Alfa reports strong operational performance in Q1 2024

Alfa Financial Software (Alfa) has reported a strong operational performance in the first quarter of the year with seven deliveries for Alfa customers comprising one v4 to v5 upgrade and six regular upgrades.

In the first quarter of 2024 Alfa released the second and third instalments – Total Capability and Sustainability – of their Alfa Systems 6 launch which covers ten new modules and is being released in six functional instalments.

Alfa’s pipeline continued to develop strongly in Q1 2024, converting one large US automotive prospect and one very large multi-country European equipment prospect, both on Alfa Cloud, resulting in a strong boost to TCV – up 15% to £190m from £165m at December 2023.

Alfa continued the momentum in the late-stage pipeline with one new prospect bringing the current total to ten.

For the first quarter of the year ended 31 March 2024, trading was in line with expectations and Alfa’s expectation for mid to high single digit revenue for the year remain unchanged.

The Q1 trading update noted that 2023 revenue performance was unusually strongly first half weighted and Alfa, therefore, entered 2024 expecting revenue performance to revert to a more normal pattern of second half weighting.

In line with these expectations, revenue for the first quarter of £26m was down 2% on a constant currency basis versus a very strong quarter in 2023. Alfa attributed this decrease in revenue to lower services revenues as new projects ramp up and lower software revenues due to an increased focus on investing and delivering Alfa Systems 6 functionality.

Subscription revenue continued to show strong mid-teens percentage growth in Q1.

Andrew Denton, Chief Executive Officer of Alfa, said: “We have had a strong start to the year, securing two exciting new customers and starting work with a number of prospective clients in the late-stage pipeline. At the same time, we continue to invest in the competitive differentiation of our product with three of the six instalments of Alfa Systems 6 launched to date. Additionally, we continue to see strong sequential growth in our subscription revenue stream. As a result, we are well placed to achieve our expectations for the year.”