Tecnotree (TEM1V) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered stable performance with net sales of EUR 16.9 million, up 4% year-over-year, and positive free cash flow of EUR 1 million, reversing a negative EUR 4.7 million last year.

• Revenue growth was driven by new markets, high-margin license revenue, and a strategic focus on ARR and mature markets.

• Five successful go-lives, expanded partnerships with four global system integrators, and a major new anchor account in the Netherlands marked significant customer wins.

• Order growth of 15% and strong cash collection of EUR 14.3 million highlighted operational improvements.

• Recognized as a TM Forum ODA finalist, received the ODA in a box award, and featured in Gartner's Magic Quadrant.

Financial highlights

• Net sales: EUR 16.9 million (+4% YoY); EBIT: EUR 4.5 million (+2% YoY); net income: EUR 1.5 million (-5.6% YoY); EPS stable at EUR 0.1.

• Free cash flow: EUR 1 million in Q1 2025, up from EUR -4.7 million in Q1 2024.

• Capex to sales reduced to 14.7-15% from over 20% YoY, with further reductions targeted.

• Order backlog at EUR 70.3 million, down 6% YoY; ARR stable at EUR 7.6 million.

• DSO days reduced to 155 from 216, with trade receivables down by EUR 7.4 million YoY.

Outlook and guidance

• 2025 revenue guidance: low- to mid-single-digit growth in constant currency; operating margin expansion of at least 200 basis points.

• Free cash flow guidance for 2025: greater than EUR 4 million.

• Capex to sales targeted at 10-12% by year-end; receivable days target 100-140.

• Dividend payout policy set at 10% of free cash flow.

• FX exposure to be reduced to 10-15% within three years.