Unit4 Results Image credit Pixabay/GeraltUnit4 has issued a momentum update for the first half of 2022. However, the update is unusual in that the company has shared no numbers or percentages about its revenues or growth. Its Q1 2022 update revealed that it had achieved a 20% growth in cloud revenues. This time, nothing. Has growth slowed?

This latest release focuses on customer wins and implementations. During Q2, Unit4 completed 91 go-lives (up from 36 in Q1) and signed up 18 new customers for its solution (down from 20 in Q1), including 8 for ERPx. Those customers included: Elizabeth Glaser Paediatric AIDS Foundation, Dogs Trust, Gemeente Bergen op Zoom, Agora Strategy Group, Norwich City Council, Oslofjord Convention Center, Kronoby kommun, Malax kommun, Kvarnen and the Royal Devon University Healthcare NHS Foundation Trust.

These wins are in the Nordics, the Netherlands and the UK, with nothing of note in the United States that Unit4 can talk about. It does not mean that the company has not won deals there, but it indicates it is struggling to win over customers against competitors Sage Intacct and Oracle NetSuite.

Optimism remains

The quarter also saw the acquisition of Scanmarket, the Danish source to contract provider. The acquisition boosts Unit4’s ERP and procure-to-pay offerings, and delivers a unified source-to-pay solution for customers.

Patrick Reymann, IDC Research Director, Procurement and Enterprise Apps, said of the deal, “The Unit4 acquisition of Scanmarket fits perfectly with our hypothesis, consistently reinforced by IDC research data, that customers want procurement solutions as part of full suite ERP offerings. 

“The procurement application space is vibrant and growing, as buyers continually tell us they need help managing their spend data. This combination will provide tremendous value to existing clients and will give prospective buyers a strong reason to consider the combined Unit4 / Scanmarket offering going forward.”

Importantly it shows that the investors, while limiting what Unit4 can disclose, are investing for growth.

Mike Ettling, CEO at Unit4 (Image credit Linked In)
Mike Ettling CEO at Unit4

Mike Ettling, the CEO of Unit4, commented, “The first half of 2022 has seen Unit4 gathering pace. From winning an array of great customers across multiple industries, to acquiring a global software business like Scanmarket, with its market-leading global strategic procurement capabilities and cloud-based solutions, we are evolving the world of ERP. Customers are looking to us to enable their journeys to cloud and to help them digitize their organizations to drive business success. We look forward to growing with our customers over the second half of 2022, and beyond.”

Besides the team from Scanmarket, Unit4 also strengthened its leadership team, with Tania Garrett joining as Chief People Officer from Adobe. It has also strengthened its presence in Lisbon, Portugal and continues to do so with its job portal offering around 70 positions in the country. It is also hiring elsewhere and seems to have aggressive expansion plans.

The Portuguese hub will be multi-disciplinary and will support operations across the globe. It already has over 200 employees in the country, according to LinkedIn and is its seventh-largest operation and still growing.

Success beckons

Unit4 also announced Success4U. This combines the different services that Unit4 offers customers into a single integrated offering. It combines Customer Success, Support and Professional services and provides access to the Unit4 Community4U.

Customers can select one of three paths for their engagement with Unit4: Standard, Hybrid and Professional. It enables each customer to determine how engaged they want the Unit4 teams to be, whether accessible for third-line support or fully engaged within their projects from the beginning of the journey. That journey consists of four stages: Engagement, Onboarding, Value Realization and Value Expansion (a continuous process after going live).

Michelle MacCarthy, Global Head of Customer Success at Unit4, spoke in a video accompanying the launch: “I am excited to announce the launch of Success4U, our tailor fit services right for you and your business. Success4U is currently being offered to our cloud customers and Unit4 ERP, Unit4 Financials, FP&A and our human capital management solutions.”

Enterprise Times: What does this mean

Unit4 is winning new clients in some regions and investing in growing its global operations. What is unclear is whether this is at the expense of roles in other countries, especially in Europe. Is the idea of building a centre of excellence in Portugal to save costs or to boost expansion? More likely, it is both.

The lack of numbers or even percentages in the results announcements may also concern some. While Unit4 is owned by VCs TA Associates and Partners Group, it is unusual for a company not to issue some indication of growth. The Unit4 challenge is its long tail of legacy on-premises installations. Are these hindering growth? Is it managing to migrate these to its cloud solutions, and should it reveal how successful these migration initiatives are?

On the other hand, at a time when there are concerns around the economies across the world, Unit4 continues to hire new people. These roles are in Europe, Asia and North America. Are these replacements or expansion, and if the latter, is now the best time to hire?

Ettling has a strong strategy at the start of the pandemic, cutting costs and investing in growth. Is he taking the same approach now? It will be interesting to see what happens.


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