Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nemetschek SE (NEMTF, Financial) achieved a total revenue of EUR 996 million in 2024, with organic growth of 14%, exceeding their guidance range of 10% to 11%.
- The company's annual recurring revenue (ARR) grew by 34.6% organically, surpassing the target of more than 25%.
- The acquisition of GoCanvas contributed significantly, adding around 300 basis points to revenue growth.
- Nemetschek SE (NEMTF) reported an EBITDA growth of 16.8% to EUR 301 million, with margins slightly above the forecast range.
- The transition to a subscription and SaaS-centric business model resulted in recurring revenues reaching a new high of 86.5% of total revenue.
Negative Points
- The construction industry faces global challenges and economic uncertainties, impacting Nemetschek SE (NEMTF)'s market environment.
- The integration of GoCanvas, while progressing, still presents challenges and dilutive effects on profitability.
- The design segment faces prolonged sales cycles and hesitations in European markets, particularly in Germany.
- The transition to subscription models in the design segment may lead to temporary accounting-related impacts.
- The company's growth strategy requires continuous investment, potentially limiting immediate margin expansion.
Q & A Highlights
Q: How do you view the current demand environment, particularly in the US and Germany, and what are your expectations for organic growth seasonality in 2025?
A: Yves Padrines, CEO, explained that while there are potential changes, the market conditions in Q1 2025 are similar to 2024. The US market remains strong despite some indicators suggesting otherwise, and the German infrastructure spending fund could have positive effects, though it's too early to tell. Organic growth seasonality will see some volatility, with strong demand in Q1, especially in the build segment, and a higher comparison base in Q4 2025.
Q: Can you provide insights into the revenue growth outlook beyond 2025, and how do you prioritize margin improvements versus growth?
A: Yves Padrines, CEO, stated that while specific guidance for 2026 and beyond isn't provided, they foresee attractive double-digit growth potential in the coming years, with a focus on mid-teens growth. The company prioritizes growth over margin expansion, with continued investments in innovation, AI, and market expansion.
Q: What is the status of the GoCanvas integration, and are there any joint offerings planned?
A: Yves Padrines, CEO, reported that the integration of GoCanvas is progressing as planned, with strong collaboration between teams. Joint offerings are being well-received, particularly by large resellers, and cross-selling between GoCanvas and Bluebeam is starting to gain traction.
Q: How is the transition to subscription models progressing in the design segment, and what impact do AI functionalities have on monetization?
A: Yves Padrines, CEO, noted that the transition to subscription models is accelerating, with brands like Graphisoft and Vectorworks stopping perpetual license sales. AI functionalities are being integrated into premium packages, enhancing user experience and driving subscription adoption, though industry-wide AI usage remains below 10%.
Q: What are the expectations for the build division's growth trajectory post-transition and GoCanvas integration?
A: Yves Padrines, CEO, expects the build division to achieve 20%-plus revenue growth in 2025, normalizing to mid to high-teens growth over time, supported by strong demand and the successful integration of GoCanvas.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
