Good afternoon, everyone, and welcome to the Investor Call. Today, we are going to present the results of the first nine months of 2025 and the fourth quarter of the year. Together with me, the CEO, Daniele Misani, will introduce the.
Good morning.
Good morning, Daniele. We will introduce the result, main business updates. I will then go deeper into the financial. At the end of the call, there will be a Q&A section, and you can leave your answer in the dedicated chatbot that is available in the meeting room. We will wait just a few seconds more, and then we will start with the Investor Call. Thank you so much for joining me.
Thank you, Andrea. First time, we are together.
Yes.
No, Berlin, Milan.
Pleasure to be here.
Thank you, everybody. Good afternoon. It's an unusual time. Usually, we have the presentation the day after, but we decided to go in the afternoon just after the approval of the results. We can start with the presentation about the nine-month results. In terms of revenues, we recorded EUR 281 million with a growth of about 30% with respect to the same period of the last year. There is a contribution of the acquisition we did last year, of course, but there is also a continuity in organic growth driven by synergies among the companies of the group. We recorded more or less 10% of growth. That is EUR +80 million with respect to the same period of the last year, like-for-like perimeter. In terms of EBITDA, that is our focus also for our, let's say, long-term plan.
We are, let's say, improving a lot the operational efficiency. We are driving, let's say, the business with added value with respect to high, let's say, volumes but less margin business. We recorded EUR 41.1 million in terms of EBITDA in nine months. That is a growth of 50%. It's important to highlight that the EBITDA is growing better than the revenues. This is due to our strategy to focus on our Smart Solutions and high-value services we deliver to customers in order to have an overall profitability that we reach the target of 15% during the plan. We already recorded for the nine months a 14.6% in terms of EBITDA margin. If we look to the overall, let's say, market segments and divisions that we deliver to market, also the growth is driven by the two more profitable units within our, let's say, ecosystem.
Especially the Smart Solutions part is growing at 46% year to year, from EUR 44 million to EUR 64 million in terms of, let's say, turnover. Also, the Digital Advisory is growing fast, so + 58%, EUR 48 million against EUR 31 million. Also, the Software Engineering part is growing with a + 17%. In terms of EBITDA, there is, let's say, the same increase in terms of, let's say, contribution. The Smart Solutions part is growing 56%, EUR 13.1 million against EUR 8.4 million. This part is highly profitable, so it's more than 20%, considering also that we expand all the investment in our Smart Solutions portfolio. The Digital Advisory part is EUR 6.5 million, 14% as an EBITDA margin. The Software Engineering part is EUR 21.5 million, 13% overall. All the divisions of the group are growing, and the EBITDA margin and the EBITDA in terms of absolute value is growing faster than the revenue.
Means that there is more operational efficiency and more, let's say, focus on high-value digital transformation programs with respect to, let's say, volume-driven, let's say, projects. We continue to invest. Also, the investment in our Smart Solutions division has increased in a significant way with respect to the last year, + 70%. We expanded, fully expanded in our profit and loss, EUR 18 million of investment in our proprietary solution. Also, the revenues are already giving, let's say, contribution in the short term. 46% of growth of the Smart Solutions revenues. Of course, the investment is more mid-long term because we believe strongly that our proprietary assets are a driver of growth, positioning, lock-in in customer base. The investments are needed in order to have the cutting-edge solution in order to solve complex problems of our customer base. International revenues are growing.
In the first nine months, more or less EUR 46 million. That is 60% of the total revenues. We keep, let's say, a quite stable net financial position, so a sustainable debt. Overall, the adjusted net debt is EUR 120 million. I want to highlight that we are continuing our buyback program because for us, it's important to acquire also shares in order to continue to invest in M&A and acquire new companies. Overall, let's say the treasury shares with the evaluation at 30 September is equivalent to EUR 9 million, more or less. EUR 190 million net debt adjusted with EUR 10 million of treasury shares already in. In terms of core market incidents for us, as we discussed during our capital markets day, it's important the positioning, especially in fast-growing areas like Aerospace & Defense and the Banking & F inance, so the fintech offering overall that are strongly, let's say, growing.
We have a lot of opportunities that will be captured in the short and mid-long term. The other division, let's say the diversification among the different industries, is quite stable according to last year. We have, let's say, measured growth for the fast-growing part, maybe some slowdown in the Telco, M edia & Gaming department, but the rest of the market is still growing in a good way. In terms of evolution and subsequent events, we have to announce, let's say, that we are starting with the scale-up, let's say, projects of the MarTech division. The first step was to open up in the, let's say, Emirates area. We opened up offices in Dubai that started to go to market in September.
It's, let's say, a startup, a newcomer that we opened up with the aim to use, let's say, the technology, Smart Solutions that we have built and delivered to Italy across, let's say, other countries. First country is Dubai, so the Emirates area. This part is doing already well. We plan to have a break-even of the investment in the current year. TXT will be, let's say, a majority shareholder starting from 2026, and we will start to consolidate this offering also in the next year. The investment will give contribution on a midterm, so not immediately, but let's say the first steps are good. This one is just the first of investments that we will do to internationalize the MarTech business. We will open up similar initiatives in other countries, focus especially in Europe and South America.
In terms of, let's say, business across the division, we have a good, let's say, growth from all the segments. As you know, we are focused in delivering our speed-up the transformational projects by using our Smart Solutions. In the first nine months of 2025, we recorded good, let's say, results related to Aerospace & Defense Smart Solutions that are embedded within big Defense programs and Aerospace programs. We are negotiating good contracts that will bring value in the next quarter and in the next years. Also, the fintech initiative to get international the business related to Smart Solutions, specifically focused on the Digital Payments area, are bringing the results. So far, we had investments. Still in our profit and loss, we can see some pressure about the investment we are doing. The last quarter of the year, we'll get the first low-hanging fruits.
We will have the first, let's say, good deal that will be consolidated in Q4 results. The pipeline for next year is quite strong and will be one of the drivers of the growth in order to meet, let's say, the expectation we already set with our industrial plan. Also, the other segments are doing good. Specifically, I want to highlight the increase of the business related to extended reality and virtual reality, for which we closed a quite important deal with a major healthcare industry that is global, that is summing up with other big initiatives that we have into the Aerospace & D efense environment. It is a value proposition that is fast-growing. There are a lot of opportunities also related to major events that will come next year related to defense, security, and so on.
The training technology powered by XR and virtual reality is an asset that the customers are continuously increasing the investment in. We have a good, let's say, forecast for the next period. Digital Advisory is one of the drivers and the stronger performance with respect to 2025. Our backlog that we acquired in the past years related to the public sector, specifically the central public sector and the local public sector, and also the healthcare, are, let's say, being converted into revenues because we have a stronger team. We are growing fast. There are a lot of projects related to digital transformation in which we put competencies, know-how. We are delivering according to promises. The Digital Advisory part, especially into the public sector, is growing faster than the average of the rest of the group.
Of course, also the MarTech domain that is quite new for us because it was included in our portfolio last year. Also, in the second part of the year, it's getting a boost in order to position ourselves as a new player in this field recognized by the customer and giving them value. That is a mix of industry knowledge and technological competencies that are delivered to their main programs. Software Enginering, that is the bigger, of course, with maybe an average EBITDA margin lower than the rest of the division of the group, is still a stronghold of the group, especially for the Aerospace & D efense, for which we have a long-term engagement with customers with good profitability. Also in the other industry, we are providing value.
Also for the public sector, for which we added the capabilities of Software Engineering, software development that were not present in the past in our offering. We see and we recognize the growth related to the industrial and the production and manufacturing and so on, for which IoT, so Internet of Things, sensors, artificial intelligence are a driver for which companies are investing. We have, let's say, clustered the solution that we have built in and acquired with the acquisition we did in the last few years in a stronger value proposition and is perceived like a driver for us and for the market for growing, not just this year, but also for the future. Overall, it's, let's say, results that are in line with our business plan for the next three years.
I would like to have Andrea maybe to focus on the financials to share with you some details about the numbers. So Andrea, take the stage.
Thank you, Daniele.
And everything for you.
Looking at the profit and loss of the first nine months, in particular looking at the EBITDA of the first nine months and the revenues. As broadly discussed by Daniele, overall top line grew by 28.2%, which, let's say, reported organic growth slightly below 4% and normalized organic growth close to 9%. In terms of gross margin, we recorded a slight, let's say, increase from 32.6% to 37.9%. This is driven mainly by operational efficiency gain over the last years. Looking at the indirect cost, as already broadly discussed by Daniele, we are accelerating the investment in our R&D, in our Smart Solutions portfolio.
The overall growth of the investment compared to the same period of the previous year is 70%, seven, zero. Also, the incidence of R&D investment on revenues grew from 4.8% in 2024 to 6.3% in the first nine months of 2025. Of course, also the, let's say, the incidence of Smart Solutions is higher, especially considering that in the last year, companies such as Refine and ProSim, with a heavy, let's say, R&D investment, were consolidated only partially in the nine months. Looking at commercial cost, also here the growth, the outperform those of revenues. We have a 46.4% growth here over the year. Also in this case, the commercial costs are, let's say, allocated mostly in the fast-growing area or in the area with a lot of potential.
We're speaking about the MarTech with internationalization, but we are also speaking about business development in the Asian market for our Smart Solutions and in the Italian, let's say, landscape to strengthen, let's say, the popular, let's say, coverage of the domestic territory when it comes to public sector. In terms of G&A costs, general and administrative, we recorded a growth, both in year-over-year growth, which outperformed the revenues, but also as an incidence. Here, we are still, let's say, allocating part of the investment to the M&A, both for the pre, let's say, pre-closing, so all the due diligence activities, legal costs, and so on, but also for the post-closing, as there are still ongoing activities to integrate the newly acquired company into the TXT ecosystem.
Looking at the EBITDA, so as broadly discussed by Daniele, we are at EUR 41.1 million with an EBITDA margin of 14.6%, which equaled to about 180 basis points more compared to the same value, to the same, let's say, KPI of the previous year. If we move to the next slide, below the EBITDA, we have, of course, a strong impact from amortization, depreciation, and write-offs, mostly coming from IFRS 15. If we look at the operating profit adjusted, so the EBIT adjusted, which only excludes PPA on acquisitions, we are at 11.6% versus the 10.1% of the same period of the previous year. Here, there is a strong, out of the EUR 8.4 million of amortization, depreciation, and write-off, excluding purchase price allocation, EUR 5 million are related to IFRS 16, also growing in this latest quarter, but we will look at that a bit later.
Another strong component is coming from depreciation, EUR 2.1 million, and those are mainly referred to, let's say, hardware used by the TXT, let's say, teams in order to deliver and to support, of course, the growth, other than some, let's say, building investment in the buildings. Looking at the amortization and write-offs, we recorded a growth compared to the previous year, but because are included EUR 0.5 million of restructuring costs related to a reorganization plan that was implemented and closed during the third quarter in the context of the public sector segment. In particular, there was a consolidation of, let's say, the structure and the teams to have a more, let's say, synergic ecosystem around the public sector offering. As we discussed, the operating profit adjusted, which excludes PPAs, EUR 32.8 million, 11.6% of revenues.
If we look at the financial results, we have about EUR 4.8 million of net financial costs, and those are mainly related to net financial charges, meaning interest on bank loans and financial charges, which were of about EUR 5.6 million netted by financial income for about EUR 0.8 million. The losses on FX rates are stable compared to the six months because in the third quarter, the exchange rate, U.S. dollar, euro was quite stable. Let's say in line with the six-month results. We have a financial income coming from M&A and in particular related to the adjustment of the fair value of an earnout that was linked to revenues with some defense contract, which have been postponed. Also in terms of from the customers, also in terms of earnout, we have, let's say, a lower depth at its fair value.
In terms of results from minorities, we have a negative result of EUR 0.2 million, which is better compared to the EUR 0.5 million recorded in the same period of the previous year. If we look at the net profit adjusted, which is, let's say, again, excluding only PPA effect, we are at EUR 21 million, EUR 21.1 million with a net profit adjusted rate at 7.5% of revenues. Also in this case, we recorded a better performance compared to the revenue growth. In fact, we have a net profit adjusted growing 42.8% in the period. As we look at the net profit reported, amortization related to PPA were EUR 5.7 million in the first nine months with a strong acceleration in the Q3 of in the latest quarter, Q3 of 2025, because in that quarter, there was the allocation of PPA related to company acquiring the second half of 2024.
I'm speaking about Refine and I MILLE. We expect a further increase of PPA as soon as the allocation of the goodwill of Webgenesys will be reflected into the books. So the reported, let's say, net profit stood at 5.5% of revenues in line with the same period of the previous year, despite the different, let's say, financial results and PPA impact. If we move to the next slide, we focus quickly on the third quarter of the year. In this quarter, we recorded 13.6% top line growth. Of course, here in the third quarter, all the companies such as Refine and I MILLE are included in the 2024 perimeter. We are looking at a, let's say, additional perimeter related to Webgenesys and IT Values.
Also in this case, let's say the growth of the gross margin is very significant, also thanks to the positive contribution of the newly acquired companies. In terms of indirect cost, the trend is particularly visible for research and development cost, which grew at a similar rate compared to, let's say, the first half of the total nine months. Instead, there was a more, let's say, consistent growth in terms of commercial cost, which grew slightly more than revenues. G&A costs instead are, let's say, somehow following the same trend recorded in the first half of the year. The margin of the third quarter was at 14.7% compared to the 12.9% of the same period of the previous year, + 28.9%. Looking at the operating profit adjusted, we also had a growth, 26.6%, and also about 110 basis points in terms of adjusted EBIT margin.
As I discussed before, we can see from this quarter a strong acceleration of PPA, which includes also the amortization of intangibles related to the first period from the date of the acquisition up to the third quarter. That's why this value is 3.4% of revenues, but is including also amortization related to previous periods. If we look at the financial charges here, we have to keep in mind that on the EUR 0.9 million of net financial charges are offset also by approximately EUR 1 million of fair value adjustment of earnouts. Let's say the net of this one-off effect coming from M&A, we will look at more than EUR 1.8 million of net financial charges, mainly interest on bank loans.
If we look at the taxation, we have a slightly lower tax rate compared to the first six months, and we expect to have a similar rate also for the Q4 of the year. If we look instead at the net profit adjusted, excluding PPA, here, particularly significant due to the effect in the specific quarter of PPA, we are looking at the net profit adjusted, which is EUR 7.6 million, growing 53.9% compared to the same period of the previous year, and then net profit adjusted margin at 8.2%. If we move to the next slide, looking at the net financial debt of the group as of end of September 2025, overall, we recorded a drop compared to year-end 2024 of EUR 29 million.
The main impact that, let's say, drove this reduction in the net debt, the increase of the net debt, are of course the effect of the net working capital, which grew by EUR 18.4 million in the period, and we will comment it with the next slide. There are also included, let's say, outflows related to acquisition and international business development for total EUR 18.4 million, of which EUR 13.6 million related to the acquisition of IT Values. There is the repurchase of treasury shares for EUR 3.3 million, the payment of dividend for EUR 3.2 million, the payment of interest and other financial charges for more than EUR 5 million, as well as the recognition under IFRS 16 of new lease contract for the Rome office amounting to EUR 3.3 million.
For sure, all those, let's say, allocation of capital investment more than offset the cash generating during the period, but we expect a reversal of the trend and the working capital absorption in the fourth quarter of the current year. It's important to note that as of September 30, 2025, financial assets include approximately EUR 8 million related to the TXT equity interest in Banca del Fucino, the sale of which initially was expected by end of September 2025 and is now with the new plan and the new agreement. This binding agreement is actually ending end of December 2025. We expect to monetize this part of the investment in Banca del Fucino by end of this year, and the remaining part, which is accounted for as adjustment to the reported net financial debt, is expected to be monetized by the end of 2026.
If we look at the net debt by nature, it's important to highlight that in our EUR 120 million of net debt are included approximately EUR 18 million, or about EUR 19 million, pardon, of IFRS 16 debts, EUR +3.4 million compared to the previous year, and about EUR 11 million of debts related to earnouts and put and call, about EUR 1.8 million higher compared to year-end 2024. In terms of financial assets, we have about EUR 83 million of cash and cash equivalents, mainly held in major banks and in euro, and we have trading securities at their fair value of about EUR 12 million. The other short-term financial asset is the stake in Banca del Fucino for which the amortization is expected by end of this year and for which we have a binding selling agreement.
If we look at the financial liabilities, other than IFRS 16 and earnouts and put and call, which we already commented, we have a financial loan for about EUR 200 million, and we have other minor financial debts for about EUR 1.5 million. Of course, in this picture is not included the treasury shares that, as commented before by Daniele, are used to financing our M&A plan and are of about EUR 9 million with the price of EUR 30.20, which was the price at September 30, 2025.
Moving to the next slide, in terms of balance sheet as of September end 2025 and a comparison with year-end 2024, in terms of fixed asset, we have an overall increase of EUR 16 million, which is mainly driven by the intangible assets, which as of September end 2025 are of about EUR 178 million, with an increase of about EUR 18 million compared to year-end 2024, mainly for goodwill accounted for in the period following acquisition, partially offset by EUR 6.4 million of amortization of the period. The total goodwill accounted for among intangible assets as of September 2025, it's about EUR 144 million, EUR 145 million, and the remaining items are mainly related to customer relationship and IPs allocating for their own PPA processes, so still related to M&A. Tangible fixed assets grew by EUR 3.9 million, and the growth is mainly related to the different, let's say, IFRS 16.
As we commented before, we have a growth of EUR 3.4 million compared to the year-end, and this is mostly the reason of the increase in the overall tangible assets figures. In the other fixed assets, there is a defect, of course, of Banca del Fucino because year-end 2024, it was fully accounted for as another fixed asset among fixed assets, and now a part of it, about EUR 8 million, is considered as a financial asset within the net financial depth. As we said before, the networking capital was, let's say, growing significantly by EUR 18.4 million in the period, and that causes low down in the cash conversion compared to the current plan. We are monitoring it, and of course, it's visible that the reason of this increase is mainly attributable to inventories, which for us, it's work in progress with the fixed price customer projects and on trade receivable.
The sum of these two, let's say, items brought to an increase of about EUR 23 million, partially offset by the increase in payables. Of course, here we expect slightly, let's say, better off during the fourth quarter of the year, but it's also important to say that compared to the last year, let's say, we are growing areas where the SO are higher compared to the average of the group. And speaking about the public sector and speaking about defense market, defense domestic market, but of course, the management has a strong focus on monitoring and, let's say, fastening, let's say, the conversion of profit into cash. Moving to the next slide, we have, let's say, a shareholding structure, which is some oil line with the half year, so no major changes.
There was a further repurchase of treasury shares in the latest quarter, the third quarter, which brought us to a total buyback investment of, let's say, EUR 3.2 million, EUR 3.3 million in the quarter, split more or less heavily during the three quarters of 2025. We have also, let's say, in terms of market data, as we already discussed before, the share price at September end 2025 was about EUR 30.20 per share. Looking at the performance of the TXT stock and treasury shares in the first nine months of 2025, TXT share price recorded an official high of EUR 41.35 on 25th of February 2025 and the low of EUR 28.75 as of April 4th, 2025. In terms of treasury shares as of September 30, 2025, the TXT Group has approximately 300,000 treasury shares, representing 2.4% of the issued shares.
Treasury shares were about 315,000 as of year-end 2024, and the slight decrease is to be attributed to the transfer of TXT shares in the context of the M&A plan that more than offset the effect of the share buyback plan. In the first nine months of 2025, approximately 90,000 shares were repurchased at an average price of EUR 24.17, with a total outlay of approximately EUR 3.2 million. As a reminder, the dividend of EUR 0.25 per share was paid in May, with a total outlay of approximately EUR 3.2 million. We are done with the financial section of this investor call, and now it's time for the Q&A section.
Thank you. I remind you that you can put Q&A live on the Q&A session of, let's say, this company call. We have some questions coming from Andrea Randone. The first one, so we can publish. Thank you.
That's why I can wait for you.
Of course, Daniele, for 2026, it's very long.
Very long, so I can split in more questions.
Pieces.
Yeah. So first part of the question for 2026 and 2027, the guidance you presented in May 2025 is assuming a double-digit organic revenue growth rate. Can you confirm this target is still reasonable? Can you provide? Okay.
Let's start for the first part.
Okay.
Okay. So overall, we presented a three-year plan, so the average from 2025 towards 2027 is an average 10%, let's say, organic growth. Of course, it depends on the periods. Some periods are fast growing, some lower. For sure, in our plan, it's included also some boost in the organic growth coming from investments that we are doing, specifically the scale-up of the market division, the fintech part related to Digital Payments, plus the several initiatives we have internally in the other division to deploy new technology towards customers. We are at the beginning of the plan. We still have to recover from the one-off activity we did in 2024, and setting off these activities, we are growing at more or less 10% because the overall growth was EUR 20 million more over with the like-for-like period.
There is also, let's say, contribution coming from the growth from, let's say, the synergies we are doing with the newly acquired companies, so not fully consolidated last year, but consolidated this year that are growing. Specifically, Webgenesys and IT Values in a cluster together with HSPI. The companies in the public sector, the cluster of the public sector was strengthened in 2025, of course, and we have a common growth that, let's say, in terms of organic like-for-like, would be visible more next year with respect to this year because this year, there is still, let's say, the fact that the previous year were not present. We think and we are confident for the initiatives that are ongoing that we will have, let's say, better results starting already from the Q4.
I want to remember also that Q3 was particularly, let's say, strong last year for several, let's say, opportunities and activities we did in Q3 2024. This year is still strong, but of course, the comparison is huge, so it's very difficult to have a same, let's say, growth that we captured last year, but overall, we are confident to give, let's say, better numbers in terms of growth starting from Q4 and for sure for the 2026 on, okay, because the investments are starting to have a return. Yes. Specifically also for the Digital Finance, Digital Payments part, for now, we are still in investment in the nine months, so we have the costs of the certifications, of the development of the software we are putting in our offering.
First revenues in terms of significant revenues will come in Q4, and also the budget we are doing for the next year is quite positive because we have a pipeline of opportunities that can bring organic value next year. Another topic, for example, also for the industrial part that is connected also to the public sector for IoT in order to monitor infrastructure is a business in which we are investing in terms of development of software assets to be effective for the market, and we, let's say, consolidated in the first nine months some, so less than EUR 1 million in terms of turnover, but still from Q4 and the next year, there is a backlog of already acquired opportunity that will be, let's say, consolidated in the results of Q4 and the next year that will bring, let's say, a continuous growth.
We are at the beginning of the plan, so we are doing, let's say, this compensation of one-off activities still growing in the overall, let's say, segments we are, and we are quite confident to continue to grow according to the guidelines we gave in the plan.
Thank you, Daniele. I think you already partially answered to the second portion of this first question from Andrea. Can you provide more color on the project pipeline giving you confidence about business acceleration in the coming months?
I already spoke about IoT.
I think also the business evolution that was discussed before was a little bit more by division, so we have some opportunity in Aerospace & D efense for Smart Solutions, fintech, and let's say, yes, and of course, these IoT projects and Digital Advisory is growing faster already. Of course, market internationalization. Networking capital absorption remained quite high in the quarter. What are your expectations for year-end 2025? Consensus forecast for the net financial position at year-end 2025 are a touch below the corresponding level at year-end 2024. Does it make sense?
These are two different questions. Let's start with the question.
Okay, yes.
Related to networking capital, already Andrea, during his presentation of the financial results, gave some flavor about networking capital absorption. We also have to look inside the number. If you look at trade receivable with respect to, let's say, inventory, we are fast growing in trade receivable. This means that we are putting in place several actions in order to be more effective in terms of invoices to customers and so on.
We have strengthened the internal organization in order to be more effective in terms of invoicing and getting the money as soon as possible. Of course, there are some effects coming also for the different mix of the activity. We have the portfolio with respect to the last year. The exposure and the size of the public sector with respect to the total size of the group is increased a lot with respect to the last year. This is a part that is under pressure for, let's say, the difficulties in getting and advanced fixed price projects according to the timeline already agreed with customers. It is an area of focus that we are very, very, let's say, working on in order to improve as much as possible.
For sure, for this part of the year, there is a major pressure with respect to last year. We see and we forecast a better improvement for Q4, for example, specifically for the cash generation, also because, let's say, the number of due invoices is bigger, so it's growing. Probably we will capture and we will have a cash in on these due invoices. Of course, there is an effect related to the customers. Some of the customers that are fast growing are maybe the not-so-best payer in some way. This is an effect that we have and we want to manage as much as possible.
Yeah, not the best payer, of course, are all blue-chip, solid customers. The question is not the pay or not, it's just the possible delays. These are very, very secure receivables. It's just sometimes a matter of a few weeks or two days of delay, which brought us to a cut-off date, not very good.
I want to highlight also that we are not using, let's say, financial instruments like factoring, for example, so far, because still we have good cash to manage the working capital, our, let's say, suppliers and our employees without so much pressure because we have cash to do that. Of course, if we continue to grow and this situation is, let's say, more impactful in some way, we are evaluating also possibilities to do some factoring with, let's say, some, let's say, some financial expenses. Financial expenses, but to improve the overall situation to have a more relaxed, let's say, working capital management.
Also through that year-end last year, some of the companies that were acquired during the period were also leveraging on some factoring, which we stopped. We also have this effect comparing, let's say, last year's net working capital with the current year's net working capital.
Let's go back for the net financial position question.
Consensus forecast for the net financial position at year-end 2025 are a touch below the corresponding level at year-end 2024. Does it make sense? Year-end 2024, we were at about EUR 108 million reported. Now we were at EUR 129 million.
Still in 2025, so far we did an acquisition, so IT Values that was EUR 13.5 million, something like that. There is a higher pressure in the net financial position coming from IFRS 16. Specifically, there is a good contribution coming from the opening gap of the new headquarters in Rome that started from this year. There is a EUR 3 million.
EUR 3.3 million.
[Foreign language], EUR 3.3 million coming from that of a long-term rent for the office that we have in Rome. We changed also and we increased expenses in our headquarters international in Berlin, moving from one side to a more, let's say, suitable one just a few months ago. There is some impact coming from IFRS expenses plus earn-out part also that is impacting more than in the 2024. Of course, there is a cash generation that so far is a little bit lower than we expected during our plan. In average, first nine months, the free cash flow conversion is about 30%. Last year, we were about 45%, something like that. This is due, as we have discussed before, mainly to the major exposure to the public sector. For sure, this is a part we have to address.
I think that is reasonable to have this result because it's not only there is a mix of less cash generation and still investments that are ongoing in order to manage the growth. Beside the IFRS 16, we have increased the R&D investment of 70% more than last year. We are still investing in order to grow. Also, the initiative that we are launching in order to scale up our Smart Solutions offering at international level requires investment. 2025 for us is a year in which still we are under pressure, not mainly from NMEA, but also for internal investment in order to sustain an organic growth stronger to meet the requirements of our plan.
For 2026, do you have action in mind to improve networking capital management? I think that was also.
Already discussed.
Yes. Of course, also with the growth of the public, sorry, with the Smart Solutions, they are, let's say, DSO are way shorter. Of course, as we will acquire, let's say, new businesses, Smart Solutions, that will also, let's say, better off our overall cash generation.
We have a question from Thomas Oniedu.
Yes. Smart Solutions revenue growth, I believe, was slightly below the market expectation, but very strong margins in the quarter for the division. Can you give us more color on that? Is it for a mix? The partial sale of bankruptcy? Okay. Sorry. By one.
About Smart Solutions, I don't know the expectation of the markets. Of course, we set an expectation as a long-term, let's say, growth of an average of 17% in the duration of the plan, in the three-year plan. That is for sure not reasonable adjusted in one quarter. What we expect for the plan is the growth and the scale-up of the solution that we have on a broader, let's say, customer base, specifically at international level. Let's say the 17% growth as an average will be an average that we will reach after we scale up, of course. Still, in these nine months, the growth of the Smart Solutions part is significant.
The organic growth is about [10.5%] and overall growth for [the six].
We get some, let's say, expectation also to close some deals that are shifting, specifically one in North America that is quite important that will bring value on a long-term basis that we didn't sign in the first nine months, but I don't want to sell because I am conservative, but there is an important boost for some mature product in North America. We are still confident that the ramp-up that we will have during the next period will improve the average growth that we recorded in these first nine months.
We have the partial sale of bankruptcy position has been postponed to year-end. Can you clarify on why that?
Yes. Our agreement with the buyer of the stakes that we have in Banca del Fucino has an agreement that was ended at the end of the quarter, so in 30 September. We had some issues related to regulations. When I was about to do the handover, the time to check all the regulation shifted. The agreement was extended at the end of the year in order to complete all the checks for the regulation and close it. We still have a binding commitment of the buyer to acquire the shares. We accepted to shift because we are happy to sell the shares. Of course, if it is just regulatory issues or bureaucratic issues, we are more than happy to wait a little bit. Still, we are confident to sell the shares by the end of the year, at least the part we have already disclosed.
We are in negotiation also to extend, let's say, these sales of an additional amount to the same buyer that probably will, if everything goes okay, be completed during the first quarter of the next year. Of course, we are very active in order to sell the entire investment that we have in the bank. There are several interested parties. We are still negotiating with them. First of all, we want to close this first batch by the end of the year. Then we are more than committed to divest all, let's say, the stakes so far we have in the bank.
Thank you, Daniele. Next question. Can you give us some updates on some of the business you're launching, for example, new posts and orders?
Yes. Probably we have already answered when was posted this question, but give some flavor also for the MarTech issues. The IoT, XR, and VR was part of the presentation for which we are getting new contracts. I already told that we are in final negotiation for a good deal for the Aerospace & D efense business in North America.
New posts. Evidence-based training is very interesting.
Yes. We have, let's say, invested last year in innovative platforms, mass solution for evidence-based training of pilots. An AI platform that collects data around a pilot from the training path, from the simulators, whatever they do in classroom, but also collects data from the operation of the pilots. Data coming from aircraft, recording the performances they have with the machine, with the airplane. This kind of platform was selected by a defense player. We have already negotiated.
There are just the final steps in order to sign a first deal in a defense business for which the platform will be used for the next generation pilots to be trained and to be, let's say, followed up across all their lifetime in order to increase efficiency of pilots and also efficiency of the training process to keep pilots as much as possible aware to the new challenges that we will face. This is another example. Another example, maybe new post, I spoke a little bit, but I want to give more some flavor. First, nine months were made by opening up partnership at European level with players in different countries. We are speaking about Spain, U.K., Germany, for which we negotiate already possible delivery channels through Europe.
We are still investing in technology because there is a mix of in the joint venture of hardware coming from our partner and the software components, innovative software components that are made by TXT that are still under the process of certification, mainly for the different countries because it requires since the Digital Payments area is an area that is strongly regulated, so still needs certification in order to be operated across different countries. 2025 for us is still an year of investment. We will have the first, let's say, significant revenue in the last quarter of the year, speaking more about EUR 2 million turnover, more or less. The first batch of delivery that we will do in Italy. The pipeline is growing, and for next year, the expectations are good.
Thank you, Daniele. We have another question from Tommaso from Keppler. Working capital absorption decelerated in the third quarter. Do you have some visibility for the fourth quarter?
We have already said something, but.
Yeah, I think in the first half of the year, as we mentioned, there was also this effect coming from the discontinuity of some, let's say, factoring program from some prior company. This is also, of course, visible in the third quarter when this effect is somehow fading away. Fourth quarter of the year, looking at, let's say, the first month, almost a half, it looks better compared to the, for sure, for the first half, but also compared to the third quarter. Unfortunately, we have some very big customers, let's say, some of the main customers, which weight in terms of working capital, it's high. It's enough delay of, I don't know, a week, the collection of a big, let's say, number of invoices. Difficult to say, but for sure, the monitor, it's stronger.
Looking at, let's say, half the way, so mid of November, the trend, it's better, of course, than compared to the first half, but also compared to the third quarter of the year. We have, let's say, good visibility. If we look at the receivables from, let's say, schedule perspective, it's positive. We just need to, let's say, keep an eye on a receivable that will be due close to the year end and try not to have delays on that, let's say, items to secure a better cash conversion.
Okay. So far, we don't have other Q&A. I don't know if someone still has to ask for something. We are available. Otherwise, you can send, let's say, any questions to our investor later, and we will be back to you very quickly. Thank you very much for attending the conference call. I hope that these results are in line with the expectation. We are working hard in order to capture the opportunity and be more, let's say, effective quarter by quarter. So far, so good. It's years that we deliver a quarter better than the previous one. We are very committed in order to continue to do that for the next period. Thank you very much, and let's meet together again for the yearly results in 2026. Thank you.
Thank you, everyone.
Bye-bye.
Bye.