11.11.2025 / 09:00 CET/CEST Dissemination of a Research, transmitted by EQS News – a service of EQS Group. The issuer is solely responsible for the content of this research. The result of this research does not constitute investment advice or an invitation to conclude certain stock exchange transactions.
Reason for the research: Update Recommendation: BUY Target price: EUR 1.3 Target price on sight of: 12 month Last rating change: Analyst: Philipp Sennewald
Q3 falls behind expectations amid macro headwinds; chg.
Yesterday, QBY released a mixed bag of Q3 results, showing a further improvement in Consulting but a weaker-than-expected Managed Services segment. In addition, the Elevate project and AI-related personnel hires weighed on margins. In detail:
Q3 sales declined 7.2% yoy to EUR 43.6m (eNuW: EUR 44.3m) following a continued weakness of the Managed Services segment (-14% yoy to EUR 28.3m), which is only partly explained by the communicated accounting change (eNuW: EUR 3m yoy effect). Although this comes in a tough macro environment, it still fell short of our EUR 29m estimate. On the other hand, the Consulting segment continued to show resilience, as sales grew 8.7% yoy to EUR 15.3m (eNuW: EUR 15.4m) driven by an improved mix as well as a better utilization, which also becomes visible in a 6pp uptick in the segment’s gross margin to 13.1%. Overall, the group’s gross margin improved 0.6pp yoy to 16.8% but is significantly down an a sequential basis (-2.7pp vs H1) following the weak Managed Services performance.
Q3 EBITDA came in at EUR 3.0m (eNuW: EUR 3.1m), a 6.9% margin. However, this was significantly supported by the completion of the external tax audit related to the 2019 sale of the Plusnet telecommunications subsidiary, with the definitive tax assessment notices resulting in other operating income of EUR 2.6m. Hence, operating EBITDA amounted to only EUR 0.4m, or a 0.9% margin. Although management mentioned during the conference call that certain costs were incurred only in anticipation of the forthcoming tax assessment (eNuW: EUR 0.5m), this still represents a slight setback in QBY’s transformation path, in our view.
Nonetheless, management confidently confirmed the FY25 guidance of EUR 184-190m sales (eNuW new: EUR 184m), EUR 12-15m EBITDA (EUR 12.1m) as well as positive net income (EUR 1.0m) and FCF (EUR 1.3m). Despite the mixed Q3, we view this as reasonable given (a) the one-off nature of some costs incurred in Q3 as well as (b) the seasonally strongest quarter still ahead. Reaching the low end of the sales and EBITDA range, implies a 2.8% sales decline (vs -4.9% at 9m) as well as a 7.8% EBITDA margin (Q4’24: 8.2%).
Importantly, management continues to implement key strategic measures, such as continuously expanding the near- and off-shoring ratio (+5pp yoy to 18%), intensifying the AI and cloud portfolio, winning new enterprise clients such as Sauels, and improving operational efficiency through higher resilience, cost control, and a stronger mix of recurring and consulting revenues. For this reason, our confidence in the case remains, as we see a clear path for further efficiency gains supporting margin expansion.
At 5.5x EV/EBITDA FY25e (3.8x FY26e), shares remain at a highly attractive level. We hence confirm BUY at an unchanged PT of EUR 1.30 based on DCF and keep the stock in our Alpha List.
You can download the research here: https://eqs-cockpit.com/c/fncls.ssp?u=e9ac5a9d0463e909c03c1ea85e9ae81d For additional information visit our website: https://www.nuways-ag.com/research-feed
Contact for questions: NuWays AG – Equity Research Web: http://www.nuways-ag.com Email: [email protected] LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany ++++++++++ Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte. Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse. ++++++++++
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