Tecnotree (TEM1V) Q3 2025 earnings summary

Executive summary

• Achieved sixth consecutive quarter of positive free cash flow, totaling €3.2 million YTD, reflecting a structural shift to cash-generating operations and steady profitability.

• Revenue grew 4.8% YTD in constant currency, reaching €56.6 million, despite a 2% decline in reported terms due to forex headwinds.

• Order backlog reached a record €105.5 million, up 40% year-over-year, providing strong visibility for future revenue.

• Focus on expanding ARR and subscription-based models, especially in mature markets, to drive predictable, high-margin growth.

• Strategic investments in AI and cloud, with industry recognition from Gartner and IDC, are enhancing competitiveness and market positioning.

Financial highlights

• Net sales for the first nine months: €52.8 million (down from €54 million YoY in real terms, up 4.8% in constant currency).

• EBIT for the first nine months: €13.2 million (up from €13 million YoY), with an operating margin of 26% (vs. 24% last year).

• Net income for the first nine months: €6 million (down from €7.8 million YoY).

• Q3 revenue: €18.6 million (down 2% YoY, up 5.4% in constant currency); Q3 EBIT: €3.6 million (down 28% YoY), impacted by higher provisions.

• Free cash flow for the period: €3.2 million, compared to -€2.2 million last year.

Outlook and guidance

• On track to meet full-year guidance of low to high single-digit revenue growth and 200 basis point EBIT margin improvement.

• Free cash flow for 2025 guided to exceed €4 million.

• Capex to sales targeted at 10–12% for 2025; receivable days targeted at 100–140.

• Q4 expected to be strong, with focus on converting backlog into billings and cash.

• FX risk exposure to frontier countries to be reduced to 10–15% by 2027.