Record Results for the Quarter ended 31 March 2008 Talent management top of the agenda

Q1 2008 Highlights vs. Q1 2007

  • Revenue increases 39% to €29.8m
  • Record €6.8m operating cash flow: up from €2.5m
  • EBITDA margin up to 19% from 15%
  • Deferred revenues increase to €27.5m: growth of 51%
  • Business development continues with 3 acquisitions in the quarter: entering China and strengthening France and Norway
  • Focus remains profitability, market share growth and operating cash flow

Summary

Company

StepStone’s unique combination of online properties and solutions, built on the “software as a service” model, continues to deliver class leading increases in revenues, cash flow and profits.

Q1 2008 revenue increased 39% to €29.8m from €21.4m in Q1 2007. Underlying organic revenue growth was 37%.

Profitability also increased with EBITDA reaching a new record of €5.7m and EBITDA margin increasing to 19%. This compares to €3.3m and 15% a year ago.

Demand for StepStone products and services continued to grow, evidenced by both revenues increasing 39% and deferred revenues increasing 51%.

The company reviews all investment opportunities and maintains a successful, proven policy of investing only where it can see measurable returns within acceptable periods.

In line with this practice, StepStone completed three acquisitions in the quarter to better position itself to take advantage of market opportunities. The acquisitions were in China, France and Norway and were funded entirely from the company’s Q1 operating free cash flow.

Online

Q1 2008 Online revenue was €18.0m, 45% higher than the same quarter in 2007. The underlying organic growth rate was 41%. The EBITDA margin increased to a record level of 32% from 25%.

Investment in Online remains steady. During the quarter an additional €0.5m was invested in operating costs, primarily in customer success and product development.

Solutions

The 2008 plan for Solutions is consolidation of long term profitability, cash flow and market share. Solutions executed in accordance with plan in Q1 2008.

Demand remains strong across all products. 86 new customers contracted with Solutions during the quarter in addition to existing customers contracting for further products and services.

Solutions revenue was €11.8m in Q1 2008, 32% higher than the same quarter in 2007. The underlying organic growth rate was 30%.

Solutions EBITDA was €1.4m, the same as Q1 2007. Q1 2008 EBITDA margin was 12%, a planned decrease resulting from increased investment. The number of Solutions customers has more than doubled in the last twelve months and now stands at over 1,300. Investment in Solutions has been significantly increased in order to position the business for continued rapid growth. The expectation is that this increased investment will deliver improved margins over the coming quarters.

Outlook

The Board is very encouraged by the first quarter’s results. Organic growth, at 37%, remains very strong and the increase in deferred revenues demonstrates continued demand for StepStone's products and services. The company's focus continues to be on profitability, market share growth and operating cash flow.

StepStone has a unique set of assets, including our innovative products which are delivered via the inherently predictable software-as-a-service model, our global delivery capability and a strong balance sheet. The Board believes that these assets position the company well to meet the potential challenges ahead with confidence.

  • Click here to view the full Q1 Report.
  • Click here to view the Q1 presentation in PDF.
  • Click here for information on the Q1 Results Webex conference call.

Enquiries :

Ian Clapp, Director of Investor Relations
Tel : + 44 7850 128094