By Bernadette Hogg and Amir Orusov
(Reuters) -German software developer TeamViewer raised its outlook for adjusted core profit margin for the full year after better-than-expected profitability in the third quarter following a reduced sponsorship deal with British football team Manchester United.
TeamViewer posted on Wednesday an adjusted core profit (EBITDA) margin of 48% in the quarter, representing a 2% beat compared to an LSEG analyst forecast.
The beat was partly due to the replacement of Teamviewer as Manchester United’s main shirt sponsor, which the German company expects will also boost its margin in the fourth quarter.
It now expects its adjusted core profit (EBITDA) margin for the full year to be about 44%, up from a target of at least 43%.
However, it trimmed the upper end of its predicted revenue target range for 2024 to 662 million euros to 668 million euros from a previous target of 660 million to 685 million euros, citing foreign exchange effects.
TeamViewer’s billings in its SMB segment – which offers IT solutions to small and medium-sized businesses – fell 3% year-on-year to 118.8 million euros ($128 million), while billings in its enterprise segment grew 30% year-on-year to 35.3 million euros.
CEO Oliver Steil told Reuters that growth in the enterprise segment had taken time, but that the company had “put the investment in place over the last years and I would almost say what we see now coming through is more normal, is what you would expect”.
Steil said that in the run-up to the U.S. presidential election, the company had seen uncertainty and slower purchasing from its customers.
He said the results of the election looked quite clear and that he “wouldn’t be surprised if we actually see some tailwind coming through more”, as Republicans were considered more business-friendly.
On the company’s presence in the Asia-Pacific region, Steil said it had been a difficult marketplace over the last quarters, pointing to slower economic growth in China.
($1 = 0.9289 euros)
($1 = 0.9290 euros)
(Reporting by Bernadette Hogg and Amir Orusov; Editing by Sherry Jacob-Phillips)
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