TeamViewer TMV.DE, a German-based software company that recently went public on Monday reported an almost double profit figure as well as growth in its margins in the third quarter of this year. The tech company’s initial public offering is so far the largest in the history of Europe’s IPOs.
The company was listed on September 25 after being valued at 5.25 billion euros (circa $5.80 billion). The unique tech stock currently trading on the Frankfurt market becomes one of the few to trade on a platform characterized by a heavy presence of industrial and auto stocks.
Shares of the firm have been trading below its IPO price of 26.25 euros, making investors cautious about a company that realized its first net profit in 2018. But banks such as Goldman Sachs and Barclays have initiated coverage with buy ratings to boost investors’ confidence in the stocks.
Cash earnings before interest, taxation, depreciation, and amortization (cash EBITDA) rose by 95% to 46 million euros while billings rose by 63% to 83 million euros. Meaning, the company expanded its cash EBITDA margins from 46% to 565 within a span of one year.
Team Viewer, the brand behind an application that enables remote connectivity between devices, currently enjoys a membership spanning more than 433,000 subscribers. The firm allows free membership for consumers while providing a subscription package to enterprises.
“Our first results as a listed company underscore TeamViewer’s strong financial profile combining high growth with high profitability,” said CEO Oliver Steil.
According to Team Viewer’s majority shareholder private equity investor Permira, the firm’s billing grew 35%-39% this year while its cash EBITDA margin jumped 60% up from 2018’s 53%.
Team Viewer was founded in 2005 and has grown from providing local computer connectivity tools to serving an international clientele drawn from 180+ countries. In its recent strategic plan, the firm disclosed how it intended to further expand its services in Europe, Asia, and the U.S., promising to add large corporations to its offerings to enable them to connect not just computers but also mobile devices, tablets, wind turbines, machine sensors, and farming equipment.
Team Viewer’s IPO came at a time when there’s a sharp drop in the companies looking to go public in Europe, according to a Q3 report by PWC.