Software Giant's Shares Plunge 65% Amid Mixed Financial Results and Rising Churn
A leading software company has faced a challenging year, with shares dropping nearly 65% over the past twelve months. The decline comes as the firm reports mixed financial results, including a surge in enterprise revenue but a dip in its traditional small business segment.
The company's core enterprise division saw strong growth, with annual recurring revenue (ARR) climbing 11% to €241 million. A record deal in the U.S. helped push enterprise segment revenue up by 19%. However, the traditional small and medium-sized business (SMB) segment experienced a slight decline.
Customer turnover has also risen, with the churn rate reaching 16.4% in the fourth quarter. This trend is expected to continue until mid-2026, partly due to ongoing issues with the 2024 acquisition of British software firm 1E. The takeover has faced delays, operational disruptions, and the loss of key staff, leading to an estimated one-time customer loss of around €8 million in early 2026.
Despite these challenges, management is moving forward with product improvements. New integrations with Microsoft Intune and a partnership with Cybus for augmented reality applications are in development. The company's outlook for 2026 remains cautious, forecasting currency-adjusted revenue growth of just 0% to 3%, with an adjusted EBITDA margin of roughly 43%.
The firm is also set to transition from the MDAX to the SDAX, which will require index-tracking funds to adjust their holdings. Meanwhile, share prices recently hit a 52-week low of €4.48.
The company's financial performance shows a clear split between strong enterprise growth and struggles in its SMB division. With ongoing churn, a slow-moving acquisition, and a cautious revenue forecast, the business faces further pressure. Shareholders will now watch how new product innovations and index changes affect its market position in the coming months.
