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Good day, and thank you for standing by. Welcome to the Q2 report 2021 conference call. [Operator Instructions] And please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, CEO, Klaus Holse. Thank you. Please go ahead.
Very good. Thank you, and a very warm welcome to all of you, and thank you for joining us for this Q2 and the first half of 2021 report for SimCorp. If we move to the second slide, the disclaimer slide -- then I think you've all seen this. But if you haven't, then I would encourage you to read through it, that is kind of the statement that governs everything we say during today, about the things forward-looking nature and so on.If we move to the agenda, that is the same type of agenda that you've seen in almost every call from us, and we'll do a set of key highlights that I'll be doing, then we will transition to Michael Rosenvold, our CFO, to do a more deep dive on the financial review and the 2020 outlook. And then we will skip to Q&A.So if we move to the next slide, #4, the Q2 2021 at a glance, then what you will see is that Q2 was what we would say is a solid Q2, and it's a Q2 that is in line with the expectations we have for Q2. The order intake for Q2 was up EUR 13 million to EUR 30 million in total, and we saw a revenue growth of almost 13% when you measure it in local currencies, above 11% measured in reported euro. EBIT was EUR 30 million for the quarter, which is an increase of EUR 4 million over last year and also the margin.Our professional services growth is back on a good track. We increased almost 10% in local currencies, 7.5% in reported currencies. The 12-month reporting -- rolling software update and support is down to 1.4%. And as we've said, that is going to flatten over the quarters. And as you see, in local currencies, it's 0.8% for the quarter. Free cash flow is EUR 18 million -- EUR 18.4 million, a little bit down from the EUR 20.4 million last year, but still a very good cash conversion that Michael will get back to. Then the numbers of Q1 and Q2 on Slide 5, then what you'll see is that we saw an order intake of almost EUR 43 million for the quarter, which is up EUR 6 million over last year. We've gotten 3 new SimCorp Dimension orders and 1 new SimCorp Coric in 2021, and I'll get back to those in a minute. Revenue growth is up 11% in local currencies, 9% in reported currencies, and EBIT is up more than EUR 10 million over last year to almost EUR 54 million. That's a good increase over last year. Professional services all up 8.4% growth, 11% in local currencies, so a very good growth again in professional services. That's a high activity level with both new and existing customers in that area. Order book up to EUR 52.1 million, that is an increase compared to the same order book a year ago by EUR 13 million. If we compare to the beginning of the year, it's a little bit down. Cash flow, almost EUR 58 million, EUR 5 million up from last year. So a good performance on that area, that, as I said, Michael, will get back to in a minute.If we look at the forward-looking KPIs that we've promised you that we will also report on every quarter from now. Then the annual recurring revenue is now at EUR 263 million, and that is up 12% in local currencies. So we are also growing the ARR of the company at a pretty good pace, which we're very happy about. That signals kind of the underlying growth of the contract every year. If we look at the revenue that is already signed by now, then we have almost EUR 400 million worth of contracts that are signed by the end of Q2 and that is up from last year. So we're quite happy with that, that was EUR 363 million last year. So quite a bit also on that, which kind of bodes well for the second half of the year. If we look at the new clients, then, as I said, there are 3 new SimCorp Dimension clients and 1 new SimCorp Coric client. As you will see, it's 2 new clients in North America, it is 2 new clients in Europe, 1 in Switzerland and 1 in France. We're quite happy that France is on the map again after a couple of years where it's been a little bit dry on that front. And as you can see, it's a good spread between front, middle and back office clients and then the Coric client. We're also quite happy about that.Lastly, I just want to talk about a little bit about ESG. That is something that keeps being a key focus for many of our customers, and we have developed quite a bit of ESG functionality into the system. We've kind of taken ESG into the core system, integrated that into all the investment processes that the customer has, allowing them to have all the ESG data in the system to do what-if simulations on this, do compliance checks against ESG rules and so on and all the way through training, post training and then on to reporting. So ESG is now a fully functional set of components inside of the system. On top of this, we've got kind of the regulatory piece, which is the SFDR, the Sustainable Finance Disclosure Regulation that is out there. That is a solution we built along with a partner, and we've done quite well on that as well. The ESG is becoming more and more center of everything the investors are doing. And with SimCorp Dimension and the rest of the products we have, we are supporting them on that journey, and that gives quite a contraction for us right now.The last thing I want to mention is that this will be my last quarterly call where I'll be leaving it, it's at #36 in the row. And that's not a round number, I guess. So there's no good reason to stop there. But I think there's many other good reasons that today, we are announcing that Christian Kromann will succeed me as the CEO. Christian is also here for other questions if anybody has questions for Christian. Christian will succeed me on September 2. And for those of you who are into drama and conspiracy theories that is also the date that SimCorp turns 50. So they coincide and that's planned to be that way. Christian has been here for the last 2 years. The Board hired Christian as the COO for the business. Christian has been part of the executive management team for the last 2 years as COO, where he's led all of our market units and all of our professional services, and he has been instrumental in both driving the strategy we have. We started the 5-year strategy period 2 years ago, which was coinciding with Christian starting. And Christian has been driving a lot of the changes we've done in the company over the last 2 years: the formation of the EMEA market unit, the way we do services today, the formation of our offer lines and our product management team and so on. Christian has really had engagement all over the company by now. And the Board has deemed that he's a worthy successor, and I fully concur with that. I'm super happy that Christian decided to join us 2 years ago, and we worked very, very closely together for the last 2 years. And this is the right time that this happens. Christian is a young guy, 49 years. He's always worked in this industry. So he is very well versed in the financial services industry as such. As for a smooth transition, I have agreed to stay on in the executive management team until the end of the year with a role as a senior adviser. And then as we get into next year, I'll stay on a senior adviser as well, but no longer in the executive management team. So that's the second part of the news today other than the first half results. But now I'll give the word to Michael and allow him to elaborate a little bit on the second half results -- first half results.
Thanks a lot, Klaus. And I will move straight to Slide #11, and that is showing the usual waterfall diagrams, but of course, with the updated numbers. So if we start with the Q2 performance, then we have gone from a negative organic growth in Q2 last year to double-digit positive organic growth this year of almost 13% and that has also led to a margin of reported 25.2% and in like-for-like comparison to last year using the same FX rates at 25.7%. So an increase from 24.4% in the same period last year to 25.7% this year, so a slight increase in margin as well.If we then move on to the next slide on Slide 12, same illustration for the half year and a very similar development and picture. Negative growth last year for the first half. This year at 11% organic growth in revenue and a margin of 24.2% in local currency where the comparable number last year was 20.8%. So a decent margin improvement for the first half. But of course, bear in mind that with our business, with our revenue recognition, of course, there will be fluctuations from quarter-to-quarter. So you need to look at it over a longer-term period. But again, the first half is better than the first half last year.Going then to Slide #13, illustrating the order intake and maybe also here shown on the right-hand side, you can see the differences in order intake from quarter-to-quarter. And historically, at least, we have been very back-end loaded. That was also the case in 2020. Now let's see what happens in 2021. But at least for the first 2 quarters together, we have done better than the year before and especially here in Q2 with the of especially the new license deals, we did significantly better actually having an order intake, which was almost 80% higher than Q2 2020.Not only new license sales were made, we also did some more selling to existing clients, especially in EMEA. And then I think very notable, our -- especially Datacare order intake was very much higher than the year before. So for the subscription services, which in this quarter primarily was related to Datacare, we had almost EUR 5 million compared to a very little Datacare selling in the quarter in 2020, which was EUR 0.2 million. So that contributed quite well to the increase in the order intake. And then just to mention it, and I'll come back to that, we had one conversion from perpetual licenses to subscription licenses in Q2 this year, while we last year had 2 conversions. So we don't have a higher impact from conversion this year than the year before, actually the opposite so far.Then moving on to Slide #14. Our order book. You can see here again at the right-hand side that the order book increased slightly compared to last quarter. So the order book in March 2021, so -- increased by EUR 3 million. And if you compare to 1 year ago, we increased by EUR 13 million. And it is especially the subscription services with DataCare especially which are contributing to that growth. So we now have in our order book EUR 25 million in subscription services, while 1 year ago, it was only EUR 5.5 million. For CDD, our client-driven development, and we are going a little backwards in our order book, which is also expected because we signed some large deals 2 years ago, which we have now gradually revenue recognized. So that's a natural development. Then moving on to Slide #15, where we have distribution on the different revenue streams. Very clearly with the licenses or the new clients we signed in Q2, we have had an uptick in initial license sales and a huge growth compared to last year. We also see a good solid performance in Professional Services, which was also mentioned by Klaus. So an organic growth in local currency of almost 10%. And then our hosting has also grown quite a lot. Bear in mind that some of this is a pure pass-through revenue, so we don't make a margin on that, but the service part of the whole thing we do make a margin on. Where we haven't grown very much is software update and support as we expected and also guided for when we did the guidance in the annual report 2020. So there, we have seen a slight increase, but almost a flat level. And then additional license sales, we have seen a less sale of additional license sales in H1 compared to last year.And this is, of course, a focus area for the second half that we are doing more additional license sales than we have done in the first half. Going into further details about additional license sales on Slide #16. As you can see here, the impact from conversions are less than it was 1 year ago. So it's not like that we have had tailwind from conversions. On the other hand, we have had lower regular additional license sales than the comparable quarter last year, so EUR 2.2 million lower. And if we go to the half year on Slide 17, it's about the same picture. And here, you can see that our additional regular license sales was EUR 5.5 million lower than in H1 2020.Then moving up over to the cost picture on Slide 18, where we in Q1 saw a very little increase in cost. And here in Q2, we see a higher increase in cost. Part of this is that in 2020, we made our salary adjustments with effect from 1st of July. This year, we made the salary adjustment with effect from 1st of April. So that actually means when you do the comparison, you have 2 years of salary increase included in this quarter compared to last year. And that, of course, has some impact on the increase. So more than half of the increase is related to salary increases. The remaining part is primarily related to more hosting costs, so more other cost of sales. On the other hand, admin cost is stabilized, actually growing a little backwards. So good control on admin costs.Then Slide 19 regarding our cash flow development. I will say, a good strong 12-month rolling cash conversion of almost 100%. And bear in mind due to our revenue recognition principles and that we are revenue recognizing upfront subscription agreements, then 100% cash conversion is not the norm. So having close to 100% is actually quite a good achievement. And if we look at the free cash flow for the first half, we have grown that by almost 10%, by 9.5%. So we are relatively pleased with our performance in cash flow and free cash flow.Then finally, our full year guidance. So based on what we have delivered in the first half of the year and what we see for the rest of the year, we have maintained our guidance. We believe that this is the best estimate we have of where we will end the year. So our guidance is still in local currency a revenue growth of between 6% and 11% and EBIT margin in local currency of between 24.5% and 27.5%. To put a little more color on it, we have, of course, evaluated how we see the work moving on. And as we see it right now, we have seen that we will, most likely, still be impacted by COVID-19 restrictions, especially now with the Delta coming into play. So we will see restrictions impacting us in both Q3 and Q4, tapering off towards the end of the year. And we don't see a normalization before 2022 or that we have to wait on to 2022 to see a more normalized world. And we do also see that it seems like EMEA is more normalized, more stabilized, while outside EMEA, we see more impact from COVID-19 with travel restrictions, both in APAC but also in North America.That concludes our presentation, and now we hand over to Q&A.
[Operator Instructions] And we have a first question comes from the line of Claus Almer from Nordea.
First of all, congratulations to you, Christian, with your new responsibilities.
Thank you very much.
The first question goes to add-on licenses. Michael, you mentioned that you were to implement some new changes to the organization in the second half of this year. Maybe you could put some more color to where do you see the issues? And what are you going to do?
I think if you heard that I said that we made organizational changes then I said something wrong, but it could also be that you heard something else than what I said. But I need you to know just to make sure I didn't say anything about the organizational changes. What I did say is that it's a focus area for us to get more additional license sales in the second half than in the first half.And as always, there are fluctuations from period to period. But it is a focus area for us to do additional license sales in the second half. And we do have good dialogue with many of our large existing clients to fuel the additional license sales in the second half. Maybe, actually, Christian should add some -- put some flavor on that because I think that's relevant.
Yes, happy to. So we started this journey probably 18 months ago, where we did the change to the organization. And I would say that by now, we've been through the first round of all the customers that we wanted to build a detailed -- not a succession planning. That's a Freudian slip, I guess. But success plan and that is now starting to yield the right level of conversations.We did actually some poster child deals in Q2. And now we are filling up the pipeline with, what I would say, real strategic deals with customers. And I'm generally pleased with that. Obviously, what I'm less pleased with is the pace that they then commit to these strategic deals, and that's really where we are working. But the whole exercise of time to document the success plan on the customer and mapping our software and services, so that is working quite well. Now we -- the time is to really commercialize that and start to show it.Somewhat impacted by COVID in East and West, as we already talked about, which is also some of the most strategic deals we signed in Q2 was actually also in EMEA. So no matter whether it's a new customer or existing customer, they still need to take a considerable amount out of that pocket and that requires face time.
Okay. The root cause of the challenges within add-on licenses, have you identified that? And what will it take to just going back to the level we saw a few years back?
I'm not sure what -- going back to the level we saw a few years back. We still see healthy sales of new -- of additional licenses to our customers. And the functionality we've developed, the new users we get is actually going quite well. We sell more services to our existing customers. We sell -- we upgrade them to SimCorp Dimension-as-a-Service and so on. So it's actually going ]quite well with the existing customers, and there's more commitment. I'm not sure what -- when you say the root cause is.
So if you look at your order intake from existing clients using SimCorp Dimension, excluding client conversions and renewals, then the level we are seeing at the moment is lower than it was a few years back. So that was just what I was alluding to.
But part of the ALF is also customer renewing. We are upselling to these customers as part of the conversion. So when you look at ALF, then none of the conversions we've made so far doesn't include an upsell to that customer. So some of that comes in there. It's not like we sit and feel that we don't have anything to sell to our existing customers, and it's actually moving.
Okay. Then my second question goes to the R&D budget, which stayed flattish for the last, I guess, 6 quarters, and I know there's some COVID-19 probably included in this trend. You also mentioned in the report that some R&D employees have been reallocated from R&D to customer support.So first of all, given your nature of being a software company and also having more solutions than you had a few years back and you're also moving into the cloud space. So is it really possible to keep a flattish R&D staff? And why did you make this reallocation? That will be my second question.
Yes. First of all, the reallocation is actually not that we are moving people from doing something to something else. They are doing the same, but we have reclassified it because we think it's actually more customer service than it is a pure R&D.So we think it's a more appropriate way of presenting it in the presentation. Then you would say, why didn't you do that before? But you always get clever. And -- so it's not like we have taken them from doing something to do something new. It's actually more in which pocket you place these people. And it's about -- I would say, it's about [ EUR 500,000 ] per quarter in costs. We are moving from 1 bucket to another. Then in terms of cost, one thing we have done is that we are actually using more people now in low-cost countries also because we made an agreement with a sub-supplier. So you can say in some way, we are more efficient in what we are doing and from a cost perspective. So even though that the costs seem to be at a certain level, we are actually adding more resources because we are getting these resources to a lower cost and being -- and doing that, I don't think is a bad thing. It's not necessarily that you then put less resources into it, you just do it a little smarter than you have done in the past. These are more cost efficient than what you have done in the past. So we are still investing very heavily in our R&D, and we are more people today than we have ever been.
And within R&D because the number of employees has stayed flattish also, so if you're more within R&D, where are you...
That because we have some [indiscernible]. That's not our own employees, but they are working as our own employees. So they will be external people which are not our own employees, but they are working full time for us as a subcontractor.
Within R&D?
Yes.
And your next question comes from the line of Poul Jessen from Danske Bank.
Yes. And also from my side, congratulations to you, Christian.
Thank you very much.
Klaus, it's been a pleasure for the last 9 years. Good luck with the future work. My question more relates to the guidance, just to see what's the risk, and then you have plus 2% to plus 4% for the second half of the year. Could you say a little about what are you looking into? You mentioned areas outside EMEA. Are we're looking for a few large tenders to win? Or Is it a lot of fewer ones, which then makes it less risky? And then -- is it the add-on, who's going to do it? Or is it the -- also on the left side? And then the last question is on the order book that should we -- can it goes up by end of the year? Should we see more or less flattish year-over-year when we end the year? Or is it also a contribution from the backlog?
I think that if I can start and then Christian can finish. I think that from a pipeline point of view, we've got -- it's the usual stuff. We've got a number of midsized deals that can close. We also got a couple of big ones that could close. And whether it ends up being one or the other when we get to the end of the year, it is not clear yet, I would say. So it's both as usual. Unfortunately, it isn't that -- it isn't super predictable where we are 5 months from now in that. And I would say from a new customer perspective, there's actually quite good activity in the market. The question -- our only concern is that with this extended COVID situation in Asia and the U.S., what does that mean? Are customers getting tired and waiting or they still plowing through as we've seen them do so far. Maybe if it doesn't have an impact and they plow through, then more power to it. It's going to be fine. But we'll have to see where that takes us in some sense. But yes, -- so that's the nature of it. But if you look at the pipeline, both for new and for existing customers, they support the guidance we've given very well.
And there's no kind of mega deal as such that we have to win to get there. There is a balance. And I think -- but -- so if you have one positive thing and one negative thing. So the positive thing is that it's been a while since we've seen deals in EMEA of the size of what we saw in Q2. They fit what we do very well. And as you also would have noted in last year's average deal size, this is a good improvement, and we see more of those.The negative is, as we just talked about, that the early-stage pipeline is continuing at a relatively good pace, but they don't close. They keep on moving from 1 quarter to the other, and that's particularly in areas where we can't meet people face-to-face. So that -- that's kind of the balance we look at.
I think, Poul, for the order book because you also had a question to the order book, this is not a guidance because if we made a guidance for this, then we would have included in our guidance. But our ambition and our belief is that our order book will not be lower at the end of the year than it is today, actually the opposite. But again, we will see -- it's a lot to do with timing and what can be revenue recognized, what can we not be revenue recognized. But the fact that we are selling quite well Datacare solutions, that will by definition add to the order book because if you sell, let's say, a 5-year deal, then you will revenue recognize that over a 5-year period, and that will -- if you sell it in Q4, that will all go into the order book.
Okay. And then the final question from my side, it is more the structural one, which pops up now and then. Are you seeing any changes in the market? I'm just thinking about State Street versus BlackRock and Amundi has been working for some time also to enter this space on a larger scale. Are you seeing any changes out there from Amundi. I also get a lot of questions recently people mentioning Bloomberg, again, I know we mentioned those for the last 5 years, but I get more questions. So are you seeing any changes structurally out there?
There's one thing that we are spending quite a lot of time trying to understand is that there seems to be a trend towards that if people or customers can buy services, technology-enabled services like the ones we offer, from an independent provider and not a financial institution, they would do that. So that's the kind of fundamental argument why we strongly believe that moving to -- we normally refer to as everything as a service, but more specifically mean by that services that we can offer to our customers by utilizing our technology. So for example, what we've done with Datacare, delivering Sim's data instead of delivering a piece of software that a customer can change the data themselves. That's happening. But we are playing all hoses. So we are also expanding our delivery capabilities through partnerships with the same asset services, as I just referred to, i.e., the State Streets which is 1 of 9 partnerships that we have in that space. But that is a trend towards that if you can automate going through a software vendor with strong technology, that's where you go.
And I think that if you look at a change in the market, I think that what Christian is pointing out is exactly the right one. And the example you see that is Clearwate Analytics that does accounting for corporate treasury and for some of the insurance customers in the U.S. So they are a company that's been built the last 15 years based in Boise, Idaho, mostly driven by people, accountants doing the accounting for the customers and then building software alongside that is a good example of somebody who does this with a mix of software and people and is having -- seeing good traction, especially in the smaller and mid-tier of the market.
And your next question comes from the line of Daniel Djurberg from Handelsbanken.
Congratulations to solid quarter and sorry about your leaving Klaus. It's been a really impressive to follow you these 9 years. And also, congrats, Christian, of course. My first question would be coming back to the R&D cost, obviously, not up so much because of this internal stuff shift. Have you commented bat I missed how much of this impacted? How much would the pro forma has been for the R&D costs, excluding this shift?
Yes, it was -- I mentioned it was EUR 500,000 per quarter. So you can see the moving from 1 department to another, if that was the question.
Yes, it was. Okay. Perfect.
[ Roughly, I think ] give and take. Yes.
Yes. And then another question on salary inflation going forward. You had, of course, easy -- tough comps because of the COVID situation in Q2 last year, but giving it tougher for Q2 this year, but how to think about the second half in term of salary inflation?
Yes. But we have made our salary increase with effect from first of April. And that's why you see, you can say, the the major change. So I will say from Q3 and onwards, then you should just expect, you could say, the normal impact from a salary increase, and that's normally between 2% and 3%.
Yes. Okay. Great. And if I may, a question on professional services. I remember in Q1, Klaus, you stated that the outlook for Q2 and Q3 looked strong. And of course, with Q2 behind, I would agree, but can you give any comment on the backlog for the second half on the professional services side?
Maybe I'll take that one. So I think we're somewhat blessed by the fact that we have actually -- we had some good projects that fished of last year. Now we are adding some good sizable deals, both on existing customers as well as new customers. So we have, I would say, a decent outlook for the remainder of the year. I think once we will land and end well and that will contribute to the guidance as we expect.And then obviously, with services, it's all about building the right momentum into next year, which is really where we're focusing at the moment and maybe go a little bit back to the discussion about existing customers, but a lot of the additional business we've signed the last couple of months with existing customers has been services. And even though we still love the kind of upfront impact of selling licenses that's actually a real benefit of selling services. And what is even more important is that it's recurring services that we are selling, and that gives us much more forward load and a bigger prediction on that side. So while we are -- hopefully, if we succeed, we will see a small drop in our kind of initial services where you go in and get the cost running. And then we will see a gradual increase in our recurring service, which gives higher predictability. So I think the success plans and all of that is definitely generating good services pipeline as well. So that's important to remember that.
Yes. And from a gross margin perspective for second half from the mix, should we take this into account? Are you being -- expecting a bit lower year-over-year gross margin? Or is it anything else that...
That's a little bit on how you -- what you wanted to hear. So if you -- if we expand our hosting part, then has a negative impact on the profit margin, the gross profit margin. But on the services part, we don't see any movements there. It seems like that we can still have a good lease margin on our professional services.
And your next question comes from the line of Magnus Jensen from SEB.
Yes, congratulations to you, Christian, and good luck going ahead. Klaus, it's been a pleasure working with you. Two questions from my side. The first is to the admin cost level, which is just gradually declining and now it's already down to EUR 5.3 million for the quarter. Is this level -- so to what extent is this level sustainable, Mike?
Good. Yes, let's see. We're always trying our best. And then from time to time, you then say, okay, now I need a new function or I need to add on something. So you think -- you try to optimize all the time, and then it comes a little bit in -- and then you do a little investment. So I think we are focusing on it, and we're trying to keep the cost down. On the other hand, if we believe that we need in strengthen in some areas and do an investment, then we will do so because if that is the right thing for the company to have the right scalability and all that then we do so.But again, it's a focus for us to keep it at a decent level. And if needed then we will do some investments here and there to make sure that we can also support the growth of the company. But I think we have -- we've shown some scalability here and being able to do so. And I will not give any guidance on each of the items, but we have a focus on it.
Okay. Quite impressive. Just sort of an add-on. So it doesn't sound like there's any sort of one-offs in this other than, I guess, the traveling cost, we should expect that to come up maybe not this year, but at least going into next year, I guess?
Yes. I agree. I agree. I think it's also -- so travel cost. Yes, we should expect travel costs to go up, of course. That has helped us as well, surely.
Okay. Yes. My last question is actually more maybe of a technical character. So you -- 2 questions actually to subscription services. It seems like it comes a bit in lumps, going quite up and down quite a bit. Is that rightly observe?
Yes. Yes, it's right. Because it's big deals we are making. So you make a several years deal where you actually take over the responsibility to do the services, and it's quite a volume of what we do. So if you sign 1 or 2 of these contracts, then you will be able to see it compared to if you don't sign it. So it will be -- it's the total value of -- for instance, if you make a 5-year deal with the total value of those 5 years, which will go into the order book.
Yes, yes. And then the second question is this. Is there the same amount of sort of the right revenue from this in terms of software updates and professional services, as you see with that sort of a normal dimension contract, or is it very different?
No. No. This is the revenue we will generate based on this. So there will not be anything in addition to that. So the more or less -- yes. But it is our delivery and the payment for our delivery. And so when we then revenue recognize it, we will revenue recognize over the term of the period. And we will, of course, then also have some costs in order to deliver it because it is a service.
Our next question comes to the line of Gautam Pillai for Goldman Sachs.
First of all, Klaus, I also want to send my regards and wish you best in all future endeavors. Many thanks for all your great insights over the years. Also many congratulations to Christian on the new role.
Thank you.
Great. Coming to my questions. First, I want to follow up on the full year guidance, especially on the top line. It implies no material acceleration in revenue growth in the second half. Is there an element of conservatism here given Q4 is seasonally your biggest quarter. And you have been commenting about a back-end loaded year in the beginning of 2021, has your thinking changed, or was there a kind of a pull forward in the pipeline in 2Q?
So the thinking hasn't changed in any way. But as we say, there's also uncertainties given that COVID is extending and so on. So in that light, things are not -- it's not getting more certain, but a little less certain. So that's why we stick to what we have.
And then we -- I think it's fair to say when you compare to 2020, we had a relatively weak start of 2020, and then we had a very, very strong finish. So Q4 last year was very, very strong. And of course, we also believe that Q4 will be stronger this year. But again, when we look into the year and how we did the timing between the quarters, I think this is very much in line with what we expected.
Got it. Very clear. And maybe can I also ask a question on pipeline and sales cycles. Has your sales cycle changed through the pandemic? And also what is the level of maturity of deals in the current pipeline? Are these very nascent? Or have you been in conversations with the customers for a long time?
So maybe a couple of comments. So the time from the lead generation to qualified lead to active sales cases is more or less the same. And the positive thing there is that, that has, to a certain extent, been digitized, which we always wanted, but the time from qualified opportunity to closing has extended, especially some of the contract negotiations are dragging out substantially more than what we've seen previously. So I would say, all in all, obviously, that means that the time line extends. But it's kind of in 2 parts, which obviously means that when this is over, in whatever definition, it will be over then hopefully, that will net-net give us a positive impact on our ability to close deals as well.I would say, in terms of converting leads and identifying them in our addressable market, that's pretty good. What we're extremely pleased to see, you can say, the Dimension engine kind of continues at a relatively good pace. But where we see an uptick remains to be also in Coric, and I think we also mentioned Datacare multiple times. So we're trying to see kind of a small embryo of a portfolio effect of what we do, which hopefully is also going to give us a bit more kind of bottom on the whole thing. But still, it's going to take a while before the new product becomes of a significant size compared to Dimension. So there's still some work to be done there.
Got it. Last question from me. Can you just -- can you provide an update on the cloud journey? Are you still on track with the internal targets? And also from the level of completeness of the product, how are you developing? And the customer which moved to Dimension on Azure in Q2, was it on a specific module or the full platform?
Let me start with the first one. The customer that we signed in Q2 is the full platform on Azure. So we can host on Azure, we can host an IBM, we can be on-prem, we could be -- one of the customers we signed this quarter was actually on-prem, which is interesting given where we are these days.But yes, it's the full platform. And in Azure, we do that quite well. The technical project of lifting the product from a 2-tier product to a 3-tier product is progressing. It's a tough project in many ways, and we continue to find new ways of doing things and so on, but we are pressing down the road on that project. It might take a little bit longer, but we're going to get there, and it's a good project.But it doesn't stop us from selling anything to the customer as such. So you'll see us progress down that line on a technical upgrade. But today, we're selling on subscription, we're in the cloud, we're on Azure so nothing is stopping us. It's going to yield cost benefits to trials that are -- once they get to the 3-Tier client, and we're starting to send some of that out. But it's a technical upgrade.
And your next question comes from the line of Hannes Leitner from UBS.
Also, best wishes to both of you. Looking forward to work together. And my questions are, maybe you can give an update on the State Street's deal in Europe and the reselling agreement, how did this go? And then just circling back on the previous question around Amundi. This deal win in France, maybe you can talk there a little bit, Amundi targeting your customer base, was this a slightly different customer base, as you always say that BlackRock is doing quite a lot in wealth management? Maybe we'll start there.
Maybe we start with the State Street thing. So that's building in to be an extremely strong relationship both from a pure business point of view, but also from a generating trust between to organizations that both work together but also compete. So that's super positive. There's quite a lot of implementation work to be done related to that deal were both setting up a new fund accounting platform replacing their legacy, but we're also going out promoting the front-to-back offering where SimCorp, as I mentioned, sits in the Stage Street Alpha platform.And the market reception has been really good, but we're kind of -- so we are on track. But as I said, implementation work is ongoing, and, I don't know, there's still some work to be done before the platform is fully operational. This has also extended to other conversations in APAC. So I would say the 2 organizations are really working super well together.
And then in terms of Amundi, I can -- this is Michael Rosenvold, I can try to answer that question. I think, Amundi, they are a good competitor to us having a kind of approach very similar to BlackRock Aladdin. We see them primarily in Southern Europe, and you could see our win. We had a good win in Southern Europe this quarter. So most likely, that would be something that our competitors were also looking at, and we are able to also win in these regions. So yes, a good serious competitor, but we believe that we have a strong offering. And it also looks like the clients still believe that our offering is strong in that region. And we're very happy to see a very nice new client in France that didn't go for Amundi.
And then just maybe the last question is around the front office. Is there any -- you had the one U.S. client only choosing middle and back office and then last year also in the U.S. So it seems more that you have more in the U.S. only middle to the back deal wins. Not playing them down, but maybe you can comment there if there is something -- is there somebody in the U.S. who is -- they are very entrenched with those customers. And do you see opportunity to cross-sell them front office at later stage?
No. We still see opportunity in the U.S. on front office. But as we've talked about a few times before, the competition is harder there. We both have Charles River and BlackRock to compete with in the U.S. on front office. So that is -- it is tougher competition in many ways. And in this front office only, it's really tough competition. Where we win in the U.S. is mostly front to back. The customers we won this year in U.S. is a pension fund that decided to first go with the back and middle office. And then, of course, if they are kind of in the need of a front office as they go, we'll, of course, upgrade them to also our front office as such.
It's probably also worth noting that the 2 EMEA deals, we are reporting on including the front office, which are, in both cases, a very predominant role and where the value of cross-asset, including even the sophisticated assets, for the key selling point. And that's against the [indiscernible], so we are extremely pleased with that.
There are no further questions at this time. Please continue.
Thank you very much, and we don't have any questions coming in from the web either. So I will just say a warm thank you for all of you joining this call. In the next call that will happen in November, it will be the same team from here that will be in the room, but it will be Christian leading the call. And I really look forward to that, and I hope to see you all again by then. Thank you very much for joining.
And this concludes today's conference call. Thank you for participating. You may now disconnect.