74Software (74SW) Q1 2026 TU earnings summary

Executive summary

• Q1 2026 revenue reached €182.7 million, up 10.0% organically year-over-year, driven by strong subscription growth and a shift toward recurring software revenue.

• Both Axway and SBS contributed to growth, with Axway up 12.7% and SBS up 7.4% organically compared to Q1 2025.

• Recurring product revenue was the main growth driver, supporting a more predictable and scalable business model.

• Continued investment in AI-enabled software layers and innovation to support critical, regulated environments.

Financial highlights

• Product revenue rose to €150.8 million, up 11.5% organically year-over-year.

• Recurring revenue increased to €137.2 million, up 9.1% organically, while maintenance and support revenue declined due to migration to subscription models.

• License revenue grew 44.1% organically; services revenue increased 3.1% organically.

• Axway ARR reached €277.0 million (+8.8% YoY); SBS ARR reached €248.5 million (+8.9% YoY).

• Net debt at quarter-end was €178.9 million, with cash and cash equivalents of €57.1 million.

Outlook and guidance

• 2026 guidance: organic revenue growth of 3–5%, margin on operating activities of 15–17%, and unlevered free cash flow around 10% of revenue.

• Medium-term ambition: revenue close to €800 million and margin on operating activities ~20% by end-2028; €1 billion revenue target including selective acquisitions.

• Q1 performance benefited from favorable phasing and should not be extrapolated for the full year.