Welcome to the Q1 earnings call 2026 of q.beyond AG. I would like to welcome the company CEO, Thies Rixen, and CFO, Nora Wolters, who will guide us through the presentation in a moment, followed by a Q&A session via audio line and chat. With that, I hand over to you, Mr. Rixen.
Yeah. Thank you, Mara. Hello, everybody. Nora and myself would like to present you the Q1 figures. Before I hand over to Nora, I'd like to give you a little update about the strategy we announced in March, where we are. Little recap. We built a strategy on the foundation of what we already have. This is very important to say. We will keep our current model consult-to-operate with consulting and managed service and build on that, let's say three elements on top. One is industry focus. We like to have more vertical expertise in several industry. We play two macro trends. One is in healthcare.
There we will look at the 2,000 hospitals in the region of Germany, Austria and Switzerland and in the energy sector, and the 700 local energy providers, Stadtwerke in Germany. Healthcare, we're all getting older, so we have to transform our healthcare system and in energy, the macro trend is everything gets electrified, and we need more energy for that. Also on top of that, for the AI system which is building up. There we have to like step in the door, let's say, or foot in the door, not a step. We will keep our other big industries, like logistic or retail. This is number one.
We will put on top of technology, we will put industry expertise, therefore we will have more business and more margin. On top of that is AI. AI is like internet, like cloud, or mobile, the next big tech revolution. It's already there. It's building up. Our job will be as we do it right now with other technologies like SAP, we will build agents, and we will run agents for our customers and managed services. We see it right now. It's getting bigger and bigger and bigger and therefore it is fast. It's a new portfolio. Internationalization is we will roll out our business model in the countries we have already, like the Baltics and Spain and maybe some others. Let's see what happens.
This is our strategy, with the, where we, where we drive further what we have already achieved in the last three years. Where we are right now, we try to put some flesh on the bone, as you see here. For industry focus, we prolonged a lot of contracts. One was a major contract with [Röhlig] for five years with over EUR 100 million in TCV in the two major industry we have right now. We are in serious talks, that I can say in the healthcare sector to form a joint venture in that space. This is developing, and we see it on both, let's say, not segments, but in both areas.
We have a track record in the already existing industries, and we are close to do the first, at least for us, major step in the healthcare sector. AI orchestration, as I said, we are going to build agent for our clients and run the agents. There we have in Q4 and Q1, we have acquired +10 customers for that. Our wins in the first quarter was up to 7% with the help of the 10 new clients. We launched by ourself right now 30 agents, 38 major agents for q.beyond to drive internal efficiency. It's not only a game for us that we do it for our clients, it's also important that we be more efficient every year in using AI.
The internationalization that we already discussed with you. We are rolling out go-to-market activities in the Baltics and Spain, and we decided in Q4 to start a third nearshore center in Cluj, Romania because of SAP expertise, huge SAP expertise in this area or in this country. We will transfer our, let's say, service desk activities to Romania combined with AI to be better in that space also. This is it. For the strategy, we are quite, I'd say quite on track. Sorry. From our point of view in the first quarter. I'd like to speed it up for the rest of the year. With that, I hand over to you, Nora.
Thank you, Thies. Welcome from my side too. Q1 started as expected. Let me share a fitting metaphor. q.beyond's direction is like flying in an airplane with a clear flight plan and a permanent check of navigation data, and we adjust accordingly. This is our Strategy 2028, which follows on from our very successful Strategy 2025. For Q1, this means a strong focus on portfolio and investment in AI expertise. 2025 was a year of quality adjustment, but our resilient and structural stabilized business model, with nearly 70% recurring revenue, is the basis for a successful Strategy 2028. An impressive sales funnel of more than EUR 200 million will lead to rising revenues in the next quarters, especially in H2. Additionally, we gained more than 7% order entry than in Q1. We report traditionally two segments, consulting and managed services. Starting with consulting.
It's growing against the market trends. We earned more than 30% gross profit, + 3% margin, and + 3% revenue. This is a result of a clear improvement utilization and a higher demand for AI consulting and S/4HANA transition. The margin shows clearly that the focus on portfolio and capacity control is working. The second segment, managed services, earns an attractive margin, it's due to lower investment. There are two effects. The first, the cyclical new business 2025, and second, the investment in our AI expertise. We are not focused on cost-cutting at any cost, but rather on ramping up our pipeline. Let's have a short look at our P&L. The revenue for Q1 was EUR 42.8 million, EBITDA EUR 1.5 million. A temporarily negative consolidated net income, which is expected for year to become positive.
As expected, all results are impacted by expenses related to AI expertise and internationalization, as Thies said before. In other words, we made upfront investment for scaling. We are talking about investment cycle visibility here, not structural margin erosion. Our net liquidity is rising, plus EUR 0.6 million in Q1, and a net liquidity of EUR 42.6 million. Gaining liquidity is good, but we want more profitability. We invest a lot of time in new possible acquisition targets. Unfortunately, one failed in Q1, and at the moment we have promising talks, so maybe there will be more information in the next months. Our company is debt-free, and the net liquidity, that corresponds to EUR 1.71 each share, shows a high potential. 2026 brought and brings several milestones for q.beyond. The EGM and the capital reduction finally cleaned up our balance sheet, especially the accumulated deficit.
As the aimed results, q.beyond would be able to have share buybacks or pay dividends without endangering the financial stability. We are well prepared to implement the Strategy 2028. Our most important message today, we confirm the guidance for 2026 based on our Strategy 2028. It's a very clear signal that the execution of our strategy and pipeline compensates the microeconomical pressure we suffer at the moment. We expect revenues between EUR 182 million -EUR 190 million, and EBITDA between EUR 10 million -EUR 16 million, and a positive free cash flow. Additionally, a positive consolidated net income. We combine investments for growth and the expectation that the pipeline and financial results by the foundation for shareholders will be very successful if it's finally decided legally.
This is the end for the financials for today in this presentation, and I hand over again to Thies.
Thank you, Nora. A little outlook, 2026, 2028. We mentioned already Q1 was 7% up concerning total contract value or the bookings. We like to keep this momentum. We have a sales funnel. We have already EUR 40 million roughly in the books end of April or beginning of May, and have additionally a sales funnel of EUR 200 million. We are assuming that the next quarter will be higher in revenue, and we get a book-to-bill over 1 this year, which was the case last year and will be the case also this year as well with 2027. Therefore, we have an indicator for 2027.
Concerning the strategy, we said the aim is concerning revenues EUR 250 million approximately, with an EBITDA margin of 10%. How do we reach that? Three elements. One is organic growth, 5%. M&A strategy, roughly EUR 20 million revenue. The AI orchestration should be at least EUR 20 million end of 2028. That we are, there are at least when we look at our strategic approach and plan, that we have a high visibility of the numbers. The funnel will get us, the high funnel will get us to a growth this year. Having said that, in summary, what we'd like to achieve, industry focus will give us business and higher margin AI orchestration.
With that, we will be relevant. We are relevant, we will be relevant, and we will have new portfolio and new business and internationalization, let's say further growth opportunities European-wide, and this is also what the customer from us are expecting. Yeah. Thank you very much for your time, and we are happy to answer your questions and comments, and get your comments. Thank you.
Yes. Thank you very much also from my side. Ladies and gentlemen, we are opening the Q&A session. If you would like to ask your questions via audio line, please click the Raise Hand button. If you're dialing in by phone, please press star key nine to raise your hand and star key six to unmute yourself. Additionally, you're also welcome to post your questions in our chat, and I will read them out loud for you. We have already received raised hands by Mr. Sennewald. You may unmute yourself now.
Can you hear me now?
Yes.
Now we can hear you.
Great. There's a bit of power with this broadcast button. Hi guys. Thanks for the presentation. I was just wondering, looking at the guidance, especially on the bottom line, which continues to be EUR 10 million to EUR 16 million, what needs to happen for you to reach the upper end of this range? Honestly, looking at the Q1 now and also the environment, I have a hard time seeing you at EUR 15+ million EBITDA this year.
The range is the range we picked as we like to have a range where we are, let's say, prepared for whatever will happen with the German or European economy. At the lower end, I think we are well defended with our current business model. At the higher end, yeah, everything must work out, huh? There are, for instance, when we look at clients, where we get, let's say as an example, huh, where we get kickbacks from the vendors, where we have special deals. This will help us to get the higher end.
There are certain elements in it, but everything must work out to get the EUR 16 million.
Okay. I understand. Yeah. Of course. Good to hear that you feel well protected on the lower end. In the last call, you mentioned that you already have like I think it was around 300 agents in place, which you most of them use this internally, but already had some leads for external monetization. How is this going so far?
Yeah, I think the low-hanging fruits have been harvest. All what concerning reporting. The most of the agents, so low-hanging fruits had been harvest. Most of the agents are a managed service and central for other in, let's say, in the shared service part for reporting, patching, and process automation. Low-hanging fruits have been identified, have been harvest. Now we tackle, let's say, the more complex, complicated agents. This is a track right now, huh? It's evolving all over the company. I think everyone or most of the people, I must say, have at least understand the potential. Now it's, if We all know that if you build an agent, they have to run the governance.
The agent have to be compliant, and so on. It's getting a little bit more complicated, but potential is still there.
Maybe you mentioned M&A, that also that you, that you had like a failed deal you said in the first quarter. What's your I mean, how confident can we be that you will add some inorganic growth throughout the year? Can you maybe remind us of maybe the scope of that?
Yeah, you could be very confident. This is our strategic plan, so we will execute on this. The one who failed, it's , as leaders, you have to say often more no than yes. So if, for example, the price is not right, then we said no, so therefore we didn't pick it. Though the add-on, it depends a little bit, how big the targets are in terms of revenue. I would not allow myself to give an answer right now. But there will be an impact. And the most important thing is not, let's say, the number right now, so much as the potential for the future. So as I like to explain, we are targeting for healthcare. We are targeting the 2,000 hospitals in Germany, Switzerland and Austria.
Most of them, they're behaving like a mid-size company like the German Mittelstand. Yes, they are public-owned some cases, but they still behave like that and it's the same is true for the 700 Stadtwerke in Germany at least. This is the potential we see in the next years. Plus the transformation, let's say, pressure they have, huh? This is much more important than the figures right now.
Okay. Healthcare is clearly crystallizing as the priority there, I'm hearing.
Yeah
I'm hearing out of this.
Yeah.
Okay. Yeah, thanks a lot, guys. That was very helpful. I will go back into the queue.
Yeah. Thank you.
Thank you so much also from my side. We have another risen hand by Mr. Kai Kindermann. You may unmute yourself now.
Yeah. Good afternoon, everybody. Two questions.
Hello?
Can you hear me? Is everything okay?
Yeah.
Yeah.
We hear you.
I think I heard a weird sound, but okay. First, what caused the rise in consulting cost? Maybe you can expand a little bit on this further, especially compared to the third quarter last year where you had the same level of revenue. My second question would be on what amount of investment and expenses in AI are you expecting in the coming quarters?
We didn't get the first question. Can you repeat it, please?
Yeah. If you could expand further on the rise in consulting profit you had in this quarter, especially in comparison to the third quarter in the last year, where you had the same level of revenue but lower gross profit.
Yeah, for consulting, it always depends on the mixture, on the revenue mixture, we are showing. I don't have the Q3 figures in my head, but I would assume there's revenue in it, which is not so profitable as in Q1. For example, if you have license in it or let's say one-timer, which are not so profitable. What I can say for Q1, it's real consumption which we have driven. This is what we like to see. This leads us to the higher margin. There's a structural effect in it when you compare the Q3 to the Q1 figures.
Okay, thanks.
Concerning AI investments, we believe the majority is done. What we are now figuring out is which models to use. For example, we have started with Copilot, so it's Microsoft Copilot. Anthropic is now on top of it, so Claude. Now we have both. Maybe we have a third one. I think the major part is done, and now it's about optimization of the several systems. Do we need to provide every employee with an AI tool, or do we provide our employees with agents they can use? We will optimize that. My answer would be majority is done.
All right. Thank you very much.
Thank you, Mr. Kindermann. We have another question by Mr. Frederik Nilsson. You may unmute yourself now.
Thank you. Can you hear me?
Yes.
Yeah.
Hi. I was just wondering why you choose to add a new nearshore hub in Romania rather than expanding in Spain or Latvia, for example?
Yeah. Two reason. One is language. Two reason. One, the first reason is language. We have a lot of clients, and I showed you the prolongation we did in Q4 last year, Q1 this year, so the contract prolongation. There are several others to come which have a service desk element in it, service desk portfolio. We got a lot of pressure from our clients. Also cost-wise, w e were looking for an answer to reduce the cost. One is for sure, human resource. The other one is AI. The midsize company are not ready to use full AI powered service desk, we will build up one half-half. One with Romanians, German-speaking Romanian resources plus AI, therefore we cover the service desk portfolio. This is reason number one.
Reason number two is that we, Nora mentioned it, that we are very successful in the SAP business right now. Our assumption is that this will be at least midterm to long-term. We see that we need to provide our customers with services, application management services, where we run the applications for them. We see also the cost pressure, also when the customers are globally or European-wide. You find in Romania they have a good SAP-skilled workforce. These were the main two reasons. To be honest, it took us some discussions because of complexity.
You mentioned it, the third one. Now we are convinced that this is the right answer for this kind of two portfolios, so service desk and SAP application management.
I see. Great. Could you perhaps give us some approximate estimation of the costs related to international expansion and AI, as you mentioned, is holding back the earnings in the quarter?
It's a figure, what is it? Several million per quarter. It was in Q3, Q4, and Q1. Let's say between EUR 2 million-EUR 3 million, huh? More or less.
Okay, great. Just lastly, you mentioned also discussions about the joint venture in healthcare. What size are we talking about then? Is it a greenfield or is it you're going into something that's already up and running with quite some revenue or could you talk about that?
Yeah. This will be a company which is up and running, which is very, very well positioned, let's say, in the healthcare segments for hospitals. Therefore, we would like to form a joint venture. We will take over the majority of the shares, let's say 51%, we will, as we did for logineer, I'm not quite sure if you know this case. We have built a joint venture five years ago, the same setup, 51%, like, is with q.beyond, we drive with the other partner the business forward. This we like to do in healthcare and this we like to do in energy. Revenue is always around, for the beginning, let's say EUR 10 million- EUR 20 million for the targets.
We develop this revenue with the joint venture partner further.
Great. I understand. That's all for me. Thank you very much.
Yeah. Thank you.
Thank you so much, Mr. Nilsson. There are no more risen hands or further questions in our chat box. With this, I would say we come to the end of today's earnings call, and I would like to thank you very much for your interest in q.beyond AG. A big thank you also to you, Mr. Rixen and Mrs. Wolters for your presentation and your time. Should you have any further questions at a later date, please feel free to contact investor relations. I wish you all a successful day. Thank you, and bye-bye.
Thank you.