74Software (74SW) Q1 2025 TU earnings summary

Executive summary

• Q1 2025 revenue reached €170.4 million, up 6.9% year-over-year, with organic growth of 6.1%.

• Strong commercial momentum and successful integration of Axway and SBS drove performance.

• Both Axway and SBS delivered robust growth, with double-digit ARR increases and significant new customer wins.

• Strategic focus on recurring revenue and product-led growth continues to reshape the business.

Financial highlights

• Axway revenue: €82.5 million (+6.0% organic), SBS revenue: €88.3 million (+6.7% organic).

• Product revenue grew 12.9% organically to €139.0 million; recurring revenue up 10.2% organically.

• License revenue surged 69.3% organically; services revenue declined 16.4% year-over-year.

• ARR: Axway €262.3 million (+10.9% organic), SBS €230.7 million (+10.4% organic).

• Net debt reduced to €179.1 million after €25 million bank debt repayment.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: revenue growth of 2–4% to around €700 million, operating margin 14–16%.

• Unlevered free cash flow targeted at ~10% of revenue; leverage ratio below 2.0x.

• Revenue above €750 million and operating margin >17% targeted by 2027.

• Axway momentum expected to continue in Q2, then stabilize; SBS shifting to a product-centric model.