SSH - Q4 result broadly as expected, 2020 guidance signals confidence in turnaround
SSH Q4 result was broadly as expected. Outlook for 2020: SSH expects revenue growth of 10-15 percent and an improving operating result.
- Q4 net sales were EUR 4.1 million (vs. 4.7m our expectation). Net sales decreased by -35.8% compared to the previous year mainly due to the end of the patent licensing programme and reduced consulting revenue.Software business sales decreased -11.8% y/y due to the smaller initial project size compared to last year including a large license deal received in Q4’18.
- Software fees were EUR 1.8 million (2.2m Evli), Professional services were EUR 0.3 million (0.2m Evli), and Recurring revenue was EUR 2.1 million (2.3m Evli)
- Q4 operating loss was EUR -0.1 million (vs. 0.2m our expectation)
- EPS was -0.02 (vs. 0.00 our estimate)
- Liquid assets were EUR 12.0m (11.6m Q3/19)
- Business outlook for 2020: SSH expects revenue growth of 10-15 percent and an improving operating result (-1.2 MEUR FY'19)
- SSH expect clearly faster growth rates for PrivX and NQX, steady growth for UKM matching the industry growth rate, and modest growth for Tectia, which is the most mature product. The combined effect of these growth rates will result in moderate short-term growth, which SSH expects to accelerate over the next several years.
- CEO comment: “We are making progress with our new products, PrivX and NQX, which we expect to start having an increasing impact on our revenue and bottom line in 2020 and beyond.”