SaaS revenue grows at 24%
In a brief Q3 update, NetDimensions Holdings Ltd (L:NETD) announced that revenue and invoiced sales for Q3 were ahead of Q314. Secure SaaS revenue grew by 24% to $2.6m (we are forecasting $5.2m revenues in H2), with invoiced SaaS sales ahead by 40% to $2.8m. SaaS is the business model of preference (NETD also offers annual licences and perpetual licences), and no data were disclosed on the other revenue types. However, deal size continued to grow, albeit at a slower rate than in recent quarters, with the average first-year contract value from direct new clients increasing by 5%. We are maintaining our forecasts, which imply 11% revenue growth in H2, including 19% SaaS revenue growth. This leaves the shares trading on 1.1x FY16 EV/sales – a big discount to its larger US multi-tenant SaaS brethren, which trade on c 5x FY16 EV/sales.
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