Resilient base as Sopheon transitions to SaaS
Sopheon has reported FY 2020 revenues in line with the $30.0m guidance given in its January trading update with adjusted EBITDA a little ahead of expectations at $5.9m. We view this as a resilient performance in the face of COVID-related headwinds and as it is the Group’s first full year of concluding Software as a Service (SaaS) contracts for new customers – the mix shift means that much of the associated revenue will be recognised in future years. The Group retains a strong cash position. We introduce estimates for FY 2021E and FY 2022E which reflect the solid base as Sopheon invests in the transition to cloud-based solutions and sees an increased bias towards SaaS in its contract mix. The Board changes announced emphasise the focus on pursuing growth opportunities – particularly as Sopheon is actively looking at making acquisitions to complement its organic growth as it continues to evolve its business model. M&A could, of course, make a considerable difference to the pace of change within the Group.