Germany’s Nemetschek Group has released its 2024 fiscal results and outlook for fiscal 2025. The AEC/O industry software giant has exceeded USD 1 billion in annual revenues in fiscal 2024, growing by more than 16.9 percent year-over-year (YoY) to EUR 995.6 million (USD 1,079 million at today’s rate).
Results and Momentum
Despite a challenging global market, the Group produced positive growth on multiple fronts, including its ongoing transition to subscription and SaaS offerings. The MDAX and TecDAX-listed Group expects continued strong momentum in 2025 with double-digit revenue growth of 17 – 19 percent and sustained EBITDA margin of around 31 percent. That figure includes a revenue contribution of around 350 basis points from GoCanvas, which the Group acquired in 2024.
Yves Padrines, CEO of the Nemetschek Group stated:
2024 was another very successful year for the Nemetschek Group thanks to our resilient business model with a high share of recurring revenues, our broad global presence, and our innovative solutions. We have also made significant progress with our strategic initiatives, including the well-advanced transition of our business model to subscription and SaaS, new features in the area of artificial intelligence, and the acquisition of GoCanvas—the largest acquisition in the company’s history.
Continuing, he notes: “These milestones strengthen our foundation for the next phase of growth. Together with the structural growth drivers in our industries, which are becoming even more relevant due to the increasing cost pressure in the construction industry, all signs are once again pointing to continued substantial growth and the continuation of our success story in 2025.”
Key Data
The following data are brief summaries. See below for link to details.
- Group Revenue — up 16.9 percent to EUR 995.6 million in 2024 (curency-adjusted: 17.2%)
- Upside — The Group expected revenues around 10 – 11 percent but organic growth (sans any pickup from GoCanvas) was 14 percent, surprising to the upside.
- Annual Recurring Revenue (ARR) — increased by 41.9 percent to EUR 1,019.9 million, with organic growth accounting for a healthy 34.6 percent.
- SaaS and Subscription — Now accounts for 86.5 percent of total revenues.
- EBITDA results — increased by 16.8 percent YoY to EUR 301.0 million with 30.2 percent EBITDA margin.
- Net income — grew by 8.8 percent YoY to EUR 175.4 million.
The board has proposed a dividend increase to EUR 0.55 per share, up from previous EUR 0.48 per share at the Annual General Meeting.
Strategic Highlights
The new acquisition of GoCanvas is a key revenue growth driver for the Group and synergies with Bluebeam are especially important but yet to be clearly defined. From a Bluebeam event we attended last fall, we understand that field apps or functions for Bluebeam may involve GoCanvas apps and technologies going forward but details are non-existent. This could mean that Bluebeam offerings get more layered in conjunction with GoCanvas, offering further scaled SaaS products for AEC customers. Moreover, existing GoCanvas customers may be turned into Bluebeam customers as well.
Nemetschek Group exceeds USD 1 billion in fiscal 2024 results.q
The Group continues to attack India as part of its internationalization expansion plan. To drive further growth the Group will continue to make strategic investments in startups in AEC/O markets as well as full acquisitions like the latest GoCanvas buy. Additionally, its daughter brands also make strategic acquisitions from time to time, with a recent one by ALLPLAN.
With a German-based AI Innovation Hub and new synergistic efficiencies amongst its daughter companies, the Group is hoping to leverage key R&D competencies across its many companies and leverage them strategically across the entire group.
The Design segment continues to be the biggest revenue segment at EUR 488.8 million, up 13.1 percent YoY. The Build segment grew even further at 28.4 percent to EUR 340.7 million, while the Media segment came in at EUR 120.1 million, up 7.8 percent. The Manage segment actually declined slightly at -1.1 percent to EUR 49.9 million.
For more detailed data on the Group’s financials see here.
Architosh Analysis and Commentary
The Nemetschek Group has been growing its revenues at a steady rate for the past decade. In the past five years, revenues have grown from the mid USD 600 million range to now just over USD 1 billion. It is also growing its free cash flow at a five year rate of 15.69% TTM. That happens to exceed Magnificent 7 companies like Micosoft whose five year FCC TTM rate is under 12%. And in a more relevant direct comparison, the five year FCF TTM for rival Autodesk is just 2.85%, despite that company’s five year revenue growth of over 13% compared to the Nemetschek Group’s five year revenue growth of 12.32%. This shows a significant difference in how these two competitors are generating their positive free cash flow for shareholders relative to their overall financials and business operations.
The Nemetschek Group has delivered a stable and growing stock dividend to shareholders.
The five year dividend growth rate for Nemetschek Group is 14.45%, whereas its chief rival in AEC (Autodesk) doesn’t currently pay a dividend to investors. Looking at these fundamentals in relation to not just rivals but some of the other Magnificent 7 companies might be quite informative. For example, Nemetschek Group has a rather hefty dividend payout ratio of 44.86%, compared to companies like Microsoft at 25.44% or AEC rival Bentley Systems at 35.21%.
In such a competitive market as the AEC software industry and with numerous acquisition opportunities emerging around emerging technology, one might prefer the Group invested more of their net earnings for more or larger acquisitions. And speaking of Bentley, their 2024 fiscal year revenues were USD 1.34 billion, not terribly much larger than the Nemetschek Group. The Group is undoubtedly growing at a strong rate and rewarding shareholders with strong free cash flow and rising dividend rates.
The Nemetschek Group’s steady growth in free cash flow (FCF TTM).
In comparison to Autodesk’s free cash flow, which has gone up and down in major swings. (FCF TTM)
