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| Land | Finland |
|---|---|
| Lista | Small Cap Helsinki |
| Sektor | Informationsteknik |
| Industri | Kommunikation |
Tecnotree Corporation Stock Exchange Release 5 August at 9:00 EEST
· Order book over EUR 100 million for the first time
· Raising full year revenue guidance range up to low / high single digit growth in constant currency
· Five quarters of consecutive positive free cash flow despite weakening USD
H1 Results
- Net sales of EUR 34.2 million (34.9) -2.1% Year on Year, in constant currency, EUR 35.9 million, +2.7% Year on Year.
- Operating result of EUR 9.6 million (8.0) +20.6% Year on Year.
- Operating margin of 28.0% (22.8%).
- Foreign exchange losses EUR 4.0 million (2.5).
- Net Result EUR 2.6 million (3.7) -30.0% Year on Year
- Gross cash flow from operations EUR 10.5 million (7.3).
- Positive free cash flow EUR 2.1 million (-3.9).
- Earnings per share EUR 0.2 (0.2).
- Order book at the end of the period EUR 105.7 million (72.6).
Q2 Results
- Net sales of EUR 17.3 million (18.7) -7.2% Year on Year, in constant currency, EUR 18.8 million, +0.7% Year on Year.
- Operating result of EUR 5.1 million (3.5) +43.6% Year on Year.
- Operating margin of 29.2% (18.8%).
- Foreign exchange losses EUR 2.7 million (0.8).
- Net Result EUR 1.0 million (2.1) -49.2% Year on Year.
- Gross cash flow from operations EUR 4.1 million (6.3).
- Positive free cash flow EUR 1.1 million (0.8).
- Earnings per share EUR 0.1 (0.1).
| Key figures, MEUR | 4-6/2025 | 4-6/2024 | 1-6/2025 | 1-6/2024 | 1-12/2024 |
| Net sales | 17.3 | 18.7 | 34.2 | 34.9 | 71.6 |
| Operating result | 5.1 | 3.5 | 9.6 | 8.0 | 23.8 |
| Result before taxes | 2.1 | 2.9 | 4.4 | 4.9 | 12.8 |
| Result for the period | 1.0 | 2.1 | 2.6 | 3.7 | 8.3 |
| Earnings per share, basic, EUR | 0.06 | 0.12 | 0.15 | 0.22 | 0.50 |
| Order book | 105.7 | 72.6 | 105.7 | 72.6 | 79.6 |
| Gross cash flow from operating activities | 4.1 | 6.3 | 10.5 | 7.3 | 21.3 |
| Free cash flow | 1.1 | 0.8 | 2.1 | -3.9 | -1.8 |
| Change in cash and cash equivalents | 1.2 | 0.4 | 2.3 | -4.0 | -4.1 |
| Cash and cash equivalents | 19.1 | 16.8 | 19.1 | 16.8 | 16.8 |
| Equity ratio % (Equity/Total Liabilities) | 68.5 | 65.6 | 66.7 | ||
| Debt Equity ratio % (Debt/Equity) | 5.7 | 5.3 | 4.2 | ||
| Personnel at end of period | 691 | 852 | 758 |
Unless otherwise stated, all figures presented below are for the financial period 1-6/2025 and the figures for comparison are for the corresponding period in 1-6/2024.
Initial Guidance for 2025
- Net sales are expected to grow by low to mid-single digit percentage in constant currency terms.
- Operating result margin expected to see margin expansion of at least +200bp.
- Free cash flow guidance > EUR 4 million for the full year.
- Capex as a percentage of net sales is targeted at 10-12%.
- Receivable days are expected to range between 100-140.
- Dividend pay-out policy targets 10% of free cash flow.
- Foreign exchange exposure to frontier country risk will be reduced to 10-15% within three years.
Revised Guidance for 2025
- Net sales are expected to grow by low to high-single digit percentage in constant currency terms.
- For the other metrics the company maintains the initial guidance.
Assumptions for 2025
- Industry analysts reported that the long-term growth of the Business Support Systems (BSS) industry is forecasted to grow at +2.2% per annum 2024-2029, in constant currency. However, 2025 is forecast to be negative growth year for the industry. Despite this, the company expects positive top line growth due to anticipated significant market share gains and the current order backlog.
- The company will continue its focus on increasing license sales, while evolving its delivery model to an Annual Recurring Revenue (ARR) model and continue to increase the same in 2025. This will ensure that the company will have more predictable and stable quarter on quarter net sales.
- The cost optimisation programme that commenced in 2024 will continue to provide margin benefits in 2025 and beyond.
From CEO's Desk: Free cash flow on target; Increased demand for Tecnotree products and expansion in Europe
The first half of 2025 reflects our continued focus on financial discipline and strategic wins, despite USD weakening. We are now proud to report five consecutive quarters of positive free cash flow, a clear signal of our operational rigour bearing fruit.
Our positive free cash flow of EUR 2.1 million in H1 2025 (-3.9) reflects a structurally improved business model. Operating margin rose sharply to 28.0% by a significant +520bp, while operating profit grew 20.6% Year on Year to EUR 9.6 million. This performance reinforces our belief in the strength of our underlying fundamentals and strategy. Due to a 13% dollar weakening against the euro over H1 2025, foreign exchange losses increased to EUR 4.0 million in H1 2025 (2.5). Despite this, the company earned free cash flow of EUR 2.1 million, reaffirming underlying strength in cash generation and cost control.
Our DSO 174 days at the end of H1 2025, increased slightly from H1 2024 (170 DSO days). However, we remain confident to meet the guidance - a testament to improved collections discipline and "Think Cash, Do Cash" initiative started in 2024.
Revenue rose by 2.7% to EUR 35.9 million in H1 2025 (34.9) in constant currency. This growth was fueled by gaining market share and expanding our footprint in the MVNX (Mobile Virtual Networks) segment. Our record order book of EUR 105.7 million, highest in history of the company, reflects the stability of future revenues. Several large projects signed in H1 - particularly in UK, Europe and South Africa - are in early delivery phases with billable milestones weighted toward H2 2025 and 2026. Our growth continues to be strengthened via SI (System Integrator) partnerships with the likes of HCL Tech, Accenture - assisting in expanding into mature markets.
We are beginning to see a regional revenue shift, especially in Europe and the Americas, where license revenue grew to EUR 5.7 million in H1 2025 (0.2) - increased by 28 times. This validates our strategy of expanding in mature markets and gradually reducing dependency on frontier markets. As a result, the share of Europe & Americas in the order book has nearly tripled to EUR 27.1 million (9.9)
In addition to new logos, many of our existing customers renewed and expanded their Annual Recurring Revenue (ARR) contracts, showing confidence in our products and long-term roadmaps.
Our personnel have continued to decrease. Coupled with our ongoing global rationalization, we remain on track to achieve EUR 7 million in cost reductions in 2025.
The cost cutting measures initiated in Q2 2024 were timely and allowed us to pivot towards more AI driven efficient execution. This will enable us to scale growth while keeping operational costs under control.
From a balance sheet perspective, we remain in a strong position:
- Trade receivables remained stable at EUR 32.8 million in H1 2025 (32.6), slightly above H1 2024 but below year-end 2024 levels (EUR 34.5 million), despite some large project ramp-ups.
- Other receivables decreased to EUR 37.7 million from EUR 42.0 million at year-end, reflecting improved project-related invoicing controls.
- Cash and cash equivalents rose to EUR 19.1 million (up from EUR 16.8 million at year-end).
- Trade payables and other current liabilities fell to EUR 10.4 million from EUR 15.1 million in December 2024 - indicating that we are managing short-term obligations with discipline, even as we invest in deliveries.
H1 2025 was significant in terms of our brand recognition and market impact. Our AI-native platform, "Tecnotree Moments", was awarded "Telecom Vendor of the Year for GenAI, CVM (Customer Value Management) and Marketing Transformation" at the Asian Telecom Awards, validating our leadership in intelligent customer value management. In a major milestone for regional transformation, MiFibra, with Tecnotree as its orchestration partner, won the Ookla® Speedtest Award as the fastest internet provider in Peru and the most stable network in Latin America.
In parallel, Tecnotree was named a Visionary in the Gartner Magic Quadrant for AI in CSP Business Operations and featured across three Gartner Hype Cycles and three Market Guides-spanning B2B digital marketplaces, revenue management, and customer experience. We were also recognized with five finalist nominations at the TM Forum Excellence Awards, showcasing our strength in ODA (Open Digital Architecture) implementation, partner-led monetization, and digital composability.
Our capex to revenue ratio during H1 2025 was 14% compared to 18% in 2024, slightly above our target range of 10-12%. However, we are confident to meet the full year guidance by end of 2025. Our product stack remains well invested and industry leading.
The company has already reduced frontier country foreign exchange exposure to 10% in H1 2025 compared to 27% in 2024, aligned with our target range of 10-15% by 2026.
Although the order book is at record levels, revenue timing remains milestone-dependent in the short term. We are expanding our full year revenue guidance up to high single digit growth in constant currency terms. We reaffirm our full-year 2025 guidance on free cash flow > EUR 4 million and operating margin expansion.
I want to thank our investors, clients, partners, and employees for standing with us. Together, we are building a more resilient, scalable, and digitally connected Tecnotree.
Webcast for investors and media
Tecnotree webcast of results is tomorrow, 06 August 2025 at 10.00 a.m. EEST (Helsinki). Shareholders and potential investors are invited to pre-register a zoom account and join the online presentation via this link: https://zoom.us/j/96264089694. The event will be recorded, and the presentation materials will be made available on the company's website https://investors.tecnotree.com.