SoftwareOne raises full-year margin guidance above 24%

SoftwareOne reported higher third-quarter revenue and raised its full-year 2026 adjusted EBITDA margin guidance to above 24%.

The Swiss software and cloud services group posted third-quarter revenue of CHF 377.3 million, up 7.4% year on year in constant currency, while reported growth was 9.9%. Reported EBITDA rose to CHF 65.6 million from CHF 42.0 million, and adjusted EBITDA increased to CHF 79.5 million from CHF 65.2 million.

Adjusted EBITDA margin reached 21.1% in the quarter, up 2.1 percentage points from a year earlier. Reported EBITDA margin was 17.4%, an increase of 5.2 percentage points.

In the first nine months, revenue rose 10.3% in constant currency on a combined like-for-like basis to CHF 1.20 billion. Reported EBITDA climbed to CHF 250.9 million, while adjusted EBITDA reached CHF 283.3 million, giving an adjusted EBITDA margin of 23.7%.

The revised profitability outlook follows margin expansion as the business absorbs Crayon, which has been consolidated since July 2025. On an IFRS-reported basis, nine-month revenue increased 44.1% year on year.

Since the integration began in 2025, the group has realised CHF 85 million of cost synergies through the profit and loss account by the end of the third quarter. It has already achieved CHF 100 million of run-rate cost synergies and expects a further CHF 5 million to CHF 10 million by the end of 2026.

Integration costs also weighed on the numbers. EBITDA adjustments totalled CHF 14.0 million in the third quarter, mainly linked to Crayon integration, while nine-month adjustments came to CHF 32.4 million, including CHF 29.9 million related to acquisition integration costs.

SoftwareOne maintained its forecast for mid- to high-single-digit revenue growth in constant currency on a combined like-for-like basis. It also reiterated a cash conversion target of above 60% of reported EBITDA and a dividend payout ratio of 30% to 50% of adjusted profit for the year.

Business lines

Growth in the quarter was led by Software & Cloud Services, where revenue rose 11.2% in constant currency to CHF 194.6 million. Adjusted EBITDA in the division more than doubled to CHF 19.2 million, while margin improved to 9.9% from 4.8%.

Software & Cloud Direct returned to growth, with revenue up 2.9% in constant currency to CHF 148.1 million. Adjusted EBITDA rose 13.2% to CHF 68.8 million and margin increased to 46.4%.

In Software & Cloud Channel, revenue increased 7.3% to CHF 34.6 million. Adjusted EBITDA in the unit slipped 2.6% to CHF 17.8 million, and margin fell to 51.6% from 55.4% because lower operating leverage offset revenue growth.

Regional picture

Growth was broad-based across regions. Asia-Pacific recorded the fastest third-quarter expansion, with revenue up 23.5% in constant currency to CHF 86.0 million, supported by momentum across all three business lines.

Central and Eastern Europe grew 17.3% to CHF 18.9 million, while Western Europe, Middle East and Africa rose 9.0% to CHF 76.7 million. Latin America increased 8.3% to CHF 23.0 million and North America grew 5.5% to CHF 45.1 million.

The Nordics posted growth of 3.6% to CHF 48.9 million. DACH was broadly flat, with revenue edging up 0.5% to CHF 77.6 million, as gains in Software & Cloud Direct were partly offset by softer services performance against a strong comparative period.

AI and CSP

SoftwareOne pointed to continued demand linked to cloud subscriptions and artificial intelligence-related work. Customer interest is rising in cloud migration, data, security, governance and cost management, with the strongest increase currently in AI FinOps.

It also said the market shift from Enterprise Agreements to Microsoft's Cloud Solution Provider model remained at an early stage. Based on customer demand, licensing changes and the introduction of three-year CSP contracts, SoftwareOne expects conversion volumes in 2027 and 2028 to be two to three times higher than in 2026.

"We delivered a solid third quarter, with growth across all three business lines and continued strong progress on profitability. Software & Cloud Services led growth, while Direct returned to growth and Channel continued to expand. Looking ahead, we see significant opportunities from the continued evolution of software, cloud and AI. CSP remains a multi-year growth driver that deepens our customer relationships and creates additional opportunities to attach Services, while increasing AI adoption is driving demand across cloud, data, security, governance and cost optimisation. The strong profitability development also allows us to raise our full-year adjusted EBITDA margin guidance to above 24%," said Raphael Erb, Chief Executive Officer of SoftwareOne.