SoftwareONE (SWON) H2 2024 earnings summary

Executive summary

• 2024 was a pivotal year with fundamental changes to restore customer centricity, decisive actions to resolve sales execution issues, and a focus on sustainable, profitable growth.

• Gross billings reached CHF 11.4 billion and revenue CHF 1,017 million, with adjusted EBITDA at CHF 223.4 million.

• The announced combination with Crayon targets CHF 80-100 million in cost synergies and aims to more than double reported EBITDA in 2025.

• Over-achievement of cost reduction program delivered CHF 58 million annualized savings by year-end 2024, with the target raised to CHF 70 million.

• Regional empowerment and new leadership implemented to drive agility and customer-centricity.

Financial highlights

• Revenue grew 2.9% year-on-year in constant currency to CHF 1,017 million; Q4 revenue declined 5.1% due to muted customer spending and GTM execution issues.

• Adjusted EBITDA margin was 22.0%, down 2.3 percentage points from the prior year.

• Contribution margin increased 5% year-on-year to CHF 679.8 million, driven by delivery efficiencies.

• Net cash position at year-end was CHF 12.6 million after dividends and share buybacks.

• Adjusted profit for the period was CHF 73.0 million, down from CHF 109.6 million in 2023.

Outlook and guidance

• 2025 standalone revenue growth is guided at 2%-4% in constant currency, with adjusted EBITDA margin at 24%-26% and reported EBITDA expected to more than double.

• Dividend payout ratio remains at 30%-50% of adjusted profit.

• 2026 targets: double-digit revenue growth and adjusted EBITDA margin approaching 27%.

• Negative impact of 2%-3% expected from Microsoft incentive changes in 2025.

• Total operating expense adjustments expected below CHF 30 million in 2025, excluding Crayon costs.