Sofistic grows 114% in revenues, leading Cuatroochenta’s organic growth

Sofistic leads the organic growth of Cuatroochenta, its parent company, with a 114% growth in the unit’s revenues, driving the company’s international expansion.

Cuatroochenta has increased its revenue and EBITDA 10-fold in the last 4 years. Since 2018, the net revenue of the software and cybersecurity company has grown from €1.9 million to €19.3 million, which in the last year represents a proforma growth of 30%; while EBITDA has grown from €0.2 million to €2.01 million in that period, with a 4% increase in 2022. Sofistic, has obtained revenues of 5.78 million euros, representing 30% of the company’s total, and ended the year with positive EBITDA, confirming the degree of maturity of the business and the possibilities of further improving its profitability.

This is the result of the Financial Report 2022 that Cuatroochenta’s CEO, Alfredo R. Cebrián, and CFO, David Osuna, have presented this week to shareholders and investors at the Palacio de Linares in Madrid, headquarters of Casa de América, in the second Investors Day that the company convenes since its incorporation to BME Growth in 2020 as a listed company..

Cebrián emphasized that “Cuatroochenta is starting to materialize the results of its plans based on a model focused on the recurrence and scalability of its solutions and services and the international expansion, as well as the development of the organic business on the companies acquired in the past”.

Thus, the organic growth of Sofistic stands out, which in 2022 has registered a 114% increase in revenues; going from 2.70 million euros in 2021 to sales of 5.78 million euros in 2022. An evolution that has contributed to the fact that Cuatroochenta’s organic growth in 2022 has been 26% higher compared to the sales volume in 2021, while the global spending on software in the same year only grew by 7.1% according to the latest report by Gartner.

As Osuna explained, this growth “is based on team sizing, continuous product improvement and process optimization, with a commitment to scalability and recurrence“.

With respect to the recurrence of the whole group, the Annual Recurring Revenue (ARR) stood at €11.89 million, which is almost double the 2021 figure and already represents 62% of Cuatroochenta’s total business (excluding the Custom Development business line). The high recurrence of Sofistic’s business, which recorded 75% of recurring revenues due to the sale of licenses of a recurring nature, has also played a crucial role in these results.

Total results 2022 (pro forma)

EBITDA
2022

2,01 million euros

“An example of integration and growth”

Cebrián highlighted the evolution of Sofistic, which operates in Latin America, the U.S. and Spain. “Since the acquisition of Sofistic in 2019, it has been an example of integration, growth and internationalization, managing to end the year with positive EBITDA, which shows the degree of maturity of the business and its possibilities to continue improving its profitability,” explained the company’s CEO.

In 2022, Cuatroochenta’s sales outside Spain accounted for 26%, while in 2021 they represented 15%. In this line, the growth of the cybersecurity business in Latin America allows the company to accelerate its internationalization and diversify revenues, with the expansion of the teams in Colombia, Panama, Costa Rica and Dominican Republic and the beginning of the activity in Mexico and Ecuador at the beginning of 2023.

In addition, Sofistic has received in 2022 different awards, recognitions and certifications that have strengthened its positioning and sales strategy. Among the most relevant, the awards it has received from leading software manufacturers in cybersecurity as a reference partner in Latin America. Specifically, the North American companies CrowdStrike and Exabeam and the British company Darktrace have recognized Cuatroochenta’s cybersecurity division as the most outstanding partner of 2022, for its innovation and as service provider of the year, respectively. In addition, the SOC (Security Operations Center) has also achieved in 2022 the recognition as a member of FIRST, the most important Forum for Incident Response and Security Teams (known as CSIRT) in the world, as it is considered a specialized center in critical sectors.