On Friday, VOQUZ released FY 22 figures, showing strong top line growth but a weaker margin compared to FY 21 due to significant growth investments, especially in connection with the newly set up Singapore entity.

FY sales increased 21% yoy to € 4.7m, thus slightly exceeding our estimate of € 4.6m. Growth was mainly driven by continuously strong order intake (+21% yoy to € 5.0m) especially for the company’s flagship software samQ as well as the launch of its new product visoryQ, which largely maps advisory services with intelligent software thus eliminating scalability constraints. Notably, the company was able to increase the share of recurring orders (managed services + maintenance) by 14pp to 68% of total order intake, which allows for good visibility on future growth.

FY EBITDA decreased by 35% yoy to € 0.6m (in line with eNuW), implying a margin of 13%. As outlined above, the decline is mainly attributable to growth investments into the newly set up entities in Singapore and Romania, which led to an increased personnel expense ratio (+6pp yoy to 27%) as well as one-offs to the tune of € 0.2m. Adjusted for these one-offs, the EBITDA stood at € 0.9m (19% margin).

Investments into the sales structure are seen to bear fruit in the short-term, supporting a further growth acceleration, in our view. Moreover, visoryQ looks set to make a significant sales contribution already in 2023e (eNuW: € 1m). In fact, VOQUZ has already been able to acquire a large US company (> $ 100bn Mcap) as a customer for its software, serving as proof-of-concept. On top of that, the acquired remQ software (SAP compliance software) is also seen to add some € 0.5m (eNuW) in revenues.

Overall, we regard VOQUZ as well positioned to grasp the promising opportunities of the strongly increasing demand for Software Asset Management solutions. With its unique value proposition, based on strong ROIs, as well as a marketing push, the company should be able to accelerate key account wins. Against this backdrop, sales are seen to grow dynamically at a 35% CAGR to € 11.6m in ‘25e while EBITDA should improve to € 3.9m (34% margin) in the same time span (eNuW).

Considering the promising growth prospects of the company as well as the high scalability of the business model, the stock looks undervalued trading at only 8.6x EV/EBITDA ‘23e. We hence reiterate BUY with an unchanged PT of € 32.00 based on DCF.