SoftWareOne Q4 update - A Beast or a Prince?
2025, Q4 and 2026 expectations2025 has certainly been a rollercoaster. Negative growth appeared, and margins deteriorated partly due to Microsoft Incentive changes. In addition, previous cost improvement programs turned out to be fake. Then "The Beauty married the Beast". We now have a more competent board in place with all the incentives to do the right things, and we have a "CEO leadership" with two "no-nonsense" people in charge who obviously understand both Sales and Partner relationship. This could end very well.
Q4 update - very well done 💪
On the positive side we saw;
11% growth in LCY, far above our estimated 5%
Cost synergies in line with our high assumptions
"Adjustments" lowered a lot as communicated (better than we expected)
Reported EBITDA margins up a lot (from 8.5% to 19.5%)
No significant negative surprises
On the negative side we had;
Cost creep from inflation slightly above us
Investments in new sales capacity that could be either ok or not
No significant announcements (sale of SAP could be one)
2026 guiding - this is more than good enough
5% growth (mid single digit), Adjusted EBITDA up to 23% (from 20.9%) and cost-synergies up from 80-100 MCHF to 100 MCHF is (more than) good enough for us. Let's assume that the new management and board now understands that Investor credibility is not built on "hopes or dreams" but on what you deliver and how you manage expectations🙂
Target price 11.1 CHF is unchanged for now, but it could improve slightly when we have worked the figures properly. Is it a Prince arriving after all?
Disclaimer:
Hvaler Invest is a significant shareholder so you cannot trust us (or perhaps you can?)
Best regards,
David and Sverre
Hvaler Invest AS
Lillestrøm, Norway
31.03.26