Teamviewer Se

Ladies and gentlemen, welcome to the Teamviewer SEQ3 9-month 2024 conference results call and webcast. I would like to remind you that all participants will be listed on remote any conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Bicela Grubesic, Vice President, IR. Please go ahead.

Thank you, Operator, and good morning, ladies and gentlemen, and welcome to TeamViewer's Q3 2024 earnings call. I am Bicela Grubesic, Head of IR, and today I am joined by our CEO, Oliver, and CFO, Michael, to present our results. As per usual, Oliver will run you through the quarterly business highlights, and in the second half, Michael will present the Q3 financials. The presentation will be concluded by a Q&A session. Please note that you can find the important notice and the APM disclosure on slide two and three of the presentation. I would now like to take a few minutes to explain the introduction of ARR, which we made this quarter. As a leading SaaS company, we today introduced annual recurring revenue at the group level and for our SMB and enterprise business. This forward-looking KPI offers a clear view of annualized recurring revenue while eliminating multi-year deal noise from billings. Aligning with SaaS peers, this market standard metric facilitates better growth assessment and peer comparison, and it provides a clear, predictable view on our business. We calculate ARR as annualized recurring revenue for all active subscriptions at the last day of the reporting period. Specifically, we take the daily subscription revenue at the last calendar day, and we multiply this by 365 days. The previous calculation method was based on last 12 months' billings. As a result of the new ARR calculation methods, our net retention rate is now also calculated based on ARR. Additionally, we have decided to eliminate currency effects, and we will report NRR on ARR in constant currency. For more background and historical comparison information, please refer to the appendix of the earnings presentation, slide 21, 22 and 23. And for transparency purposes, we will continue to disclose both ARR and NRR in all of our materials for one more quarter. Additionally, this information will be included in the comparable table on slide 23 until Q4 24. And now I hand over to Oliver to kick off presentation.

Thank you, Bezira. Good morning, everyone. Also, a warm welcome from my side. Thank you for joining our Q3 2024 earnings call. Before we start with the content of this presentation, let me remind you that we are organizing an in-person field trip for investors and analysts in the UK on the 11th of December. The focus of this event is to experience our products through several demo stations firsthand and also to hear from our customers what benefits they generate with the help of our solutions. and we think this is an ideal opportunity to learn and understand more about our technology and solutions. If you're interested in coming and have not yet registered, please reach out to our IR team. I think it will be very beneficial to see you there in person. Now, let us look at the highlights of this quarter on slide five. We've delivered another strong quarter from our perspective and are very satisfied that we've met our expectations for revenue growth and even exceeded our ambitions for profitability. And I'm also pleased with the continued strong momentum in our enterprise business. In terms of revenue, we achieved a strong growth of 8% in constant currency year over year with continued positive contributions from all regions. Enterprise again showed strong revenue growth with 23% in constant currency year-over-year, which is a continuation of our already strong momentum that we saw this year. Our ARR, important measure as Bezerra's note, was up 7% in constant currency year-over-year. And this shows that our underlying growth dynamics are healthy when we eliminate distortions and quarterly volatility that occur in billings, especially from the multi-year deals with upfront payment. In addition to our revenue and ARR growth, we achieved an outstanding adjusted EBITDA margin of 48%, supported by the scale back of our Manchester United partnership, but also by our maintained strong cost discipline. Net income, therefore, increased significantly by 49% and adjusted earnings per share by 30% year over year. It is important to note that we continue to navigate in very challenging market conditions. Particularly in this context, we have seen a good execution in the third quarter. We delivered on our growth ambitions with continued strong enterprise momentum and achieved outstanding profitability. Our strong, healthy fundamentals are underscored by high single-digit ARR growth. With the first nine months of the financial year behind us, we have narrowed our revenue guidance range for full year 2024 to between 662 and 668 million, which is within our original revenue guidance range. And we have raised our adjusted EBDA margin guidance by one percentage point to now at least 44%. Michael will elaborate on this in more detail later. I would also like to share our growth expectations for the fourth quarter. As a reminder, we will be facing more challenging comparison in Q4 due to last year's exceptionally strong billings performance, especially within enterprise. We anticipate a similarly challenging trading environment to continue in Q4. And as such, we expect to see low single digit growth in billings for this period. This is also reflected in our updated revenue guidance range, which implies that we expect to see revenue growth in Q4, but at a lower level than what we've seen in Q3 and year to date. Michael will explain this in more detail later. However, I want to emphasize that we remain well positioned for significant growth once the macroeconomic conditions improve. Let's now go back to Q3 and look at the regions and customer categories on slide six. All regions contributed to revenue growth in constant currency in the third quarter. We are satisfied with this development in light of a continued challenging macroeconomic environment, as the global economic growth for 2024 is forecasted to be barely above 3%, according to OECD. We see continued demand from customers and are building on our pipeline already for the year ahead. In constant currency, our growth trajectory was as follows. strong 9% year-over-year. Americas grew 7% and APEC grew 5% year-over-year. On the right side, you will notice that our enterprise revenue has shown robust growth and increased by an impressive 23% year-over-year. Meanwhile, our SMB revenue achieved mid-single-digit growth and grew by 5% year-over-year in the third quarter. Enterprise ARR was up 20% and SMB ARR grew by 4%. both year over year and in constant currency. In the third quarter, enterprise made up around 22% of our revenue mix, which is a significant increase from just 17% two years ago, and it reflects our efforts to successfully drive sustainable growth in enterprise. Let us move on to slide seven and look at the development of our different ARR value ranges in enterprise and in SMB. Before we dive into this slide, I want to highlight that all numbers here are now based on ARR, which demonstrates sustained underlying growth in our business. Previously, we reported last 12 months billings per ACV, annual contract value bucket. We will continue to disclose this information in the appendix of our earnings presentations for one more quarter, so you can still find it on slide 26 in this deck. Coming to ARR now, as you can see on the right side, Enterprise showed strong double-digit growth across all ARR buckets. We saw 16% growth in the lowest value range, a very strong growth of 23% and 26% in the middle range, and an outstanding 30% year-over-year growth in the highest value range of over 200,000 euros in ARR. For SMB, we saw 4% growth in the lowest value range and a good mid-single-digit growth of 8% in the highest value range of between 1% 1,500 and 10,000 euros. The decline of 1% in the middle SMB value range was mainly driven by upsells. Now let's move to slide eight with an overview of new logo win and interesting use cases. On this slide, I would like to highlight three interesting customer stories to demonstrate the breadth of our solution portfolio and the value that our products bring to our customers. The first one is co-op. I'm sure you know a large retail hotel company in Switzerland, one of the biggest Swiss companies overall. They are using Tensor for secure IT support of 22,000 devices. And they also decided for Frontline to improve their warehouse picking processes. I want to highlight this deal to underline our cross-sell potential. We offer a wide range of solutions for enterprise customers, and we know these companies also like buying more than one product from the same trusted vendors. The second example is Caetano Bus, a Portuguese OEM. You probably all have experienced their product multiple times already because they build airport shuttle buses that bring you from the terminal to the airplane. They also build and run other types of buses. For example, they provided the bus shuttles at the Olympic and Paralympic Games this year in Paris. Caetano Bus started to use our augmented reality solution for fleet management so technicians can get remote expert help. If you know a bit about commercial vehicle business, you will know that they have strict SLAs in place. Every longer downtime of buses means penalties, so keeping maintenance as short as possible has a real financial impact for Caetano. The third one is YPF, one of the largest energy companies in South America, $20 billion in revenue. They are using TeamViewer Frontline for inspection and workflows in their refineries. These need to be 100% correct. Otherwise, the operations of a whole plan can be compromised. That's why they decided to go digital with us and improve the entire workflow. Frontline now ensures that their operations are safer. Moreover, the documentation of the inspection is much easier now. Before I hand over to Michael to run you through the financial, let me quickly talk about another business highlight that is worth mentioning here. At the end of October, We've launched Session Insights as a new AI-powered feature in our remote connectivity solutions. It will empower IT support teams to resolve issues faster and scale expertise, even with limited staff. AI-generated session summaries serve as automated case documentation and relieve IT service desks of the critical yet time-consuming task of report writing. Moreover, it speeds up troubleshooting and handovers, reducing mean time to resolution and boosting customer satisfaction. Additionally, powerful analytics dashboards allow businesses to track and meet service level agreements, identify recurring issues, and trouble some applications to drive improvements and optimize resources. We got great feedback from our beta users and are looking forward to our customers experimenting with it and adopting it in the future. And of course, we are already working on additional features and integrate AI more broadly in our platform and solutions. And with this, I hand it over to Michael for the financial overview. Thank you.