SoftwareOne Appoints New CEO, Slashes Revenue Growth Forecasts

SoftwareOne Holding AG, a leading global software and cloud solutions provider, has appointed Raphael Erb as its new CEO, effective November 1, 2024. Erb, who has spent over 25 years at the company, succeeds Brian Duffy, who will pursue opportunities in the US. Alongside this leadership change, SoftwareOne has revised its financial guidance for 2024 and beyond, reflecting a disappointing Q3 2024 performance.


SoftwareOne's Q3 2024 results fell short of expectations, with revenue growth of 3.1% YoY in constant currency (ccy) and 1.4% YoY in reported currency, reaching CHF 236.7 million. Adjusted EBITDA margin decreased by 4 ppts YoY, primarily reflecting lower-than-expected growth. The underperformance was driven by a reduction in certain vendor incentives, sales execution issues following the implementation of a go-to-market transformation, and a more cautious spending environment in key markets.


In response to these challenges, SoftwareOne has revised its full-year 2024 guidance to reflect a more conservative outlook. Revenue growth is now projected at 2-5% YoY ccy, down from the previous 7-9% target. The adjusted EBITDA margin is expected to be 21-23%, compared to the earlier 24.5-25.5% guidance. Looking ahead to 2026, the company aims for double-digit revenue growth in constant currency and an adjusted EBITDA margin approaching 27%.

Raphael Erb's appointment as CEO signals a commitment to internal talent and continuity, which could facilitate a smoother transition and preserve institutional knowledge. Erb's extensive experience and leadership style align well with the company's transformation and growth objectives. His focus on enhancing customer focus, empowering frontline employees, and improving the commercial model suggests a strategic approach to addressing the current challenges and restoring SoftwareOne's growth trajectory.


The revised financial guidance, while disappointing, reflects the company's commitment to transparency and adaptability. Investors should monitor SoftwareOne's progress under Erb's leadership, as his strategic initiatives could drive a turnaround and restore investor confidence in the company's long-term prospects. Despite the short-term challenges, SoftwareOne's low-risk business model, effective management, and favorable market trends position it for potential recovery and growth.

In conclusion, SoftwareOne's appointment of Raphael Erb as CEO and the revision of its financial guidance reflect the company's commitment to addressing its recent underperformance and restoring growth. While the short-term outlook may be challenging, investors should remain optimistic about the company's long-term prospects under Erb's leadership. As always, it is essential to conduct thorough due diligence and consider macroeconomic and industry-specific risks before making investment decisions.