Shares in Nemetschek dropped on Monday following the company's report of a decrease in net profit for the second quarter. The decline is attributed to the company's transition from a license-based business model to subscription and software-as-a-service (SaaS) offerings.
At 0812 GMT, Nemetschek's shares were down 3.2% at EUR63.38.
The German software company recorded a net profit of 32.8 million euros ($36.1 million) in the second quarter, compared to EUR46.5 million in the same period last year. Meanwhile, revenue increased from EUR203.8 million to EUR207.5 million.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) also experienced a decline, falling from EUR68.6 million to EUR56.1 million.
Nemetschek attributed the lower EBITDA margin in its design segment to the impact of the transition, personnel expenses, and one-off investments. The company also mentioned that customers made purchases ahead of schedule due to price changes.
Citi analysts commented on the company's outlook for 2023 and the following years, expressing interest in the potential effects of the accelerated subscription transition as well as one-off margin challenges.
Looking ahead, Nemetschek maintains its forecast for currency-adjusted revenue growth of 4% to 6% and an EBITDA margin between 28% and 30% for the full year of 2023. In 2024, the company expects double-digit percentage revenue growth and an EBITDA margin exceeding 30%. Furthermore, revenue growth of at least mid-teens range is estimated for 2025.