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SSH - CMD notes: High ambitions

SSH held a CMD yesterday, where the company offered insight into its business and outlined its long-term ambitions. The recently announced SSH200 Growth Vision aims at EUR 200m net sales during the 2020’s, with primary growth engines being UKM and PrivX. We do not make any changes to our estimates or recommendation at this moment.

Addressable market not lacking in size or growth potential

To reach EUR 200M in sales by 2029, SSH would need to grow around 24% annually. From the underlying market’s perspective this is achievable, given the strong growth profiles in the markets. According to SSH, the Enterprise Key Management market is estimated to be USD 3.5 bln and expected to grow annually 21% by 2024. Looking at PrivX’s market, the Privileged Access Management is estimated to be USD 6 bln, with 30% annual growth expectations by 2023.

The SSH200 Growth Vision

The growth engines for the vision are UKM and PrivX. SSH estimates that there are thousands of potential customers for UKM, with deal sizes ranging from a hundred thousand up to millions of euros. PrivX poses an even bigger opportunity, but currently the number of customers is small, and sales ramp up is still very much on-going. SSH does not expect any material revenue impact from PrivX this year, nor was the company ready to give any estimate on the number of customers or ARR it expects to have from PrivX in the coming years.

No changes to estimates and recommendation

SSH maintained its 2019 guidance (>10% growth from software business) and mid-term target (similar or faster growth than market). Apart from previously announced partnerships and alliances, SSH did not specify what concrete new measures it would take to accelerate growth or what investments it requires. Based on yesterday’s CMD, we note that the vision is bold, but we’d like to see growth materializing in the figures. Thus, we have not made any changes to our estimates or recommendation. Our estimates reflect the company’s current short and mid-term guidance.

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