Jena, 27 July 2022 – Intershop Communications AG (ISIN: DE000A254211), a global provider of B2B commerce solutions for the upper mid-market and wholesalers, recorded a slight increase in revenues to EUR 18.5 million in the first half of the financial year 2022 (previous year: EUR 18.3 million). The company was able to further expand its cloud business. Cloud revenues increased significantly by 31% to EUR 6.7 million (previous year: EUR 5.1 million). Incoming orders from new and existing customers increased by 48% to EUR 14.3 million. Cloud ARR (annual recurring revenues) rose from EUR 10.8 million in the prior-year period to EUR 14.4 million in the current financial year. Net new ARR improved by 52% to EUR 2.3 million (previous year: EUR 1.5 million). License and maintenance revenues increased by 8% to EUR 5.3 million in the reporting period (previous year: EUR 4.9 million).
Earnings before interest and taxes (EBIT) amounted to EUR -0.5 million in the first six months of 2022 (previous year: EUR 1.0 million). The decline in earnings was primarily due to a decrease in service revenues from EUR 8.2 million to EUR 6.5 million. This is due to the fact that some projects turned out to be more complex than calculated and therefore required more time and resources. Measures to increase efficiency have already been initiated in this regard. In addition, the high level of incoming orders from outside of the DACH region in Europe meant that the strategically intended expansion of the partner business resulted in a shift of service revenues in favor of our certified partners.
Gross profit on revenues decreased slightly by 1% to EUR 8.6 million, and the gross margin was 46% (previous year: 47%). Operating expenses increased by 19% to EUR 9.1 million. Research and development expenses rose to EUR 3.6 million (previous year: EUR 2.7 million). Marketing and sales expenses amounted to EUR 4.0 million (previous year: EUR 3.9 million) and administrative expenses to EUR 1.7 million (previous year: EUR 1.6 million) in the first half of 2022. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at EUR 1.1 million in the reporting period (previous year: EUR 2.6 million). The result after taxes amounted to EUR -0.8 million (previous year: EUR 0.7 million).
Markus Klahn, CEO of Intershop Communications AG: “Growth in the cloud business remains fully intact, and our well-filled new customer pipeline allows us to look forward to the second half of the year with confidence. In the service business, we have already initiated measures to ensure more efficient project completion and therefore expect service revenues to rise again with improved service margins.”
At the interim balance sheet date of 30 June 2022, total assets of the Intershop Group were up by 15% to EUR 45.4 million, in particular as a result of the acquisition completed in March 2022. Equity capital amounted to EUR 16.4 million (31 December 2021: EUR 17.4 million). As a result of the increase in total assets, the equity ratio declined to 36%. Cash flow from operations stood at EUR 1.9 million in the first half of the year, compared to EUR 2.3 million in the same period of the previous year. Cash and cash equivalents were up by 6% compared to the end of 2021 and amounted to EUR 12.9 million at the end of the first half of the year.
Intershop confirmed its full-year forecast and expects incoming cloud orders to rise by about 20% and a 10% increase in net new ARR. In addition, revenues are expected to grow by about 10%, with a positive operating result (EBIT) of at least EUR 1.0 million.
The interim report for the first six months of 2022 is available at https://www.intershop.com/en/financial-reports.
Intershop (founded in Germany 1992; Prime Standard: ISHA) enables the world’s leading manufacturers and wholesalers to digitalize, transform, and boost their businesses. Our e-commerce platform and cloud-based technology give B2B companies the power to establish and expand their digital presence, improve customer experience, and increase online revenue. With 30 years experience and a global presence, we help our 300+ clients turn products into profits, customers into business partners, and transactions into lasting relationships.
Intershop is built to boost your business. Learn more at www.intershop.com.
This news release contains forward-looking statements regarding future events or the future financial and operational performance of Intershop. Actual events or performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such difference could include, among other things: Intershop's limited operating history, the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results, significant dependence on large single customer deals, consumer trends, the level of competition, seasonality, risks related to electronic security, possible governmental regulation, and general economic conditions.