TeamViewer's Q3 Earnings Report

Overview

Shares of TeamViewer (ETR:TMV) dropped 10% after the company reported its third-quarter results, with billings growth falling below analyst estimates.

Key Financials

• Billings Growth: 4% year-on-year increase, excluding currency fluctuations, which was below expectations.
• Revenue Growth: 8% year-on-year, matching consensus estimates.

Segment Performance

• Small and Medium-Sized Business (SMB) Segment: Billings declined by 2% year-on-year, attributed to a tough environment in China, Japan, and South Korea.
• Enterprise Segment: Billings increased by 32% year-on-year, exceeding the 12.6% consensus estimate due to strong subscriber growth and higher annual contract value (ACV).

Adjusted EBITDA Margin

TeamViewer reported an adjusted EBITDA margin of 48%, surpassing the consensus of 46%.

Guidance Revision

The company revised its full-year 2024 guidance, narrowing revenue to €662-668 million, slightly lower than the prior estimate of €660-685 million. It increased adjusted EBITDA margin guidance to at least 44%.

Analyst Comments

Goldman Sachs noted that the revised guidance indicates a low-mid single digit growth rate for Q4 2024.

Cash Flow

TeamViewer reported levered free cash flow of about €41.3 million for the quarter, with a free cash flow conversion rate of 51%, significantly lower than the 90% from the previous quarter.

Despite this, the company maintained its full-year free cash flow growth guidance of 8%.

Analyst Outlook

Analysts from RBC maintain a positive outlook on TeamViewer’s shares, citing the strength of its product offerings, the durability of its subscription model, and favorable cash flow prospects.