Good day, and thank you for standing by. Welcome to Vusion Q3 2026 sales conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the conference. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Olivier Gernandt, Vusion's Investor Relations Officer. Please go ahead.
Thank you very much, Heidi. Good afternoon, ladies and gentlemen, and welcome to Vusion's third quarter and nine months 2026 sales webcast and conference call. Joining me today are Thierry Gadou, our Chairman and Chief Executive Officer, and Thierry Lemaitre, our Deputy CEO of Corporate and Finance. Thierry Gadou will begin by reviewing the group's key operational and financial highlights for the third quarter and the first nine months of 2026. He will also share his perspectives on our business momentum and conclude with an update on our full-year outlook. We will then open the floor to questions, which both Thierry Gadou and Thierry Lemaitre would be pleased to answer. Before we begin, let me remind you that some of the statements made during today's call may be forward-looking and are therefore subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied.
For further details, please refer to the safe harbor statement included in our press release and on slide three of today's presentation. Our third quarter sales press release was published earlier this evening and is available in both French and English on our website, vusion.com. Today's presentation slides are also available on our website under the Regulated Information section, and a replay and a transcript of this call will be made available on the website following the event. And with that, it's my pleasure to hand you over to Thierry Gadou for his opening remarks.
Thank you, Olivier, and good afternoon. Good morning, everyone. Thanks for joining our conference call. Very pleased to present with Thierry Lemaitre our sales figures for the third quarter and year-to-date nine months. First, in summary, Vusion delivered another strong quarter with adjusted revenues increasing by 25% at EUR 445 million, and nine months adjusted revenues up 28%. At constant foreign exchange rates and tariffs, this would be a 41% growth. Order intake were up 10% year-on-year at EUR 462 million. This is our best Q3 ever. Our VAS revenues, which are revenues from software services and all non-ESL solutions, continue to expand with a strong growth of 45% in Q3. It's our best VAS quarter ever and 40% for the first nine months. Within that, recurring VAS revenue increased by 77% over the first nine months, and annualized recurring revenues, ARR, reached EUR 154 million, up 82% year-on-year.
Finally, with this strong quarter, we are reiterating our full-year guidance with global revenue growth of 15%-20% at constant exchange rate and tariffs, around 40% VAS revenue growth, and an EBITDA margin increase of more than 100 basis points for the full year. Let's review the third quarter in a bit more detail now. IFRS revenue reached EUR 433 million at 24% compared with last year. On an adjusted basis, group revenue reached EUR 445 million of 25% year-on-year, and at constant exchange rates and tariffs, adjusted revenue growth reached 49%. At this point, I will let Thierry re-explain as last time the exact adjustment of constant rates and tariffs. Thierry, if you can just give, again, an explanation on that.
Yes.
On the recent slide.
Let me remind first why we made such a guidance. First, we experienced significant volatility in euro-dollar exchange rate between 2025 and 2026, with the rate moving from 1.10 in H1 2025 to 1.16 in H2 2025 and H1 2026. We had anticipated the potential for such currency fluctuations, which is precisely why we set our 2026 revenue guidance at constant exchange rates compared with 2025. I would also like to remind you that in 2026, as was the case in 2025, the group expects its US dollar denominated cash inflows and outflows to be broadly balanced. As a result, foreign exchange fluctuations should primarily affect reported revenues, while their impact on gross margin on EBITDA should be significantly more limited. The second source of volatility relates to U.S. tariffs. In Q1 2026, the U.S. Supreme Court's ruling had two main consequences.
First, tariffs paid in 2025 were fully refunded by U.S. Customs and Border Protection in Q3 2026. In turn, Vusion refunded its customers the portion of these tariffs that had been passed on to them and recognized as revenues in 2025. Second, new tariffs were introduced in 2026, albeit at lower rates, and Vusion also passed on part of these additional costs to certain customers. As a result, reported revenues in 2026 is affected by several tariff-related effects, making year-on-year comparisons with 2025 less meaningful. This is precisely why we report revenue growth at constant exchange rate and tariffs to neutralize these effects and provide a clearer picture of the group's underlying business performance. Now for Q3 2026 more specifically, adjusted revenues at constant tariffs and euro/dollar exchange rates stood at EUR 529 million, which is a 49% increase versus Q3 last year.
Thank you, Thierry, for this explanation. Over the first nine months of the year, IFRS revenue reached EUR 1.25 billion, while adjusted revenue amounted to EUR 1.28 billion, representing year-on-year growth of 30% and 28% respectively. At constant exchange rates and tariffs, adjusted revenue growth reached 41%. In terms of geographical performance, growth was driven by strong momentum in both our two regions. In EMEA, revenues reached EUR 330 million over the first nine months of the year, up 11% year-on-year, with growth accelerating Q3 at 20% growth year-on-year. The momentum is good in the region. We win more deals and expand the business with our large customer base. The increase in order entry since the beginning of the year is now translating into a ramp-up in deliveries and revenue, and this momentum is expected to continue over the coming months.
Business is also well-balanced across the region, with particularly positive momentum in France, Germany, the U.K., which by the way, the U.K. is now our third largest market in Europe, Scandinavia, Spain, and Turkey. As some deployments are accelerating in the fourth quarter, we expect a revenue growth of 15%-20% in the EMEA region for the full year. If we could look at the rest of the world, the Americas and APAC region, revenues reached EUR 954 million on an adjusted basis over the first nine months, up 35% year-on-year, primarily driven by the United States. This strong business momentum continues to be supported by the deployment of EdgeSense at Walmart in the United States, the completion of which is expected in the coming weeks.
In parallel, our partnership with Walmart is expanding to new geographies, Mexico and now Canada, and several projects involving new solutions are also underway, some of which are at an advanced stage and should lead to deployments in the near future. In addition, Vusion has a large and growing pipeline of pilot projects with retailers in North America. Among these, Vusion has recently signed an agreement with a prestigious North American specialty retailer in the non-food sector, now beginning deployment across around 200 stores in the U.S. and Canada. More generally, our U.S. sales pipeline is at an all-time high, and we anticipate strong adoption momentum over the coming years across our entire ESL and VAS portfolio. Regarding the growth in order entries, in the third quarter, global entries reached a strong EUR 462 million, up 10% compared with the record level of the third quarter of 2025.
This outstanding momentum was largely driven by the EMEA region, with significant contract wins from several major retailers in Germany, as well as new orders in France, the U.K., Austria, Scandinavia, and Turkey. In the rest of the world, solid order entries were notably supported by the signing of a new agreement to deploy our next-generation platform at Walmart Canada. Following, you remember, the agreement signed in Mexico in the first half of the year, this represents another major deployment project for 2027. Over the first nine months of the year, global order entries reached EUR 1.14 billion and close to EUR 1.6 billion on a 12-month rolling basis. Vusion continues to anticipate strong order intake momentum in the fourth quarter, supported by its robust sales pipeline and ongoing negotiations.
The group is targeting approximately, no change versus what we said a month ago, EUR 1 billion in order entries for the second half of the year, and we expect full-year orders to exceed the level of 2025. The other highlight of the quarter is the acceleration of VAS. In the third quarter, VAS reached EUR 77 million, up 45% year-on-year, representing slightly more than 17% of total revenue. Over nine months, VAS revenue reached EUR 202 million, up 40%, and accounted for approximately 16% of Vusion's total revenue versus 14% in 2025. So within that, the recurring VAS reached EUR 100 million over the first nine months. That is a growth of 77% compared with the same period in 2025, and it is driven notably by continued strong momentum in VusionCloud.
Our cloud install base has nearly doubled over the past 12 months, reaching over 600 million connected devices at the end of September. On an annualized basis, our recurring VAS revenues reached EUR 154 million in Q3, up 82% year-on-year. Subject to the successful completion of the ISM acquisition, which should be completed before the end of the year, Vusion's pro forma annual VAS revenue is expected to reach approximately EUR 400 million in 2026. 2026 guidance is confirmed with this strong third quarter. We confirm the growth and profitability target that we announced with the publication of our annual results in February 2026. Adjusted revenue growth of 15%-20% at constant exchange rates and tariffs. Here again, I will ask Thierry to give a precise explanation of what that means in terms of reported versus revenue at constant dollar and tariff.
But Thierry, maybe you can comment-
Yes, sure.
-are showing, which is the same as the-
This chart provides an overview of our full year revenue expectations, consistent with the guidance we shared during our H1 earnings call. We confirm that the group revenue is expected to grow by 15%-20% in 2026 at constant in tariffs and euro-dollar exchange rates compared with 2025. This translates into a full adjusted revenue range of EUR 1.75 billion-EUR 1.83 billion on a comparable basis. We expect the negative foreign exchange impact between 2025 and 2026 to be approximately EUR 50 million, assuming a euro-dollar exchange rate of 1.16 for H2 this year. Given the current evolution of the euro-dollar exchange rate, this impact could even be lower than that. In addition, we anticipate a negative impact of approximately EUR 100 million from changes in U.S. tariffs.
This excludes EUR 68 million in credit notes issued to customers to recent tariffs that had been passed on to them in 2025. The full EUR 68 million impact was recognized in Q3 2026 in both adjusted and IFRS revenues. Taking these two effects into account, we expect full year 2026 adjusted revenues to range between EUR 1.60 billion and EUR 1.68 billion, subject of course to movement in the euro-dollar exchange rate during Q4.
Thank you, Thierry. In other words, no change in our guidance here, where we confirm also our guidance of approximately 40% growth in VAS revenue with a stronger growth in recurring VAS revenues. We anticipate an improvement of more than 100 basis points in Adjusted EBITDA margin and a continued growth in our operating free cash flow. With this, I will hand over for questions.
Thank you. We will now begin the question and answer session. As a reminder, if you wish to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. If you wish to ask a question via the webcast, please type it into the box and click submit. We will take our first question. Your first question comes from Hugo Paternoster from Kepler Cheuvreux. Please go ahead. Your line is open.
Yes. Good evening, gentlemen. Can you hear me well?
We can.
Yep.
Great. The first question I have, I will just have three, is on pricing and especially the competition in Europe, especially again in Germany. Just wonder how competitive the tender was in Germany and does your EdgeSense allow you to maintain your ASP? A follow-up on that is, should we expect the German wins to contribute already this year or should it flow into the next year? The second question will be on the order intake and especially on the VAS order intake. Currently, what is the share of the recurring VAS that you have in the order book as of the end of September? The last question is a bit a broader question, but could we have an update on the ramp-up of Carrefour, the U.K. ramp, and also the ramp-up that you have in Mexico? Thank you.
On pricing, any deal that is of significant size, there is always an aspect of, let's say, competition. We are not alone. On the pure hardware side of the deal, there is a competition. We also have differentiation, and because in the cases particularly of some of these German deals, we have been also selling in the EdgeSense platform, which is unique today in the world. We have our, I would say, our pricing power when it comes to strong innovations. That is a general situation of the market, there is obviously price competition like in any market, but we are also driving a lot the market with innovation and very innovative products. That is how we maintain a reasonably good momentum in gross margin as you have seen over the past few years. Because our variable cost margin are increasing in percentage.
The second part of your question on pricing was about the ramp-up. I didn't exactly get the connection with the pricing. Was it somehow-
The second part was regarding the German wins, and just wonder when it should flow into the revenue, whether there is some revenue that could be generated already in Q4, or is it mostly for next year?
No, no, it is going to. Most of the order entries, it takes a bit of time with manufacturing lead times, et cetera. So it is for next year.
Okay.
Regarding your second question, I think we tried to answer. We give the VAS revenue, we give the recurring VAS revenue, and we give the annualized recurring VAS revenue. At the end of September, the recurring part of our VAS is, in annualized term, EUR 154 million, which means that is the revenue that we have for starting for the next quarters. That's a part of the question. I think the total VAS is going to continue to grow significantly. As I said, in pro forma terms, given integrating also the ISM acquisition, it should be around EUR 400 million this year. We expect that to be higher next year. Then the ramp-up of Carrefour, you mentioned Morrisons. Yeah, those are our projects for which deployments are now underway and visible. The ramp-up of Carrefour are already visible in a number of hypermarkets.
But it's the beginning, so there is still a lot to do. Morrisons is also deploying. They are already at over a few hundred supermarkets deployed. It's moving well and it's going to continue in Q4 and the first half of 2027.
Okay. The last one was Mexico with Walmart.
Just an update-
Yes, well
-on the situation there, please.
Yes. The rollout is going well. We announced this during the first half, and the rollout is already started and going very well. We are very pleased that now we signed also the rollout in Canada. We are expanding in Walmart International. Obviously, we could not do that if the rollout in Mexico is not going very well. We also have another banner under test in Mexico because we had already two, and we had a pilot also working quite well in the third banner in Mexico, which has quite a number of convenience stores. It is an important topic. Everything going well.
Okay. Just to follow up on that, the last banner in Mexico, do you expect that potentially to be confirmed, or to advance for next year? Is it more a topic for 2028? Any update on that?
No. It is always difficult to speak about something that is not yet decided. But I think it should be faster than 2028.
Okay. Thank you.
Thank you. We will take our next question. Your next question comes from the line of Aurélien Sivignon from Oddo BHF. Please go ahead. Your line is open.
Hi. Good afternoon, both Thierry and Olivier. Three questions on my side. First, a follow-up on the order intake. I was still quite surprised by the Q3 numbers since there was a lot of shifts during the quarter. So could you provide maybe some more color on the main drivers? Was it driven more by extension or renewal from existing customers, or more likely by new wins? Also, to what extent are VAS solution already contributing to Q3 order intake? The second one is still on order entries. If I have not mistaken, reaching flat full year 2026 order entries versus full year 2025 will imply roughly EUR 560 million in Q4 standalone. What is your current level of confidence in achieving that number by year-end? Last one on EMEA, should we expect growth in this region to further accelerate in Q4 versus the roughly +20% in Q3?
Thank you.
Yeah. So in the order entry from Europe, it's really both driven by new wins, new logos, and at the same time, expansion of large customers who continue to expand. We've always said that a part of our growth is definitely coming from our existing customer base. We still have a partial completion, only a partial coverage and penetration of our customer base. So there is growth there. But there were quite a number of new wins, and it's no surprise, I think the order entries in Europe since the beginning of the year are growing, and significantly growing. So it continues in Q3 with both new logos and significant new wins and also expansion of our customer base. The VAS contribution is actually twofold.
It's very significant because on the one hand, VAS is growing, so VAS is a very obvious, and you can see it in our numbers, contributor to our growth in general. It's an engine of growth. It's an accelerating engine of growth, so that's the first thing. But it has also an impact on our overall business, so there is leverage on VAS because it differentiates us very much. So it's also driving win rate on the rest of the business, which is the ESL business. So it has a very significant contribution because our VAS differentiates the total value that we can deliver to customers with a shelf edge technology. The confidence, so we are expecting, as you calculated very well, above EUR 500 million in Q4. We'll talk about Q4 when we talk about Q4, so it's a bit early, but we are confident on this target.
Regarding EMEA, the revenue in EMEA is growing quarter- after- quarter, sequentially, EUR 100 million, EUR 110 million, EUR 120 million. Is it going to continue to grow? As we said, if we want to reach 15%-20% for the full year in Europe, EMEA will grow more in Q4.
Thank you, Thierry, for the color. I am going back to the queue.
Once again, if you wish to ask a question, please press star one one on your telephone. We will take our next question. The question comes from Flavien Baudemont from Bernstein. Please go ahead. Your line is open.
Yes. Good evening, gentlemen. I have two questions on my side. The first one is on the order entries. Can we have a color on the share of EdgeSense in your ESL order entries if we exclude Walmart and Carrefour? Then you mentioned an agreement with a large U.S. retailer. I would like to know, first, we know that you hate giving names, but can you have a little bit more detail about the client? When I say that, I mean the number of ESL per store, and is there only 200 stores to equip, or is it going to be a second and a third wave like it happened for Walmart? Thank you.
The first question, the order entry. One of the large deals that we signed in Europe is an EdgeSense deal. Again, EdgeSense is also very significant in most of our pipeline today. It is a significant portion of the pipeline, and that German retailer will be the second largest large rollout of EdgeSense in Europe. It is probably not the last one because there are multiple EdgeSense deals right now in the making. EdgeSense is a driver of growth, definitely, not taking into account Walmart International and EdgeSense. Same in, by the way, the U.S., the majority of our pipeline is on EdgeSense.
In Germany, is it a new client or is it an existing client for the EdgeSense deal?
We will announce it soon, anyway.
Okay. No worries.
We will talk about it. U.S. retailer, we do not disclose it because it is a choice of the retailer. We will disclose it. It is a specialty retailer, very well-known brand, but not a major tier one. But very famous brand and it is a great win. But we will talk about it also later because we are not free to talk about this name yet. But it is part of the order entry, so we had to mention it.
Okay. Thank you.
It is EdgeSense, by the way.
Thank you. Once again, if you wish to ask a question, please press star one one on your telephone. There seems to be no further questions at this time. I will hand back for closing remarks.
Thank you very much. By now, you should have all received an official invitation to our Capital Markets Day on November 18. The full executive team will be with me, and we look forward to discuss our future growth prospects. It should be an exciting event. We hope many of you will be able to join us on the afternoon of November 18. Thank you for your attention, and see you then.
This concludes today's conference call. Thank you for participating. You may now disconnect.