Quarterly Statement Q1 2020

ATOSS Software AG has started the new year by breaking records in the first quarter. The Munich headquartered workforce management specialist boosted sales in the first three months to EUR 19.8 million, a significant rise of 17 percent. The order book showed particularly impressive growth in view of orders received standing at EUR 11.0 million, more than double the figure for the previous year, and Annual Recurring Revenue, used as a control metric for the cloud business, rising 78 percent to EUR 9.8 million.

The quarterly figures presented by ATOSS Software AG are once again impressive testimony to the continuing high demand for workforce management solutions in professional corporate management. With its solutions revolving around digital workforce management, the company succeeded once again in winning numerous prestigious companies as new customers in the first quarter and maintaining the strong growth of the previous year.

For example, sales of software in the period from January to March 2020 saw a significant rise of 9 percent, up to EUR 11.8 million (previous year: EUR 10.8 million). This equates to a 60 percent share of the Group’s total sales (previous year: 64 percent). The largest boost to growth within software revenues came from recurring sales with cloud solutions which jumped 73 percent to EUR 2.7 million (previous year: EUR 1.6 million). The consistently positive development of software maintenance over the last few years was also sustained. Sales in this area rose 9 percent to EUR 6.4 million (previous year: EUR 5.9 million). Overall, recurring sales as a proportion of software revenues increased appreciably by 8 percent to 77 percent (previous year: 69 percent). Sales from consulting services climbed by 25 percent to EUR 6.2 million, a significant year-on-year increase (previous year: EUR 4.9 million). Hardware sales generated revenue of EUR 1.2 million in the first quarter (previous year: EUR 0.8 million), while other sales amounted to EUR 0.5 million (previous year: EUR 0.4 million).

Operating earnings improved 11 percent to EUR 5.1 million compared with EUR 4.6 million in the previous year. This was in line with expectations and it was achieved in spite of a significant year-on-year rise in personnel costs resulting from capacity expansion, primarily in the Customer Services and Support as well as the Research and Development departments. ATOSS earned EUR 0.86 per share in the first quarter (previous year: EUR 0.80).

The order book performance is particularly impressive given the present general conditions. Besides more than doubling orders for software licenses to EUR 11.0 million as at 31.03.2020 (previous year: EUR 5.0 million), the crucial metric for controlling in the cloud business - Annual Recurring Revenue (ARR for short) - also enjoyed double-digit growth, rising to EUR 9.8 million (previous year: EUR 5.5 million), an increase of 78 percent. ARR stands for the sales generated by the company within the next 12 months on the basis of monthly cloud usage fees applicable on the closing date.

Against the background of ATOSS’ leading position in the workforce management market, a successful first quarter and a business model that generates growth – also in times of crisis such as the last economic slump in 2008/2009 - the Management Board continues to view the future in positive terms.

Effective, highly efficient digital solutions for demand-optimized workforce scheduling are indispensable for companies, and even more so in times of volatile market movements - as currently demonstrated by the outbreak of the coronavirus pandemic. This is the only way to create transparency and efficiency in the process of managing short-time working, reducing and flexibilizing working time triggered by fluctuations in capacity utilization and the gradual resumption of production, distribution and workflows in other sectors under totally new conditions. Based on its product range of highly flexible tools, ATOSS is helping companies to implement control and management systems transparently, efficiently and promptly. This fortifies cost-efficiency and competitive strengths in the shadow of the looming recession.

Thanks to its excellent order book as at 31.03.2020, characterized by the particularly strong order intake for software licenses and a high share of recurring sales, the company continues to expect total sales for 2020 to be recorded at around EUR 80 million (previous year: EUR 71.4 million) in spite of the present situation. ATOSS is anticipating a modest dip in orders in Q2 due to the economic effects of the corona crisis, with orders picking up again in Q3 and largely returning to normal in Q4. Against this background, the company is now expecting an EBIT margin for the entire year of around 25 percent.