Sopra Steria Group (SOP) H2 2025 earnings summary

Executive summary

• Achieved all 2025 targets: organic revenue growth at -2.2% (within guidance), operating margin on business activity at 9.5%, and free cash flow at 6% of revenue.

• Net profit attributable to the group rose 18.3% year-over-year to €296.8 million, with EPS up 22.2% to €15.23 and a net margin of 5.3%.

• Q4 2025 marked a return to organic revenue growth (+1.8%), with positive momentum in Southern Europe, France, UK, and key sectors like financial services, defense, and public sector.

• Major commercial wins in defense (NATO), AI (Caisse des Dépôts), healthcare (NHS SBS), and space (CNES), plus ramp-up in AI and consulting.

• Strategic focus on next-gen technologies, AI, sovereignty, and defense, with 60% of business now in next-gen tech and significant increases in certifications and client AI projects.

Financial highlights

• Revenue: €5,648.0 million, down 2.2% year-over-year, within guidance.

• Operating profit on business activity: €534.3 million (margin 9.5%), down from €564.7 million (9.8%) in 2024.

• Operating profit: €441.2 million (margin 7.8%), down 4.1% year-over-year.

• Net profit: €304.2 million, up 17% year-over-year.

• Free cash flow: €340.9 million (6% of revenue), with a conversion rate of 63.8% and yield of 10.7%.

• Dividend proposed: €5.30 per share (vs. €4.65 in 2024).

• Net financial debt: €246.7 million, down over 35% from 2024.

Outlook and guidance

• 2026 organic revenue growth targeted at 1–2%, including a ~2-point negative impact from SFT program conclusion; excluding SFT, growth would be 3–4%.

• Operating margin on business activity expected at least 9.5%, with free cash flow around 5% of revenue.

• Medium-term (2026–2028): organic revenue growth 2–5%, operating margin 10–11%, free cash flow 5–7% of revenue.

• Tax rate expected to rise to ~27% in 2026.

• Aeronautics and defense expected to grow 5–10% in 2026.