hGears (HGEA) Q3 2025 earnings summary

Executive summary

• Profitability improved despite a challenging environment and weak e-Bike market, supported by cost-saving measures and production shifts; 9M25 results slightly exceeded expectations.

• Third quarter marked the weakest in company history due to sales pulled forward, but overall nine-month profitability increased and management sees early signs of stabilization in e-Bikes.

• Liquidity and cash preservation remain top priorities, with a stable balance sheet and improved free cash flow.

• Management raised and confirmed 2025 guidance, expecting revenues at the upper end of the range and improved EBITDA and free cash flow.

Financial highlights

• Nine-month 2025 sales totaled between EUR 69.6 million and EUR 72.1 million, down 3.8% year-over-year; Q3 sales declined 8.4% year-over-year and 17% sequentially.

• Adjusted gross profit was EUR 31.8 million, down EUR 1.9 million year-over-year, with a gross margin of 45.6%.

• Adjusted EBITDA improved to EUR 0.9 million, with a margin of 1.3%, driven by EUR 1.9 million in personnel savings and EUR 0.5 million OPEX reduction.

• Free cash flow improved to EUR -0.6 million from EUR -2.5 million last year.

• Net debt ranged from EUR 8.7 million to EUR 17.2 million, with cash and equivalents at EUR 8.7 million and total liquidity of EUR 10.7 million including undrawn credit.

• Equity ratio at 45.1% at end of nine months, down from 49.4% at year-end.

Outlook and guidance

• 2025 guidance: revenues EUR 87–90 million, adjusted EBITDA EUR -1 million to +1 million, free cash flow EUR -2 million to zero.

• Expectation of gradual recovery in e-Bike segment in 2026 as destocking nears completion.

• CapEx to remain below 3% of sales, focusing on maintenance and selective investments.