Deutsche Börse AG (DBOEY) Q1 2025 Earnings Call Transcript

2025-04-29 14:34:03 ET

Deutsche Börse AG (DBOEY)

Q1 2025 Results Conference Call

April 29, 2025 08:00 AM ET

Company Participants

Jan Strecker - Director, Investor Relations

Stephan Leithner - Chief Executive Officer & Chairman of the Executive Board

Gregor Pottmeyer - Chief Financial Officer

Conference Call Participants

Mike Werner - UBS

Kyle Voigt - KBW

Arnaud Giblat - BNP Paribas Exane

Bruce Hamilton - Morgan Stanley

Johannes Thormann - HSBC

Enrico Bolzoni - JPMorgan

Andrew Coombs - Citi

Hubert Lam - Bank of America

Ian White - Autonomous Research

Ben Bathurst - RBC Capital Markets

Tobias Lukesch - Kepler Cheuvreux

Oliver Carruthers - Goldman Sachs

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to the Deutsche Börse AG Analyst and Investor Conference Call regarding the Q1 2025 financial results. [Operator Instructions] Let me now turn the floor over to Mr. Jan Strecker.

Jan Strecker

Welcome, ladies and gentlemen, and thank you for joining us today to go through our first quarter 2025 results. With me are Stephan Leithner, CEO; and Gregor Pottmeyer, CFO. Stephan and Gregor will take you through the presentation. And afterwards, we will be happy to take your questions.

The link to the presentation materials for this call have been sent out via e-mail and can also be downloaded from the Investor Relations section of our website. As usual, this conference call is recorded and will be available for replay afterwards.

With this, let me now hand over to you, Stephan.

Stephan Leithner

Thank you, Jan. Welcome, ladies and gentlemen. I will begin today's call by providing a summary of the achievements in the first quarter. Following this, I will comment on the latest developments in Europe and the growth opportunities they present for us beyond our existing targets.

Let me emphasize, overall, the development in the first quarter has proven to be slightly more successful than what we had originally anticipated. In addition to the underlying growth that we incorporated into our strategy, we observed the initial benefits of the recent surge in market volatility, a trend that has strongly continued in April. All businesses performed in plan. And the key drivers of the overall outperformance were the developments in cash equities, fund services and FX, all of which reported strong double-digit net revenue growth.

The broadly overall only stable net revenue performance in Investment Management Solutions was mainly driven by high comparables in 2024 in Software Solutions. In the first quarter of last year, there were exceptionally large contract renewals at Axioma and SimCorp, which resulted in significantly lower upfront license revenues in the first quarter this year.

In addition, in the first quarter last year, we signed up a significant new on-premise client in the Middle East. Put those together and you explain a large difference in terms of the starting point. As we have explained many times in the past, due to the point-in-time recognition element in our software business, revenue development can sometimes be lumpy from quarter-to-quarter. This is why we focus on the annual recurring revenues, or ARR, as our key performance indicator for our growth and client momentum.

Driven by significant customer wins in North America, including one of the largest asset managers in the world, ARR increased 15% year-on-year at the end of the first quarter and amounted to a new record level of €618 million. This performance puts us slightly ahead of our key peers. That's what I want to emphasize and the momentum continues into April with the addition of one of the largest U.S. public pension funds to our SimCorp One SaaS solution....

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