Cherry (C3RY) Q4 2025 earnings summary

Executive summary

• 2025 was marked by structural refocusing, operational cleanup, and major leadership changes, including the appointment of an interim CEO and new divisional heads.

• The company transitioned to a platform-driven model in Digital Health, focusing on core competencies in Peripherals and Components.

• Strategic review and realignment included potential divestment of either the Peripherals or Digital Health & Solutions segment, with M&A processes initiated.

• Sale of the Active Key hygiene business for €10.3 million generated a €5.7 million book gain.

• Cost discipline, inventory reduction, and operational efficiency were prioritized, with significant restructuring and site transitions.

Financial highlights

• Full year 2025 revenue was €94.3 million, down 15% year-over-year, mainly due to weaker Component demand and the sale of Active Key.

• Like-for-like revenue grew 4.7% year-over-year, excluding divestments.

• Adjusted EBITDA for 2025 was €-9.8 million, a 40% decline year-over-year, with Q4 adjusted EBITDA at €-4.9 million.

• Inventory reduced to €28.8 million, down €29.5 million from the previous year, with office SKUs cut by 43%.

• Net working capital improved to €22.5 million from €40.2 million, and cash conversion cycle improved by 90 days to 116 days.

Outlook and guidance

• Guidance for 2026 will be provided in Q2, focusing on realistic assumptions, profitability, and gross margin improvement.

• The company aims to further reduce inventory, sharpen operational control, and focus on sustainable profitability.

• Digital Health expects up to 200,000 additional unit deliveries through 2028, with a shift toward recurring software revenues and a 45% reduction in return rates.

• Peripherals segment targets margin improvement and innovation in wireless and retail products, with growth opportunities in B2C and cordless devices.

• Strategic review for potential divestment of a major segment is expected to conclude in H1 2026.