(Reuters) - German software company TeamViewer (DE:TMV), which floated recently in Europe's biggest initial public offering of 2019, on Monday reported a near-doubling in core profits and an expansion of its margins in the third quarter.
The Sept. 25 listing, which valued TeamViewer at 5.25 billion euros (4.53 billion pounds), added a rare technology growth stock to a Frankfurt market that is heavy with industrial and auto stocks.
But despite analysts at banks including Barclays (LON:BARC) and Goldman Sachs (NYSE:GS) initiating coverage with buy ratings, shares have traded below the IPO price of 26.25 euros as investors remain wary of backing a company that only turned its first net profit last year.
Billings rose by 63% to 83 million euros while cash earnings before interest, taxation, depreciation and amortisation (cash EBITDA) jumped by 95% to 46 million euros.
That implied an expansion in cash EBITDA margins to 56% from 46% a year ago at TeamViewer, whose software enables remote connectivity between online devices. The company counts more than 430,000 subscribers, offering its services free to consumers and by subscription to enterprise clients.
"Our first results as a listed company underscore TeamViewer's strong financial profile combining high growth with high profitability," said CEO Oliver Steil.
TeamViewer, still majority owned by private equity investor Permira, confirmed its guidance for growth in billings of 35%-39% this year and for its cash EBITDA margin to exceed 60%, up from 53% last year.
