Teamviewer Se

Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everybody, and welcome to TeamViewer's Q2 2024 Earnings Call. I am Bicela Grubasic, VP, Investor Relations at TeamViewer, and I am joined today by our CEO, Oliver, and CFO, Michael. As per usual, Oliver will run you through the quarterly business highlights, and in the second half of our call, Michael will present the Q2 financials. and the presentation will be concluded by a Q&A session. Moving to the next slide, please note that you can find the important notice and the APM disclosure on slides two and three. And with that, I hand it over to Oliver to kick off our call.

Thank you, Bicéra. Good morning, everyone, and also a warm welcome from my side. Thank you for joining our Q2 2024 earnings call. Let us kick off with the highlights of this quarter. We delivered a strong performance in the second quarter with particularly good results in the enterprise business and the Americas region. After attending relevant events and conferences to build our pipeline in previous quarters, especially in Q1, we now successfully converted the pipeline into larger volume and longer term deals. From a financial point of view, second quarter revenues increased by 9% year over year in constant currency with continued growth across all regions. We also continue to deliver on profitability. Our adjusted EBITDA margin improved sequentially and we achieved a strong 41% while we continue to invest in the enterprise growth. Speaking of enterprise growth, the second quarter saw strong double digit enterprise revenue growth of 21% year over year in constant currency. Enterprise pipeline conversion was very good and we were able to replicate successful use cases across industries, win large new customers and expand existing contracts. In this context, we also noted a growing customer interest in operational technology and frontline use cases. Meanwhile, our already strong net retention rate further increased to 116% and we increased our enterprise customer base to now over 4,300. Another notable development is the Americas region. If you take a step back and remember that we were rebuilding our teams amid a particularly difficult macro environment there, our new structures in the region are delivering success, as emphasized by our double-digit reported revenue growth in billings in the second quarter. We won new logos and were able to sign higher volume deals with interesting use cases. Some of them I will present in more detail in a few minutes. Before I move on, let me briefly touch on the cybersecurity incidents we were confronted with at the end of Q2. As you are aware, we were attacked by a sophisticated threat actor. Immediately upon detection, we activated our incident response team and procedures, started investigations together with a team of globally renowned cybersecurity experts from Microsoft, and then implemented effective remediation measures. Based on the results of our diligent investigation, we concluded that the incident was contained to our internal corporate IT environment. This means neither our separated product environment nor the connectivity platform or any customer data were touched. Our products have been safe to use at all times. Let me remind you that we have made substantial investment in security over the last years. that clearly paid off during this incident. Our cybersecurity posture is already best in class. Therefore, we could act swiftly and take the right measures during the incident. As security is core to our DNA, we will continue to invest in it going forward. As a consequence of the incident, we implemented further strong security protection layers, such as hardening authentication procedures for our employees to a maximum level and a full zero trust approach. At this point, I'd like to really take a second to thank our own colleagues in the IT and the security teams, as well as Microsoft cybersecurity experts involved. It was their commitment to protecting our system and our transparent communication about the incident that ensured our customers continued trust in our products. We did not see a notable decline in the usage of our software around or after the incident. Customers that we spoke with during and post the incidents were appreciative of how we handled it. Based on our current internal financial materiality assessment, the damage is limited to investigation and remediation costs, and we do not consider this incident to be material. Now back to our Q2 highlights. From a financing perspective, we further optimized our maturity profile by extending our 440 million euros revolving credit facility with two more years to now 2029. This obviously reflects the confidence in our business model and strategy. And to wrap this up, with a strong second quarter in the books, we have continued confidence in achieving our guidance for the full year 2024. And we are continuously recognized for our progress and development by third parties and partners. We recently won the Microsoft Partner of the Year Award for our integration with Microsoft Teams. And only this week, industry analysts have recognized us and our frontline product as market leader for connected worker platforms in the PEC innovation radar. We are incredibly proud that our relevant use case and strong partnerships have led to that achievement. Let's now have a look at the annual contract value split of our SMB and enterprise billings over the past 12 months. As you can see on the right side, the highest value segments were the drivers of the overall strong of LTM billings in our enterprise business. Contracts with an annualized value of over €200,000 grew by an outstanding 60% over the last 12 months. And the second highest segment of 100,000 to 200,000 euros also saw strong double-digit growth. This development was driven by a successful conversion of deals across the board, including Tensor OT, so for operations technology, and frontline use cases. This underlines the persistent relevance of our solutions and our strong position as a partner for digital transformation in the enterprise space.