Demand for Talent Management drives 25% revenue growth during third quarter
HRchitect featured StepStone in our May 2008 release of The Suite Life of Integrated Talent Management.
StepStone, a leading global provider of total talent solutions, reported a 25% increase in third quarter revenues to €31.8m, from €25.4m in Q3 2007. Underlying organic revenue growth excluding recent acquisitions was a healthy 21%.
StepStone operates a unique business model. The “Software as a Service” products generate predictable revenues and cash flows whilst the online products continue to benefit from the ongoing structural shift away from traditional media to online search and matching.
The company strategy is to have a portfolio of products delivered to a wide geographic base of customers. The volume based online products enhance the company’s ability to take advantage of favorable economic conditions, whilst the software as a service based talent management products soften the impact of potential adverse economic conditions due to the inherent predictability of the monthly revenue streams from an increasing international customer base.
Demand for the company’s online products increased in September after the traditionally slower summer months of July and August. Total invoiced sales of online products in the third quarter of 2008 were up 24% versus the same period last year. The current quarter sales will impact future quarter revenues due to the deferred revenue recognition model which the company uses.
Online demand in European markets is however developing at markedly different rates. StepStone’s online sales in Germany continued to grow at a rate consistent with that of the last few quarters, whilst there is a clear deceleration of growth rate in most other markets.
Demand for the company’s talent management products remained robust during the quarter, attracting 95 new talent management customers and the company continued to complete an increasing number of cross sale and up sale transactions amongst its extensive customer base.
The final quarter of the year is traditionally the company’s strongest, and we see little reason at present to indicate any change to this fourth quarter trend.
However, after the unprecedented economic turmoil of the last three months, economic conditions are tightening across Europe which is in turn impacting customer confidence.
HRchitect’s expectation is that overall growth will continue to soften into 2009. In anticipation, the company will continue to closely manage its cost base and cash generation.
For more information on StepStone, visit www.stepstone.com
Matt Lafata, HRchitect