Basware (Helsinki: BAS1V) is having a good year. The eInvoicing provider announced their second-quarter results on July 10 (our sister site, CPO Rising, also covered this announcement), noting an increase in operating profit of 26.9% over the year-ago period. The results become even more impressive when you look at the first half of the year—Basware netted €1.462 million in profit between January 1 and June 30 of 2014, compared with a loss of €661 thousand in the same period in 2013.
Earnings per share has shown a whopping 108.4% increase in the second quarter as well, jumping from €0.03 in Q2 2013 to €0.06 per share in Q2 2014. Overall net sales, by contrast, grew a mere 0.1% in the second quarter, with sales in the Network Services division up 12.7% and Solution Services down 3.5% quarter-over-quarter. Network Services contributed fully 25% of net sales to the quarter, which is also a growth from €7,154 a year ago to €8,066 in 2014.
Basware CEO Esa Tihilä expressed optimism for the company’s performance, stating that, “According to the most recent industry surveys, e-invoicing has become more commonplace and the volume of e-invoices has grown significantly in Europe and globally. The adoption of e-invoicing is expected to increase even more rapidly as the benefits of e-invoicing are realized more widely, especially with the support of regulatory standards and a supportive infrastructure.”
Basware’s Business Strategy: Keep on Keeping on
Basware reiterated its commitment to the strategic objectives announced at the end of 2013: 150 million transactions processed annually by the end of 2015 and 15% to 30% annual growth in sales, along with recurring revenue contributing 70% of net sales and profit margin of between 15% and 20%.
So far Basware is well on its way to achieving these goals—transaction volume grew 29% to 18.7 million quarter-over-quarter, with an 8.5% uptick from the first quarter. In terms of recurring revenue, Basware doesn’t have far to go: recurring revenue from subscriptions and the like contributed 66.5% of net sales in the second quarter.
The overall eInvoicing sector continues to grow year-over-year, according to Ardent Partners’ 2014 ePayables research. This is good news for Basware, seeing as their transaction volume grew nearly 10% more than the overall market growth.
Tihilä emphasized in the earnings release that Basware’s prospects are looking up for the rest of the year, with a million business connected on the Basware Commerce Network and the benefits of eInvoicing taking more of a center stage on a global level. Tihilä expects growth in both the Network Services side of the business, and that the company’s fixed costs will remain static throughout the rest of the year—should this bear out, Basware may report a very good 2014 indeed.
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