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In breaking news this morning, UK cybersecurity provider Darktrace announced that it has agreed to sell itself to private equity firm Thoma Bravo, for a value of about $5.32bn. The deal will give Darktrace holders $7.75 in cash, or 620 pence per share. Shares closed at 517 pence in London trading on Thursday, giving the company a market value of £3.6bn.
Thoma Bravo walked away from talks to buy the company in 2022 after the companies couldn’t agree on terms (See - Darktrace takeover talks collapse), but it would seem that the value on offer was too much to pass up this time round. Even with the c20% premium paid the share price is still down c.38% from the highs we saw in 2021. Darktrace will join Thoma Bravo’s already impressive Cybersecurity portfolio which includes the likes of Sophos, Proofpoint, Sailpoint, Sonicwall and McAfee.
Cambridge-based Darktrace, which first listed on the LSE in 2021, lashed out at the state of the London public markets (and rightly so), complaining that its financial performance “had not been reflected commensurately in its valuation” with its shares being consistently undervalued relative to US peers such as Crowdstrike and Palo Alto Networks. The deal represents great value for a business that grew 26.5% in Q3 with an expected acceleration of growth in the second half of the year – See Darktrace up 26.5% in Q3, raises guidance for “H2 of re-acceleration”.
So there departs another of one of the UK’s most promising publicly listed tech stocks. Tech investment prospects still look bleak for those who want to invest in the UK, with the GAMMAN companies – namely Google, Amazon, Microsoft, Meta, Apple, and Nvidia, continuing to be the primary choice for those looking to capitalise on the AI boom, with no comparable UK alternatives remotely in sight.
Posted by: Simon Baxter at 10:26
Tags: acquisition cybersecurity
Faculty has been awarded a £2m contract to help deliver the NHS Artificial Intelligence Deployment Platform (NHS AIDP) pilot for medical imaging diagnostic technologies.
The AIDP will act as a hub for radiological images submitted by NHS trusts, routing these images for interpretation by AI products supplied by a range of vendors. If the results pass performance checks when the pilot is running in shadow mode, trusts will have the option to move to live mode, which will see results transferred back into hospital systems to help support radiologists with their clinical diagnoses.
The pilot is intended to test whether having a centralised platform and deployment processes will: 1) accelerate the safe and ethical deployment of AI across multiple hospital sites; 2) provide a cost and time-effective standard deployment process for AI products for the NHS; 3) provide access to post-market surveillance resources of AI vendors; 4) provide a case study for accelerating the broader adoption of technologies across the NHS; and 5) test the approach before a potential switch to live mode.
Faculty will act as the prime contractor for the delivery of the AIDP. It will work with Cimar (provision of the core AI Deployment Platform), Royal Surrey NHS Foundation Trust (pseudonymisation and post-market surveillance technology) and a range of AI product vendors covering chest x-ray and computed tomography (CT) scans, musculo-skeletal x-ray and prostate magnetic resonance imaging (MRI). The 18-month pilot will work with NHS Trusts in the East Midlands Radiology Consortium (EMRAD) and Thames Valley Radiology Network (TVRN).
London-based Faculty has been heavily involved in the ethical application of AI in the health sector, including helping to understand the biosecurity risk landscape, modelling patient flow, enhancing medical imaging processes, and supporting COVID-19 mitigation initiatives. Its work with the AIDP is an important part of efforts to to make medical diagnostics more efficient and scalable, which in turn should boost NHS productivity and lead to better outcomes for patients.
Posted by: Dale Peters at 10:21
Tags: nhs contract health AI
As expected, AI continues to be a major factor driving revenue growth for Microsoft, with total Q3 revenue up 17% to $61.9bn. Investors responded positively with shares up c.4% in pre-market trading.
Growth across the various segments was broadly in-line with Q2. Revenue for Productivity and Business Processes was $19.6bn, up 12% yoy, Intelligent Cloud revenues were $26.7bn, up 21% and More Personal Computing was up 17% to $15.6bn. Azure growth shows no signs of slowing down, up 31% yoy, with AI services contributing 7 points of growth (up from 6 points in Q2, and 3 points in Q1). Overall Microsoft Cloud revenue was $35.1bn, up 23% yoy. Commercial bookings jumped 29% yoy, driven by growth from large, long term Azure contracts, including a $1.1bn deal with Coca-Cola for Azure cloud and AI.
The number of Azure AI customers continues to grow with more than 65% of the Fortune 500 now using the Azure OpenAI Service. Nearly 60% of the Fortune 500 now use Copilot according to Microsoft, with companies like BP, Cognizant, Moody’s, NVIDIA, and Tech Mahindra all purchasing over 10,000 seats. Microsoft also said that 30,000 customers have used Copilot Studio to customise Copilot for Microsoft 365 or to build their own, up 175% QoQ. Microsoft CFO Amy Hood said during the company's earnings call that the tech giant is seeing near term AI demand outstrip available capacity.
Microsoft also saw an acceleration of revenue from migrations to Azure, with the number of $100m plus Azure deals increasing over 80% yoy. It also highlighted the importance of being the ‘hyperscale platform of choice’ for SAP and Oracle workloads, with Conduent and Medline moving their on-premises Oracle estates to Azure, and Kyndryl and L’Oreal migrating their SAP workloads to Azure.
As well as its significant investment in OpenAI, Microsoft continues to rely heavily on partners to bring customers a selection of foundation models and open-source models, LLMs and SLMs, including those from Cohere, Meta, and Mistral. Earlier this week it announced Phi-3, a number of SLM’s (small language models), which are already being trailed by companies including LTIMindtree, PwC, and TCS.
Over half of Azure AI customers also use Microsoft’s data and analytics tools. TomTom for example is using Cosmos DB, along with Azure OpenAI Service to build their own immersive in-car infotainment system. Microsoft Fabric also continues to gain traction, with now over 11,000 customers. Fabric is integrated with Azure AI Studio, meaning customers can run models against enterprise data that is consolidated in Fabric’s data lake, OneLake. GitHub Copilot is also helping to drive growth, with 1.8 million paid subscribers, up 35% QoQ, and GitHub revenue up 45% yoy.
Posted by: Simon Baxter at 10:15
US headquartered, SS&C Technologies largely maintained the acceleration in growth which built during the latter part of FY23 through the first quarter of the new financial year. The global provider of services and software to the financial services and healthcare industries saw revenue for the three months ended 31st March increase by 5.3% (4.7% organic) yoy to $1.435bn. Net incomefor the period improved significantly rising by a quarter yoy to $158m.
Reporting stronger market conditions, the company cited its Intralinks business, which provides virtual data rooms for M&A, banking and securities, and alternative investments, as the primary driver of the Q1 top line uptick. The first quarter also saw Lloyds Banking Group (LBG) and Schroders select SS&C to support their activities in the UK. The deal related to Schroders Personal Wealth, a joint venture between the two providing financial advice and wealth management services to LBG customers both online and face to face (see: Lloyds Banking Group and Schroders j.v. selects SS&C).
The company, which owns RPA specialist Blue Prism, continues to deploy intelligent automation and generative AI throughout its operations. Commenting on the latest results, Chairman and CEO, Bill Stone stated that SS&C is now seeing real benefits in client service and productivity flowing from these investments.
In February, the company issued guidance for the current fiscal equivalent to 6.6% revenue growth at the top end. The Q1 performance leaves SS&C firmly on track to deliver against this expectation.
Posted by: Duncan Aitchison at 10:12
Tags: results software financialservices IT+services autmation
Tech Mahindra capped off FY24 with another largely lacklustre quarter. A 6.4% constant currency yoy decrease in revenue for the three months ended 31st March (Q3: -5.4%) meant that turnover for the full fiscal of $6.28bn declined by 4.7% against the prior year. The top line softness hit the bottom line hard. EBITDA for the period fell by almost 40% yoy to $599m. This knocked 550 bps off the corresponding margin which fell to just 9.5% from 15% in FY23.
The only bright spot across the offshore major’s sector and regional business portfolio was the Manufacturing vertical. Now accounting for around a fifth of firm-wide sales, revenue from this industry segment increased by over 7% yoy during the last financial year. Turnover from Tech Mahindra’s largest vertical, Communications, Media & Entertainment, shrank by over 12% yoy to $2.3bn.
From a geographic perspective, it was the firm’s Americas territory which proved the most resilient last year. The top line yoy decline in this region, which generates about a half of global revenues, was a modest 1.4%. In Europe, Tech Mahindra saw its sales drop by over 8% against FY23 to c.$1.5bn.
No forward guidance was provided by the company. There were, nonetheless, a couple of more positive indicators in the Q4 numbers. EBITDA margin for the period improved sequentially by 220 bps to 10.9% and net new deal wins increased by c.30% qoq to $500m. Neither of these data points, however, suggest there will be an imminent reversal of Tech Mahindra’s fortunes. Commenting on the FY25, CEO, Mohit Joshi said the company looks forward to an "improvement in clients spending". For now, this feels more like an expression of hope rather than a statement of expectation.
Posted by: Duncan Aitchison at 10:00
Tags: results offshore IT+services
Results out overnight from Alphabet saw the firm beat financial analysts’ expectations in terms of both revenue and EPS.
Google’s parent achieved earnings per share of $1.89 and Q1 revenue of $80.54bn (+16% in constant currency). In EMEA, Alphabet revenue grew slower at 12%. Following Meta’s lead in February, Alphabet announced its first ever dividend - 20 cents per share and to be paid in June. The Board has also approved the repurchase of $70bn in shares.
In the Google Cloud segment, revenue increased c.28% (as reported) to $9.5bn (up from 25.5% in Q4). Here, we continue to see significant enrichment of collaboration with its partner ecosystem. Google’s rock-solid heritage as a data specialist sets it apart from the other hyperscalers, while its position and ongoing investment in AI continues to help fuel extensive activities amongst both partners and end customers.
TechMarketView customers can read more analysis on the performance and moves of the big tech vendors and their partners (big and small) by using our EXTENSIVE HotViews archive.
For market trends and analysis in complex, fast-moving markets, see recent research including: AI: Market trends, use cases, and suppliers and Quantum acceleration is on the horizon.
For more on how the likes of Google are working with the world’s largest systems integrators, see our unique Market Readiness Index for our tech buyer clients, out next week.
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Posted by: Kate Hanaghan at 10:00
Tags: results
Fujitsu has released its FY23 results (year to end March 2024), which showed notable improvements inside its core Service Solutions business. Top line revenue for the whole of Fujitsu was up 2.2% to 3,756 billion yen. Profit for the year was 254.4 billion yen, an increase of 39.2 billion yen from the prior year.
In Service Solutions, the performance was good – and the key driver of the company’s improved profitability. The top line increased 9.9% to 2,137.5 billion yen. Adjusted operating profit was up (to 237.2 million yen) with the margin improving to 11.1% – an increase of three percentage points over FY22. Driving that was the increase in revenue but also improvements in productivity – including better use of Global Delivery Centers and standardisation in development work. Profitability was squeezed a bit by investments in growth areas (notably Uvance offerings and employee training), but this is essential – and planned. Fujitsu is also “strengthening” investment in R&D in five key areas, including AI and quantum computing (see TechMarketView’s latest research: AI: Market trends, use cases, and suppliers and Quantum acceleration is on the horizon). Japan’s Service Solutions revenue grew faster at +12% with Fujitsu’s home country registering “solid growth” in digital and modernisation deals.
Over in Europe, there was a “pull-back” in orders from last year’s “large-scale” deals with the carve-out of the German private cloud business also impacting the numbers. The UK, which is Fujitsu’s largest subsidiary outside of Japan, does not get a specific mention as per usual. Contract renewals and new wins suggest progress in the commercial sectors, but we think Fujitsu needs to put more focus on getting deeper into some key sectors. Of course, it is unprecedented times for this business in light of the Post Office Horizon IT Inquiry (read our analysis: Impact of Post Office Inquiry on Fujitsu and wider IT industry) and the tsunami of related media coverage. The UK is not surprisingly investing considerable time into communicating with customers, partners, and employees. A major programme is underway to ensure the business responds in the best possible way to the Inquiry (which is still ongoing) and repositions itself appropriately for the longer term.
Posted by: Kate Hanaghan at 09:55
ServiceNow has announced its results for Q1 2024 (ended 31 March 2024), again exceeding guidance – see last quarter: ServiceNow exceeds Q4 guidance, raises outlook – by posting total revenue of $2.6bn year-over-year (up 24% in constant currency), the vast majority of this figure being subscription revenue ($2.5bn, up 24.5% ccy).
It’s been (another) bumper quarter for ServiceNow, with the company recording eight transactions over $5m net new annual contract value (ACV) – double the number from Q1 2023. It now sports 1,933 total customers with >$1m ACV (representing a 15% yoy growth).
Unsurprisingly, in this age of AI-fuelled everything, ServiceNow credits its GenAI-powered Now Assist “experience” with providing the largest net new ACV contribution to date of any new product family launch in a comparable period. New variants, such as Now Assist for ITIM AIOps and Impact AI Accelerators came to market during the quarter. On the subject of GenAI, ServiceNow’s expanded partnership with NVIDIA resulted in the introduction of new telco-specific GenAI solutions (in February); and in the same month acquired telco-focused NetACE network management and automation technology from Israel-headquartered Atrinet (see ServiceNow targets telcos with latest acquisition). Expect more AI-driven business transformation activity from ServiceNow in the telco space once that deal closes (expected in Q2).
As a result of the Q1 figures, ServiceNow has raised the midpoint of its subscription revenues guidance range for Q2 2024 (to $2.525bn-$2.53bn, representing growth of 21.5%-22%). Full year guidance for subscription revenues now has a slightly raised floor, standing at $10.56bn-$10.575bn (up 21.5%-22%).
Posted by: Craig Wentworth at 09:43
Tags: results telco
Business process specialist WNS grew revenue in Q4 by 6.9% YoY to $336.8m on the back of continuing strong sales activity. This helped WNS end FY 2023 with overall Group revenue growth of 8.1% to $1,323.4m (FY23 $ 1,224.3m). Profits improved slightly on the year previous with operating profit coming in at $140.1m (FY23 $137.3m). Despite the respectable FY results WNS’s share price was down some 10% today as the company reported fourth quarter earnings that came in below expectations.
Q4 revenue continued to grow on the back of new client wins, some expanded contracts, and some favourable currency movement. This was then partially offset by the offshore delivery transition of a large internet client and some volume reductions elsewhere in their portfolio. Q4 profit decreased YoY impacted by the impairment of major Healthcare client contract termination and annual wage increases. This was then partially offset by the revenue growth, some improved productivity and currency movements.
Leadership wise WNS announced that Arijit Sen, the company’s Corporate Financial Controller, has been appointed CFO from July, succeeding Sanjay Puria who is stepping down for family reasons but will continue in an advisory role until April next year. Looking forward WNS is now expecting FY 2025 revenue to be between $1,293m and $1,357m, up from $1,284.3m in FY 2024.
Posted by: Marc Hardwick at 09:31
Sopra Steria is one of several companies publishing first quarter results today with Group revenue coming in at €1,587m, up 13.8% on the same period a year ago. Most of this is inorganic, factoring in the impact of the CSGroup and Tobania acquisitions from March last year and October’s Ordina deal – these acquisitions were worth some €184.1m to the top line in Q1. Organically, Group revenue was flat (+0.3%), held back by its comparison against the strong growth (+9.1%) of the same quarter a year ago.
The UK business continues to perform strongly, posting revenue of €240m, representing growth of 7.4% (all organic). The UK now accounts for some 15% of Sopra Steria revenue globally and was buoyed by “a very robust public sector and a private sector that started to feel the positive effects of new contracts signed in the second half of 2023, which will gradually ramp up over the course of 2024.”
Group CEO Cyril Malargé pointed to market conditions that remain strong for large-scale digital transformation projects but are “substantially less dynamic for discretionary investments”. Strategically, the priorities for Sopra Steria this year remain integration of its acquisitions, with a planned divestment of its banking software business likely to come in Q2 or Q3. As with the rest of the market Sopra Steria has been raising its Gen AI game with investments in its rAIse programme to embrace the technology. The firm’s consulting business, Sopra Steria Next has recently signed new partnerships with Microsoft to assist businesses in implementing of Microsoft 365 Copilot and has joined the NVIDIA AI Consulting Partner Network. Looking forward, the business is targeting organic revenue growth of between 2% and 4% for this year.
Posted by: Marc Hardwick at 08:34
Tags: results itservices
On 11th April, the Competition and Markets Authority (CMA) published a paper updating on its work reviewing the impact of AI Foundational Models on competition and consumer protection.
It has only been six months since it had published its previous paper. Yet, such is the nature of the market, that in that time, a range of developments have altered the shape of the Foundational Model ecosystem. And the CMA is worried that the GAMMAN companies – namely Google, Amazon, Microsoft, Meta, Apple, and Nvidia - have both the increasing ability and the incentive to shape the market in their own interests.
In this latest ‘View from the Chief Analyst’, Georgina O’Toole, considers whether the CMA is justified in its view of the GAMMAN companies and the potential for their behaviours to negatively impact competition in the Foundation Models market. She also looks at what evidence there is of damaging behaviour to date. And finally, she considers whether, if the CMA decides to pursue enforcement action against the GAMMAN contingent, it really has the teeth to enact change.
In answering these questions, Georgina also obtains fascinating insight – in ‘A Conversation With…’ - from TechMarketView’s Principal Analyst, Simon Baxter, during which she explores a range of topics including; fears of hyperscaler dominance, market consolidation of AI foundation models, and the competition amongst suppliers across the AI ecosystem.
TechMarketView subscribers can read this View from the Chief Analyst in UKHotViewsExtra now. If you are not yet a subscriber - or are unsure whether your organisation has a corporate subscription, please contact Deb Seth to find out more.
Posted by: HotViews Editor at 18:15
Meta shares are down c.13% in afterhours trading after the company reported higher than expected AI spending, despite a strong Q1 performance.
The business reported revenue grew 27% to $36.46bn in Q1 FY24, however the firm said it now expects to spend between $35bn and $40bn, (£28bn-32bn) in 2024, up from an earlier prediction of $30-$37bn, as the business continues to accelerate infrastructure investments to support its AI roadmap. Meta said it is not providing guidance for years beyond 2024, but expect capital expenditures to continue to increase next year as it invests aggressively to support AI research and product development.
Meta CEO, Mark Zuckerberg, seemed prepared for an adverse reaction by investors, commenting; “I think it’s worth calling that out, that we’ve historically seen a lot of volatility in our stock during this phase of our product playbook where we’re investing in scaling a new product but aren’t yet monetizing it”.
Last week the company launched the latest version of its open-source AI large language model Llama 3 - See Meta releases latest AI model Llama 3. Meta is building AI into a number of its services, with its AI assistant ‘Meta AI’ to be available across Facebook, Instagram, WhatsApp, Messenger and for the first time through a standalone website. Users will also be able to create images from text in real-time using Meta AI’s new Imagine feature. Though the Llama 3 AI models are being used to power its own internal AI applications, Meta is still giving them away for free, so it’s not going to be directly clawing back investment any time soon, though by making them open source they do benefit from essentially some free R&D as organisations use the models, training them further.
Zuckerberg was quite clear that Meta expects multiple years of investment into AI before any pay off, but is confident in the long-term opportunity. He highlighted several ways to build future business, including; scaling business messaging, introducing ads or paid content into AI interactions, and enabling people to pay to use bigger AI models and access more compute. AI is also at the core of its advertising proposition, which generates nearly all of Meta’s revenue, helping to show people more relevant ads.
We must of course not forget about the Metaverse, Meta’s other big loss-making bet. Reality Labs (which is the arm of Meta focused on virtual and augment reality), generated revenue of $440m in Q1, but an operating loss of $3.8 billion! Meta says it expects operating losses to increase meaningfully yoy due to ongoing product development and investments
Posted by: Simon Baxter at 10:10
Tags: AI advertising metaverse
US based security awareness training and simulated phishing platform KnowBe4, has announced it has acquired UK HQ’ed email security supplier Egress. Further terms of the transaction were not disclosed.
KnowBe4 provides a platform that allows organisations to drive awareness of security threats and change user behaviour through security awareness training and simulated phishing attacks. The platform also includes a real time security coach that detects and responds to risky end user behaviour to provide immediate feedback. UK Customers include Whitbread, Action for Children and River Island, with a reported 65,000 customers worldwide.
Egress’ Intelligent Email Security suite provides a set of AI-enabled security tools with adaptive learning capabilities to help prevent, protect and defend organisations against sophisticated email cybersecurity threats. Egress customers include NHS East of England Ambulance service, City of Edinburgh council and Bensons for beds. By acquiring Egress, KnowBe4 plans to deliver a single platform that aggregates threat intelligence dynamically, offering AI-based email security and training that is automatically tailored relative to risk.
Both companies have been making AI-led investments with KnowBe4 releasing Artificial Intelligence Defense Agents (AIDA), which enable organisations to automate the dynamic selection of security awareness training and testing to give users a more individualised learning experience. Meanwhile, Egress launched its AI-powered Automated Abuse Mailbox in early April, which utilises AI to instantly inspect and remediate attacks. With on average 85% of emails reported to abuse mailboxes false positives, AI can significantly help in cutting down analyst investigation times.
Posted by: Simon Baxter at 10:05
Tags: M&A cybersecurity
Pinewood Technologies Group plc (formerly Pendragon plc) has published its maiden results following its transition into a pure-play SaaS business.
In September 2023, Pendragon—one of the UK’s largest automotive retailers—announced a plan to sell its motor and leasing divisions to Oregon-headquartered Lithia in a £250m deal. In October, Lithia announced it had signed a revised agreement on improved terms increasing the total cash consideration by 42% to £397m. The deal was approved by shareholders later that month and the sale completed at the end of January 2024. As part of the deal the companies formed a strategic partnership that will see Pinewood’s software platform adopted across Lithia’s network in the US and UK, and the creation of a joint venture to co-develop automotive technology solutions for the North American market.
Revenue from continuing operations for the 13-month period ended 31 January 2024, was up 28.3% to £24.5m (2022 (12-month period): £19.1m). Revenue including intercompany revenue was up 26.0% to £32.0m (2022: £25.4m). Operating profit was £10.0m (2022: £7.0m) with profit before tax coming in at £9.9m (2022: £7.0m). Core business operating profit was up 25.5% to £13.8m (2022: £11.0m).
The company achieved 4% growth in user numbers during the period, resulting in c.33,100 now using its software. It saw growth in UK & Ireland and internationally as it benefited from new implementations in Denmark and Luxembourg. Pinewood also sustained good customer retention with a net user churn rate of c.2%.
Following the disposal of its motor and leasing divisions, Pinewood is a much smaller business than its predecessor (Pendragon group revenue in 2022 was £3.6bn), but one that is now laser focused on higher margin cloud-based dealer management software. It is well positioned for growth through a combination of a robust financial situation and opportunities for international growth, particularly through its partnership with Lithia in North America. TechMarketView will be following its progress.
Posted by: Dale Peters at 09:53
Tags: results saas transport software automotive partnership
IBM announced its Q1 results last night, which saw the stock tank by up to 9% in after-hours trading.
The news wasn’t all bad, with earnings per share (EPS) hitting $1.68, ahead of the expected $1.60. Revenue, however, came in below analyst expectations at $14.46bn. A tightening around discretionary customer spend in part contributed to this.
Across its segments, IBM saw revenue growth of 5.9% in Software (constant currency), 1.7% in Consulting, with Infrastructure growth all but flat. The sum of that was 3% growth in Q1 at the top line. IBM said its book of business around watsonx and GenAI “showed strong momentum” and has now breached the one-billion-dollar mark. IBM also grew 3% in FY23, with growth across all segments.
IBM also announced its intention to acquire HashiCorp for $6.4bn. The firm’s capabilities span infrastructure and security lifecycle management, which helps organisations increase automation in hybrid and multi-cloud environments. News of the deal appeared to slip out into parts of the media before the official announcement.
For FY24 as a whole, IBM expects mid-single digit growth.
Posted by: Kate Hanaghan at 09:50
Tags: results acquisition
Atos’ Q1 results, for the period ending 31st March 2024, illustrate the effects of Atos’ precarious financial position on the confidence of clients and prospects.
The trouble is that it’s a vicious cycle. A difficult three months has done nothing to shore up the coffers. Indeed, rather the opposite. As of March 31, 2024, cash & cash equivalents and short-term financial assets stood at €1.0b, down €1.4b compared with 31st December 2023. Net debt, meanwhile, stood at €3.9b at the end of the quarter, compared to €2.2b three months prior.
With July 2024 remaining the target date for reaching a financial agreement with the Group’s creditors, there will be prolonged uncertainty, and, undoubtedly, a difficult Q2. Atos is now in the process of revising its 2024-27 business plan “to lead to an increase in new money needs and to a potential additional debt reduction”.
At the top level, Atos’ revenues for the quarter were down 2.6% organically to €2,479m, with an operating margin of 1.9% or €48m (compared to 3.3% in Q1 23). In Northern Europe & APAC (which includes the UK), the decline was 3.2% to €754m.
Globally, revenue at Eviden, the part of Atos focused on Digital, Big Data & Cybersecurity, declined by 3.9% organically to €1,164m, highlighting the fact that Eviden’s business is defined by shorter-term bookings and smaller contracts and is, therefore, hit hard when clients are nervous to sign deals. One of the challenges highlighted Is “contract scope reductions in the UK”. Meanwhile, revenue at Tech Foundations, the part of Atos focused on Digital Workplace, Infrastructure Services, and Professional Services, and with more longer-term multi-year deals, declined organically by a lesser 1.5% to €1,314m. However, in Northern Europe & APAC, Tech Foundation revenues increased, with some of that growth driven by increased BPO activity.
The forward view is heavily impacted by the unwillingness of clients to commit to new arrangements with the Group until its future is put on a firm footing. The Book-to-Bill ratio for the group was 64% in Q1, down from 73% a year before. The Tech Foundations business is particularly suffering, as clients will be far more reluctant to enter into major long-term, transformational, contracts; the Tech Foundations Book to Bill for the quarter stood at just 47% (with Eviden’s at 83%, driven by new High Performance Computing contracts).
Both the Tech Foundations and Eviden businesses are executing on their transformation plans internally. But this must be very tough to achieve with the purse strings pulled tight. Interestingly, the attrition rate for Q124 was “the lowest Q1 over three years, at 13.0%”. But as the situation drags on, it must be an incredibly difficult environment in which to work, particularly as it remains unclear how the Tech Foundations and Eviden businesses will continue to operate together under the same umbrella. It seems highly likely that we’ll see a delayed impact on attrition in the next few months. Agreeing a financial resolution cannot come soon enough, for investors, for clients, or for employees.
Posted by: Georgina O'Toole at 09:40
Tags: results corporateactivity debt refinancing IT+services
UK-based electric vehicle (EV) charging analytics platform supplier Camion has raised EUR2.7m in pre-seed funding, led by EQT Ventures with participation from First Look Capital and RitMir Ventures.
Camion describes its tech as “location intelligence”, using machine learning to optimise the deployment of EV charging points across real estate portfolios – providing services both to real estate owners and charging point operators. According to the company, its proprietary algorithms evaluate the key factors driving EV charging demand and power availability, and then construct a property-based revenue model that estimates the potential lease revenue for property owners (taking into account associated development costs).
The company’s aim is to accelerate the proliferation of EV charging points, focusing on areas where predicted demand makes the infrastructural investment worthwhile. Whilst this isn’t a policy that will ensure outlying hard-to-reach locations are covered, it will at least serve to increase EV charging point availability for the mainstream.
EV charging is at the nexus of real estate, transport, and energy supply – and (along with innovations in vehicles themselves) is central to the roll-out of a post-fossil fuels travel infrastructure. All of these use cases areas are featured in TechMarketView’s Sustainability Technology Activity Index (our unique take in the sustainability technology landscape). Subscribers to our SustainabilityViews research stream can download the Index now. If you are not yet a subscriber, or would like to learn more about our sustainability research, please contact Deb Seth for more information.
Posted by: Craig Wentworth at 09:24
Tags: EV charging real estate
Despite sequential top line growth turning negative in the final quarter, LTIMindtree’s FY24 revenue increased by 4.2% yoy at constant currency to c.$4.3bn. The company’s pace of expansion for the twelve months ended 31st March exceeded that of the Tier 1 offshore vendors which have announced results for the period. TCS, Infosys and Wipro posted annual rises in turnover of 3.4%, 1.4% and -4.4% respectively. LTIMindtree’s full year net profit improved by 1.4% yoy to $553.4m.
In terms of industry verticals, it was demand from the company’s Manufacturing & Resources clients that proved the most robust in FY24. Sales in this market segment were up by 14.6% yoy to generate nearly a fifth of global turnover. The performance of LTIMindtree in the Banking, Financial Services and Insurance arena, which accounts for almost 40% of firm-wide turnover, was more muted. A 6.6% yoy decrease in this sectors Q424 revenue limited its full year growth to just 2.2%.
From a geographic perspective, company sales in Europe dipped by 3.6% yoy in the final quarter to $167m. This constrained the territory’s FY24 revenue improvement to 3.5%. LTIMindtree North America fared better with turnover in this region up by almost 6% to around $3.15bn.
The company was silent regarding the outlook for the new financial year. The c.16% yoy increase in FY24 order inflow achieved by LTIMindtree is a positive lead indicator. The Q4 slowdown in revenue growth, however, suggests that the firm will have its work cut out to deliver a significant uptick in its pace of expansion for the current fiscal. The realisation of the aspiring Tier 1 offshore vendor’s objective of becoming a $5bn turnover business, targeted eighteen months ago for FY24 (see here), now appears to be a few years away barring acquisitive assistance.
Posted by: Duncan Aitchison at 09:20
Cambridge-headquartered Checkit, is a software provider that helps organisations manage operations in a hybrid working environment. Full year results out this morning outline a business on a path to profitabilitywith its SaaS pivot and focus on cost cutting starting to delivering results (SaaS move checking out for Checkit).
Operationally, the business is focused on a productivity play around the “Augmented Worker” automating activity to free up staff time that can be deployed on more valuable activity. This includes for example, IoT sensors added to stock (ranging from food to blood), workflows to help drive collaboration and data/intelligence to support compliance.
FY24 results headlines include ARR growth of 16% to £13.3m (FY23 £11.5m) and recurring revenue growth of 17% to £11.2m (FY23 £9.6m) as the business continues its SaaS journey. Total Group revenue was also up 17% to £12m (FY23 £10.3m). The business continues with its progress towards profitability, with a 46% improvement in adjusted EBITDA to -£3.4m (FY23 loss of £6.4m), driven by the revenue growth, an increase in gross margins to 67% (FY23 63%) and an 11% reduction in operating costs.
Checkit's USP is that it helps organisations manage its staff and its physical assets (buildings/equipment/inventory) through a combination of workflow, asset, and buildings management – given the challenges of the current economic environment positioning this as a productivity play makes absolute sense. The challenge will be convincing clients to invest now to save further down the line. Looking forward Checkit now expects to reach breakeven in FY27 (calendar year 2026).
Posted by: Marc Hardwick at 08:16
Tags: results software operations productivity
Cardiff-based insurtech, Peppercorn AI, has successfully raised £3.25m in new funding. The cash injection was provided by a variety of investors including, EHE Capital and Angels Invest Wales. The company previously secured £1.8m in seed funding from EHE Capital in April 2022.
Peppercorn AI, which started life in 2020, is the brainchild of CEO and serial founder, Nigel Lombard. Lombard’s previous ventures include digital car insurance MGA, Hedgehog, and telematics-based car insurers Provancy and Drivology.
Peppercorn AI has developed a SaaS platform called Pipr and utilises conversational AI to streamline insurance processes and reduce operating costs. The insurtech claims to provide “a new experience, that puts the customer in control”. The startup intends to put the latest funds towards the development of conversational AI technology to support its growing pipeline.
Posted by: Jon C Davies at 07:04
Tags: funding AI insurTech
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