INTERSHOP Communications (ISHA) Q1 2026 earnings summary

Executive summary

• EBIT turned slightly positive in Q1 2026, reflecting the impact of cost-cutting measures and laying groundwork for breakeven for the full year.

• Cloud business showed improvement with higher order entry, increased revenue, and better margins, though net new ARR remained negative due to contract expirations.

• Service business margins improved, no longer burdened by a major project, with February acceptance boosting results.

• Cash flow turned positive, and cash reserves increased.

• New customer business remains subdued, with investment reluctance among existing customers due to economic uncertainties.

Financial highlights

• Total revenue declined 13% year-over-year to €7.94 million in Q1 2026.

• EBIT improved to €101 thousand from €73 thousand in Q1 2025, with EBIT margin stable at 1%.

• EBITDA rose 10% to €0.9 million, EBITDA margin up to 12%.

• Net new ARR dropped from €554 thousand to -€614 thousand due to contract expirations.

• Operating cash flow improved to €2.93 million from -€143 thousand year-over-year.

Outlook and guidance

• Cloud order entry and net new ARR expected to remain at previous year's level for 2026.

• Revenue projected to see a slightly smaller percentage decrease compared to the prior year.

• EBIT expected to remain balanced.

• Macroeconomic uncertainties persist due to geopolitical tensions and weak economy.