74Software (74SW) Q4 2025 earnings summary

Executive summary

• FY25 revenue reached €707.2m, up 3.8% organically year-over-year, exceeding guidance, with both Axway and SBS contributing to growth.

• Operating margin improved to 15.2%, with unlevered free cash flow at €80.4m (11.4% of revenue), and EPS up 40% to €1.39.

• Net leverage reduced to 1.92x, enhancing financial flexibility and supporting deleveraging.

• AI strategy and investments are driving product innovation, customer adoption, and operational efficiency.

• Employee engagement and customer NPS scores reached record highs across both brands.

Financial highlights

• Revenue grew to €707.2m, with organic growth of 3.8% despite FX headwinds; gross margin increased to 67.3%.

• Net profit rose to €40.8m (5.8% of revenue), up 40.7% year-over-year.

• Unlevered free cash flow reached €80.4m, more than double Axway's previous record.

• Recurring revenue accounted for 75% of total, with product revenue at 81%.

• EPS increased 40% to €1.39.

Outlook and guidance

• 2026 organic growth guidance raised to 3%-5% CAGR, with operating margin targeted at 15%-17%.

• Unlevered free cash flow expected around 10% of revenue.

• By 2028, aiming for €800m revenue and 20% operating margin; mid-term ambition to reach €1bn revenue with selective M&A.

• Services revenue expected to decline further in 2026, then stabilize and grow in line with overall revenue.

• Continued focus on ARR as a key metric, with expected CAGR of 10% and further alignment with product revenue.