Good morning and good afternoon, everyone. This is Omar Maher from EFG Hermes. I'd like to welcome everyone to HPS's Full-Y ear 2025 Results Conference Call. I'm pleased to be joined by Mr. Brahim Berrada, HPS's Managing Director of Corporate Services. As usual, the call will begin with a discussion of the key highlights of the period, and this will be followed by a Q&A session. I will now hand the call over to Mr. Berrada to begin the presentation. Thank you.
Thank you, Omar, and good afternoon or good morning, everyone, and thank you for joining. Before we start, I would like to mention that our CEO, Abdeslam Alaoui Smaili, is unfortunately unable to join us at the start of this call due to some travel commitments. He will probably join before the end of the conference. In the meantime, I will take you through our 2025 performance, which marks a key inflection point for HPS, and we will share also how this positions HPS for the next phase of growth. Let's start with the highlights of 2025 performance, and we can summarize the year 2025 in three strategic headlines. The first one that I want to raise is the SaaS acceleration and the inflection point that we've reached.
Our recurring and regular revenue reached 72.3% of total revenue. The SaaS reported revenue grew by 27.2% or 32.7% on FX-adjusted revenue. For the first time in our history, SaaS is now the number one revenue within our global activity. Our platforms in Canada and Australia are generating strong revenue growth, positive cash flow, and expanding also margin as existing customers progressively ramp up their CaaS portfolio and their transaction volumes. The second important headline is the record visibility we reached and the strong improvement of our financial profile. We closed 2025 with a backlog of MAD 1.7 billion, up 89% year-on-year. It's also important to highlight that nearly 60% of this secured revenue is fully recurring, so coming from SaaS, maintenance, and switching activities.
Our financial profile also significantly improved with an operating cash flow that is 5x 2024 level, allowing us to reduce our net debt by more than 42%. We can say that HPS enters 2026 with the strongest balance sheet in its history. The latest headlines concerning exceeding our initial guidance for the year. Revenue increased by 22.3% compared to our target of 20%. EBITDA rose by 30% in line with our expectations, and net profit jumped by more than 40%. These three headlines, in fact, tell the story of a company that is in transformation. A transformation which after a period of heavy investments is now generating real, tangible and accelerating profitable growth.
When we are talking about these inflection points, this inflection is particularly visible when we look at the year in two halves. On our H1 results presentation, we made a clear commitment. We said that the EBITDA would triple in the second half compared to the first half, and this is exactly what we delivered. EBITDA for H1 was approximately MAD 70 million with the margin at 10.4%, when H2 EBITDA was approximately MAD 216 million with a margin of 25%. That is an EBITDA that is multiplied by three in a single half year, and the full- year EBITDA stands at MAD 286 million at 18.4% margin. This is not an accounting effect. It reflects the real operational drivers.
The accelerating ramp-up of our SaaS platform and the progressive deployment of our record backlog in 2025, supported by the delivery of the two major on-prem contract that we signed in the mid of 2025. One of the main achievements of these financial performance are primarily driven by outstanding commercial momentum. In 2025, we achieved approximately MAD 900 million in total contract value, of which 30% is on SaaS. This marks the second consecutive year of explosive TCV growth with an average that is almost 4x the average of the previous years. Among these highlights, we have the two major wins in tier one with the Worldwide Bank in Asia. Each contracts in the tens of millions of U.S. dollars.
These wins consolidate HPS as a leading payment technology worldwide, and in particular in Asia, which is probably the largest and the most dynamic payment market in the world. The result of this commercial success is a backlog that now stands at MAD 1.7 billion, up 89% year-on-year. This gives us exceptional visibility as we execute our AccelR8 plan. The second point where I would like to spend some minutes is the SaaS acceleration because it's the engine of our future growth in the execution of our strategic plan. SaaS revenue increased by 27.2% year-on-year, significantly ahead of the 16.7% CAGR delivered between 2021 and 2024.
Our major platforms today, Canada, Australia, are now in active ramp up and processing increasing transaction volume on infrastructure that are already built and ready to scale. The consequence also of our commercial achievements is that our 2027 secured SaaS run rates coming from our existing customer alone is approximately MAD 480 million, meaning more or less 30% CAGR between today and the end of 2027. Just to be explicit on this point, this is a very conservative assumption. It includes only the existing customer on existing contracts, and any new SaaS business we win in 2026, 2027 is incremental to this figure. It's also important to highlight that this revenue growth will occur with limited incremental cost because infrastructures are already deployed and the platforms are live.
As volume ramp up, we collect the revenue with very high marginal contribution, and this is the operating leverage that we will drive our margin toward the AccelR8 targets comprised between 25%-30%. Let's have a closer look at our AccelR8 strategic plan. On revenue, we are at 75% of the way toward our target range. On the regular and recurring revenue, we are at 72.3% on the global revenue, so at toward 85% of our target. On the EBITDA, we are at 18.4%, so progressing toward the 25%-30% target of our AccelR8 plan. On the last one, the mix, America and Asia revenue is about 20%, compared to our 30% target.
Across all the dimensions, 2025 execution is fully aligned with our strategic plan and confirms the trajectory of our strategic roadmap that we shared with you in the beginning of this plan. Let's now turn to our guidance for next year. We are guiding for organic revenue comprised between 12%-17%, aligned with our AccelR8 objectives. This growth is supported by three drivers. The first one, the continued ramp up of our SaaS platforms. The second one is the progressive deployment of our record backlog into recognized revenue. And the last one, it's our ongoing expansion in Asia and Americas. We are very successful since two, three years, and that are the most dynamic and strongest market in our industry.
On the EBITDA margin, we expect an EBITDA margin that will be above our 25% level. The operating leverage from SaaS ramp-up combined with the disciplined cost management and improved revenue mix give us a clear visibility toward our AccelR8 towards range 25%-30% by 2027. To conclude, we enter 2026 with probably the strongest financial position in our history and a very strong commercial pipeline, and we are confident that we will be able to deliver the guidance that we share with you today. I would like also to take few minutes to walk through our AI program. AI is clearly a key pillar of our next phase of development and is a very structured driver of revenue growth and margin expansion.
We have built our program around two streams. The first one, it's AI for Business, so where we deliver AI capabilities to our customers. This AI capabilities that will be delivered will drive new revenue streams and improve also our value proposition, especially in areas like fraud or agentic commerce or agentic finance. The second one is more internal on the productivity, and this is mainly to improve our delivery efficiency, our coding productivity, and the quality also of what we deliver to our customers. In parallel to this productivity, it's also reducing costs by delivering augmented workforce to our colleagues through a program that we called Human Eye, that will help all our colleagues to be more efficient on their day-to-day work within the company.
Let's now take you through the detailed financial performance. Perhaps before going into the details, I would like to make a quick clarification on the metrics that we use. You will see in the presentation reported figures that include the impact of CR2 full- year integration and FX impact. You will see also adjusted figures or underlying growth that are at constant perimeter, so pro forma, and at FX neutral. These figures, the adjusted and the lines are the real group performance for 2025. The reported revenue of MAD 1.5 billion represents a reported growth of 22.3%, exceeding our guidance for 2025, and the underlying growth was 10.7%.
The underlying, I remind you, it's without the one-off or on pro forma basis and without any FX impact. The recurring and regular revenue reached MAD 1.12 billion, representing 72.3% of our total revenue, up 25% year-on-year compared to 2024. EBITDA reaches MAD 286 million, up exactly 30% in line with our guidance targets. CR2 integration is slightly exceeding expectation with underlying growth of 24% compared to full- year 2024. At the segment level, our core payment activity, which now includes CR2, reached MAD 1.3 billion, up 26.6%. The switching activity delivered MAD 97.6 million, up 9.5%. Testing generated revenue of MAD 66 million, down by 18%.
This trend of the testing confirms the relevance of the group to refocus on its core higher value activities, and HPS will continue the initiative to divest this segment from the activity during 2026. The portfolio mix is shifting as planned toward higher margin more recurring SaaS-led payment technology and away from lower margin like testing services. If we want to have the view on the underlying growth to properly understand the underlying commercial performance of the business, we also need to look at the pro forma constant currency view. On this basis, we have reached MAD 1.6 billion, representing a growth of 10.7%.
The difference between the reported and the underlying is first the full integration of CR2 in 2025, when in 2024 it was only four months of activity. The second one is the FX impact due to the exceptional depreciation of U.S. dollars during 2025 that was down by more or less 9.7%. This impacted our revenue by -MAD 60 million. If we look to the revenue bridge, it shows the precise decomposition of our revenue movement from 2024 pro forma to adjusted and reported 2025 figures. Our core payment activity contributes to more or less MAD 87 million of growth. CR2 added on top of this MAD 63 million .
Switching contributes MAD 10 million, another million dirhams on this growth. This organic and FX natural growth contribution brought us to an adjusted 25 figure of MAD 1.6 billion. Against this, we face the FX headwind of MAD 60 million. The net effect is the reported MAD 1.5 billion on the revenue. Turning to our core payment activity on an adjusted basis. The payment revenue reached MAD 1 billion , representing underlying growth of 9%. The headline story here is the SaaS. SaaS adjusted revenue reached MAD 296 million, up 32.7%. For the first time in HPS history, SaaS become the number one revenue line in the global activity.
This is the inflection point we have been building toward. Our platforms in Canada, Australia are now fully operational and entering ramp-up phase, meaning that transaction volumes are growing, and revenue and margin will follow. The maintenance adjusted revenue delivered MAD 236 million, up 3%. Project delivery was MAD 203 million, up 5.3%, reflecting backlog conversion into revenue, including the initial phase of the two major on-prem contract that we signed in mid-2025. We expect from these two contracts a revenue contribution significantly larger in 2026 because we will have a full year of deployment of these two contracts.
Just to conclude on this, HPS payment activity with 81% of this business that is recurring and regular, the revenue mix of this business is becoming more predictable, more valuable with every passing quarter. CR2 completed its full year of consolidation within HPS Group, and the performance slightly exceeded our expectations. Full- year revenue was about EUR 30 million representing underlying growth of 24% on a constant currency basis. EBITDA margin reached 20.8% on an adjusted basis also. And we have 62.5% recurring and regular revenue that reflects the CR2 subscription-based business model in our global revenue. Geographically, 82% today of CR2 sales come from English-speaking Africa with some big customers.
We are building a pipeline in Middle East and Asia that will drive geographic diversification in the coming years. Now today the integration is complete, the governance is unified, and cross-sell synergies between HPS and CR2 client bases are being actively built since the beginning of 2025. Our switching activity delivered revenue of MAD 97 million, up 9.5%. This is a business characterized by dominant market position and structural volume growth. In 2025, we regularly exceed the 1 million daily card transaction. The card transaction volumes grew by 24% year-on-year. The e-commerce grew by 21.5%, and the merchant payment operation grew by 28%.
Mobile, from a very low level, is the fastest growing line today with the growth of 51% compared to last year. Some major achievements in 2025. The first one is that we renewed our tokenization certification. The second one is the completion of the ISO 20022 migration. This protocol facilitates seamless communication between different systems, and bridges also card payments with account-to-account and real-time payment system. We are building in Morocco an infrastructure that will be able to support the future of the payment in the country. With the 95% recurring revenue share, switching continue to be a very highly predictable and cash generative component of our group activity.
Let's now turn to profitability and cash flow. This is the two dimensions where the operating leverage of our SaaS model is becoming most visible. On the pro forma and constant FX basis, our EBITDA grew by 35.5%, and our adjusted margin reached 18.8%. This is the operating leverage of the SaaS model that is now becoming visible in our P&L. As our SaaS platform ramp up their transaction volume, revenue grows with limited incremental cost as the infrastructure is already deployed and the team already in place. This dynamic is the engine of our margin expansion towards the AccelR8 targets of 25%-30% EBITDA margin. The EBITDA bridge shows the detailed movement from pro forma 2024 to reported 2025.
The revenue contributed MAD 150 million of EBITDA growth. HR costs absorbed more or less MAD 50 million, when external costs absorbed MAD 45 million , and the other costs added back more or less MAD 20 million . We arrive to an adjusted EBITDA about MAD 304 million, representing the margin of 18.8%. The FX headwinds of MAD 18 million bring us to the reported MAD 285 million of EBITDA, with the margin of 18.4%. Our cost growth in 2025 reflects a deliberate strategic decisions and not structural inflation. HR costs grew by 6.1%. Within that, we paid MAD 60 million in bonuses, reflecting the exceptional performance of our teams.
Internal headcounts grow only by 2.5%, and we actually reduce external resources by MAD 40 million. Net HR costs growth is very disciplined within HPS, and we have global growth that is about 6%. The second main cost growth is cloud and infrastructure that grew by 55%, and this reflects the direct cost of hosting of our Tier 1 SaaS platforms. This investment supports the SaaS revenue ramp-up, and its proportion in the revenue will decline as volume will scale. We've made also strong investment in AI capabilities across our delivery team to support our AI strategy, as explained in the beginning.
We've made also a very strong investment in cybersecurity, mainly to deploy a security operations center, so a SOC, across all our infrastructures worldwide, so our data centers. These are structural investments in our long-term competitive positioning. We have also rental and facilities costs that grew by 18%, reflecting new offices or expansions, directly supporting our geographic diversification strategy and geographic growth in some region. In total, our cost structure reflects investment in more security, global expansion, and SaaS scale-up. This is really very strategic investment to support the growth of HPS. Cash generation is a key highlight for this year. Operating cash flow reached MAD 240 million, 5x the 2024 level.
This reflects the maturation of our SaaS contracts, which, after the initial investment phase, are now generating significant positive cash contribution. We have also a closing cash position that was MAD 250 million, and net debt that was reduced by more than 42%. The long-term debt to equity ratio stands at 55%. We can conclude that HPS enters 2026 with probably its strongest ever balance sheet. This gives us the financial capacity to invest in growth, maintain shareholders' returns, and absorb any macro uncertainty. Let's now look ahead to 2026 and outline the key drivers of our growth and margin expansion plan. We have four main driver that will support our performance for 2026. The first is the SaaS ramp-up acceleration.
As explained, our Canadian and Australian platforms are now active and are in the ramp-up phase. We have all the signed existing customer that are migrating their existing portfolio and volumes on our platforms. The 2025 SaaS revenue of MAD 284 million will move to MAD 480 million in 2027. Representing more or less a CAGR of 30% for the next two years. This is only with existing customers. As volume grow on existing infrastructure, the incremental margin will be high because the cost will not be linked to the increase of the volumes. The second point that is important is the backlog deployment. We have a record backlog of MAD 1.7 billion, up 89% compared to last year.
That provides exceptional revenue visibility. The major 25 projects win are now entering implementation phase, and the revenue contribution in 2026 will be significantly larger than compared to 2025. Third point is margin expansion. Here again, the operating leverage from SaaS scale-up combined with disciplined cost management will push our EBITDA margin above the 24% or 25% level. The 18.4% that was delivered in 2025, and we are moving toward our target by 2027 that will be achievable thanks to all the SaaS ramp-up that we are driving today. Last one that will support the growth for 2026 is the geographic diversification. Today, Asia and Americas represent approximately 20% of our 2025 revenue.
Secured SaaS ramp-up in these two region will contribute to an additional $15 million of annual revenue, and this will be fully deployed before 2027. Let's close by some four key takeaways that we believe are important to keep in mind. The first one is 2025 was a record year across every KPI. Revenue, +22.3%, EBITDA, +30%, backlog, +89%, operating cash flow multiplied 5x . HPS delivered its strongest year in history, demonstrating the power of SaaS model at scale. Second one, SaaS model has reached its inflection point. Recurring revenue are now at 72.3%, the highest in our history. SaaS is now the number one payment revenue line.
Canada, Australia are cash generative, and our 2027 SaaS run rate is approximately MAD 480 million from only existing customers. This provide us an extraordinary revenue visibility. Third point is that we have the strongest balance sheet in HPS history. Cash at MAD 250 million. Net debt reduced by 42%. Operational cash flow 5x higher than 2024. All these financial strengths give us the capacity to continue investing in growth while maintaining our shareholders' returns. Last one, it's our 2026 guidance. We expect an organic revenue growth comprised between 12%-17% aligned with our AccelR8 guidance and EBITDA margin above 2025 level.
All of this 2026 guidance are aligned with our AccelR8 targets and as supported by the record backlog that we have at the end of 2025. SaaS operating leverage and disciplined cost management will help also to reach the expected EBITDA margin in 2026 and 2027. Globally, based on all these achievements in 2025, we are confident to reach the objective of an EBITDA margin in 2027 comprised between 25%-30% EBITDA margin. Thank you for your continued confidence in HPS and happy to take now your questions.
Thank you very much, Brahim. We'll now move to the Q&A session. If anyone would like to ask questions, you can either use the raise hand function to ask your question verbally, or you can put your question in writing through the Slido app Q&A box. First question, anonymous. It says, "Thank you for your time. Assuming you don't add any new client, how much time will it take you to migrate all your existing clients to SaaS models?
Okay. Perhaps a clarification on the SaaS acceleration and SaaS business that we are developing. Today, all the SaaS revenue that we have is coming from new customers and not from migrating our existing customers, on-prem customers to SaaS. All the figures that we shared and all the ramp up or all the new revenue that we expect in the coming years is coming from the ramp-up of the new customer that was signed in 2023, 2024, 2025 on SaaS. Will come also from new customer that we will sign in 2026 and 2027.
Of course, we have in our strategy the ambition to move some of our customers from on-prem to SaaS because we believe that first we can deliver to them a better service, so we can discharge them from all security complication, from all platform management and enhancement complexity, based on one single platform that is mutualized for all our customers. We believe that some type of customers that struggle to manage all this can be convinced to move from on-prem to SaaS. It's something that started. Last year we moved two customers from on-prem to SaaS. Today, just to be clear, the main growth of SaaS and the main part of the revenue of SaaS is coming from new customers.
Thank you. The next question is, what would be the expected impact of the integration of CR2 on the group's profitability in 2026 and 2027, particularly in terms of operating margin and scale effects with the PowerCARD portfolio?
For 2025, as an example, CR2 provided or delivered an EBITDA margin of 20.4%, higher than the EBITDA margin provided by HPS standalone. We believe that in 2026 and 2027, CR2 will continue to be EBITDA accretive for the group. We are also working on a strategy to introduce the SaaS business model into the CR2 model. To try also to increase the EBITDA margin of CR2 today around 20% to higher margin in the future. We believe that the benefit of CR2 will be very important in terms of EBITDA contribution.
It's also contributing to the growth of HPS, but it's not visible on the figures. It's all the synergy that we have between our technologies. We saw in 2025 all the added value when we combine our engine, PowerCARD, with all the very digital platform of CR2 on top of our product. This is something that is creating more attraction for customers and more revenue and margin for the group.
Thank you. Next we have a question from Rachid Alaoui. Please go ahead.
Yes. Thank you. It's great to be here with you. I wanna thank you all for the presentation. I have some maybe two or three questions about the FX issue. How it had cost MAD 18 million in 2025. How would you handle this for the next year or the next coming years? First, t he backlog of MAD 1.6 billion. What is the timing of that backlog to do so? Can you tell us something about the testing activity? You tried to sell the testing activity, but it didn't— I mean, how will you handle this kind ? Maybe last one, please. I'm guessing or assuming that the SaaS is making more progress than licensing. You took two licenses in Asia in 2025. Is it the way you expect doing business for 2026 or it's only an opportunity? Thank you very much.
Okay. Regarding FX impact, perhaps one remark. The MAD 18 million is, I would say, a financial impact and not real impact for the full amount. Today the revenue of HPS is based mainly on delivery. Meaning when we sign a project and we deliver a project to a customer, the revenue that is recognized in our figures is the amount of the contract multiplied by the progress rates of the project at the end of the year. When we arrive at the end of the year, we have to re-estimate this level of revenue based on the new exchange rate, for example, of the U.S. dollar.
Even if we did not yet collect the cash from the customer, we will suffer from a loss due to a decrease of the U.S. dollar. We will face the same impacts on all our assets that are in U.S. dollars. For example, our bank accounts, all our invoices not yet paid, et cetera. The FX impact is inherent to our activity and to our international exposure. We worked this year and the year before with different partners here in Morocco and outside to see how we can handle this to protect when we sign a contract, how we protect the future revenue that will come from this contract based on specified FX rates.
Today, we did not yet find any relevant solution because it's something that costs a lot and probably costs higher than what today we have in our figures. The other way that we handle this, and this is something that is already in place. First we have the mix between the different currencies that give us some balance position and exposure compared to the U.S. dollars that can be very volatile compared to the Moroccan dirhams, and some others can be positive. We have also in some contracts, when it's possible, adding some contractual protection for HPS in case we suffer from strong FX impact. It's a way to manage it.
There is the other aspect. If you look to the figures, in fact, the impact of the FX on the revenue is MAD 60 million, but on the EBITDA is only MAD 18 million. Our strategy to expand our presence worldwide and also having an exposure of cost that is more and more outside the Moroccan dirhams is also a way to balance the risk on the EBITDA and the profit. We are moving progressively to a more balanced situation between revenue and cost to have less and less impact, the FX impact on the margin. Regarding your second question— Yeah.
Okay. Little question please here. I mean, h elp me just guess how shortage or a decrease in the dollar about 10%. It was like 2025, 10% decrease in dollars means MAD 18 million in the EBITDA and MAD 60 million in the revenue.
Revenue.
Is that correct?
Yeah. Yeah.
Yeah. If the dollar decreases in 2026 about 10%, it will cost you around that or something more?
It's hard to say because it depends when we collect our cash at the end of the year, the assets that we have in currency. So it's a mix of different metrics. It can be an approximation.
Okay. Thank you. Okay.
Your second question was about. You're welcome. The second question was about the backlog. The backlog represents the secured revenue that is signed, not yet recognized in our figures. In this backlog, we have two big families. The first one is the one-off revenue. It's all the builds or the professional services or the licenses that we sell to customers that are not yet recognized in our revenue because the recognition of revenue is based on progress rates of the project, okay? Just to give you an example, if we have a project of 100, and at the end of 2025, we made a progress of 20%, we will have in our revenue for 2025, 20, and we will have 80 in the backlog.
This backlog of non-recurring revenue will be deployed over the next three, four years. Today, in the backlog of 2025, in the MAD 1.7 billion, 40% of this backlog is non-recurring. The rest, so the 60% is the recurring revenue that is recognized every year in our revenue. We have 60% of the backlog that will be recognized in 2026 and again in 2027, again in 2028, et cetera. I hope that it's clear.
Y eah. Okay. Thanks. Sorry.
What about? Yeah.
Brahim, t he 40% of one-off revenue, you expect to t o realize the project in 2026 or maybe expand to 2027?
It depends on the project. It depends on the size of the project. When you have a project that is simple, not too much complex, in terms of solution, in terms of functionality, et cetera, it's something that can be deployed over, I would say, nine months to one year. The amount that you will have in the backlog for this project specifically will be recognized in the following year. You can have some projects that are more complex and bigger. The two contracts that we mentioned, we signed in 2025 that are with tier one banks in Asia, it's tens of millions U.S. dollars each.
It's a multi-phase project deployment, and this kind of project will take four to five years of deployment. This is the initial project plan with the customer because the customer probably will start with the first phase, for example, with the acquisition business. The second one with the issuing, et cetera, and will deploy multiple countries. This is very huge project that can be deployed over a couple of years.
Regarding the third point, about testing divestment. We signed an agreement with another company that decided to buy the testing activity. At the end of the year, we faced some developments or execution of this divestment complication. The buyer decided to buy not the company, but the I don't know how to say this in English, but the business itself. To be able to buy the business, we needed to have the confirmation or the approval of the customer of the testing business to approve this transfer or this sale of the business to another company. The customers gave their consent, but not formally.
They said, "Please finalize the sale, and after that we will approve officially the transfer of our contract to the new company." This is something that the buyer didn't want to do or to manage because he didn't want to take the risk to see any customer after the execution or the sale to see a customer that will refuse to transfer its business to him. This is why the execution has not been finalized. What we are doing today, we decided to separate the testing activity in a new company and to sell this company, and this is something that will be more easier. We already have some other buyers that are interested in the business, so we expect to finalize this in the coming months.
What are the figures? I know it's maybe confidential or something. What are round figures about this testing activity? Is it will have a huge impact or on maybe the margins or something? I mean, it's exceptional for 2026.
Excuse me. You mean the divestment or the amount of sales?
No, divestment of the testing activity. Is it big? I mean, a big amount of cash or no?
You mean the benefit of the sale of the business?
Yeah.
No, it's not too big. The objective is not to make cash on this.
Be profitable. Yeah.
It's really to make HPS more profitable and more. Yeah.
Okay.
Sir Rachid, I think that you ask another question at the end, or no? It was the last one.
Yes, about licensing and the SaaS. I mean, i t was 50/50 or something like that.
No. In fact, first, HPS strategy is not to force any of its customer to choose between the two business models. As you know, HPS is a very respectable player, but it's a small player, so we are not like Microsoft. We cannot force any bank to go away that they don't want to go. If a bank wants to go SaaS because it's aligned with its strategy, they will go. If they want to have a on-prem solution, having the control on the solution, on the security, et cetera, they will do it. HPS will be out if we are not able to offer this.
The strategy of HPS and position is to be able to offer any business model to all its customers. The SaaS transition and of course is the preferred option for HPS because it's a business that is more profitable, driving a stronger margin for the group. As much as we add customers on existing platforms, the margin are high. For the customer also, it's interesting because they are not handling all the complexity of managing the security, of managing the platforms, of managing the enhancements coming from the international schemes, et cetera, et cetera. SaaS, and this is the transition that we face in the passing years is impacting the margin on the short term because we have to invest.
We invested a lot the last two, three years on security, on building platforms, et cetera, on teams deployment, et cetera. After this 2025, we have reached this inflection point, and we start to deliver margin cash flow, et cetera. The on-prem project will continue to provide a short term margin to the group. The two contracts that we signed, the two big contracts, because it's not the only ones, we signed some other contracts. The two bigs that we signed in 2025 helped HPS to balance the SaaS impact with the immediate and strong margin contribution. In the future, it's something that will continue. Now on the mix, it depends on the regions where we are active.
We have some regions that are very SaaS-oriented, for example, North America or Australia. We have some others that are more on-prem oriented like regions in Asia, Singapore, Malaysia, etc. Last 2024 , 2023, 100% of our new sales, new logos were on SaaS. This year, 2025, in terms of value, 70% were on-prem and 30% were SaaS. Look, it will depend every year based on geographical success of HPS and the opportunities that we will have in the different regions.
Okay. Thank you very much. Thank you, Sir Brahim.
You're welcome.
Thank you. Next we have a written question that says, as the scale of—
Excuse me, Omar, want to interrupt. I think that Abdeslam Alaoui is with us, but he's connected.
Yes, I'm here. No. It's resolved.
Oh, okay. Perfect.
Great. All right, great. The question says, as the sale of ACPQualife has not been completed, what strategic alternative do you now choose? Relaunch a sale process, reorganize the activity internally or reposition the testing offer? And what consequences could this have on your refocusing on payment activities?
Yeah. No, I think that we've already answered to this question with the Rachid question. The objective remains the same, is to divest. We are just preparing the right vehicle to divest properly and also to give opportunity to our existing colleagues that are working in this activity to grow in a space more focusing or more focused on this kind of activity and probably more exciting for them.
Right. Thank you. The next one says, after the recent transactions, including the integration of CR2, what are your priorities now in terms of external growth? Is it types of assets sought, geographical areas, targeted technologies, or the size of the acquisitions envisaged?
Okay.
Brahim, if you like, I can—
Yeah. You take this one.
Yeah, I take this one. Thank you for the question. The external growth strategy was always to explore how we can get better technology and in the fastest way. The equation of the build or buy was to be resolved in each and every case. Now, what we are looking at, and we shared this in the previous press conferences, is we want to be more relevant. We want to have a bigger footprint in the customers space where we act and in the payment industry, which means in other words that we need to cover more payment rails, and we need to make sure that we are relevant in the future evolutions. What the payment industry is moving towards is the open banking and the open finance globally, which means that we need to address the rails in addition to the rails that we are addressing now.
We are addressing the card rails. We started addressing the account-to-account payment, and we want to be more relevant in that. The second space where we are exploring and we have already started this exploration and also the development of this business is to also be active in the tokenization of assets space, which means that we decided to invest and make sure that HPS PowerCARD CR2 will be able to provide a tokenization of asset platform which enables the issuance of stablecoins. It's important always to remember that HPS has always been a technology provider, so we'll provide the technology to whoever would like to move to the open banking, the open finance space, or would like to issue or to use a technology to tokenize assets that will drive to a transaction on a fully disintermediated space.
To conclude, what we have done with CR2, we have provided the technology that we had with transversal or vertical growth. We went down the value chain by providing interaction with the end customer with a glass to ledger experience. On the HPS platform, HPS CR2 platform, we are today having the ledgers, the payments, and also the interaction with the end customers through mobile portal, et cetera. What we are doing now is growing horizontally to grow on the payment rails and make sure that our platform will remain and will continue to be as relevant as it is today and even more.
Thank you. Next, we have a question from Ali Nasser. Please go ahead.
Hi, guys. Hi, everyone.
Hi, Ali.
Congrats on the numbers. Fantastic. Good to see you.
Thank you.
I had a few questions. I wanted to ask about margins. In the AccelR8, the medium-term targets will be 25%-30%, correct?
Yep.
You expect to reach that as soon as the 2027 full year?
Yep.
Your second half EBITDA margin is already at 25%. In the guidance, you say, you know, you want your margins in 2026 to be higher than 2025. It would just help to maybe understand, without giving me precise numbers, like, is the second half EBITDA margin a bit of, you know, a bit of an anomaly in the sense that, you know, you expect that EBITDA margin in 2026 should be lower than second half. Still gives you that direction towards the AccelR8? That's the first question. I'll do one by one. It's easier that way.
Perhaps it's easier. On the margin. There are two items to highlight in 2025. The first one is that in 2025 we find two large on-prem contracts. As mentioned earlier, on-prem contracts are delivering immediate and high margin for the group. Just to give you perhaps the reason why on-prem is delivering high margin. When you sell a contract on-prem for customer, in average, you have 50% that is license and 50% that is professional services. And the margin and the license, there is no cost behind. Professional services is delivery. It's normal, I would say, margin, but the license is 100%.
When you sign a very large contract, the high level of license fee generates a very strong impact on margin. This is the first one. The second one that is specific perhaps to 2025. These large contracts, we had some that has been signed only on H2, but we have the team that started to work on this project in H1. Because it was not yet signed, we were not able to recognize any revenue on these customers or on these contracts on H1. We have probably part of the margin that switched from H1 to H2. But I think that the main impact is more coming from the on-prem contract that is delivering a better margin in 2025.
Okay. The implication would be for 2026 margins are likely to be lower than second half, but still, o bviously quite a bit higher than the full year.
The margin will continue to grow for sure, because we will continue to deliver this on-prem contract, but we will also have the ramp up of SaaS. The margin will continue to grow for 2026. For 2027, the target of 25%-30% is something that we have a strong confidence to achieve this. Just to give you also perhaps some flavor of the margin. As we said during the presentation, just on SaaS of existing customer that are already signed. In 2025 we have a revenue of MAD 280 million. In 2027 from this same customer, we will have MAD 480 million. We will have MAD 200 million that will come from existing customers. This is something that is secure. It's not assumptions. It's only the migration of their existing card portfolio on our platform.
This MAD 200 million, in fact, there is quasi no cost behind. The platforms are already there. The people are already there. We can assume that this 200 will probably provide 90% or between 80%-90% of margin. We will have, let's say MAD 160 million-MAD 180 million that will go directly to the EBITDA margin.
That's the two clients in Canada and Australia.
Yeah. It means that based on today's EBITDA of MAD 280, we have MAD 180 that will come automatically from the existing customer. Which means it's MAD 280. It means that it's a growth of 64% coming from SaaS.
Yeah. Very strong. Quite visible.
Yeah.
Okay. Clear. Great. That's clear. Thanks, Brahim. The second one is on, y ou have a slide on the costs, cost drivers 2025, but you highlighted cloud and infrastructure. I think the point is very clear that you know, this line should start to grow less than revenue in 2026. Can you give us a flavor. In all of cloud infrastructure, how much, you know, how much does it represent of revenue at this in 2025? Just so I can kind of get a sense of when you grow, you know, what, when do you expect this line? Because it's grown 55%, but I'm not clear on how much it represents of the cost structure.
Yeah. Here, if you always see my screen.
Yeah.
You have in 2025 hosting cost that is MAD 30 million for a SaaS revenue. I would say SaaS plus switching because the switching is on the same platforms. If I remember well, MAD 330 million. Aziz, correct me if I'm wrong, but I think this is the figures that we have. We have the SaaS fee, MAD 280 million plus the switching. Let's say that we have MAD 380 million. It's less than 10%.
Okay.
Okay?
Okay, yeah.
We have MAD 30 million on MAD 330 million. Now, t hese costs are covering platforms in Morocco, platforms in Mauritius, platforms in U.S., platforms in Canada, platforms in Europe, platforms in Australia, in Singapore, and I think that's all. If I'm missing something, Abdeslam, please correct me, but I think that's all the platforms that we have.
I think so.
The main constraints or the main challenges on SaaS business are all the data sovereignty policies in the world. That obliges the service provider to invest in new platforms when they're facing some data sovereignty constraints. Today, all the platforms that we have cover, I would say 90% of the business that we can have on SaaS in all the regions. It's not excluded that we can face situation where we'll have some business in South America or in some exotic region where we will have to build the platform. Today, it means that all new SaaS business or all ramp-up of our existing customers will come on these platforms. When we say platforms, it means also people or teams that are deployed worldwide to manage these platforms.
We have teams in North America, in Australia, in India, in Morocco, in Mauritius, and in Europe. Meaning that, the cost, the incremental cost is not so big.
Yeah, that's very powerful.
I don't know if it—
Yeah. No, it's very clear. Thank you. Thank you, Brahim.
Okay.
Last one is just, I mean, it's two questions in one. Maybe this is to Abdeslam on new sales activity and you know, how you're thinking about AI. You know, as I'm sure you know, it's become you know. The sector generally is experiencing lots of pressure on the valuations and there's concerns that there's gonna be some investment required or some competition. You know, we're hearing from some banks that there's a reluctance to you know, choose service providers or switch because they're unsure how the technology will evolve. Maybe it's two questions in one. You know, one, how are you thinking about AI investing? And two, is it impacting conversations with clients on the sales side commercially? Thank you.
Thank you, Ali, for the question. It is indeed a very disruptive situation. Before I answer, I just would like to give a little flashback. You know, HPS has always surfed on any disruption that has happened over the past 30 years of operations. We had the first real disruption in the payment space. It was the smart card. We moved from the magstripe to the smart card. Internet came, mobile came, and now we have AI. Historically, and this is not only because of our past capabilities, I think we should be able, or at least we are preparing ourselves, and we prepared ourselves more than two years ago to what is happening today.
Today, the AI as such, as an industry, we are users of the AI. We are using AI. I think Ibrahim has mentioned this in the beginning of the presentation. We are using it as to be more to augment ourselves, to reduce our cost of humans. In fact, it's not to reduce our cost of humans, it's to do much more with what we have. We have started two years ago on multiple exercise, et cetera. What we are seeing today is that we are collecting what we have grown on the two years' time. There is a cost to it, definitely. We think that this cost will continue and will be in ratio. It is an investment. It's not a cost. We are investing for the future. We think that we are still going to have investment.
We had an investment in 2025, and we are in our budget, and we have a team that is fully dedicated to that. From an impact on us, this is very positive because it is getting us to be better, faster, and also more secured because we are able to test much more with all this AI. On the other hand, we have loaded AI on our deliveries, and we are talking here about the fraud, about the automation, and also on some countries where we are very powerful, we will be the. We think or we are preparing ourselves, we are preparing the products to be the AI commerce enablers. This is really very important.
For this we are building relationship with back office AI or the heavy machines behind. We are users of AI. The third question that you, or rather, the second part of the question. Does it impact today our customers? Yes. I think we are well positioned because when they ask us, "Guys, what are you doing? How are we going to get better services from you guys? What are we gaining with AI with you?" Our speech today is not only a speech, it's the reality that we give them the confidence by proving that we are doing better with AI. We had one customer at least that came to us, and he said, "My suppliers have to be 30% more efficient with AI." We have shown him that with him on partnership, we will be able together to do better with the existing effort that we have, plus AI.
Yes, we are prepared. Do we think that it will disrupt? I think definitely. It's a real disruption. A lot of people will die with this wave, but a lot will survive and be stronger, and we will most probably see new actors. In the AI we will have the AI suppliers themselves that will most probably get up on the value chain of the businesses like us. We have in our end as a business layer of payment, we need also to get down on the value chain and be a little bit more active in the AI space. I hope I-
Abdessalam, thank you. That's really great and clear. Is it slowing down sales cycles or, you know?
No, sorry. Is it still?
Slowing down tender activity or not yet?
Is it still? Sorry?
Is it slowing down, tender activity or sales cycles at all?
No, no. I would say surprisingly, there are two facts that have not, or at least have not yet reached, have not generated the impact. AI with the several months of revolutionizing news, this is something that we have not yet felt in the RFPs. Inside the RFP we start seeing t he impact of it. Do you guys use this type of AI? Do you guys test this? What are the agents that you will be able to give us to test? We see the flavor of AI within the within the RFPs.
Fantastic. Thank you. Thanks, guys. All the best and well done again on a strong second half.
Thank you.
Thank you. Next, we have a couple of written questions from El Mehdi. It says, "Thank you for your presentation. We noted that the tax rate was relatively low in 2025. Could you elaborate on the main factors behind this, and what do you think about the tax rate in 2026?
Brahim ?
I can take it if you want, Brahim.
Okay, Aziz.
Okay. In fact, the lower tax rate that we have this year is due mainly to a different tax that we have in our consolidated accounts due to an intragroup transaction. This gain, in fact, was taxed immediately at the entity level that was selling a license to another company within the group. It spread over this rate through a depreciation. This creates, as I said, temporary tax benefit now, as a different tax which will reverse, in fact, gradually in the coming years, in the four coming years. For the next year we expect, because the most part of our taxable income is in Morocco.
As you know, in Morocco we have a really big difference between the tax rate that we have as a company having more than MAD 100 million taxable income, which is 36%. Yeah. If we are less than that, we will be at 20%. According to that, we think that if we are less than MAD 100 million as a taxable income, we should be, on average between 25%-30% as tax rates on our consolidated accounts. I don't know if my answer is quite clear. If not, you can also request any clarification, and we'll be happy to answer. Thank you.
Thank you, Aziz. There's a follow-up from Mehdi as well. It says, "Could you share the backlog split across the main segments, especially payment? I'm not sure if you heard the question. Would you like me to repeat it?
Oh. I guess that Brahim has some issues, because we don't hear you well, Brahim. I don't know if there is any issue from your side.
Hello.
No problem.
Hello?
Yeah, it's okay with that now.
We hear you, Sir Aziz, I mean.
No, Ibrahim. 'Cause I guess that Ibrahim has some issues.
Hello?
Yeah, Ibrahim. Go ahead.
Can you hear me?
Yeah, sure. Yeah.
Yeah. It's fine.
Okay. Yeah. I was able to hear you, but I think that it was not the case on your side. In terms of backlog splits, the first level of split is between the one-off and the recurring. The one-off, which is product deployment and upselling is 40% of the backlog at the end of 2025. The recurring that includes switching SaaS and maintenance is 60%. On more detail, I don't know, Aziz, if you have the splits within these categories or not.
Yeah. Give me just 10 seconds, and I give it.
Okay. Is there any other question from Mehdi? I think that I have it. Mehdi, in terms of splits, we have project delivery, it's 33% of the backlog. Upselling is 9%. We have 33% that is maintenance. We have 20% that is SaaS.
Brahim, if you display, we cannot see your screen.
No, no, I'm not displaying.
Okay.
6% it's switching. Mehdi, happy to share this later with you by email if needed.
Thank you. We still have a few more questions in the Q&A box, so I'll take them one by one as fast as possible. First one, it says, "Can you elaborate further on how big the AI efficiencies you are seeing? How much costs can you cut, and what productivity metric per employee are you seeing?"
Okay. We have deployed AI in different pilot programs or live in some business case. One that has been deployed since the beginning of 2025 is on the delivery. Here we have compared the efficiency on different teams that were working in parallel on the delivery. We have measured reduction of the effort by 35%. We have been able to produce, I would say, the same effort with 35% less cost than human working on the same projects. Abdeslam, I don't know if you have some other metrics that have been measured.
Yep. This is one metric that has been measured and yet to be deployed on all the activities where this can apply. What we are doing now in AI is making sure that whenever we do something, we measure and we deploy to make sure that we get the income. The income or the revenue or the plus that we get from the AI is not only on the human cost, it is also on the quality and mainly on the speed of delivery. As you know, and especially with our SaaS migration, the time to value is the most important thing.
A project that used to take a year and a half, with AI, if we can get 10%-15% improvement on the delivery time, you can imagine how much this will be in the revenue recognition. Our AI effort is obviously on the human cost. How can we do more with the same human capital that we have? How can we do faster? This is as important as the other. What we expect to have is still qualitative. We know that we can do better. We have measures on specific activities that have given us very encouraging figures. Brahim mentioned about the 35%.
We have seen also on the coding that is getting really very good, and especially on the quality of the testing. This is good. How much it is costing to us? It costs us several millions of dollars per year on the platforms that we are using, on the people that we are training, on the people that are fully dedicated to that. We are still on the tuning of all the discussed. Globally, it is something that is getting us better than what we used to be and where we are. We are not yet in a very accurate figures to be able to say that this is what it will give us at the end of the day. It is part of the global effort that we are doing.
Thank you. Next is, there's another question that says: Does part of the on-prem CR2 backlog eventually convert into maintenance revenues once the projects are delivered?
Excuse me, Omar, I didn't catch the question.
The question says: Does part of the on-premise or CR2 backlog eventually convert into maintenance revenues once the projects are delivered?
Yeah. Yes. Aziz, please correct me if I'm not precise or correct. The model of CR2 is that they are selling multi-year license. That includes the maintenance. In fact, they have a license that is renewed every three years. In this license cost, the maintenance is included. Aziz, is my explanation correct?
Yes, but I'm waiting for Aziz to answer.
Yep.
No, it's all right.
Okay. Yep.
Unlike the HPS model, in the CR2 model we have a multi-year license that needs to be renewed. The recurrent revenue on the CR2 license is higher than the maintenance on the HPS model. The license is a multi-year license that needs to be renewed on cycle basis.
Thank you. Next one says—
So—
Sorry, go on.
Just perhaps to complete. In fact, just because I think that the question behind is to know if there is any recurring business after deployment. Yes, it's not the same name as HPS in the business model. Yes, after each project, we have recurring that is coming. Today the recurring business of CR2 is 60%, which is a high level coming from the licenses that are renewed.
Very clear. Thank you. Next question says: What is the share of revenue denominated in U.S. dollars?
Today, we have more or less 60% of our revenue that is in U.S. dollar or in a currency that is linked to the U.S. dollar. We have more or less 12% that is in Moroccan dirhams, and the rest is in euros. This is the main split that we have in terms of currency.
Also just to complete the answer of Brahim concerning the currencies linked to the U.S. dollars, there are also hard currencies. It's mainly Australian dollar and Singaporean dollar.
Clear. Thank you. Next question says: Africa now accounts for a significant share of turnover. Can this change be considered as structural in the group's geography, or is it a calendar effect linked to the progress of regional projects?
In fact, the growth of Africa in the revenue is coming from the integration of CR2, where CR2 business is today at 80% in Africa. The real dynamic of HPS, the growth is coming from Asia and North America today. This is the most dynamic regions in terms of growth since perhaps two, three years. We see that it's accelerating. In addition, as explained during the presentation, we have $15 million on SaaS ramp-up that will come from these two regions in the next two years. Africa remains a very strategic region for our business, so we are very strong, probably number one software provider in our business.
We have a position to defend and to defend our market share there. The growth is coming from other regions. The growth that we had in 2025 is timing effect coming from the integration of CR2. We also have the other trend that will appear in the coming years is that the business of CR2 itself will diversify more and more thanks to the footprint of HPS. Today, HPS is in more than 100 countries, where CR2 is more concentrated in Africa, in some places in the Middle East and in Australia. They will diversify more and more thanks to our or the support of the group to be more active in Middle East in Asia with HPS.
Thank you. Another question on backlog. It says, as your backlog has progressed significantly, how much is firmly secured and already contractually committed, and how much still depends on the pace of project execution at the customer sites?
Well, in fact, 100% is secured. There is no uncertainty on this backlog. What is not sure at 100% is the pace of deployment of this backlog. When you have a project in the backlog, you expect to deploy it within one year or two year, but it can take one year and half or two years and half, depending on the complexity of the project or the pace of the customer to absorb the project. 100% of the value of the backlog is secured.
Thank you. There's a question on SaaS. It says the SaaS revenue in 2025 was MAD 284 million, while in the full- year publication you mentioned that SaaS represents 72.3% of total revenues, which amounts to MAD 1.1 billion. Could you please clarify?
Excuse me, Omar. I didn't catch the figures that you mentioned.
Sure.
You said.
No problem. I'll repeat.
In fact, the 70% is representing the part of r ecurring and regular revenues, not only the SaaS revenues.
All right. Very clear. Thank you. Sorry. Another written question that says: When do you think that most of the improvement in the margin will occur, 2026 or 2027, to reach eventually 25%-30% EBITDA margin range?
It will be fully impacted in 2027. 2026, and I think that we went through this question differently with the question before. We are on the way to reach the target of AccelR8 with the EBITDA margin comprised between 25%-30%. But we do not believe that it's something that will happen in 2026, so we will be in the middle. 2027, it's the target for HPS to be there.
Thank you. Lastly, we have a follow-up question from Rachid Alaoui. Please go ahead.
Yes. Thank you. Thank you, Omar. I was wondering, in the shadow of the Iran's war, is there. It will make any effect on the future of your customers, maybe postponing their investment or something, in the shadow of the Iran war and maybe the barrel at more than $100, and maybe the inflation if the war lasts more than two, three, or four months. Thank you.
As of now, we do not see any impact on our business. We have received a lot of queries from our customers asking about our business continuity plan. How are we planning to continue to deliver if the worst happen? We shared this with all our customers that were worried about this, and the business continuity plan that we have is strong. We managed to get the confidence of our customers. The impact on HPS, we had unfortunately some of our engineers that were on the most exposed places, and we managed to extract them and get them into safe places where they are today.
Today, none of our staff in Dubai have requested or have any issue of security. Our business is running, our office is open, and we follow the rules or the instructions of the authorities. Up to now, we obviously take the news from the team every day multiple times a day. Today, we have about 100+ people living in Dubai. On the business itself, if ever this war continues, we will have an impact globally on the business or the economy. Each time there is a problem or there is an issue in the economy, we have seen that the banks and the actors of payment need to react to that.
It is where we have business. I give you the example of COVID. During COVID, the transformation of payment has been absolutely phenomenal and we have done a lot of innovation during COVID, and we get more business, not during COVID, but during COVID, we had a growth on the period of COVID. After COVID, we have seen that there was a lot of things that would happen. We are not that worried from the business side. We are worried obviously to see the pain that all this is causing in the region and in the globe. In the effect on our business, we are not seeing any immediate or midterm impacts. We obviously always hope that this will stop at the earliest possible.
Thank you, Abdeslam. Thank you.
Thank you. We have no more questions in the queue, so, I'll leave the floor to you, for any concluding remarks before we wrap up the call.
Thank you all for coming. Sorry I was not able to be for technical reasons. I think Brahim must have mentioned it, Aziz as well in the beginning. We are in an inflection point. We have accelerated a bit our transformation. We are not yet there 100%, but we see the light of our transformation where the cost has been a little bit. Or our investment, not really the cost. What we are looking at is getting back to decent margins, making sure that we win business as much as possible to continue our AccelR8 program that will end in two years. We are preparing another set of ambitions to take us to the top of where we want to be. Always concentrating, always focusing on our business, on the technology, making sure that we are more relevant than ever for our customers in the payment industry.
Thank you very much, Abdeslam, Brahim, and Aziz. Thank you all for the comments and the insights, and thank you everyone for your participation today. This concludes the call, and have a good rest of the day. Thank you.
Thank you.
Thank you, Omar, and thank you all for your presence and thank you for this.
Bye.
Thank you.
Cheers.
Bye.