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Arrowhead published an Equity Research Report on Hybrid Software Group PLC
November 3, 2022


Hybrid Software Group (EBR: HYSG) Research Update


  • Arrowhead is updating coverage on Hybrid Software Group with a fair value bracket of EUR 7.1 to EUR 7.5 (share price on November 03, 2022: EUR 4.58) based on blended valuation using Discounted Cash Flow (DCF) method (90% weightage) and relative valuation method (10% weightage)
  • Despite the ongoing challenging global macroeconomic scenario, which continues to persist since H1 2022, the company delivered profitable growth in Q3 and 9M 2022
  • Revenue for Q3 2022 stood at EUR 11.3 mn in comparison with EUR 10.1 mn in Q3 2021, a growth of 11.9% year-on-year (YoY). Revenue for 9M 2022 stood at EUR 34.7 mn in comparison with EUR 33.9 mn in 9M 2021, a growth of 2.4% YoY. EBITDA for Q3 2022 was at EUR 4.6 mn in comparison with EUR 1.6 mn in Q3 2021, a growth of 187.5% YoY. The EBITDA Margin for Q3 2022 stood at 40.6% as compared with 16.0% in Q3 2021. The increase in EBITDA was due to better optimization of operational performance and the outperformance of the company’s smaller businesses which focus on color management, 3-D visualization and legacy printing devices. Q3 2022 results were favorably impacted by the sale of an unused asset (c. 69,000 IPv4 internet addresses) for EUR 3.3 mn (non-recurring), while the EBITDA for 9M 2022 was at EUR 9.2 mn in comparison with EUR 7.4 mn in 9M 2021, a growth of 24.3% YoY. The EBITDA Margin for 9M 2022 stood at 26.5% as compared with 21.9% in 9M 2021
  • Strong Q3 2022 results were marked by consistent performance in the Enterprise Software and Printing Software segments, while revenue of the Printhead Solutions segment recovered to levels in line with Q3 2021 after having experienced a severe downturn in H1 2022 due to a global shortage of electronic components
  • Xitron, a subsidiary of Hybrid Software Group and the developer of Harlequin-based Navigator RIP and workflow products for commercial, flexo, screen, digital and high-speed inkjet printing, was selected as Memjet’s exclusive Digital-Front-End Developer for New Print Engine Systems
  • ColorLogic GmbH, a subsidiary of Hybrid Software Group, recently announced the release of its latest profiling solution CoPrA 9, a control center for ICC color profiling in any color space offering many new features and improvements of all modules
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