Ladies, and gentlemen, welcome to the Q1 Figures 2025 of GFT Technologies SE Conference Call and Live Webcast. I'm Iruna, The Course Call Operator. I'd like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Andreas Herzog, Head of IR. Please go ahead, sir.
Thank you, Operator. Good afternoon, ladies, and gentlemen, and thank you for joining us. Today, this morning, we published our results for the first quarter, showing a good momentum for the start of the year. Our CEO, Marco Santos, and Jochen Ruetz, our CFO and Deputy CEO, will guide you through the details and will be happy to answer your questions afterwards. All corresponding information can be found on our website, as usual, and as well as the recording of this call, which we will make available there afterwards. Having said that, I would like to hand over to you now.
Thank you, Andreas. Warm welcome to everyone. Thank you for joining us today. I'm pleased to report a solid start for GFT in 2025, despite the volatile times that we all have been living in, as you can see on the slide three. Our revenues grew by 4% to EUR 222 million and 7% of growth in local currencies, not considering FX effects. Our adjusted EBT of EUR 15 million was in line with our quarterly plan. In terms of our guidance, we are planning and expect a higher demand over the next three quarters of the year, and we are confident that we will achieve our annual targets and, therefore, confirm our 2025 guidance. Moving to slide four, we are fully focused on executing our five-year strategy. Our Q1 highlights are connected to our five-year strategy and the respective strategic initiatives and pillars.
Our offerings and differentiation have been proven and recognized by our clients, and our portfolio has again delivered high resilience thanks to our well-balanced regional and sector diversification. Talking about the first highlights, we realized impressive growth in the U.S. and Canada markets with increased rates of 16% and 20%, respectively, year over year. We won new major deals such as a three-year, $20 million contract with one of the three largest banks in the U.S . Another three-year, $50 million deal with a Tier one asset management firm. In addition, we successfully sold our product GFT Impact to our first client in the USA We successfully initiated new offshore services from a high-efficient location, GFT India, to a Tier one bank in the USA, realizing results from our five-year strategic initiative, Global Delivery Platform and Smart Shoring.
Also, important to reinforce that our clear focus on major Tier one clients and global accounts, parts of our five-year strategic initiatives, is already paying off results and contributed to our success in such large-scale clients. The next highlight is related to the strong acceleration of our business in Latin America. Our largest market, Brazil, performed strongly with an exponential growth rate of 33% this quarter compared to Q1 last year. The integration of Software Solutions, the largest acquisition we made in the history of GFT, was completed integrally. We have already captured material synergies across the board, and especially Colombia delivered also an exponential growth of 52% this quarter compared to the previous year.
The great majority of that impressive growth in Latin America was a direct result of our five-year strategic initiative to put laser focus on our Tier one banks and Tier one insurance clients in the region. Also, the strategic initiatives of Global Business Development Platform, Improved Revenue Architecture, and AI-centric company also played a fundamental role in the accelerated expansion of Latin America. The next highlight is related to our progress and expansion in APAC and Middle East regions. Firstly, based on our strategic initiative of Global Business Development Platform and Improved Revenue Architecture, we were able to win a major digital banking project in Southeast Asia and a multimillion contract with a Tier one bank in Dubai, in the GCC, in the Gulf Cooperation Council area. Moving to the next highlight, I'm very excited to announce that we have entered the fast-growing AI-driven and multibillion robotics sector.
We are delivering a new cutting-edge AI project for one of the leading humanoid robotics companies in the world, based in Germany. This new project to win alone has a multimillion euros total contract value, and it's the largest AI pure-play project GFT ever sold in our history. This highlight is also a direct result of our five-year strategic initiative to become an AI-centric company. I strongly believe that this case will credential GFT and opens up new horizons for us into these fast-growing markets. The next topic reflects the impressive growth momentum and successful client adoption of the GFT Impact, our own generative AI product, to accelerate and improve productivity in the software development lifecycle. We could further increase livestream 315-440 in Q1, and more than 10,000 GFT employees have been initially trained in our AI Impact product.
Again, this AI-centric digital transformation company, this highlight is 100% result of our five-year strategic initiative to become the best AI-centric digital transformation company in the world. Also, important to highlight that GFT Impact product has been proving strong differentiation for us and fundamentally contributing to our impressive growth in the Americas. The next item is related to the structural challenge that we have confronted in the company. Following the principles of full transparency, ownership, and commitment with all stakeholders, it is fundamentally important to share that we have identified structural challenges in the U.K. and in the software solutions division. In a nutshell, the U.K. presented a business reduction last year. Their pipeline has been too concentrated in one single offering, transformational core banking projects, which sales cycle is 12-18 months by definition.
In other hands, they had created a large on-site delivery team, which was demanded by clients in the past, but now the market is strongly focused on efficiency and nearshore and offshore. I want to roll out the GFT USA model, which proved very resilient and successful in the U.K., and I am now implementing strongly our five-year strategic initiatives, which first marched shore, nearshore and offshore services with our Global Delivery Platform, bring all GFT global offerings and differentiators with the Global Business Development Platform, improving our revenue architecture and definitely driving our AI-centric approach. On regards of the software solutions, we separated from the board member in charge of that division in the end of December. We changed the leadership of the area recently.
We have a cost structure that does not fit with the revenue and the pipeline today, and we are now optimizing the structure in parallel with a new approach for sales and business development. To conclude this topic, myself and our top management are owning and addressing those challenges in the U.K. and software solutions with a diligent transformational action plan in order to solve them completely in line with our five-year strategy and the Gravity strategic initiative. I, myself, have done that in the USA. When I assumed GFT USA in 2020, the situation was much more challenging. We had been reducing our business for five years in a row on that type, generating staggering losses in the USA, and I delivered a quite successful turnaround for GFT. Just look at the USA today, a clear benchmark across the GFT ecosystem.
The final highlight on these slides is directly related to one of our five-year strategic initiatives, the Next Generation Technology Brands and Marketing position of GFT. GFT has been recognized as the Google Cloud Partner of the Year in 2025 in Germany and received two prestigious financial service tech awards in partnership with Saltbank and Engine by Starling Bank, which are the Best Use of IT for Consumer Finance and the Financial Service Collaboration of the Year. Now, I will hand over to you, Jochen, for the table presentation of all the figures.
Thanks, Marco. Before going into my slides, let me highlight that we are on the back of a new year, on the back of a new CEO, adapting some of our reporting metrics to better communicate our message. I will highlight on the following slides whenever that is the case. Let's go to slide number six, and here it exactly starts. The biggest change we have done is adapt our EBIT adjusted definition. In line with most of our peers and in line with demand from our investor community, GFT now also adjusts for cost of capacity adjustments, and we adjust for extraordinary items. Let's look at the list of items that we adjust for, which is in the middle of this slide, and go one by one. M&A effects is something we have been adjusting for a long time. This has not changed.
Second, capacity adjustments, we now add to our adjustment list. Capacity adjustments no longer burden the EBIT adjusted. The third pillar, share price-related effects from valuation of management remuneration, is unchanged. It was already adjusted in the past. It is quite a small number for a company of our size. We know our peers on the other side of the Atlantic adjust for far higher programs like this in their P&L. Last but not least, other extraordinary items are new to the list, and this is expected to come into play very rarely. For example, the roughly $9.8 million extraordinary profit from one court case in Brazil last year will be one of those other extraordinary items. As a reminder, that positive effect happened in Q2 last year, so we will see it when we do the Q2 reporting.
You can find the detailed numbers for EBIT adjusted Q1 2025, Q1 2024 on slide 31, and the adapted KPIs for all quarters of 2024 you can find on slide 32, so it is in the backup. Now let's move to the real numbers and go to slide number seven. Overall, we have seen a resilient top-line growth despite macro uncertainties. Marco already mentioned, you could say it is a 7% growth in constant currencies, and then we are offset by 3% of FX effects. The 7% comprise 5% organic, 2% inorganic, because when we acquired Sophos, we acquired them 1st of February, so we add one month of Sophos, which is M&A effect. The FX effects are mainly because of the strong euro. We see the euro strong in Q1 versus the dollar, but also against all of the Latin American currencies.
Therefore, we had a higher FX effect than in years before. Second KPI, order backlog, is up 14%, quite strong. I already mentioned last time that we have been able to win a couple of long-term deals in the US, three-year deals, and Marco mentioned them again today. Our order backlog is a bit more long-tail than it used to be. Not all 14% are related to 2025, but we feel comfortable with this backlog and our guidance. EBITDA is down 27%. The number we focus on most, EBIT adjusted, is down 18%. On the right side, we give four small bullet points explaining this. Overall, GFT operational business was solid, somewhat muted in continental Europe and strong in Americas. Four effects explain the change versus Q1 of last year in detail. These are the small bullet points you see on the slide.
Let me go one by one. Additional investments in line with our five-year growth strategy, as we had already announced with the yearly guidance, burdened Q1 versus last year by EUR 700,000. Far higher social security charges in Brazil and Spain. In Q1, we have been able to transfer two-thirds of those increases in cost to our clients, roughly two-thirds, resulting in the Q1 2025 burden of the remaining one-third, which amounted to EUR 600,000. The third point, U.K. government changed the rules for R&D, so they came in lower, and that effect was EUR 300,000. Now the last but not least biggest effect, business challenges that Marco already mentioned in the U.K. and in our small software unit, GFT Software Solutions. Here, the EBIT adjusted of these two units in Q1 2025 was EUR 2.5 million below Q1 of last year.
If you add up all those four, it's a EUR 4 million gap to last year. The two in the middle, social security and R&D subsidies, they will stay. They will not move out anymore, right? The cost base is simply higher or the R&D base is lower. That effect is EUR 900,000. The investments, the first point, will lead to more revenues and profits over time, not immediately, but over time. The last point is something we work on right now to improve it as fast as possible. The EBIT adjusted margin is down to 6.8%, comparing to 8.6% last year. In line with our guidance, the EBT is EUR 10 million. It will be probably similar to that number in the second quarter, and then we expect to have a similar evolution like last year, stronger profitability in the second half of the year.
Now let's go forward, go to slide number eight, and start on the left side. As the headline already indicates, the insurance business gained traction, 24% growth in the first quarter. For those who follow us for a longer time, last year, I think it was -10% in the first quarter for insurance. So we have a lot of changing, moving patterns in GFT, showing that a company that is globally can balance some of the risks. This year, insurance is supporting growth, 24%, especially coming from Brazil and Canada. At the same time, the banking business is flat, no growth in the banking business versus last year. We have a slower business in the U.K. We have a somewhat slower business, new to business in continental Europe, and we have compensated this with growth via M&A and in our Americas markets.
Last but not least, industry and others up 12% for different smaller reasons. Now I go to the right side to our client portfolio, and here we also have tweaked our values somewhat. We have adapted the numbers. We now start with the biggest group at EUR 25 million. It used to be EUR 50 million. Now we do it at EUR 25 million, which means four clients fall into this group, representing 23% of the GFT portfolio. The biggest client, as mentioned in the sub-headline, represents 12% of the overall GFT revenue. The next group of EUR 10 million-EUR 25 million was boosted to 38% of our total business. Now we are using the data for one quarter and assuming it will be the same throughout the year.
Maybe there will be somewhat a statistical effect and the number will come down a bit because this might have been some clients were just above EUR 2.5 million in the quarter and fell into this bigger group. So 38% is a very good number going towards global accounts. Next group, EUR 2.5 million-EUR 10 million, represents 20% of the GFT portfolio, and the funnel of clients below EUR 2.5 million represents 19%. From now on, we will exactly show it with these values attached. We believe the client portfolio is well-based for the years to come. Going forward, let's go to slide number nine and look at the quarter. This is usually interesting in quarters two, three, or four. I will just repeat what I already said on prior slides because we only have one quarter to look at. Q1 2025 versus previous year is up 4%.
The growth we already mentioned, mostly due to Americas. When we compare to Q4 of last year, so just the quarter before, we see a 1.5% reduction, which is also usual in our business that our clients start a bit weaker, a bit more cautious into the year when spending their IT budgets. That's why we're down 1.5% in that. Looking at profitability, the same explanation is true that I just used. We are down 18% on EBIT adjusted for the reasons mentioned, increased personnel cost, and the weaker business in U.K. and software solutions. Comparing to the last quarter, to Q4, the gaps are bigger. Utilization was lower, revenue was lower in Q1 of 2025. That's why we see a bigger gap between Q1 of this year and Q4 of last year. Moving forward, slide number 10, revenue and earnings by segment.
Let's start at the top with the continental European business segment. We're down 2% in revenues, which is organically, there's no other effects. We saw a small slowdown in the European market. It is - 1% here, - 3% there. All our bigger markets were not growing. This compares to a Q1 last year where we saw organic growth of 12%. So 12% plus last year, - 2% this year. Okay, the flip side is Americas, U.K., and APAC. Growth of 11% organically and total 10%. This segment was negative in Q1 of last year. The two segments just changed their role with the Americas, U.K., APAC segment, especially growing in Brazil, U.S., and Canada. It's also reflected on the profitability side to the right, but let me repeat. Please look at profitability of the GFT group. We mix profitability between segments because we do smart shoring.
Sometimes delivery margins are in one segment and the sales margins are in other segments. Still, let's look at it for a second. We see that continental Europe is down 42%, driven by the weaker demand that we have faced. Utilization was not as good as last year, and we had the declining software solution business inside. All these led to a reduction of the EBIT adjusted. In Americas, U.K., APAC, it was the other way around. Despite the U.K. business evolution, which was not supportive of the margin, we saw good progress in the U.S. and in Canada. And some of the markets, which have been holding back a bit last year, at least went to zero or slightly positive in 2025. Therefore, a strong improvement on profitability in the Americas, U.K., and APAC segment. Let's move on to slide number 11 and look at the regional breakdown.
Another slide that we have adapted. So far, we showed a lot of countries on this slide. We thought it's probably better to cluster them in regions, which we from now on do. Europe is our biggest region, representing 42% of the GFT revenue. We're down 5% versus last year's first quarter. You see on the right side, a lot of our big countries down 3%, 1%, 3%. It's not big moves, but we have not progressed in the first quarter. The clients have been more cautious in Q1 of this year than they have been last year. Latin America is the other side of the medal. We are 27% share of GFT revenue, and we see growth of 29% on EUR basis, which means in these markets, we have grown in local currency even faster. Brazil up 33% in EUR, Colombia up 52%.
Now this includes the M&A effect. There is an additional month in this number. The organic growth of Colombia was double-digit, 10%-12%, but the 52% is linked to M&A. North America, 70% of the GFT portfolio, up 19% versus last year. US growing by 16%, Canada by 20%. Strong start in North America. U.K., 10% of the GFT business, down 20% in revenue. Challenging market for us at the moment. Marco talked about our positioning there that we have to work on. Some revenue was moved by client demand from London to Frankfurt or to New York. Even if we discount for that, it is a double-digit negative on the revenue side. Last but not least, APAC and others, more or less flat for the first quarter. We expect APAC to show a significantly better year in 2025 than 2024.
It's not yet showing in the first quarter, but I'm very sure that latest next quarter and for the full year, we will see a green arrow for growth in this region. Let's go to slide number 12, and let's do these a bit faster. P&L, not much to talk about. The non-personal costs are in check, growing more slowly than the revenue. The personal cost burdened by higher capacity adjustments and increased social security cost. Of course, our two entities that challenge us at the moment, U.K. and software solutions, they have a worsened ratio of people cost versus revenue. We are working on that. That's the KPI we need to improve. Going further down, our cost in check, income taxes at 29% tax rate. This is pretty much what we expect for the full year. Going to slide number 13, the cash flows.
We started the year with a net cash of EUR -42 million. You might remember me talking about a very, very strong operating cash flow in the fourth quarter, really giving us a lot of incoming money and therefore a low working capital base for Q1. Yeah, now we have Q1 2025. It's the flip side, right? Not so much to be paid, EUR -4 million. We would have expected EUR 10 million less last year, and these EUR 10 million moved to Q1. Overall, we can't influence the payment behavior of our clients. EUR -4 million is okay for us. We're fully on track for the targeted operating cash flow for the year. Nothing happening on the investing side. Financing activities, we paid back some loans, which brings us to a net cash at the end of the quarter of EUR -51 million.
Going forward on slide 14, I think we can do the balance sheet very fast because not much happened. Main effect, we used cash to pay back some of our loans, which on top reduced the balance sheet total. All other balance sheet items are moving in line with this business evolution. Which brings me to slide 15, the people slide. Let's start with the employee number. We see we're 90 people less than at the end of 2024, so it's a minor impact. We are highlighting all the countries that are up or down, but usually it's a handful of people up or down per country, so not really worth mentioning. Workforce more or less stable. Number of external contractors reduced by 100. Then utilization.
Utilization, you see that we have added a line between Q4 and Q1 because from now on, Sophos, which is now fully integrated in our systems, is part of our utilization calculation, and they are lifting the waterline of GFT. They are changing the baseline because we have added 1,400 people at a very good utilization, above 93%, which simply increases the baseline of utilization in GFT. If we would take out that effect of roughly 0.8% plus some non-billable work we have done in Italy, utilization of the old GFT without Sophos would have been very close to the 90% we saw in Q1 of 2024. More or less the same utilization on the business side plus adding Sophos. Now, including Sophos, we will continue to be higher on the utilization. That is a statistical effect.
Attrition, last but not least, significantly increased to 12% in line with our business evolution. Wherever we saw growth on the business side, we saw growth on the attrition. Americas, North, South America, this is happening, while in Europe, attrition is still quite low. It is an early warning, and it continues to be an early warning indicator between people changing jobs and business picking up. We believe the number as Europe will expectedly pick up during Q2 and the second half. We see attrition also going further up throughout the year 2025, probably towards 13%-14%, which we will see at the year end. This brings me to slide 16, which we just drop in because it is something we have announced in March, the share buyback program, and we want to mention it today at least once.
We have informed you that we are doing a EUR 15 million share buyback, should be roughly 650,000 shares, of which 108,000 already have been acquired until Friday last week. We are working on this already. Probably will not take until October to get all the 650,000 shares. We are authorized by the AGM. We need to renew that in the upcoming AGM to perform the full scope of this order by share buyback. We expect last point, purpose, KPI impact, that the shares will be redeemed, and the guidance, of course, was included in our guidance. The share buyback was included in our guidance. That is the right sentence. All right, to my last two slides. 17, guidance of 2025. Mark already reiterated it. The revenue guidance remains at EUR 913 million in revenue, 7% growth. The EBIT adjusted, we now adapt for the changed methodology of the EBIT adjusted calculation.
It used to be EUR 68 million. Now we take out the EUR 7 million of capacity adjustments we assumed when we did the guidance, and the new EBIT adjusted is therefore EUR 75 million for the full year. Just as a comparison, the comparable number for 2024 was EUR 78 million. Now my very last slide, additional milestones for 2025. The first two are unchanged, so the free cash flow is expected at EUR 45 million, the net debt 0.2 times EBITDA. The last one, the utilization, we slightly increased because of the statistical Sophos effect that we have now learned. Our do really works, and we increased the utilization expectation for the year to 91%. With that, last slide, Marco, over to you.
Thanks, Jochen. Let's move now to the slide number 20.
My final slide to conclude the Q1 performance and the outlook for the coming months and years. I'm very pleased to share with you that we demonstrated our resilience and delivered a solid top-line growth in Q1 despite global market challenges. The AI software and services market is a great opportunity for GFT, and we have already delivered tangible results for our business and operations, and I'm confident that there is much more to come. We are executing our five-year strategy with diligent focus, clear goals, and global strategic initiatives, which have already created positive impact for GFT. We have diligently identified and addressed the challenge in specific markets as part of our strategy to build a solid foundation for the medium and the long term. Our five-year strategy has started successfully.
Myself and the entire team are determined to make GFT the number one responsible AI-centric digital transformation company in the markets and to achieve our ambitions, growth targets of EUR 1.5 billion of revenues and to significantly improve our profitability with an adjusted EBIT margin of around 9.5% by 2029. Let's go beyond. Thank you very much for your time and attention. Now, Jochen and I will be happy to answer your questions.
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question.
Anyone who has a question may press star and one at this time. The first question from the phone comes from Knud Hinkel with Pareto Securities. Please go ahead.
Yeah, thank you very much for having me. I have two questions, if I may. First of all, I was a little bit surprised to see that you had already a lot of capacity adjustments and also planned more during the year despite the good utilization. I think you partially explained why this goes together, but maybe 9% still looks rather high, and EUR 7 million is an unusually high number from my point of view. Maybe you can explain why this is the case. Second, on software solutions, can you a little bit explain in more detail the business models here? Am I right that this also includes the compliance software that has been recently acquired?
What is going on there? Maybe you can add some color here. Thirdly, and lastly, my usual question on large language models, can you give us an update how you see how the competitive landscape and also customer demand changes with regard to the production process? Let's put it like that on the side of GFT. Thank you very much.
Let me pick up the question about capacity adjustments. Yeah, they stood at EUR 3 million in the first quarter. It was EUR 1 million a year ago. The slower start in Europe led to some capacity adjustments, and we're already working on the U.K. side. Therefore, this will continue throughout the year. We for sure had hoped we need less capacity adjustments in the year 2025, but we have to adapt to market environment and the challenges at hand.
Therefore, we expect to see it at the end of the year at EUR 7 million and more again.
Thanks, Johan. In regards to the software solutions, yes, this unit encompasses the compliance software. It is called Visma Acts. We also have another product that's called Engineer there, and you also have an asset that's called Sphinx. In terms of, let me go, let me talk about the Engineer part. Engineer is a software that we have been developing for some time, and it is focused for manufacturing and industry manufacturing. It is a project portfolio management, and we have, with the pipeline, it is a weak pipeline, and we are now doing a focused approach in order to improve the pipeline and be able to have more results on that front.
We are also even studying as well to not only globalize, to also have a global and globalize the approach for that part in Engineer and also getting to other segments, for example, defense and military. Okay? That is the Engineer part. In terms of the compliance, it is my heart. The products we have current install base that is quite big. The same thing, we have a weak pipeline on the compliance solutions, and we have a team that is working on support and maintenance and also enhancements and also developing new functionalities, improving the smart heart, and that group of people compared to what we have in terms of revenue is we are now optimizing and looking in a way to make it more optimal. That is the second question. The third question regarding the production, you mentioned about the large language models, right?
Large language models and generative AI into the software development lifecycle into our core business. For that part specifically, we've been moving very strongly and very well and capturing lots of success stories on that front. Our products, that's called GFT Impact, have been moving very well into the market. We've been pushing to make it and sell it and adopt it into our clients. We also started that in the United States, in the U.S., so we were successful to sell to the U.S. We have the pipeline is very strong, very strong across the board in Europe, in APAC, in North America, Latin America for the GFT Impact.
I must say that one of the reasons, and it's a truly competitive advantage differentiator that we've been growing in North America and especially in Latin America, is because of our deployment of generative AI into our core business, into our fixed price proposals and services. It's been for us, large language model generative AI being a stronger differentiator and competitive advantage that's reflected to our growth in Americas.
Okay, thank you.
The next question from the phone comes from Wolfgang with Berenberg. Please go ahead.
Yes, hello, good afternoon. Two additional questions from my end. First, on the momentum in, let's say, trading or new contracts coming up, do you see a similar pattern for Europe and the Americas in the second half, or could we see some kind of shift, a little lower growth in the Americas and Europe recovering?
The second question, you mentioned new neobank projects, one in APAC. Were these all won in the first quarter of this year, or is there still some overflow from 2024? To what part does this fill the order book?
Okay. Let me start with the last question. In terms of those successful stories and wins in the APAC region, yes, we are very, very happy and very excited. We were able to close and sell a quite important digital banking implementation in Southeast Asia in APAC and a multimillion, very large scale new contract in Dubai, in the Middle East, in the GCC area. Those projects came from, let's say, a very, very focused business development process that we've been doing for months. We were able to secure them and to sign those deals now in Q1.
In terms of backlog, yes, this is going to those projects, they are long-term projects. They are not three-month, four-month projects. We are talking about year-plus projects. That has improved considerably our backlog for the APAC region. Okay. For your first question, in terms of contract shifting between Europe, US in the second half? This is quite an interesting question. We have planned in our budget, in our goals and targets for 2025, to have a, let's say, more slow start in Europe. What we are presenting now in the reduction that we presented in Q1 is exactly what we planned into our numbers. I would say that we have been managing that quite diligently.
We see the pipeline in Europe moved very well this quarter in Q1, and we see good traction and recovery, if I can say like that, in terms of growth for Europe over the next quarters. We sense that in our pipeline, and that is what we see at this point of time. It is on plan and a good momentum way forward. You said the other side, the flip side, right? If there is some kind of reduction, right, in the USA, I must say that our pipeline in the USA is also growing. It is also at this point of time, considering all the volatility in the whole markets. I must say that at this point of time, our pipeline in the U.S. is also strong. I do not see a reduction over the next quarters in the U.S. or Canada.
We see a continuous growth story as well. Very good, very good, very, very, very good. Very happy with the development of USA, North America. Very happy. I think everybody currently is giving the disclaimer that cannot really be sure what the U.S. government does. Will they move their country, right? That is probably the last remaining question mark. Will they go into a recession? Can they avoid that? Can they fix the things? That is probably what you hear in every call. As I mentioned, I would say that thanks for the quite strong work from the team and focus, diligently approached. Our pipeline is quite sustainable in the U.S. Obviously, you cannot control macroeconomics, but thanks to our business, it moves very well.
Thanks a lot. Very helpful.
The next question from the phone comes from Andreas Wolf with Warburg Research.
Please go ahead.
Yeah, hi everyone. Thank you for taking my question. Congratulations on the strong top-line development in Q1. I have a couple. The first one is also related to the topic that you have just touched upon. It is the US/tariffs. Would tariffs impact your business in any way if they were implemented? Maybe you could share your views. We do not know how those will be designed, whether there will be any tariffs at all. Mr. Trump seems to change his opinion every day, but maybe just as a general help to be able to better assess possible tariffs and their impact on the business. I am also looking at the second quarter, Jochen. I am just trying to understand all the one-off positive and negative that we should expect for Q2.
Last year, we had roughly EUR 6 million of a net tailwind, if I'm correct. Then from the one-offs we had in Q1, EUR 1.5 million will remain. Is this correct? Did I get this correctly? Could you just clarify or correct me? That would be helpful. The last is on your offshore capacity. How quickly is GFT moving here? Did the expansion in offshore location already help to gain tier one clients? Thank you.
Let me start with the tariff question because basically, it's quite simple. There are formally no tariffs on services. They are only on goods. They have not been in the past. I could imagine if Europe starts that, there could be retaliation, but so far, there are no tariffs on services. Now, this doesn't mean we're not impacted because our clients are impacted.
If tariffs hurt the American economy, it might hurt banks and then the demand cycle. Fundamentally, we're not directly affected by tariffs in the U.S . Q2 will be the challenging quarter of the year. We will see most of the restructure we talk about and the challenges in the U.K. that we mentioned in the second quarter. This will be adjusted on EBIT, but not on EBT. Therefore, it's a bit still unclear how good the second quarter will be. It depends on the operational performance, how fast Europe picks up. If we can exceed the Q1 EBIT adjusted in the second quarter, I would assume we will be slightly below. We will see the strong quarters again in Q3 and Q4 because we will have done most of the utilization homework in the U.K.
Also, the restructuring we've done so far is the homework for the utilization of the coming quarters. Therefore, we will see the same pattern that we have seen in 2023 and 2024. It is again different markets where this restructuring happens. U.K. is a repeater, but everything else is a bit mixed because now this time, Latin America, U.S. is strong, but Europe is a bit weaker. Q2 will be the weakest quarter of the year. The offshore question, I'll leave to you, Marco.
Thank you, Johan. In terms of the expansion of shore locations, it is spot on on our five-year strategy. One of the pillars of our five-year strategy that we are moving forward, which is our Global Delivery Platform and bring more smart shore, offshore, nearshore to our offerings and accelerate high-efficient locations such as Colombia, such as India.
On that regard, I'm very happy to say that we successfully sold GFT India to one of the three largest banks in the U.S. So we started that. It's a true story, reality. We started that operation. That's very happy. It's very happy news, very successful news. That proved the vision that we had in our strategy that we needed to amplify our global delivery platform and bring India and high-efficient locations into our service mix. We did that. Because of that, we were able to discuss some opportunities in that one of the doing that bank in the U.S. They bet on us, and we were able to start that. Very happy with that. Obviously, first steps on that, first steps on the five-year strategy.
But I do believe that this pillar is going to be fundamentally important for our future in five years from now.
Thank you, Marco.
For any further questions, please press star and one. The next question comes from Sven Sauer with Kepler Cheuvreux. Please go ahead.
Yeah, hi. Thanks for taking my question. The first one, I just wanted to clarify if I understood that correctly. The issues in the U.K., they will be resolved by Q3, Q4 this year. And the second question is regarding all of the new projects that you have mentioned, the multimillion projects in the U.S. and the robotic project in Dubai. I was just wondering, all of these projects, are you as GFT exclusively on these projects, or are other IT services companies participating as well? Thanks.
Thank you. Thanks for the question.
In terms of U.K., we are now confronting, right, a challenging situation in the U.K., and we are owning that thing. We started a process to solve them. We are now bringing, we are assigning, I just assigned one of our board members, and he is 24 by seven in U.K. We already took the decisions to implement some change in U.K., in the U.K. leadership. We are also running a program of restructure in the U.K. in order to be in line with our strategy, to be more efficiently leverage over offshore, nearshore. Also bringing all our offerings, all our global offerings to the U.K. market as we are doing in America, as we are doing in other parts of the world. That should take time. It's a turnaround. Let me be very transparent with you. That's a turnaround.
We are doing a turnaround in the U.K. I am very confident with what we are doing and the things that we are implementing, right, for the units. What is the plan? Our plan is to solve all those challenges in this year and start capturing upside and results next year. That is our current plan. We are executing that. We are in the beginning of the journey. We are in the starting of the journey because the change that we are doing are to be some change that we are doing in the U.K. Okay? We need to change people. We need to change our approach. We are owning that, and we know how to do it. We have done it in other markets. I specifically have done that in the USA before. We are going to make this one.
That's for the first question. The second one? Yeah, the big projects in APAC, right, in the digital transformation.
This is the Operator speaking. The line currently is muted. Ladies and gentlemen, please hold the line.
Now, I'm trying to answer the same question. We talked in two nowhere land, right?
How is it? How is it? Answering the second part of your question. For those digital banking projects in the APAC and Middle East, and also those large-scale projects in the U.S. and the robotics industry, for those projects, we are alone. We are the main service provider, which shows also the strength of our portfolio and our core differentiators. We are driving those digital banking projects, AI pure play projects in the robotics, and also those large-scale projects for tier one banks in the U.S .
Great to hear. Thank you.
Ladies and gentlemen, that was the last question. I would like to turn the conference back over to Andreas Herzog for any closing remarks.
Thank you, operator. As there are no further questions for the moment, I would like to thank you for participating. As always, our IT will be available for you if you might have further questions afterwards. Thank you very much again, and goodbye.
Talk soon. Bye-bye.
Thank you.
Ladies and gentlemen, the conference is now over. Thank you for choosing Coruscal, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.