty of combining on demand remote support, proactive issue detection, and remediation from decks. We have a promising pipeline in place, including a very good proportion of larger deals, and we expect a good conversion towards the end of the year as is typical in the enterprise business. That said, we anticipate to deliver growth acceleration in the second half of the year. Thank you very much. Back to you, Oliver.

Oliver Stael, CEO, TeamViewer: Yeah. Thank you, Mark. I think beyond the developments in the decks and the digital workplace space, obviously, we’re also not standing still on the original TeamViewer side. And TeamViewer, we also made very strong progress with our AI offering in the second quarter. We have consistently expanded the AI feature since their launch in the last year.

And in addition to the session insights and the analytics capabilities that we had introduced already in October, we’ve now added TeamViewer Copilot, which is an AI assistant, which is embedded inside our, remote support product, and works throughout the remote support sessions. So how it works is then an IT service desk agent can then chat with the copilot in real time, for example, to access device data, diagnose issues, generate resolution workflows, or then even automate everyday tasks. July, we bundled the AI capabilities into a single add on, for our customers, which is named TeamViewer Intelligence. And with our enhanced AI offering and our leading DEX capabilities, we position TeamViewer now at the forefront of the digital workplace transformation. And we are very confident to capitalize on the early successes that we have in this space already.

So if I conclude this part of the presentation, I think we achieved very relevant milestones in the second quarter. We are reiterating our full year guidance, and we expect to deliver growth acceleration in the second half of this year. We made very good progress with our product integration and the launch of new products in the digital workplace space. And now we have an enhanced offering for enterprise and SMB customers. We have targeted go to market strategies in place for all our products, and we are improving the customer journey and the sales channel specifically for SMB to reignite growth in that space as well.

And like this, we are unlocking new cross sell opportunities in this segment. We’ve completed a good portion of the integration work in the first half of the year already, so we can fully concentrate on execution in H2. And we see really good progress on pipeline development with larger pipeline for TeamViewer, for 1E Dex and also for cross sell with higher value deals, and we expect to materialize particularly in Q4 when enterprise business typically sees a seasonal peak as you’ve seen in the previous years as well. And with this, I would like to hand over to Michael now for the financial overview. Thank you.

Michael, CFO, TeamViewer: Thank you, Oliver and Marc, and good morning, everyone. Let us now have a look at our key financials for the 2025. Next slide, please. TeamView delivered a solid second quarter. Our revenue reached around €191,000,000 up 6% year over year in constant currency.

Strong growth in the EMEA region more than offset the softness in The U. S. Market. And our profitability remained strong. Pro form a adjusted EBITDA increased by 17% year over year to €84,000,000 resulting in a significant year over year margin expansion from 40% to 44%.

Profitability benefited from optimized marketing spend in the sponsorship area. Pro form a adjusted EPS was up 90% compared to TeamViewer stand alone in the prior year, reaching €0.28 for the quarter. And I’m pleased to share that our pro form a net leverage ratio further improved to 2.9x, down from 3.1x in Q1 ’twenty five and is fully in line with our deleveraging targets. Now let’s dive into the details of our Q2 results. Next slide, please.

Pro form a revenue in Q2 grew by 6% year over year in constant currency to around €191,000,000 Cvio standalone contributed €174,000,000 also growing 6% year over year. This was supported by a strong enterprise momentum over the last twelve months in the EMEA region. ONE E stand alone generated €70,000,000 in pro form a revenue, reflecting a 7% increase year over year in constant currency. ONE E’s revenue growth was affected by tougher year over year comp due to its U. S.

Department of Veteran Affairs contract that was signed last year in Q2, seasonal effects and additional headwinds due to recent U. S. Federal budget cuts. ARR grew by 4% year over year in constant currency and reached €759,000,000 As Oliver explained, the enterprise ARR grew by double digit percentage year over year, driven by the continued strength of the TeamViewer enterprise business. This growth was partially offset by softer performance from 1E.

Sequentially, ARR was broadly flat, primarily due to the challenging U. S. Market conditions during Q2 and also sequential negative FX effects. Importantly, our profitability remained strong with an adjusted EBITDA margin of 44%. Let us continue with our Enterprise business on Slide 14, please.

Enterprise continued to deliver double digit growth in both revenue and ARR, underscoring the fundamental strength of TeamViewer’s core business. Pro form a revenue reached EUR59 million in Q2, marking a 15% year over year increase in constant currency. ARR also grew by 13% year over year in constant currency, reaching €227,000,000 by the end of the first half year. This performance was primarily driven by the EMEA and the APAC regions, both of which demonstrated a solid enterprise momentum. Given the nearly all One East business falls within the enterprise category, the macroeconomic uncertainties in The U.

S. Had a notable impact on overall growth. Additionally, year over year growth in enterprise ARR was tempered by the high value deals 1E secured in Q2 of last year, which led to tough year over year comps, as we discussed during our last call in May. The enterprise net retention rate, which had benefited from 1E’s contribution in Q1 and the high value deals of 1E secured in Q2 of last year, declined by five percentage points to 98% in Q2. Adjusted for the upsell from SMB customers during the period, enterprise NRR reached 103%.

As shown on the top right of the slide, the number of enterprise customers continued to grow, both sequentially and year over year, reaching now 5,143 customers at the end of the quarter. Pro form a enterprise ASP remained steady at €44,000 per customer. Let’s now move on to our SMB business on Slide 15. Laterally, the broader macroeconomic environment also influenced our SMB customer base. Given the prevailing macro sentiment, our SMB business delivered a solid performance in Q2.

The pro form a SMB revenue reached €132,000,000 for the quarter, up 3% year over year in constant currency. This reflects a zero percentage point improvement in growth trend over Q1. SMB ARR grew by 1% year over year in constant currency, totaling €532,000,000 now at quarter end. This growth was supported by good traction in the EMEA region, partially offset by the slowdown in The Americas. SMB counted 651,000 customers at the end of the quarter.

Somewhat lower customer count was primarily preliminary due to slightly higher churn and limited new customer inflow, both linked to the temporary macro challenges in The U. S. Market in particular. Our SMB ASP was up 3% year over year and reached EUR817. This demonstrates our ability to expand the business with existing customers through effective cross and upselling initiatives.

As part of our ongoing efforts to increase customer value and drive monetization, we have recently embedded new webshop functionalities directly into our products. These enable personalized add on offerings based on actual customer usage, creating a more tailored and seamless upselling experience. We expect this to have a positive impact on our SMB business alongside the rollout of DAX Essentials and our AI powered features, both of which open up additional upselling potential. Let us now take a look at our cost base on the next slide, please. The pro form a adjusted EBITDA margin improved significantly by four percentage points year over year, reaching now 44% in the quarter.

This was driven by our optimized sponsoring spend. Most recurring cost items as percentage of revenue remained stable or slightly declined compared to the same quarter last year. As previously communicated, we saw a sequential increase in marketing expenses of around EUR 5,000,000, primarily due to the launch of our new Make Work Work Better brand campaign at the April. Despite this, total marketing costs were 12% lower than in Q2 twenty twenty four. Our primary areas of investment were sales and research and development, which increased by 78% year over year, respectively.

These investments were focused on hiring new talent to support our sales efforts across all regions and to drive the development of innovative product features, some of which Oliver and Marc presented earlier. The gain recorded under other cost items reflect lower bad debt and proceeds from the derivatives during the quarter. Overall, the recurring cost decreased by 2% year over year whilst we continued to invest into strategic growth initiatives. Let us move on to net income and EPS development on Slide 17. Pro form a adjusted earnings per share was €0.28 in Q2, up 19% year over year compared to TeamViewer stand alone.

For further details, please refer to the pro form a adjusted net income bridge on Page 12 of the earnings press release. Main driver for this strong result is the optimized sponsorship cost and the 1E contribution in the quarter, which led to an IFRS EBITDA of nearly EUR 83,000,000, up 38% year over year compared to TeamViewer standalone. Total interest expenses for the quarter amounted to €10,400,000 an increase of €5,700,000 year over year, driven by the financing of the 1E transaction. Financial FX result increased by €21,000,000 year over year. In addition to the €5,700,000 interest impact, the FX result reflects negative translation effects related to an intercompany loan, which is required under IFRS.

Our share count was around 3% lower year over year due to our continued buybacks during 2024, and this further supported the EPS growth in the quarter. With this, let’s move on to cash flows on Slide 18. Adjusted for the nonrecurring items related to the ONE E acquisition, levered free cash flow amounted to €59,600,000 in Q2. This translated into a strong cash conversion of 71% for the quarter. For the full year, we continue to anticipate a cash conversion rate of around 70% at guided FX.

Other factors influencing cash flow in Q2 included higher working capital, driven by phasing effects from high value contracts and increased interest payments related to the ONEe acquisition. This was partially offset by lower tax payments, which mainly result from changes in our tax scheme and phasing effects. I will now give you a short update to our financing on Slide 19. We continue to deleverage in line with our targets following the 1E acquisition. During the quarter, our pro form a leverage ratio improved further to 2.9x, down from 3.1x in Q1 ’twenty five.

Cash and cash equivalents amounted to around €41,000,000 at the end of the first half of the year, down around €50,000,000 compared to year end 2024. CapEx and acquisition costs for 1E of €686,000,000 were balanced by our operating free cash flow of €110,000,000 and borrowings of €590,000,000 As of June 30, financial liabilities amounted to roughly €1,000,000,000 an improvement of around €130,000,000 compared to the end of Q1. Net financial liabilities totaled €992,000,000 at the half year mark. Despite ongoing macro challenges, we remain firmly committed to disciplined capital allocation. Combined with our strong cash profile and solid cash conversion, this positions us well to achieve our leverage target of around 2.6x by year end 2025 and below 2x by the 2026.

Let us continue with our financial guidance on the next slide. We delivered a solid performance in the second quarter. These results are particularly noteworthy given the difficult conditions in The U. S. Market, in particular, where uncertainty and delayed customer decision making affected the overall environment.

Looking ahead, we reiterate our full year guidance. For full year 2025, we anticipate continued top line growth on a pro form a and like for like basis, as outlined in the table. We expect the ARR growth to range between $815,000,000 to €840,000,000 which reflects between 7.510.8% year over year. We expect full year pro form a revenue between $7.78 and €797,000,000 This translates to between 5.17.7% year over year growth. Let me remind you that our full year guidance is based on a eurodollar FX exchange rate of 105.

At an assumed yearly average rate of 114, the ARR range would be reduced by around €24,000,000 and the revenue range would be reduced by a low teens million euro amount, 10 to 12. Our guidance implies a growth acceleration in the second half of this year. Let me outline why we expect this acceleration. First, I have been with the company now for three years, and our expected growth acceleration aligns with seasonality patterns observed in the previous years. And this trend is once again evident in the strength of our pipeline.

As Oliver and Marc explained, we are already seeing a larger pipeline and higher conversion rates. Strength in sales execution in recent months is expected to drive improved win rates. Additionally, we anticipate larger deal volumes, particularly in Q4, when enterprise typically experiences a seasonal peak. Second, we are starting to see ARR synergies from the ONEe acquisition. Although our new DEX offerings have only just launched, we’ve already secured promising leads from our existing TeamViewer customer base.

And third, we are improving the customer journey and sales channels, especially for SMB to reignite that space and unlock new cross sell opportunities for our AI and DEX offerings, for example, with our new in product marketplace and a broader adaptation adoption of the new UI. Fourth, in that context, we will continue to run targeted go to market campaigns to strengthen performance across all of the regions. And finally, with the team integration progressing very well, we are now shifting our focus from organizational alignment to operational execution, which enables us to drive growth more effectively. We will continue to monitor macroeconomic developments closely and remain disciplined in our approach. That said, we are confident that the measures we have outlined positioned us well to achieve our targets for the full year.

With this, I would like to hand back to the operator to open the Q and A.

Youssef, Chorus Call Operator: We will now begin the question and answer session. The first question comes from Mo Moala, Goldman Sachs. Please go ahead.

Mo Moala, Analyst, Goldman Sachs: Great. Thank you. Hey, Oliver, Michael and Mark. I had two questions. Firstly, can you talk about sort of the delta between sort of ARR and the kind of slight acceleration in revenue growth you need to hit the midpoint of your guidance?

And what are the kind of factors that underpin your visibility? I know that the enterprise business and probably 1E is going to be a bit more back end loaded to Q4 given the larger deals. But, specifically, on the SMB side, you know, what is the sort of pipeline that you have around the new SuriTech’s product? And and the second question is, you know, on the SMB side, we saw some pickup in the churn now. Any sort of particular reasons for that?

And as we think about your marketing spend, do you need to step up sort of campaigns to sort of stimulate, this growth in the second half as well? Thank you.

Oliver Stael, CEO, TeamViewer: Yeah. Hi, Moe. So, yeah, as you say, AI acceleration on the enterprise side, I think it’s I think it’s pretty clear. I I read your question as that pipeline pipeline coverage is well understood, And it’s just it’s not a little bit seasonal. It’s really significantly back end loaded as we’ve seen in other years, if you look at q four.

And then also with one e, this is even more the case because the deal size is larger, and it’s more strategic purchase or procurement decisions, which are typically taken more towards the end of the year with budgets being available and so forth. So I think that’s pretty clear. SMB, AR acceleration on SMB, yeah, we need a we need a notch up, in terms of growth, when we go through the year. Clearly, there has been a lot of focus, on enterprise recently and then the 1E acquisition and the integration work. In parallel, we have reworked our campaign structure for SMB.

We’ve also reworked the in product presentation of cross sell opportunities. We are also rolling out our newer remote product with a new UI. If you are on the new product as a customer, then it’s much easier to access and purchase cross sell products in remote management, patching DEX essentials, also and so forth. So there’s a shift going on in the customer base to move the customers to the new UI and by that have more opportunities to do in product promotions and direct on the web purchases. So there’s a significant shift in how we speak to our customers and address cross sell.

And then thirdly, new products and new own products. So DEX Essentials and TMJO one are our own products with our own functionalities, fully integrated with the TMJO core proposition. So this is a significant shift. As you know, the cross sell products in the SMB space, notably endpoint protection, patching, are third party products, which are OEM ed and then integrated into our flow. That’s good, but it’s obviously much, much better to have the latest and greatest functionality in IT automation, which we have with TIMU-one and DEX Essentials.

And that’s why we have been pushing a lot to bring this to market quickly. As I said before, general availability is only today, actually, really today at noon. And from there, we will drive the cross sell initiative. So these things, important on the kind of marketing, product positioning, and sales side for SMB. And then they will have we will have a washout of like for like price increases that we did in the past.

So we will have less tough comps on the pricing side. And we also would see the churn initiatives that we’ve put in place last year coming to fruition more and being effective. We see early indications there in The Americas and significant improvement on the churn in SMB in APAC over the last quarters, and we believe that this will continue to be the case. So this is ARR SMB. I don’t I think I almost covered second question as well.

Michael, CFO, TeamViewer: No. There there was on the campaigning and whether we have to step up on the spend in marketing, especially with what Oliver outlined. We did accelerate the spend in q two for all the purposes we explained, So that should come rather down with all the new initiatives which are in product, so rather less spend. That’s the idea. Maybe the last one on the SME churn that was really driven by The US.

So it’s it’s really we believe at CNO that this is to the to the macroeconomic situation, which should really cool down now.

Mo Moala, Analyst, Goldman Sachs: That’s great. Thank you.

Youssef, Chorus Call Operator: The next question comes from Florian Trausch, Kepler Cheuvreux. Please go ahead.

Florian Trausch, Analyst, Kepler Cheuvreux: Yes. Good morning all. My question is, again, on the SMB space, but more related to DEX Essentials. I mean, you mentioned the general availability starting today. Can you give us some feedback on, I mean, the last couple of weeks, or let’s call it, testing the market period?

What is the feedback from clients? What do you believe is the realistic ASP assumption here? I mean, it’s probably just out today, so maybe give us some color on the pricing strategy here. And what you believe can be, let’s say, the add on growth for SMB overall in coming quarters. Yes,

Oliver Stael, CEO, TeamViewer: happy to. So I’m going disclose all the details on pricing and positioning here in in in a call like this, but, because also there’s a competition out there. We are ahead, and we want to stay ahead. So what are we doing? So a DEX Essentials is a reduced version of the DEX proposition.

So it’s a set of key automations to remediate common widespread IT issues on customer endpoints. We target customers that, in the SMB space that are managing a couple 100 endpoints, up to a few thousand maybe. So so that’s obviously important that you have an amount of endpoints that you’re managing. So then naturally, if you think about our SMB segmentation, that fits nicely into the customers that buy, premium and corporate licenses, so say customers that are sitting in license count above euro amounts of €1,500, between €1,500 and 10,000. So that’s the sweet spot.

Heavy users of our product, managing a good set of IT endpoints, and we position the product to this. Through inside sales, so this is an assisted sale with with an with a person. And what is most important in these things is the feedback you get from your sellers early on when they touch the product and talk to customers, and this is very positive feedback. So we’ve closed a very good number of deals already with customers. Customers understand the proposition.

It is an obvious, add on to what we do because it is allowing for some self healing or self remediation of issues on the IT side. Pricing wise, interesting. This is endpoint based pricing. So as you know, TeamViewer in general is channel based pricing or mostly seat based pricing. Here, we move to endpoint based pricing, which is where the market will go.

Also, if you think about a proposition like TeamViewer one, this will also or is also going to be endpoint based. So this is a step into endpoints. So the customer has a license with us, which is technician based, and then tells us how many managed devices they would move to the DEX Essentials platform, and that’s then priced per device per year in a nice single digit euro amount. And if you put that all together, then you see that it’s a meaningful upsell. If you take a €2,000 license or so and then take a thousand endpoint situation, and you take the pricing I just mentioned, you find that it’s easily a 40 thirty, forty, 60% upsell, if customers decide to add DEX Essentials.

So, that’s that’s how we’re playing around with it. So early days, as I said, And as you said, general availability today, and then we will take it from there, but promising early results. Hope that answers Yes, your

Florian Trausch, Analyst, Kepler Cheuvreux: perfectly. Thank you very much.

Youssef, Chorus Call Operator: The next question comes from Alice Jennings, Barclays. Please go ahead.

Alice Jennings, Analyst, Barclays: Hi, good morning. Thank you very much for taking my question. I just had a couple thinking about the ARR acceleration for H2. So firstly, you spoke on the call about an improvement in conversion ratios in h two. I was wondering if you could quantify how much of an improvement you need, compared to historical conversion ratios in order to achieve the midpoint of that ARR guidance?

And then also from a phasing perspective, so you’ve spoken to a back end loaded acceleration in ARR growth, especially in Q4. But how much can we reasonably expect to see already, in the third quarter?

Oliver Stael, CEO, TeamViewer: So I think the the first question, 100% right. So, obviously, we track pipeline, and we have a historic view on conversion rates if we go into Centimeter Enterprise and also 1E, because we’re both tracking we were both tracking pipeline in the past, different systems, but we have merged the two systems now. And so we have a have a view on this. The what we’re assuming when we go into the second half of the year and how we look at the pipeline is actually the historical conversion rates that we were seeing in previous years. I think the what what is fair to say is that Q1 and Q2, especially Q2 conversion, was low, because of the macro uncertainty.

So we we don’t need any conversion uptake in the second half, which goes above and beyond what we’ve seen last year or the year before or the year before, just normal course of business with good conversion of the deals. I think the problem of the business so far, and I think for many companies, is that the conversions actually have been lower than historical comps, and that we believe will normalize and ease out. To get to midpoint of guidance, we have obviously when we did the guidance and the guidance range, which still stands, we have assumed the normal conversion rate, but with a some conservatism baked in because when we did the guidance, we already saw that the market is not in super good state.

Gustaf Traubeck, Analyst, Berenberg: And

Oliver Stael, CEO, TeamViewer: then phasing, q three versus q four. I mean, q four is the big quarter. If you go back last few years, Q4 was significantly bigger in terms of deal conversion, especially also in December, for the bigger deals. It’s very normal course of action. So a little bit will be visible in mostly September.

Now it’s kind of summer break. A little bit will be visible in September already, but mostly, we’re looking at Q4 here. And also, when you look at the cross sell pipeline between 1E and TeamViewer, very naturally, we only started in the first quarter. And these are nine to twelve month sales cycles. So a lot is actually also for Q1, Q2 next year.

But in Q4, we have a good shot with a good number of deals.

Alice Jennings, Analyst, Barclays: Perfect. Thank you so much.

Youssef, Chorus Call Operator: The next question comes from Ben Castillo Bernal from BNP Paribas. Please go ahead.

Ben Castillo Bernal, Analyst, BNP Paribas: Hi, guys. Thanks for having me on. Two for me, please. Obviously, plenty of new products, innovation announced now. So I guess how are you thinking about the penetration of your installed base here?

If you look forward twelve months from now, what would be a good achievement in your view in terms of how much of that installed base you can sell this to? And then second question is on the 1E outlook. I recall you were guiding to 17 to 23% growth here for 1E standalone. Is that unchanged? You know, obviously, the the group guidance is unchanged, but just wondering if there’s any moving parts there with One e versus TeamViewer stand alone.

Thanks.

Michael, CFO, TeamViewer: Let let me do the second one first. So the the the breakdown of one e and is not a guidance. This is further information. We give a group guidance. All of the details is further further detailation.

So how we manage the guidance is in the end is not relevant as long as we manage it, and we are at full swing factor here, and especially what Oliver mentioned with the with the big pipe here on on on increasing also big deals, size deals. We are super confident on both ends, but in the end, it it what matters is the group that may maybe

Oliver Stael, CEO, TeamViewer: that’s Yeah. Maybe adding to this, I think the the difference is just also the the type of deals in one e. I mean, they are they can be very sizable, sizable customer situations, very strategic deals. And depending on the outturn of this, that changes, the pivots towards one e or towards TeamViewer. So I think that this is quite a range of outcomes here, on the 1E side, and therefore, I think it’s hard to hard to predict at the moment how this will play out.

And then there is the cross sell between the 1E and the TeamViewer and the TeamViewer one proposition. We do want platform consolidation and integration, so we need to see how this shapes out. We focus a lot on the platform play, the TmuO one, and the large deals on the deck side, and that’s that’s the key driving factors. On the first question, Ben, penetration dex essential. So it it’s too early, I would say, to give you a number for a twelve months out, what does success look like.

We are we we are very positive on how quickly we’ve been able to sell it and how quickly our inside salespeople first first a few, and now most of them are touching it. So that’s good. Significant number of quotes out to customers. Now GA is starting today. With GA, we’re changing the pricing a little bit as well because we were testing with it in different markets and see what the right price points would be.

So there’s a little bit of testing ongoing. And in parallel to this, we’re rolling out the new UI faster, which makes it much easier to also then add cross sell products. So with this, I think we probably need to be in the next earnings call after q three with three months of GA under our belt to then talk more about numbers and trends, and from there, give you a number of where we could be twelve months from now.

Michael, CFO, TeamViewer: The

Youssef, Chorus Call Operator: next question comes from Gustaf Traubeck from Berenberg.

Gustaf Traubeck, Analyst, Berenberg: I have a quick one on 1E and the VA contract. Could you remind me there, is this contract renewed on an annual basis? You talked about renewing it now. So should we expect the renewal for next year, same quarter as well? And then a question in a similar vein.

As you change the pricing structure a little bit, are you thinking about changing contract durations as well to kind of enhance visibility in the business? Or are you sticking with what you’re running at the moment?

Oliver Stael, CEO, TeamViewer: So answer is VA is a multiyear deal, but that is formally being reconfirmed, renewed on an annual basis, so again, in Q2 next year. So that’s an easy one. And then on the contract side, no. No change on contract. Blanks, we have for the SMB, I think annual contract upfront pay is is the standard.

When we move to additional products, we change the pricing or we add a pricing parameter, which is endpoint based pricing, but we still keep the, the annual logic. For the vast majority of our customers, that’s 100% the right thing. You can argue that at the very entry level, consumption based, postpaid monthly or so could be something that you could think of, but we don’t believe we should go that way that way. And then on the upper end, which is probably more what you’re referring to, we have multiyear deals. The bigger the deals, the more strategic the deals, on TeamViewer tends to our upper end and, even more so on one eDEX.

Clearly, customers typically want to commit for a longer time with annual payment or upfront payment, so this will be more and more the case. And, yes, that does increase visibility, but I think it’s a more a normal development. The more we go into enterprise, the more this is part of our business longer term customer contracts with increased visibility.

Bisera Grubesic, Head of Investor Relations, TeamViewer0: Thank you.

Youssef, Chorus Call Operator: The next question comes from Victor Cheng, Bank of America.

Bisera Grubesic, Head of Investor Relations, TeamViewer0: Hi. Oliver, Mike, Mark. Thanks for taking my question. Two, if I may. I guess, first of all, on, you know, retaining the Fed customers or maybe more generally as well, are there any concessions maybe in terms of pricing or anything else for for that to go through?

Do you see any pressures on that end going forward as well? And then secondly, on margins, in q two margins, it’s at 44% already. Generally, H2 margins, I guess, specifically for Q4, should be a bit higher. You haven’t changed your full year guidance on margins. So how should we think about H2 margins as well?

Oliver Stael, CEO, TeamViewer: Yeah. Let me take the first one. Yeah. I think the that that especially in q two, with federal customers, or customers that are affected by federal buying behavior, this has been a little bit of a wrestle. Of course, there is you need to do something, in most cases.

And I think you heard from other software companies, I’m sure, that they had to do something. Some actually got kicked out, we know, from, quite a few software vendors that just kicked out completely. So I think question number one is, do you have a strategic proposition with these customers such that they keep the offering, which was the case, which is good, and then it’s a it’s a give and take, to reduce the scope of licensing or give some price concessions here and there. In our particular case, I think was a, was a little bit of a rescoping to kind of create some savings, a little bit of repricing to create some savings, and postponing, some of the upsell opportunities that we originally had had seen, and had baked into our plan. So a little bit of everything there.

From our perspective, early days, but, since a few weeks, it seems to the regime seems to have changed a little bit. Obviously, everybody is cost conscious, but I think the seems the worst is over, in this respect with the discussions we were having, and, obviously, also changes in the personnel setup in The US and then with the big bill that has been pushed through now. I think the the the backdrop has changed quite materially from our perspective, and we think that the worst is over on that one. But obviously, we stay we stay alert, and we look at all our customers. But none of the customer by far has that profile and size that we had in the q two, so it’s much more normalized comps now quarter over quarter if we go into the second half of the year.

With this, maybe Mike, margin? Yes.

Michael, CFO, TeamViewer: On margin, so Q1, 43%, Q2 now 44%. You could take indeed a look. We are rather looking at this from a prudent perspective. For the second half, we expect, again, something between forty three and forty four. We thought it’s too early to quote victory here.

It’s still a half year. The the the macro overall situation, we think the sentiment improves, but we stay on alert mode. And let’s see how this works out. But for us, today, it would have been too early. But in general, Victor, you’re absolutely spot on.

We are on a very good road here.

Bisera Grubesic, Head of Investor Relations, TeamViewer0: Got it. Thank you.

Youssef, Chorus Call Operator: The next question comes from Tobey Og, JPMorgan. Please go ahead.

Bisera Grubesic, Head of Investor Relations, TeamViewer1: Yes. Hi, good morning. Thanks for the question. Perhaps just on Wani, again, on the slower decision making and the postponed upsell opportunities that you mentioned there is kind of part of the pieces. Have you closed out any of those postponements yet so far in July?

And do you expect to close out these postponements in the second half? And then again, just kind of coming back to that sort of steady state growth outlook for 1E, given the pressured budget outlook, any

Gustaf Traubeck, Analyst, Berenberg: kind

Bisera Grubesic, Head of Investor Relations, TeamViewer1: of changes to your thinking around what the outlook for 1E sort of looks like kind of steady state given given those changing budget dynamics? Thank you.

Oliver Stael, CEO, TeamViewer: Yeah. So, no, we haven’t closed any of these postponements, and I wouldn’t I wouldn’t see us doing so, in the next few months or maybe even until the end of the year. I mean, I think we all all means many software companies. I think we’re quite happy and satisfied that we’ve gone through this phase, secured the customers at a meaningful price point. And I think I don’t think you wanna go back just a few months later and and open that that box, probably let it sit there.

But what is important and what we do, very actively is focus on the sectors which are actually which do spend and have not been affected by this so much. And if you go through one year, this is clearly a banking financial services. This is also more and more industrial customers, retail customers, health care customers because the Dex topic per se is really gaining attention around the world. So I think in two, three years ago, Dex wasn’t wasn’t very much known. Now it’s really second year magic quadrant.

So it’s front of mind digital workplace management, and there is other sectors that really are looking into this, and we focus on those more. So in that sense, we’re also trying to go where the spending is and where there’s less pressure. But in Q2, we wouldn’t because, a, Q2 is not a big quarter and b, we had this those few deals and this especially big deal that we need to deal with. So I think medium term, steady state outlook on 1E hasn’t changed since we had discussed it in the acquisition. Ladies

Youssef, Chorus Call Operator: and gentlemen, that was the last question. I would now like to turn the conference back over to CEO, Oliver Stael, for any closing remarks.

Oliver Stael, CEO, TeamViewer: Yes. Thank you once again for your time and engagement today, as always. Good to have those questions and the discussion. We will continue to execute on the strategy. We really believe that strategically, there’s a really big win, the acquisition of 1E and the proposition of a platform play, with the different parts of it from reactive remote but all the way to fully upfront automated and autonomous endpoint management.

So we we we get good interest from our partners, customers, continue to work on this, and, look forward to to keep you updated, also, obviously, on things like DEX Essentials. As I just said, next earnings call, we should have more visibility. And looking forward to speaking with you soon. Thank you very much.

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