Seco (IOT) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 reached €47.2M, flat year-over-year but up 7% sequentially, signaling a rebound in demand and order recovery, with revenues and gross profit margin exceeding guidance.

• Clea software suite contributed €5.9M (13% of total revenues), with recurring revenue rising to 38% of Clea sales, its highest level since launch.

• Adjusted EBITDA was €9.4M (20.0% margin), showing strong operating leverage and cost control, though down 9.2% year-over-year.

• Order backlog and pipeline showed a strong V-shaped recovery, with book-to-bill ratio above 1 and most clients returning to historical levels, except for lagging recovery in Germany and the Dutch region.

• Strategic partnerships and ongoing R&D investments reinforced technology leadership, especially in Edge AI and integrated IoT solutions.

Financial highlights

• Net sales: €47.2M in Q1 2025, up 7% sequentially and flat year-over-year.

• Gross margin: €25.1M (53.2%) in Q1 2025, up from FY24 but down from 56.0% in Q1 2024, driven by increased software sales.

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

• Adjusted net income: €2.3M (4.9% of net sales), 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

• Revenue guidance for Q2 2025 set at over €50M, with gross profit margin expected to remain above 50%.

• Growth expected to accelerate progressively through the year, with quarter-by-quarter improvement and revenues projected to return to historical levels by summer 2025.

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

• Management remains cautiously positive, with most of the US region's 2025 budget covered by contracted orders.

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