74Software (74SW) Q3 2025 TU earnings summary

Executive summary

• Q3 2025 revenue reached €172.8m, up 6.3% organically year-over-year, driven by strong demand and effective sales execution.

• Both Axway (+8.8% organic) and SBS (+4.7% organic) contributed to balanced growth, with integration between brands advancing and synergies materializing.

• Annual Recurring Revenue (ARR) rose to €262.8m at Axway (+12.2%) and €233.8m at SBS (+10.1%), supporting a highly predictable revenue model.

• The group increased its full-year 2025 organic revenue growth guidance to around 4%, at the upper end of its initial range.

Financial highlights

• Q3 product revenue was €140.1m (+9.4% organic), with recurring revenue at €129.2m (+9.1% organic).

• Customer-managed subscriptions grew 23.3%, own-managed subscriptions up 16.9%, while maintenance & support declined 8.1% as the shift to subscriptions continued.

• License revenue increased 12.7% to €10.9m, and services revenue declined 5.2% to €32.7m.

• Year-to-date (9M 2025) revenue was €516.8m (+6.4% organic), with product revenue up 11.7% and recurring revenue up 11.6%.

Outlook and guidance

• Full-year 2025 organic revenue growth expected at around 4%, with operating margin guidance unchanged at 14–16% of revenue.

• Unlevered free cash flow is projected to be at least 10% of revenue, and leverage ratio to remain below 2.0x through year-end.

• Ambition to surpass €750m in revenue by 2027 with operating margin above 17%, targeting around 20% by 2028.