Cherry (C3RY) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw operational improvements and organizational streamlining, with Project Blossom and "Goes 7" transformation programs targeting sustainable profitability and EBITDA/EBIT breakeven by 2027.

• Revenue declined 17.8% year-over-year to EUR 20.8 million, mainly due to weak demand in Gaming & Office Peripherals, high channel inventories, and strategic realignment.

• Digital Health & Solutions (DH&S) segment delivered strong growth, with revenue more than tripling year-over-year to EUR 5.2 million, driven by regulatory mandates and delayed infrastructure rollout in Germany.

• Management restructuring and governance rightsizing are underway, including board changes and entity mergers to align with company scale and reduce costs.

• A 4:1 reverse share split and capital reduction are planned to restore capital market eligibility and support future financing.

Financial highlights

• Group revenue for Q1 2026 was EUR 20.8 million, down 18% year-over-year, impacted by one-off sales in the prior year and negative currency effects.

• Adjusted EBITDA improved to minus EUR 600,000 (margin -2.9%) from minus EUR 2 million (margin -8.0%) in Q1 2025, reflecting cost discipline and margin expansion.

• Free cash flow was positive at EUR 1.1 million, a year-over-year improvement of EUR 10 million, mainly due to working capital management.

• Gross margin improved to 46.7% from 43.7% year-over-year, reflecting better pricing and product mix.

• Net loss narrowed to EUR 4 million from EUR 5.8 million year-over-year, driven by reduced operating costs and lower depreciation.

Outlook and guidance

• No reliable full-year outlook provided due to ongoing M&A process and incomplete 2025 financials; more details expected next quarter.

• Project Blossom and transformation initiatives target EBITDA/EBIT breakeven in 2027 and additional cost reductions.

• DH&S segment is well-positioned in the German e-health market, but planned divestiture may impact future growth.