Alfa reports strong momentum in H1 2024

Alfa Financial Software Holdings PLC (Alfa) has reported a solid first half of 2024, with strong operational performance, continued pipeline momentum, and trading in line with expectations.

The company remains poised for steady growth, maintaining its full-year expectations and demonstrating resilience and adaptability in its strategic initiatives and market positioning.

Strong operational performance

Alfa has demonstrated robust operational performance throughout the second quarter, continuing its delivery track record with six customer deliveries, adding to the seven deliveries achieved in the first quarter. This brings the total to thirteen customer deliveries for the first half of 2024.

Significant investments have been made in enhancing Alfa’s product offerings, particularly focusing on the development of ten new modules for Alfa Systems 6.

In Q2, the fourth instalment of Alfa Systems 6, titled “Scalability”, was released. This latest update introduces advanced functionalities designed to help customers scale their businesses with greater flexibility and speed. Key features include the adoption of more adaptable cloud technologies, easier expansion into new markets, simplified portfolio migrations, and true 24-hour operations across multiple time zones.

Continued pipeline progression

Alfa’s pipeline has shown continued strength, with notable progress in the second quarter. Following the signing of full contract packs for two significant prospects in Q1, Alfa added two new prospects to the late-stage pipeline in Q2: a UK-based Alfa Start customer and an existing Asia Pacific v4 customer. The late-stage pipeline now includes eleven prospects, with services being provided to eight under letters of engagement, up from six in the previous quarter.

The company remains confident in the overall strength of its pipeline, from early-stage opportunities through to late-stage prospects. Employee retention has remained high, and Alfa has increased its recruitment targets in the EMEA and US regions to support the growing pipeline.

Total Contract Value (TCV) at the end of Q2 remained consistent with Q1, reflecting significant growth of over 35% compared to the same period last year. This stability follows strong TCV growth in Q1 driven by the conversion of two new customers.

Trading in line with expectations

Trading in Q2 has aligned with the company’s expectations, and the Board continues to project mid to high single-digit revenue growth for the full year. The revenue pattern for 2024 is expected to be more typical compared to the unusually strong H1 of 2023.

H1 2024 revenues were in line with last year’s strong first half on a constant currency basis, and strong revenue growth is anticipated in H2.

Subscription revenues have shown high teens growth compared to the previous year, with sequential growth continuing into Q2, where revenues grew by high single digits versus Q1.

While software revenues were significantly lower than last year due to the ongoing investment in Alfa Systems 6, services revenues were slightly down but are expected to rebound in the second half of the year as new projects ramp up.

Andrew Denton, Chief Executive Officer of Alfa, said: “We are pleased with our performance in the first half of the year and are looking forward to an exciting second half of the year with several significant projects ramping up and the release of the final two pillars of Alfa Systems 6.

“This combined with strong sequential growth in Subscription revenues and an encouraging late-stage pipeline means we are well placed to achieve our expectations for the year and remain confident in the longer-term outlook for the business.”

Detailed half-year results are anticipated to be released on 5th September 2024.