Teamviewer Se

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the team viewer Q2H1 2023 results call and webcast. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchdown telephone. Please press the star key followed by zero for operator assistance. And I would now like to turn the conference over to Ursula Kehret. Head of Investor Relations, please go ahead.

Good morning, everyone, and welcome to TeamViewer's Q2 2023 earnings call. My name is Ursula Caret, and I am pleased to host today's call. I am joined by our CEO, Oliver Steyl, and our CFO, Michael Wilkins. Oliver will kick off the presentation by updating you on the business and financial highlights of the second quarter of 2023. In the second part of today's call, Michael will guide you through our Q2 financials in detail. As always, the presentation will be followed by a Q&A session. Please note that, as always, you can find the important notice and the APM disclosure on slides two and three. And with that, I hand it over to our CEO, Oliver Stein.

Thank you for the introduction, Ursula. Good morning, everyone. Thank you for joining our Q2 2023 earnings call. As always, let me start with a glance at the second quarter of 2023. I think after a solid first quarter, we continue to make progress in Q2 in many different ways, not only in terms of business growth and financials, but also in terms of our product offering, the use cases, our go-to-market approach, and just in general, our overall leadership in the marketplace. Let me start with the numbers first. We saw double-digit top-line growth with revenues up 12% to 154.2 million euros and billings up 13% at constant currencies in the second quarter. And our adjusted revenue EBITDA margin came in at 41%, despite additional investments in R&D and marketing, underlining that TeamViewer is a highly profitable company. A strong driver of our success in this quarter was once again the SMB business, that showed a strong billings growth of 14% on constant currency. And it's great to see that our core business is so resilient. To further strengthen our leadership position in the SMB space, we recently launched TeamViewer Remote, which is the next generation of our remote access and support product. And due to the dedicated communication campaign around the launch, we were able to generate additional awareness for the product in Q2. And since our last quarterly call, and also since some of you met Michael, Peter, and Hendrik in London, we've received very constructive user feedback that we are building upon to continuously optimize the product and improve the offering for our SMB customers. Not only SMB business showed a strong performance in Q2, we also did well in the enterprise business that had a slower first quarter, if you remember. Despite a difficult market environment, we were able to close some larger deals within the quarter, and we successfully replicated use cases across regions and initiated and executed several measures to increase the traction again and to end the quarter with 9% enterprise billing growth on constant currency. Given the challenging market in the enterprise software industry in general, we believe this is a good achievement, even though we saw much higher enterprise growth rates in the past, of course. In addition to remote connectivity, we are also well positioned to benefit from an increased augmented reality momentum in the market. With Apple recently presenting their new Vision Pro device, we believe that we will see further adoption of AR and mixed reality technologies across use cases, regions, and different industries. And the whole industrial metaverse space is an ongoing innovation play. certainly takes some time and will happen in phases, but we are ready to capitalize on that development. According to our verticalization approach in the last quarter, we have focused on increasing our footprint in the logistics sector with a dedicated go-to-market strategy for a frontline vision-picking solution. And then lastly, we've added new experienced leaders to our management board and senior leadership teams. May Dent will join the management board as new chief product and technology officer at the end of August, clearly strengthening our focus on product development and innovation and centralizing all technology responsibilities at management board level. And Constanze Backhaus joined our senior leadership team as chief human resources officer in mid-July, so she's on board already. Both are, from our perspective, fantastic additions to the team and will help us doubling down on a variety of strategic initiatives and further increase our innovation capabilities. From my perspective, to sum it up, we achieved double digit growth in Q2 while focusing on improving TeamViewer across the board with many different activities. And we see that our investments into people, product and marketing are paying off. Let's have a quick look at the development of our SMB business, which was driving our growth in Q2, similar to Q1 actually. And I will be looking at billings on a constant currency only here. Michael will share the full picture, including revenues later. But as you know, billings are rather an indicator of current trading and business momentum, while revenues are the result of past successes. So you can clearly see on the left-hand side that after a difficult phase for SMB last year, at the end of 2022, SMB Billings came back and continued to grow stronger than actually I think a lot of people in the market had expected. But we have worked all the time on our SMB product offering on sales and all the marketing channels and on our website. And we are now happy to see the results of these ongoing efforts. And as previously mentioned, plus 14% Billings growth on a constant currency in Q2 is really strong. On the right hand side, you see the increase in average selling price in our SMB business within one year. Plus 12% in ASP underlines once again our strength in up and cross-selling to our existing customer base, as well as demonstrates also our pricing power. If you go to the next slide, a quick look at enterprise, you can see the development of our billings here. As said before, We see plus 9% growth on constant currency in Q2 as a success, given where the market for enterprise software is at the moment. We told you in Q1 that this low performance in enterprise was a temporary weakness, and we worked thoroughly on a number of measures to be able to turn the growth rate around again. What I explicitly want to highlight is the nice increase in the enterprise subscriber number. Within one year, we were able to win 29% more customers, enterprise customers, and are now close to 4,000. Another important topic is upselling from SMB to enterprise. So if we take a closer look at the billing split for Q2, Looking at the chart on the left-hand side, you can see our increased growth momentum in the SMB segment with LTM billings in Q2 2023 up 13% on a year-on-year basis to almost 530 million euros. With the largest SMB bucket up 28%, this may come as a slight surprise, but I'd like to take a moment to highlight the development of the smallest SM bucket here as well. The bucket containing customers with annual contract values below 500 euros has developed from a development of minus 6% in Q4 2022 to minus 1% in the first quarter of this year and now actually evened out. This is a very good development at the entry level where we have seen increased competition in the last years after the COVID spike, if you remember. Before I continue with the enterprise development on the right-hand side, let me point out that we once again managed to record A great net upsell from SMB to enterprise amounting to 22.3 million euros. Enterprise LTM billings increased by 21% on a year-on-year basis and amounted to 132.6 million euros. The bucket containing largest deals with annual contract volumes of 200,000 euros and more returned back to growth from an LTM perspective after decreasing by 6% in the first quarter. And enterprise growth in general was fueled by some larger deals coming through after we had seen some deal slippage in the last quarter. And as always, let's look at two recent enterprise deals from the upper bucket and why they are relevant in the grand scheme of things on the next slide. One example from APEC, we've been able to close a tensor deal of more than 600,000 euro in volume. One of the big four, quote, banks in Australia and New Zealand is using our enterprise connectivity solution to streamline IT support for their more than 40,000 employees. The main reason why they decided for TeamViewer is our leading security posture and our compliance with all relevant security and privacy requirements. This means that we are well positioned to serve demanding customers from highly regulated industries such as financial services or the healthcare sector, where security of sensitive data is absolutely key. And the other example I want to share with you is NADRO. It's the largest Mexican wholesaler for the healthcare industry. NADRO operates 14 warehouses across the country and recently optimized its product picking using TeamViewer Frontline together with SAP's extended warehouse management software. This led to an improved logistics performance of up to 30%. We were able to win NADRO as a joint customer based on our SAP partnership by the end of last year. And now in Q2, we saw similar pilot projects with frontline vision picking and SAP integration taking place across all regions. And that shows while the sales cycles are quite long and it takes some time, but it's clear that our investments in the SAP partnerships are really starting to pay off now. And let's now have a dedicated look at our regional performance on the next slide. Billings and revenues increased across all regions in the second quarter with the strongest operational performance in APEC, where billings were up 20% year on year at constant currency. A good sign that the recent investments in the organizational structure in that regions are paying off. The Americas regions, where reorganization of the sales team setup has been initiated in Q1 2023, showed the lowest billings growth rate. This also leads back to longer procurement cycles in the current macroeconomic environment. But clearly, we are driving the reorganization at full force to lead the region back to previous successes. If you look at revenue, the Americas region showed the strongest growth rate with 16% year-on-year. Clearly, this can be explained by currency tailwinds from previous periods, the links converting into revenue. EMEA reported the strongest Q2 billings growth at nearly 79 million euros, up 14%, and the region contributed 52% of total billions in the second quarter. Looking at growth drivers, all regions' revenues benefited from successful up and cross-sell measures. targeted monetization campaigns and an increasing number of multi-year deals stemming from a well-developed and loyal customer base. And with that, I'd like to hand over to Michael for the financial highlights.