Strong profitability but sales below est.; Chg.

Yesterday, mVISE reported solid FY25 prelims, showing that its multi-year transformation is delivering tangible results despite a persistently weak macro environment. While sales declined as planned, profitability continued to improve, underlining the quality of the new mix. In detail:

On the top-line FY25p sales declined to € 5.5m (eNuW: € 6.9m), implying a 41.1% yoy decrease. That development was even more pronounced in H2, which showed a 48.5% decline to € 2.4m. This reflects the company’s deliberate exit from volatile, skill-based IT-services and its strategic repositioning towards software centric development models. Importantly, the quality of revenues improved , as recurring sales now account for c. 70% of total sales, highlighting the successful shift towards more stable and scalable revenues. Capacity utilization remained high at above 85% throughout the year, confirming that the revenue decline was strategic rather than demand-driven and that operational resources were deployed efficiently.

Positively, profitability continued to improved despite the lower sales base. FY25p EBITDA increased c. 15% yoy (FY24 reported figure inflated by discontinued elastic.io) to € 1.3m (eNuW: € 1.3m), implying a 23.7% margin. For H2, we even saw a 33.3% margin as EBITDA arrived at € 0.8m. Recurring EBITDA contributed c. 65% (+23pp yoy), further enhancing earnings visibility and resilience.

For FY26, management put out a new guidance of € 1.5m EBITDA, which we see as achievable given the completed restructuring, high utilization levels and the scalable operating setup in place (eNuW new: € 1.6m).

Beyond that, FY25 also laid the operational groundwork for the next growth phase of mVISE. With software development now centralized, management designed a scalable blueprint for future acquisitions in its aim to pursue a buy-and-build structure. As outlined before, mVISE is on track to create a platform for software-centric companies via minority stakes and active operational involvement. Mind you, that we do not consider any future M&A in our model. Hence, any deal announcement could provide upside to our current forecast and price target.

Despite the strong share price performance with +81% YTD, we continue to see upside in light of 11.3x FY26e EV/EBITDA for a software company with strong recurring revenues. This is backed by our new DCF based PT of € 10.50 (old: € 12.80) - BUY.