Quadient confirms mid-term ambitions to drive sustainable profitable growth for cloud-based software solutions with expected Annual Recurring Revenue reaching c. €250 million by the end of 2023.
Continued shift to subscription and SaaS models and increasing share of subscription-related revenue across Quadient’s Intelligent Communication Automation (ICA) solutions as part of the execution of the Back to Growth strategy
Strong business momentum for ICA expected to continue over the phase two of Quadient’s strategic plan
Detailed KPI ambitions by the end 2023 for ICA, including Annual Recurring Revenue of c. €250 million
Quadient , a leader in business solutions for meaningful customer connections through digital and physical channels, held on 27 January 2022 an education session dedicated to its Intelligent Communication Automation (ICA) cloud-based software solutions, hosted by Geoffrey Godet, Chief Executive Officer and Chris Hartigan, Chief Solution Officer for ICA.
Quadient ICA’s solutions are focused on automating customer’s business communications and financial processes to deliver improved and personalized experiences to their customers. Across the Company’s worldwide operations, ICA is well positioned to address an estimated €6+ billion market, currently growing double-digits per annum.
During the session on 27 January 2022, Quadient outlined the significant progress made across its ICA software business as part of the execution of its Back to Growth strategy, notably:
- The continued shift from license to subscription and SaaS models to better address customers’ needs and market demands with the share of subscription-related revenue1 representing c. 67% of ICA revenue for the first nine months of 2021;
- The fast expansion of ICA installed base to more than 11,000 customers at the end of the first nine months of 2021, more than 70% of which being already subscription and SaaS customers; and
- The significant cross selling synergies generated through Quadient’s Mail-Related Solutions sales organization, which is a key competitive edge.
Within the framework of phase two of Quadient’s Back to Growth strategy, the Company’s ambition is to maintain this strong business momentum by focusing on accelerating the shift of ICA’s customer base to subscription and SaaS models, expanding its installed base of cloud-based solutions, notably through cross selling with potentially up to 120,000 mail-related customers, and building more recurring SaaS and Cloud revenue.
The tangible synergies and disciplined management are expected to drive sustainable profitable growth for Quadient, as reflected in the Company’s confirmed ambitions to achieve over 20-25% subscription-related revenue1 CAGR over its three-year plan and c. 30% solution profit margin on a full-year basis by the end of the three-year plan.
At the end of the education session, Mr. Godet detailed Quadient’s ambitions for ICA by the end of the 2021-2023 three-year period as it relates to each of the ICA KPIs that are monitored within the framework of phase two of Back to Growth, namely:
- Over 90% share of SaaS and subscription customers in ICA total customer base;
- c. €250 million Annual Recurring Revenue; and
- c. 75% share of subscription-related revenue1 in ICA total revenue.
As a reminder, Quadient has hosted in the last twelve months a series of education sessions for the financial community, with each session dedicated to one of its major solutions. The objective of these sessions is to provide more details and insights into the market, customer requirements, solution capabilities, business model, and go-to-market strategy.