Cancom Q1 2025: Revenue Miss And Margin Pressures Highlight Uneven Start To The Year

2025-05-19 15:54:46 ET

Summary

• Cancom Q1 2025 results show revenue down 6.8% YoY and EBITDA falling 30.6%, missing consensus expectations amid cost inflation and weak German demand.
• Germany segment revenue declined 14.4% with margin compression to 3.5%, while international revenue rose 8.3% and maintained a strong 7.6% EBITDA margin.
• Recurring revenue remains the strategic focus, but onboarding delays and rising personnel and operational costs continue to limit near-term margin recovery..
• Despite progress in AI initiatives like the CANCOM Assistant, weak cost absorption and execution risk support a cautious hold rating on the stock.

Cancom (US Ticker: OTC: CCCMF ; German Ticker: COK ) reported rather slow Q1 2025 results, which are below market expectations. Revenue declined by 6.8% YoY to €410.5 million, which is roughly in line with the market expectations of €420 million. EBITDA dropped 30.6% to €21.1 million, which is considerably below market consensus of the €25 million (ca. 16% miss). As a result, EBIT and net income declined significantly by 60.3% to €5.4 million, and 68.6% to €3.2 million, respectively. However, the market reaction was moderate, with Cancom’s stock price decreasing by approximately 2.4% from €28.70 on May 13 to €28.00 on May 14. This tempered response may suggest that investors had already priced in some level of weakness, in particular in light of similarly weak results reported earlier by its closest German competitor, Bechtle (US Ticker: BHTLF ). Please refer to our latest article: Bechtle Q1 2025: Underwhelming Start, But The Setup Is Quietly Loading. ...

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