Milestone Systems Reports 14% Annual Growth Rate Over 5 Years
The company attributes its positive financial results to continued focus on long-term sustainable growth and staffing in 2019 report.
COPENHAGEN — Milestone Systems reported on Tuesday a compound annual growth rate (CAGR) of 14% during the past five years, with net revenue increasing from $137.4 million in 2018 to $151.2 million in 2019. The operating income (EBIT) was $ 18.2 million compared with $28.5 million the previous year, a planned consequence of increased investments in innovation and development, according to the financial report.
The positive revenue development primarily derived from an increase in license and Care sales, a service and support program. The company said it continued to increase sales in all its markets during 2019.
The company attributes its positive financial results to continued focus on long-term sustainable growth and staffing. In the past five years, Milestone Systems has nearly doubled the number of employees to more than 900 people. In 2019, increased investments were made in R&D capacity, expanded engineering teams in Copenhagen and Sofia and the establishment of a new engineering hub in Barcelona.
The company’s 2019 financial report includes the following highlights:
- Invoiced revenue generated from Milestone licenses and certification amounted to $96.7million, equivalent to 56% of total revenue, and an increase of 12% compared with 2018. The main product in the Advanced segment is XProtect Corporate, representing 40% of license revenue. In the Business-Ready segment, the main product is XProtect Professional+, representing 24% of license revenue. Both products continue to show good performance and are growing year on year.
- Invoiced revenue generated from Care sales amounted to $56.4 million, equivalent to 33% of total revenue and an increase of 22% compared with 2018.
- Operating expenses totaled $124 million compared with $101.8 million in 2018, representing an increase of 22%. The growth is mainly driven by higher costs for personnel and is a consequence of Milestone’s increased focus on driving innovation and the continued expansion of our sales force. Operating expenses amounted to 82% of revenue compared with 74% of revenue in 2018.
- An operating income (EBIT) of $18.2 million was recorded for the year, compared with $28.5 million in 2018. The decrease of 36% was a consequence of establishing Arcules Inc. and the subsequent sale of the related activities in 2018, the increase of our development capacity and investments in new headcount to accelerate further growth.
- Profit before corporate tax was $19.1 million in 2019, compared with DKK 209 million in 2018, a decrease of 38%. Milestone delivered a satisfactory financial result in which profit was in line with expectations and the planned decrease was due to the significant investments in growth initiatives.
The 2019 annual report marked the final duty for Lars Thinggaard, who has served as president and CEO for the past 17 years. In March, the company announced he would be leaving the company. For the past six years, since the company’s acquisition by Canon Group in 2014, he has led Milestone as a standalone company within the Group.
The company’s board of directors has started an open search to appoint his successor.
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