Seco (IOT) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 reached €47.2m, up 7% sequentially and flat year-over-year, surpassing guidance and signaling a business rebound.

• Gross profit margin improved to 53.2%, exceeding guidance but normalizing from the prior year's high.

• Adjusted EBITDA was €9.4m (20% margin), showing strong operating leverage and cost control.

• Clea software suite contributed €5.9m (13% of total revenues), with recurring revenue rising to 38% of Clea sales.

• Order backlog and pipeline showed a strong V-shaped recovery, with most clients returning to historical levels except in Germany and the Dutch region.

Financial highlights

• Net sales: €47.2m in Q1 2025, up 7% QoQ and flat YoY.

• Gross margin: 53.2% in Q1 2025, up from FY24 but down from 56.0% in Q1 2024.

• Adjusted EBITDA: €9.4m (20.0% margin), down from €10.4m (22.0%) in Q1 2024.

• Adjusted net income: €2.3m, nearly flat year-over-year.

• Net working capital reduced by EUR 20 million year-over-year, but increased in Q1 2025 due to higher trade receivables.

Outlook and guidance

• Q2 2025 revenue expected at over €50m, with gross profit margin to remain above 50%.

• Growth expected to accelerate through the year, with quarterly revenues projected to return to historical levels by summer 2025.

• Recurring Clea revenue expected to grow steadily, with a significant increase anticipated in 2026 as new customers enter mass production.

• No negative impact from U.S. tariffs; costs passed through to customers.

• Management remains cautiously positive on the business outlook.