A warm welcome to the Q3 earnings call 2026 of q.beyond AG. I would like to welcome the company's CEO, Thies Rixen, and CFO, Nora Wolters, who will guide us through the figures in a moment, followed by a Q&A session via audio line and chat. I hand over to you, Mr. Rixen.
Yeah, thank you. Good afternoon, everybody. We like to present you the financial results of Q3. I will start, and then I hand over to Nora, which she will walk you through the details of the figures. As you have read this morning, Q3 is heavily impacted by one-off charges. We give you the details for full transparency in a minute. I like to mention that we are not happy with the communication which have been, especially in October, which has happened. We as the board, we take responsible for the communication, but this communication has not met our standard. We will walk you through, give you full transparency, will not say too much for the future. We will prepare for next year and then deliver as planned. Overall, we regret it very much.
Q3, you see it here, [EUR 43 million], more or less the same amount of revenue as we had last year. You know from our history that we always have a strong quarter, Q4 strong quarter, and with that, we are going to meet our numbers. EBITDA EUR -7 million, adjusted EUR -3 million. You see the net income, which is EUR -9 million, not what we like it to be. Having said that, I will hand over to Nora. Nora will walk you through the details.
Thank you, Thies. Slide four is the most important slide of my part, and I will take time with it. The quarter-on-quarter comparison shows two things at a glance. Revenues are stable at EUR 43.2 million. Earnings are not. In between lie one-off charges totaling EUR 9.5 million, and I am now going to walk you through exactly where they sit. To read the slide correctly, one note up front. The red box shows the five causes of the one-off charges, each with its total amount. The one-offs column in the table shows something different, namely the P&L line in which these amounts are booked, accumulated where they were actually incurred in the third quarter. Each cause is spread across several P&L lines. That is why the box and the black column only reconcile at the total, an EBITDA impact of EUR 9.5 million. There are three main items.
Let me take the items one by one. First, cost of revenues, EUR 40.7 million after EUR 36.3 million. This includes EUR 6.5 million of one-off charges, EUR 3 million in restructuring provisions, EUR 1.3 million of variable compensation, now recognized in the period it accrues, EUR 1 million from a one-off increase in license costs, EUR 0.5 million from the delayed ramp-up of our site in Romania, and EUR 1.7 million for internal projects. Excluding these effects, cost of revenue would stand at around EUR 34 million, below the prior year. The gross profit of EUR 2.5 million is not an operational collapse. It simply carries the largest share of the special charges. Second, sales and marketing, EUR 5 million after EUR 3.1 million, including EUR 1.1 million of one-offs, namely EUR 0.8 million in variable compensation and EUR 0.3 million in restructuring provisions.
Third, general and administrative expenses, EUR 4.4 million after EUR 3.8 million, including EUR 1.9 million of one-offs, EUR 1 million for restructuring, and EUR 0.8 million for internal digitalization projects, first and foremost our own S/4HANA implementations, and EUR 0.1 million in variable compensation. On an adjusted basis, administrative expenses are below the prior year. Our cost discipline is intact. In addition, the other operating result came in at EUR -0.2 million after EUR +2.6 million in the prior year quarter, which was a one-off effect of the Plusnet transaction. Now the question that matters most to you, how much of this is truly one-off? Close to three quarters, the restructuring at EUR 4.3 million, license costs at EUR 1 million, Romania at EUR 0.5 million, and the internal projects at EUR 1.5 million burden the year 2026 and will not recur.
The EUR 2.2 million of variable compensation are not an additional expense, but a timing shift recognized in Q3 rather than Q4, as the accruals require. They burden this quarter, relieve the fourth quarter, and are neutral for the whole year. This is also the reason behind the correction of our preliminary figures on October 29th. We identified this provision requirement during the final reconciliation of the quarterly accounts and informed you within days. Our full-year guidance was not affected. Transparency over window dressing, even when it is uncomfortable. Now to the segments. Starting with the one that shows where q.beyond is heading. Our Consulting business grew by 7% over the first nine months to revenues of EUR 48.6 million, and by as much as 13% in the third quarter. What really matters, though, is the quality of that growth.
Gross profit rose from EUR 6.3 million to EUR 9.1 million, EUR 9.3 million on an adjusted basis, and the gross margin from 14%- 19%. Five percentage points more margin on growing revenues. That is a proof that we are not buying volume. We are working better. The drivers remain firmly in place. Sustained demand for S/4HANA migrations, a Microsoft business with a strong momentum, notably Agentic AI, Copilot Studio, Modern Workplace, and Cloud Migration, and for the first time, our healthcare subsidiary, GITG. One example from the quarter, Vitakraft, the pet care specialist and a long-established German Mittelstand company, selected us as the partner for its complete S/4HANA transformation following a joint preliminary study, including sovereign IT operation in a European cloud. Managed Services remain the segment with the greatest need for action, and I will be clear about that. The price competition persists, including in contract renewals.
The reported gross profit of EUR 9.5 million for the first nine months includes EUR 3.7 million of restructuring provisions. Adjusted, it stands at EUR 13.2 million at a 16% margin after 21% in the prior year. This is precisely where the restructuring is focused, and it has taken effect quickly. Almost 70% of the staff measures we resolved in August are being implemented in the Managed Services segment. From 2027, this segment will operate on a significantly lower cost base. On top of that come two growth levers that cost us nothing because the substance is already in place. First, in our own certified data centers, 1 MW of capacity is ready to be commercialized. The operating costs are largely fixed, so every additional unit of utilization has a disproportionate effect on earnings. We see a potential for an additional EUR 1.5 million-EUR 2.5 million EBITDA there.
Second, new business is coming back, and it comes with names. With the AMEOS Group, one of the largest private hospital operators in the German-speaking region, we have won our first healthcare projects together with GITG. Add to that Eurogate, Europe's largest shipping-line-independent container terminal group, right at the heart of our logistic focus sector, and mecom, the Hamburg-based media distribution specialist from the dpa Group. These wins show that segment is not fading away. It is being repositioned, and it is already winning again. Turning to our financial position. Net liquidity stood at a solid EUR 33.5 million as of 30 September, EUR 1.34 per share. The decline versus the end of June is explained by two items.
First, the free cash flow of EUR -4.5 million, which reflects the quarter's one-off charges, and second, the payment of EUR 3 million for the acquisition of 51% of GITG. Because reliability matters more right now than a flattering number, let me also tell you how this develops through year-end. In the fourth quarter, the EUR 9.4 million for the share buyback completed in October will flow out, and we expect a free cash flow of around EUR -2.4 million. On that basis, we expect net liquidity of roughly EUR 21.7 million at the year-end. That figure includes the significant special expenditures for the current year, components related for restructuring, GITG, and the share buyback. Two points matter to me here.
First, we are financing all of this entirely from our own resources, with no bank debt at the AG level and an equity ratio of 65%. Only GITG still carries a residual loan, which, in line with the purchase agreement, is expected to be repaid in the course of the next year. Second, the repurchased shares. Just under 10% of the share capital will be held in treasury for the time being and will not be canceled. That preserves our flexibility. On to the guidance. Let me say it as plainly as we say it internally. From the management board's perspective, this year is really disappointing. On 21st October, we adjusted our guidance on this basis of updated projections for the second time this year, and we know what that means for your confidence.
We now expect revenues of EUR 174 million-EUR 178 million and EBITDA of EUR -4 million- EUR -2 million, unchanged. We expect a negative consolidated net income and a negative free cash flow for 2026. For the fourth quarter, this range implies a break-even to slightly positive EBITDA. This is not wishful thinking. It is simple math. The fourth quarter is seasonally our strongest, and the one-off charges from Q3 will not recur. This slide shows you this year's development once more, but from a different angle than the P&L, as a bridge from our previous to our adjusted guidance, calculated at the midpoint of each guidance range from EUR +5 million - EUR -3 million. These EUR 8 million consist of three blocks, and each has a different quality.
First, EUR 4 million from license costs and our internal S/4HANA project. These are one-off charges.
They will not recur. Second, EUR 3 million from sales pipeline shifting into 2027. In our ad hoc release of 21 October, we still put this margin effect at around EUR 1 million. Having completed our detailed planning, we now quantify it at EUR 3 million, with the third block correspondingly smaller. This changes nothing about the total or the guidance, but you should hear about this from us, not discovered in your own model. This revenue and the margin that comes with this is not lost. It arrives later, and you can verify that in the order intake Thies will show you in a moment. Third, EUR 1 million of staff expenses, essentially one-off items, including the ramp-up cost of our new site in Romania. With that, you know every component of this year, by course, by P&L line, and in the bridge to our guidance.
What this means for the year and ahead is something Thies will now put into perspective.
Thank you, Nora. To give you some light at the end of the tunnel, is that the new orders in Q3 are almost as high as in the first half of the year, with roughly EUR 50 million, as you see here. Our new sales approach, new salespeople, new sales organization is paying off. You see it here, the new orders are better than next year in the [mid bubble], and this higher volume will strengthen for sure our revenue base you already see for next year. This combined with the, we already mentioned, with the one-off cost, which will not recur next year. We have with the restructuring, we have done 80% is in the books of restructuring already, and we lower our cost base.
We have new orders we already see, and we expect also a strong quarter in Q4 with some big deals in it, so that we have a good solid base for next year. As we said, we will not do any promises today, but for sure it will be better than this year. With that, we are happy to take your questions and comments.
Yes. Thank you very much for your presentation. We will now move on to our Q&A session. If you would like to ask your questions via audio line, please click the Raise Hand button. If you are dialing in by phone, please press star key nine to raise your hand and star key six to unmute yourself. Additionally, you are also welcome to obviously post your questions in our chat box, and we will read them out loud for you. We have already received two risen hands, and I will allow Mr. [Sebastian Weidhüner] to speak now. I just sent you an invite to unmute yourself.
Do you hear me?
Yes, we can hear you. Hello.
All right. Thanks. I mean, the past few weeks have raised many questions. Today I would like to ask a few of them. Please let me do one by one. In August, you told the market in your last earnings call that after the GITG acquisition and the share buyback, you would have more than EUR 30 million of net cash. Now it is only EUR 24 million, and this is even before the payments for the job cuts. What is your net cash forecast for the end of this year?
The forecast is EUR 21.7 million.
All right. On October 21st, you cut your EBITDA forecast again by EUR 8 million at the midpoint. You did not hold a separate call then. Whose decision was that, and why did you think it was not needed?
It is a good question. Maybe afterwards we would do it differently. It was our decision made. Who was responsible for this that we did not have a call? Nora and myself, and that is it.
Okay. You talked also in this call a lot about strong orders, but after nine months, orders are EUR 102 million, and the revenue is EUR 129 million. This is a book-to-bill ratio of 0.8, so below 1.0. Am I missing something here, or how do you think about it?
Yeah, we talked especially. That is right. We talked about Q3, that the orders were as high as in the first half year. This implies that it was not as good as expected, though the execute or the results were not good in the first half year, and we expect also good quarter Q4 order intake. All in all, we have a good chance to jump over 1.0, the 1.0 book-to-bill ratio, but let us see.
What is with the contract with Fressnapf? I think the extension is at the end of this year.
Yeah. How should I put it? We have finalized it last week, and it is in the process. It is in the signing process right now. We have signed it, the customer is signing it, so it is more or less in the books.
M aybe on the EUR 2.2 million of bonuses you booked. This is a year with a loss and two profit warnings. Why are these bonuses so high, and who gets this money?
We have several agreements with the works council, and not everything is focused on the company figures, but also the Consulting segment is doing very well, and in the sales segment too. We have a different goal of the bonuses this year.
All right, a nd on the S/4HANA project cost, it was more than you planned, and you sell these projects also to customers. So what went wrong on your side?
We have different projects. This was S/4HANA, a public project, and we focused on implementing it with a special partner because we did not do this special kind of project in the past. So we did it together with an external partner and had to overcome some difficulties.
And maybe one more question on higher costs. You said the higher license costs are one-off, but why did they come up, and how can you be sure they will not come back next year or lead to permanently higher OPEX?
Some are paybacks. Not paybacks, we have to pay because the licenses were measured again, and some will come in the next year, but will be planned. And this one-offs won't recur again.
It's because of the infrastructure architecture. If you change the infrastructure architecture, the amount of CPUs, for example, you can change also the license costs. And this we have done and will do, already is done, and we will do it. Most of it will be only this year.
But when you had to pay more than you expected, is it also the case for the next years?
But that is what I said. That is what I said. It is for this year, and if you change the system up, the infrastructure architecture-
Yeah.
-then you do not have to pay as much as this year.
And maybe a last question on the big picture and also a personal one, and please let me ask it. Is this really the last restructuring of the company? What makes you sure of that? A lso, many of your promises did not hold, and why do you think you are still the right management team to lead this company going forward?
As I said, Sebastian, we regret what happened. We are not proud of it, what happened in August and October. We cannot be proud of it. Concerning the, let us say, the restructuring or the cost optimization, this will be an ongoing path. T his kind of impact, we do not see it right now for next year, but we will work on it, but with different measures. So, because costs will be high or will be higher, so we have to cope with it. So, I cannot say this is just once and it will never occur again, but not in this kind of impact.
All right. Thank you.
Thank you.
Thank you, Mr. [Weidhüner]. We have two more raised hands, one from Mr. [Nielsen]. I just sent you an invite to unmute yourself.
Thank you very much. Hi, Thies and Nora.
Hi.
Hi.
Just a clarification regarding the order intake. You discussed the book-to-bill just previously here, but I suppose that includes the recurring Managed Services that you have. Isn't that right? This is purely new orders on top of that, or how should I interpret the number?
Yes, the EUR 50 million you saw in Q3, let's say EUR 20 million, more or less, are new orders, and this is mainly in the Managed Service space. How should I put it, to make not new promises, and we see that some deals we have in the funnel for Q4, and the biggest one are mainly Managed Service deals.
Okay, but the order intake, it does include some kind of renewals for customers you already have then. Is that correct?
Yeah, sure.
Okay, I see. Okay.
As I said, or as we were asked about Fressnapf, this is a prolongation of the contract for three years. These numbers you will see in Q4, and for sure, this is always a mixture of new business and existing business. We save them for the future.
Okay, I see. Looking at the strong order intake, but Managed Services is still quite soft because of a soft economy among SMEs and so on. Have you found new growth pockets, or how should we interpret the difference in those numbers?
You mean for Managed Service?
Yeah, exactly.
Yeah.
It is a difference. The order intake is strong, but the numbers are on the soft side, I would say.
[crosstalk] Yeah, okay, because this will take time. You have always a ramp-up time between, let us say, an average half a year to, yeah, average half a year. You win the deal, and then you work on the transition for half a year, and you see the revenue afterwards. There is always a time delay between winning and seeing the revenue. This is in the nature of the business.
Yeah, I see, but more from a demand perspective, if you understand what I mean.
Yeah.
It should be hard to gain new orders if the market is soft, if you understand what I mean.
Yeah. The market is soft, but on the other hand, there are some trends like security. If you do not feel safe with your infrastructure, you are going to do something with this, to go to a service provider. There is also this Broadcom price increase for VMware, so a lot of customers are thinking to go to a new infrastructure, so do more open source base. For instance, we are helping customers to go on this, to transition to this new infrastructure. There are several new trends which will help us.
Okay, I see. Lastly, the adjusted gross margin in Managed Services, 12%, it is a bit lower than what we used to see. Is it mainly a volume-driven number? Is it something else in it?
It is mainly volume-driven. We say adjusted was 17%, 16%, no? 16%? Yeah, it was 16%. We like it to be over 20%. What is missing right now is the volume. This is the main part. Yes, we have price increases here and there, but the volume, which hits us then, but the volume is missing, and with the new deals, I see a good chance to come back next and the year after to the margins we are used to.
Okay, that's all for me. Thank you very much.
Yeah, thank you.
Thank you so much, Mr. Nielsen. We have one more risen hand by Mr. [Kindermann]. I just sent you an invite to unmute yourself.
Hello. Good afternoon. The first question from me is on the available capacity in your data center, just the megawatt to market. When do you expect to fully commercialize it? Is it in 2027 or?
Yeah, I mean, this year, we have this free capacity since last year. I said this several times, and I cannot hear myself anymore. There are chances to sell it. We have one in the healthcare space, but as I said, I will not do any promises. We are working on it. It takes time. This is about 25% right now with an option to sell 50% of the capacity. There are possibilities. We are working on it. I think the signing will be Q1 next year, and then we have several others, but these are then in 2027, Q2, Q3.
Okay. That is a chance that you have a significant portion at the beginning of 2027.
Yeah, and then we will. We said we will sell it. If we cannot, let us assume we cannot sell it, then we will go different paths and think about our data centers in a different way, as we do right now.
Okay, got it. My other question is on the variable bonuses. My understanding is now that in the prior years, you always booked them fully in the fourth quarter, and now it is in the quarter in which they occur. How is the total sum for 2026 comparing to 2025?
The total sum is nearly EUR 8 million, which means 100% for each bonus in the different works council agreement, but we expect less. There is the difference to the last year.
Okay, but it is comparable to 2025, no?
It is comparable, but we have a different quote this year, so we had to correct this.
Okay.
To give you more transparency, we have three buckets of variable payment. The total amount is EUR 8 million, as Nora said. Especially Consulting, as you have seen, is doing good, and we expect that sales is also doing good with a book-to-bill over 1.0. So they get their, let us say, their bonuses, no? They get their bonuses. We do not get any bonus, and there is an overall bonus for every employee. They get only a portion of it, and this leads to this more or less EUR 4 million.
Okay. Just so I get it right, the EUR 2.2 million just for the third quarter, and the bonus for Q1 and Q2 hasn't been booked yet. That would still be in the Q4 figure, or?
Yeah, we have some. We had to correct this for Q3, so you will find EUR 2.7 million in Q3 and the rest in Q4.
Okay. Thank you. That's from my side.
Thank you, Mr. [Kindermann]. We have another question by Mr. [Preis]. You may unmute yourself now. I just sent you an invite.
Hi, can you copy?
Yes. Hello, Mr. [Preis].
Cool. Thanks for being allowed to ask a question as well. From the easy part to the harder one, do I understand it correctly that the figures in cash per share do not economically reflect the last share buyback, so you would have to adjust that by 10%?
We are not sure if you got your question right.
You stated a figure as the cash per share. You did not cancel the shares you bought back, but hold them as treasury shares.
Yeah.
Economically, do you have to adjust that cash figure per share for these 10%?
It is regarded in the balance sheet.
Okay. Secondly, is that the final tender now, or do you plan a new one? If so, my understanding is you would have to have another Extraordinary Shareholders' Meeting. My question is plainly, with these EUR 10 million in cash being vaporized right now, is that still the plan or not?
We have not decided about it. Yes, it is right what you said. We have not decided about it. That is the answer to your question. Do we think about it? Not now, because you can imagine that we still stick to the decision that share buyback by our current market capitalization, so as in August, was the right decision. With all that happened now, we would have taken another decision, as you can imagine. We will think about it and come back.
Well, I might say that the shares are now about a third cheaper than at the last buyback price.
No, it is not. It is cheaper, and we will see how the share price develops. Right now, you are right, it is cheaper.
Okay. Finally, regarding the data center, my understanding in the past was it should have been sold till the end of the year, including contracts, and there was a goal of roughly EUR 60 million. Now I understand that you are not sure if you can sell it at all, or have other plans, as I understood right now. So what changed the situation so significantly?
Because the deals have not come, or are delayed heavily. I am more cautious. We were sure as management that it is sellable, let us say. If we see now what happened and look at the facts, then we have not sold it. We have sold some, but not the majority. There are still chances, but I cannot rely on chances only. I must, let us say, face reality. When the one strategy is not going to work, then we will develop an alternative strategy, or have already, and execute this one.
Okay, but you mean parts having been sold, you mean the capacity. Basically, contracts renting out the capacity, not selling the data center or [crosstalk] itself?
Yeah, the capacity. Yes. Right.
But, I mean, European data centers have not really decreased in value, or do you think they have now because of that blue tsunami and a bit more trust in the U.S. because of that?
No. Our data centers, I am still talking about the capacity, so a lot of demands are higher than we have, 2 MW or 5 MW, so we have one left. It must fit. Obviously, demand must fit to what we can supply. But there are still players looking for capacity, maybe for their own use. We can take then a different path.
Yeah. Thank you, Thies. However, my question didn't quite relate to selling capacity, renting it out, but rather to the sale of the asset itself. I mean, I understood the plan was to sell the asset, not to rent out the capacity.
No, the asset, yeah, at some point in time. Yes, all right, okay. It was always a plan to sell the asset at some point in time. But before that, as a prerequisite, our plan was to sell the capacity first, so the empty, the capacity we have, and then sell the asset. Maybe if we can't sell the capacity right now, then we must think again to sell the asset without the full capacity.
Okay, so the roadblock is on the capacity level, not the asset level?
Yes.
You do not see it as problematic selling the asset altogether at the end of the day once you have rented out the capacity?
Yes. Yeah.
Okay. Thank you very much for that clarification.
Okay. Thank you.
Thanks. Bye.
For your patience.
Thank you, Mr. [Preis]. Mr. [Weidhüner] raised his hand again, so you may go on with your follow-up question.
All right, one last one. Can you hear me?
Yes.
Yes.
Right. You still have your medium-term guidance out there, so it would require EUR 25 million EBITDA in 2028. Can you explain how you plan to achieve that? Maybe you can make the bridge from this year EUR - 3 million to the EUR 25 million.
Yeah. At the moment, it is hard to say. We have it out. It is out there. With the numbers we have delivered this year, we will think about it and come back to the market at some point in time to have a new three-year guidance.
All right. Thanks.
Thank you very much again. We do not have any questions in our chat box, nor do we have risen hands. So with no further questions, we would say we come to the end of today's earnings call. Thank you very much for your interest in q.beyond AG, and a big thank you also to you, Mr. Rixen and Ms. Wolters, for your presentation and the time you took to answer all the questions. Should you have any further questions at a later time, please feel free to contact investor relations. I wish you all a successful day. Thank you and bye-bye.
Okay, thank you.
Bye.
Bye.