Investing.com -- TeamViewer (ETR:TMV) shares jumped over 6% on Wednesday following its results and updated medium-term targets, which provided a clearer outlook for investors.
TeamViewer’s pro-forma ARR is now expected to grow between 7.5% and 10.8% in FY25, reaching €815-840 million.
Revenue is projected to rise by 5.1% to 7.7%, landing between €778-797 million. While revenue guidance was broadly in line with expectations, the ARR outlook exceeded analyst forecasts, suggesting a stronger growth trajectory than previously anticipated.
The company also laid out a new medium-term outlook, aiming for a return to double-digit revenue growth starting in 2027.
Revenue targets include €850-870 million for FY26, €935-960 million for FY27, and €1,030-1,060 million for FY28.
While there is little market consensus available for FY28, analysts believe these projections might be ahead of investor expectations.
TeamViewer also expects to increase the share of Enterprise revenues to over 40% by FY28 while gradually improving its EBITDA margin toward 44%-45%.
While execution will be key, the new targets provide clarity and could strengthen the investment case.
The company’s Q4 results supported the stock’s positive movement. Revenue for FY24 grew 7% to €671 million, surpassing the company’s guidance of €662-668 million.
Q4 revenue increased by 8%, slightly above the 8% constant currency growth seen in Q3. Billings were up 6% in Q4, driven by a 19% rise in Enterprise billings, while SMB billings lagged, growing just 1% during the quarter.
SMB subscriber churn ticked down slightly to 15.3% from 15.4% in Q3, while overall net retention remained steady at 98%.
Enterprise drove the Q4 performance, with 38% constant currency revenue growth and a 100% net revenue retention rate.
Meanwhile, SMB revenue and billings growth remained subdued at 2% and 1%, respectively. SMB subscribers totaled 639k in Q4, flat from Q3, with average selling prices broadly stable. Preliminary financials indicate 23% revenue growth for 1E in 2024, though it was not yet consolidated.
Regionally, APAC and the Americas led Q4 billings growth at 16% and 7%, respectively, while EMEA trailed at 3%.
Adjusted EBITDA rose 33% year-over-year to €83 million in Q4, coming in 4% ahead of consensus and lifting the quarterly margin to 47%, a nine-percentage-point improvement from the previous year.
Free cash flow also increased 33% to €73 million, helped by a €10 million working capital inflow compared to a €6 million outflow in Q4 last year.
2025 guidance aligns with analyst forecasts. Adjusted EBITDA margin is expected at approximately 43%, in line with prior messaging and Morgan Stanley’s 43.5% projection.
The revenue guidance range, on a stated basis, is €778-797 million, or a 5.1%-7.7% year-over-year increase. TeamViewer (excluding 1E) is expected to contribute €697-712 million in revenue, while 1E is forecasted to add €81-85 million.
Adjusting for 1E’s 11-month consolidation in FY25, revenue guidance simplifies to €771-790 million, aligning closely with Morgan Stanley’s estimate of €775 million.
TeamViewer (ex-1E) is expected to achieve 3%-5% constant currency revenue growth, with 1E projected to grow by approximately 20% stated (high-teens % in constant currency).
TeamViewer has reiterated its goal of returning to double-digit revenue growth from 2027 onward, though analysts caution this remains a "show-me" story given the company’s post-pandemic decelerating growth curve.
The company also noted that its pro-forma net leverage ratio post-1E acquisition was 3.2x at the end of January 2025, with expectations to reduce it below 2.0x by the end of 2026.