Growth in recurring revenues from multi-year subscriptions (SaaS) for digital banking products has exceeded expectations. The change in the licensing model will have a clear negative impact on profitability in the short term, however in the long term, it will lead to greater stability in revenues and a sustained increase in profitability.
CREALOGIX is confident that this intended transition will have a positive effect from the 2020/21 financial year onwards in the form of solid cashflow levels and double-digit EBITDA margins.
CREALOGIX continues to grow and to expand internationally. The digital banking software specialist can report the following preliminary results for the 2018/19 financial year:
- Sales increased by 17% per cent to CHF 101.9M. This equates to a growth of 18% in local currencies.
- At CHF 1.9M, profitability (EBITDA) fell below previous year’s level (CHF 7M). The main reason for this is the intended transition from a traditional initial licence model to a SaaS/rental model, which will lead to a sustained increase in future recurring incomes. Had there not been a transition to a SaaS-based model in the past financial year, revenue and EBITDA would have been approximately CHF 7M higher.
- Furthermore, the high level of uncertainty surrounding Brexit had a pronounced negative impact on the UK business.
- Losses amounted to CHF 6.3M (in the previous year, there was a net profit CHF 0.9M). However, this includes CHF 5.4M in goodwill amortisation.
CREALOGIX also reports a positive outlook for the future thanks to new major customer wins in the international banking sector and high market demand.
Full annual results for 2018/19 will be published on 17 September 2019.