Planisware SAS (PLNW) Earnings Call Transcript

Good day, and thank you for standing by. Welcome to Planisware First Half 2026 Results. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker, Loic Sautour. Sir, please go ahead.

Good morning, and thank you for attending our call on Planisware H1 2026 results. This is Loic Sautour speaking. I will share this presentation with Stephanie Pardo, our CFO. As usual, I will start with our key messages and our commercial and our operational highlights. Stephanie will then take you through the financials in more detail. And I will come back at the end on the update for our 2026 objectives. Starting now with the key highlights of this publication. H1 2026 confirmed the strength of Planisware growth trajectory. Revenue reached EUR 106.1 million, up 10.8% in current currency and 14.8% in constant currency, led by the continued success of our SaaS operation and by the implementation of recently signed new contracts. Importantly, growth accelerated again in the second quarter, with Q2 up 16% in constant currency after 13.6% in Q1, a fourth consecutive quarter of acceleration since the low point of Q2 2025. This reflects solid commercial traction with both new logos and existing clients and continued strong demand for advanced solutions that brings greater visibility, agility and control to complex project environment. Our AI-powered capabilities keep reinforcing our differentiation and our bookings and commercial pipeline remain robust. On profitability, adjusted EBITDA reached EUR 38.2 million, up 11.4%, representing 36% of revenue and a circa 20 basis point improvement year-on-year. This was achieved despite a less favorable mix effect than usual linked to the high implementation workload, and while we maintain high hiring level to support future growth. Cash generation was again strong with adjusted free cash flow up 25.3% year-on-year to EUR 41.2 million, a cash conversion rate of 107.8%, above our circa 80% objective and reflecting a particularly good collection of invoices in the first half of the year coming all with the typical seasonality in our SaaS businesses. This further reinforces the strength of our balance sheet. For the period, operating profit reached EUR 30.7 million, up 30.4%, and profit for the period grew 32% to EUR 28.6 million. Building on this strong first half and our continued commercial momentum, we are raising our 2026 objectives while remaining attentive to a still volatile and uncertain geopolitical macroeconomic environment, and I will come back on the detail at the end of the presentation. Now on this slide, I'd like to provide some color on our H1 2026 commercial momentum. First, this momentum is broad-based. It's not concentrated. We recorded more than 40 notable wins in H1 2026, spanning across our key geographies in Europe, North America and APAC, and well diversified as well in terms of industries from life sciences and pharma to energy and utilities, as well as aerospace and defense, manufacturing, financial services, among many others. This diversification is a real strength. Our growth does not depend on any single geography, sector or deal. Secondly, both engines are supporting the strong bookings, new logos and the installed base. We are winning new customers while continuing to expand within the existing account. And the third point, we are winning against the competition. Across these deals, we are consistently displacing legacy and point-solution competitors. Customers are choosing Planisware for end-to-end capabilities, depth and a trusted, proven and sound long-term partnership. And on the fourth point, land, expand and scale with blue-chip names. We cross-sell into our installed base, which is the expansion runway inside historical accounts, several wins carrying very large enterprise footprint. The commercial momentum built over recent quarters has clearly continued into 2026. Demand remains strong across our markets from new prospects and existing clients alike as organizations seek greater visibility, agility and control over their project portfolios, which is exactly what gives us confidence in the strength of the pipeline for the second half of the year. Stephanie will further comment in detail later. But on this slide, I'd like to illustrate how our revenue mix continues to evolve. Recurring revenue made of our SaaS operation and the maintenance of perpetual licenses represented 91% of total revenue compared to 92% in H1 2025. The slight 1 point decrease is simply the mechanical effect of the very strong growth in implementation this semester. In absolute terms, recurring revenue grew by plus 12.6% in constant currency. Our SaaS model itself represented 82% of total revenue and remains the engine of our growth. Non-recurring revenue accounted for the remaining circa 9%, on which perpetual licenses were only around 1%, reflecting our continued shift away from the perpetual model. Turning to our geographic performance. All key regions contributed to growth in H1 2026. Europe, representing 50% of group revenue, was the main growth contributor, up 17% with all key European countries contributing and a decent balance between existing customers and new logos. North America grew a healthy 13.4%, led mostly by new logos. It represented 42% of total revenue and contributed 39% of total growth. APAC and rest of the world grew 10.2%, driven by strong commercial momentum, in particular in Australia, Japan and UAE, although impacted by a significant reduction in revenue from one larger Asian governmental digital agency. The region represented 8% of total revenue. By pillar, the growth remained concentrated in our 2 largest industry growth pillars. Product Development and Innovation remained our principal pillar at 54% of total revenue and 69% of total growth, with a strong 19.4% increase resulting from both new customer wins and expansion with existing customers. Project Control and Engineering represented 25% of total revenue and 39% of total growth, with a plus 25.2% increase that was very broad-based across countries. IT Governance and Digital Transformation represented 15% of revenue and grew by 1.6%, driven primarily by a new logo in the banking industry in North America and offsetting a lower contribution from the installed base. Finally, Project Business Automation, our latest pillar, represented only 5% of total revenue, impacted by revenue erosion from the existing customer base and limited new customer acquisition. Now let me turn to Stephanie, so that she can further detail the financial performance.

Thank you, Loic. And I will start with the revenue, which reached EUR 106.1 million in H1 '26, up 10.8% in current currencies and up 14.8% in constant currencies. The EUR 3.8 million exchange rate effect was mostly related to the depreciation of the U.S. dollar and to a lesser extent, the Japanese yen versus the euro, and was largely concentrated in Q1 for EUR 3 million. As usual, the following analysis refers to the growth in constant currencies, applying H1 '25 average exchange rates. Let me spend a moment on the sequential evolution of our quarterly growth. Since the low point reached in Q2 '25, our revenue growth has accelerated for 4 consecutive quarters. In H1 '26 was up by 30.6% in constant currencies and Q2 accelerated further to 16%. This confirms the recovery in commercial momentum that began in the second half of '25 when the sales cycle stabilized and we recorded an unprecedented level of new logo signatures, including previously delayed opportunities. The signatures are now translating into revenue through new desk subscriptions, implementation, and onboarding support, and we expect this acceleration to continue. Our recurring revenue grew by 20.6%, led by our SaaS model, up 14.6% and in particular by SaaS & Hosting with a solid growth of 20.7%. This growth is driven equally by new logos and existing customers. Support activities, evolutive and subscription support, grew by 6.3% combined over the semester, accelerating from 2% in Q1 to 9.2% in Q2, as we supported the deployment of new logos implemented earlier in the year. Maintenance was down by 3%, in line with our shift from perpetual model to SaaS. Non-recurring revenue grew strongly, up 41.9%, although trends varied across revenue streams. Perpetual licenses were down by 31.5%, reflecting the continued shift to our SaaS. Implementation revenue increased by 69.1%, driven by an exceptional number of initial implementations following record logo wins in late '25 and early '26. Just to say the bit, we delivered over the semester approximately twice as many initial implementations of new logos generated more than EUR 50,000 in H1 '26 compared to H1 '25. This intense onboarding activity temporarily reduced our ability to upsell historical customers and has an impact on the revenue mix, but it lays the foundation for the future recurring revenue. As many of these initial implementations are now being completed, we expect the growth of implementation to normalize in H2, while the teams will then be able to refocus on evolutive support. It would then drive the rebalancing between new and existing customers in H2 and lead to a significantly higher Net Retention Rate compared to the first half of the year. Turning to gross profit. Cost of sales reached EUR 28.5 million, up 20.9% and represented 26.9% of revenue, broadly stable year-on-year. Exceptional high implementation workload, our lowest margin revenue stream weighed on the revenue mix. However, this impact was offset by continued operational efficiencies and scale benefits. As a result, gross profit reached EUR 77.6 million, up 10.8%, representing a gross margin of 73.1%, essentially stable compared to 73.2% in H1 '25. The next slide provides a breakdown of our operating expenses, which totaled EUR 46.9 million in H1 '26, up 9.1% year-on-year, with an overall cost structure remaining broadly consistent with prior periods. R&D expenses reached EUR 12.8 million, representing 12% of revenue compared with 11.7% in H1 '25, an increase of 30 basis points. Our R&D organization continued to benefit from the internal deployment of AI tools, which enhance productivity and support our product leadership across our unified platform. Capitalized development costs amounted to EUR 2 million, up 40.2% from EUR 1.4 million a year earlier. Sales and marketing expenses reached EUR 19.5 million, representing 18.4% of revenue versus 18.2% in H1 2025, an increase of 20 basis points. Expenses increased by EUR 2.1 million or 11.8%, primarily reflecting marketing investments supporting the launch of our newly released offerings. And finally, G&A amounted to EUR 14.6 million and represented 13.8% of the revenue compared with 14% in H1 2025. This included EUR 0.2 million of foreign exchange loss compared to EUR 0.9 in H1 2025. Excluding this foreign exchange impact, G&A expenses decreased by 40 basis points as a percentage of revenue, reflecting the continued benefit of scale as the company grows. As a result, adjusted EBITDA reached EUR 38.2 million, up 11.4% compared to H1 2025, representing an increase of EUR 3.9 million. Adjusted EBITDA margin improved approximately by 20 basis points, representing 36% of revenue compared to 35.8% in H1 2025. This improvement reflects the translation of revenue growth into profits, supported by a continued disciplined approach to cost, despite less favorable mix effects resulting from the exceptionally high level of implementation activity during the term. Moving to cash generation, which was again strong. Adjusted free cash flow reached EUR 41.2 million, up 25.3% year-on-year, and represented a cash conversion rate of 107.8% of adjusted EBITDA. This is well above our circa 80% objective, and broadly in line with the usual seasonality of the first half when we collect a large part of our SaaS subscription bill at the beginning of the year. We continue to consider a circa 80% as the normative annual cash conversion rate for the coming years. Looking at the detail of the conversion from adjusted EBITDA to adjusted free cash flow. Change in working capital was strongly positive at EUR 16 million, reflecting the growth of subscription contracts billed in advance of the service rendered, together with a particular good collection of invoices in the first half. Capital expenditures amounted to EUR 6.2 million, represented 5.8% of the revenue, significantly above our usual level around circa 2%. This increase was mainly driven by the opening of new data centers, early purchase to anticipate rising RAM prices and mitigate potential delivery delays, higher capitalized development costs related to our new product, and EUR 1.5 million of renovation costs at our headquarters. These additional spending were concentrated in the first half. We expect capital expenditure to normalize at circa 3% of the revenue in H2 2026. Tax paid amounted to EUR 6.8 million, slightly lower than the EUR 7.5 million in H1 2025, which has been impacted by payment related to 2024. Together, these elements delivered an adjusted free cash flow of EUR 41.2 million and a cash conversion rate of 107.8%. The strong cash generation, together with the EUR 24.5 million dividend paid and the EUR 10 million share buyback executed during the first half of the year, growth of net cash position to EUR 204.5 million at the end of June, up 12.3% compared to EUR 195.6 million at the end of December '25 and EUR 102 million end of June '25. As a reminder, apart from lease liabilities related to our offices and data center facilities, which amounted to EUR 18.2 million versus EUR 17.6 million at end of December '25 and EUR 17.9 million end of June '25, Planisware has no financial debt. I will now hand back to Loic, to conclude with our 2026 objectives.

Awesome. Thank you, Stephanie. Before we open the floor to questions, let me come back on our objective. Well, it goes without saying that the global environment remains particularly volatile and difficult to anticipate. This being said, given our strong start of the year, given our continued commercial momentum and our solid commercial pipeline, we are raising our 2026 objective with revenue growth of at least 13% in constant currency, raised from the previous low double-digit target, and adjusted EBITDA margin of at least the fiscal year 2025 level, which was 37.4%, raised from the previous circa 37% of revenue and a cash conversion rate of circa 80%, unchanged, which we continue to consider normative for the coming years. Thank you for your attention. Stephanie and I are now happy to take your questions.

[Operator Instructions] Thank you. And the questions come from the line of Jarrod Chisholm from UBS.

Just one on the revenue growth guidance. What assumptions are factored into your raised guidance range? Could you talk to some of the expectations by pillar, geography and industry vertical? And then the second one, just on capital management and some of your plans for capital allocation. I mean, what are your plans there? You've got a record strong cash balance on hand of over EUR 200 million. Just some of your expectations there would be helpful. Then maybe just some added color as a third question, just on the IT and DT pillar. If you could provide some more detail on the lower revenue growth contribution from existing accounts there and just the dynamics that you're experiencing there, that would be helpful.

For our growth guidance, as you know, a lot of our activities, especially for new logos happens across the summer. So we are guiding at at least 13%, knowing that we are very active in this summer, but it's really at the tail end of the summer that we'll have a good read about the situation. The commercial momentum is across the board. It's across the different pillars. And maybe more importantly, it's across all of the geographies. And so as we commented, we have a very, very strong pipeline and that is the reason why we have raised the guidance to at least 13% now, which we feel confident with.

On the capital allocation, no update. We keep our dividend policy and the Board is assessing timing, a need to return cash to shareholders at some time, but no change.

The third question was about the IT and Digital Transformation pillar. So as we commented, this pillar does not necessarily show with the numbers. It has performed well, especially in the bank and insurance sector. But it was offset, as we commented, by a governmental agency, a very large reduction. But it remains a pillar in which the competitive environment is very much in our favor and where we have a very good expectation for the future.

The next questions come from the line of Ines Mao from BNP Paribas.

I have 2 questions. If we set aside implementation momentum, how would you quantify new logo signing in Q2 versus last year? And could you just indicate the blend of new logos versus contract renewals? My second question is on the CapEx. So you highlight kind of a one-off increase in CapEx in Q2 for data centers. If demand continues to be strong in H2 onwards, do you foresee additional infrastructure requirements? Or would the current rollout be sufficient for the rest of 2026 and '27 onwards?

Implementation in Q2 this year has been really strong. It has been really strong due to an unprecedented level of signature of new logos, new customers at the tail end of 2025 and the beginning of 2026, which actually continued in Q2 2026. If we compare that to the level of Q2 2025, this was our historical low point, where the level of signature back then was not very strong. So the performance this year has been excellent.

And about CapEx, so we have the CapEx related to H1 and H2. And so as Loic explained, we expect capital expenditures to normalize at 3% of revenue in H2. And we expect on a full year 2026 CapEx ratio approximately between 4% to 5%, which will be a little bit above that for the full year.

So I assume it's just enough for the surge in demand currently, plus potential more demand in '26 and '27. There would be no need to open new data centers or to lease new ones?