Secunet Security Networks AG (FRA:YSN) Q2 2025 Earnings Call Highlights: Strong Revenue Growth ...

Revenue: Significant increase in the first half of 2025 compared to the first half of 2024, driven by strong Q1 performance. EBIT: Increased from 1.4 million to 7.2 million, attributed to fixed cost depression and expenditure discipline. International Sales: Increased share from 9% to 11% on a higher revenue base. Cash Flow: Strong, with seasonal patterns affecting cash usage and dividend payments in the first half. Order Backlog: 192.5%, reflecting a strong first half and late decisions on the German federal budget. Revenue Forecast for 2025: Approximately 425 million euros. EBIT Margin Forecast for 2025: 9.5% to 11.5%. EBITDA Margin Forecast for 2025: 14.5% to 16.5%. Dividend per Share Forecast for 2025: 2.73 euros.

Warning! GuruFocus has detected 5 Warning Signs with FRA:YSN.

Release Date: August 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Secunet Security Networks AG (FRA:YSN) reported a significant increase in revenue for the first half of 2025 compared to the same period in 2024, driven by strong performance in both public and business sectors. EBITDA increased significantly from 1.4 million to 7.2 million, attributed to fixed cost management and expenditure discipline. International sales grew from 9% to 11%, indicating successful expansion beyond domestic markets. The company is the only certified sovereign cloud provider for Red Hat OpenShift, enhancing its competitive edge in the cloud services market. Secunet Security Networks AG (FRA:YSN) maintains a strong cash flow, despite seasonal patterns affecting cash usage in the first half of the year.

Negative Points

Order backlog has decreased slightly, reflecting the impact of the late decision on the German federal budget. The company's EBIT margin guidance remains conservative due to uncertainties related to the late federal budget and potential execution delays. The business sector's operating margin was slightly below last year's, influenced by a different product mix and higher cost of sales. CapEx is expected to increase in the second half of the year, following a seasonal pattern and IT infrastructure investments. The late federal budget has put additional pressure on the organization to execute orders in the last quarter, which could affect operational efficiency.

Q & A Highlights

Q: Can you share your view on government spending and when you expect first orders to come? A: Marc-Julian Siewert, CEO, explained that despite the late release of the federal budget, the company had a strong first half. He anticipates purchasing to start next year and expects spending to increase in Germany and Europe, lasting until the end of the decade.

Story Continues

Q: What are your expectations for the defense and space sector in the coming years? A: An unidentified company representative stated that the defense sector accounts for roughly 25% of total sales. They are preparing for new budgets and expect orders in the last quarter of the year. However, they cannot provide specific margin forecasts for 2026 and 2027 due to the late federal budget.

Q: Given the strong first half, is your EBIT margin guidance of 9.5% to 11.5% conservative? A: The company representative acknowledged the strong first half but emphasized the difficulty in forecasting due to the late federal budget. They expect potential realization of special funds in 2026 and beyond.

Q: Can you provide more information about your CapEx plans and foreign sales growth? A: The company representative noted that CapEx is typically higher in the second half of the year, focusing on IT infrastructure. Foreign sales increased from 9% to 11%, primarily in Europe and the Middle East, with plans to continue expanding internationally.

Q: Are you planning to increase your workforce to handle higher workloads? A: Marc-Julian Siewert, CEO, stated that the company is focused on automating processes and managing costs. Any workforce increase will be aligned with sector-specific roadmaps and cloud transformation needs, but will remain under proportionate to sales growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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