Nemetschek's 2024 Earnings: A Resilient Performance

The Nemetschek Group, a global leader in software solutions for the building and media industries, has once again demonstrated its resilience and strategic prowess with its 2024 financial results. Despite a challenging market environment in Europe and the ongoing transition to a subscription and SaaS (Software as a Service) business model, the company not only met but exceeded its financial targets. This performance underscores the effectiveness of Nemetschek's strategic initiatives and its ability to navigate market challenges.



Revenue Growth and Profitability

Nemetschek's revenue grew by 16.9% to EUR 995.6 million in 2024, with a significant contribution from the acquisition of GoCanvas, which added around 300 basis points to total growth. Excluding GoCanvas, the company achieved a currency-adjusted, organic revenue growth of 14.0%, surpassing its targeted range of 10% to 11%. This robust performance was driven by a 41.9% increase in Annual Recurring Revenue (ARR) to EUR 1,019.9 million, with subscription and SaaS revenues growing by an impressive 88.1%.

The transition to a subscription and SaaS model has been a cornerstone of Nemetschek's strategy, and the results speak for themselves. The share of recurring revenue as a percentage of total revenue grew to 86.5%, exceeding the target share of around 85%. This shift has not only driven revenue growth but also improved profitability. The reported EBITDA margin reached 30.2%, and the organic EBITDA margin was 31.1%, both slightly above the forecasted range. This indicates that the subscription and SaaS model is not only driving revenue growth but also improving profitability.

Strategic Initiatives and Growth Drivers

Nemetschek's strategic initiatives, such as the acquisition of GoCanvas and the expansion into high-growth regions like India, have been key drivers of its growth. The acquisition of GoCanvas, the largest in the company's history, has contributed significantly to its revenue growth and is expected to continue doing so in 2025. The company's expansion into India, including the opening of a go-to-market office in Mumbai, has also contributed to an over-proportional revenue growth of around 21% abroad in 2024.

The sustainability of these initiatives is evident from the company's performance in 2024. Despite a challenging market environment, Nemetschek has achieved or exceeded all its financial targets. The company's resilient business model, with a high share of recurring revenues, has enabled it to navigate through market challenges and continue its growth trajectory. The transition to subscription and SaaS offerings, which now account for 86.5% of total revenue, has provided a stable and predictable revenue stream. Additionally, the company's focus on innovation, as evidenced by the AI & Data Innovation Hub, has positioned it well to capitalize on emerging trends and technologies.

Outlook for 2025

Looking ahead, Nemetschek is optimistic about its prospects for 2025. The company expects to continue its profitable growth course with a strong double-digit revenue growth of 17% to 19% and a sustained high EBITDA margin of around 31%. This includes a revenue contribution of around 350 basis points from GoCanvas, further solidifying its role in the company's growth strategy.

Conclusion

In conclusion, Nemetschek's 2024 financial results are a testament to its strategic vision and execution. The company's transition to a subscription and SaaS business model, along with its strategic initiatives, has driven robust revenue growth and improved profitability. Despite market challenges, Nemetschek has demonstrated its resilience and ability to navigate through uncertain times. With a strong outlook for 2025, the company is well-positioned to continue its growth trajectory and deliver value to its shareholders.