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 1.0 2.1 2.6 3.7 8.3
period
Earnings per share, 0.06 0.12 0.15 0.22 0.50
basic, EUR
Order book 105.7 72.6 105.7 72.6 79.6
Gross cash flow from 4.1 6.3 10.5 7.3 21.3
operating activities
Free cash flow 1.1 0.8 2.1 -3.9 -1.8
Change in cash and 1.2 0.4 2.3 -4.0 -4.1
cash equivalents
Cash and cash 19.1 16.8 19.1 16.8 16.8
equivalents
Equity ratio % 68.5 65.6 66.7
(Equity/Total
Liabilities)
Debt Equity ratio % 5.7 5.3 4.2
(Debt/Equity)
Personnel at end of 691 852 758
period
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.
Further information
Padma Ravichander, CEO, tel +97 156 414 1420
Indiresh Vivekananda, , CFO, tel +971 56 410 8357
About Tecnotree:
Tecnotree is a global provider of AIML and digital solutions for the management
of services, products, customers and revenue for Communications Service
Providers. Tecnotree helps customers to monetise and transform their business
towards a marketplace of digital services. Together with its customers,
Tecnotree empowers people to self-serve, engage and take control of their own
digital life.
Tecnotree is listed on Nasdaq Helsinki (TEM1V). For more information, please
visit
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