Q.beyond (Xetra:QBY0) Q1 2026 Earnings Call

0:01 Welcome to the q '1 earnings call 2026 of q.beyond AG. I would like to welcome the company's CEO, Thiesslixson, and CFO, Nora Walters, who will guide us through the presentation in a moment, followed by a q and a session via audio line and chat. And with that, I hand over to you, mister Ericsson. Yeah. Thank you, Mara. Hello, everybody. Nora and myself, we'd like to present you the q one figures. And 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. The recap, we built a strategy on the foundation of what we already have. So this is very important to say. So 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.

1:04 So we like to have have more vertical expertise in several industry. We play two macro trends. One is in health care. There, we we will look at the 2,000 hospitals in the region of Germany, Austria, and Switzerland, and the energy sector, the 700 local energy providers, in Germany. So health care, we're all getting older. So we have to transform our our health care system. And in energy, the macro trend is every everything gets electrified, and we need more energy for that and also on top of that for the AI sys system which is building up. And there, we like to have a where we have to, like, step in the door, let's say, or foot in the door on the step, and we will keep our our other industry in this big industries like logistical retail. So this is number one. So we will put on top of of technology.

2:11 We will put industry expertise. Therefore, we will have more business and more margin. On top of that is AI. AI is like like Internet, like cloud, the next or mobile, the next big tech revolution. It's already there. It's building up. And our job will be, as we do it right now with with other technologies like SAP, we will build agents, and we will run agents for our customers in our service. And we see it right now. It's a it's getting bigger and bigger and bigger. And, therefore, this for us is a new portfolio. And internationalization is we will roll out our business model in the countries we have already, like The Baltics and Spain and maybe some others.

3:05 Let's see what what happens. So this is our strategy with the where we where we drive further, but we have already achieved in the last three years. So where we are right now, we try to put some flesh on the bone as you see here. For industry focus, we we prolonged a lot of contracts. One was a major contract with for five years. There's over 100,000,000 in TCV in the two major industry we have right now. And we are in serious talks that I can say in the health care sector to form a joint venture in in that space.

3:54 So this is this is developing, and we see it in both we see it on both, let's say, sec not segments, but in both areas. So we have a track record in the in the already existing industries, and we are close to to do the first, at least for us, major step in the health care sector. AI orchestration, as I said, we are going to build agent for our clients and run the run the agents. There we have in q four and q one, we have acquired plus 10 customers for that. Our our wins in the first quarter was up to 7% also also with the with the help of the 10 new clients.

4:45 And we launched by ourselves 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, let's say, let's say, be more efficient every year using using AI. So the internationalization that we already discussed with you, so we are rolling out go to market activities in the vortex in Spain, and we decided in q four to start near shore center inclusion in Romania because of SAP expertise, huge SAP expertise in this area or in this country.

5:32 And, also, we will transfer our, let's say, service desk activities to Romania combined with AI to be better in that space also. So this is it for for the strategy. We are quite, I would say, quite on track, sorry, from our point of view in the first quarter. I'd like to speed it up for the the upcoming for the rest of the year. So with that, I hand over to you, Laura. Thank you, Thijs. Welcome from my side too. Q one started as expected. Let me share a fitting metaphor.

6:17 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 q one, this means a strong focus on portfolio 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.

7:03 An impressive sales funnel of more than €200,000,000 will lead to rising revenues in the next quarters, especially in h two. Additionally, we gained more than 7% order entry than in q m. 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, plus 3% margin, and plus 3% revenue. This is a result of a clear improvement utilization and a higher demand for AI consulting and S4HANA transition.

7:54 The margin shows clearly that the focus on portfolio and capacity control is working. The second segment, managed services, earns an attractive margin, but 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 and l. The revenue for Q1 was EUR 42,800,000, EBITDA EUR 1,500,000, a temporarily negative consolidated net income, which is expected for year to become positive.

8:53 As expected, all results are impacted by a Pengsuf related to AI expertise and internationalization, as Thijs 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 €600,000 in q one and a net liquidity of 42,600,000. Gaining liquidity is good, but we want more profitability. We invest a lot of time in new possible acquisition targets.

9:39 Unfortunately, one failed in q one. And at the moment, we have promise and talks, so maybe, there will be more information in the next months. Our company is debt free, and the net liquidity that corresponds to 1.71 each share shows a high potential. So 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 share to buy q.beyond would be able to have share buybacks or pay dividends without endangering the financial stability.

10:39 So 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 the execution of our strategy and pipeline compensates the microeconomical pressure we suffer at the moment. We expect revenues between 182 to €190,000,000 and EBITDA between 10 and €16,000,000 and a positive free cash flow. Additionally, a positive consolidated net income.

11:31 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. So this is the end for the financials for today in this presentation, and I hand over again to Thijs. Yeah. Thank you, Noah. So a little outlook, 2628. We mentioned it already. Q one was 7% up concerning total contract value or the bookings. So we like to keep this momentum. We have a sales funnel.

12:17 So we have already 40 millions roughly in the books end of April or beginning of May and have additionally a sales funnel of 200,000,000. So we are we are we are assuming that the next quarter will be higher in revenue, and we get a book to bill over one this year, which was the case last year and will be the case also next this year is over seven. Therefore, we have an indicator for '27. Concern is the strategy we said the the aim is concerning revenues 250,000,000 approximately with the EBITDA margin of 10%.

13:04 How do we reset? Three elements. One is organic growth, 5%, then m and a strategy, roughly 20,000,000 revenue, and the AI cost station should be at least 20,000,000 end of twenty eight so that we are very least when we look at our strategic approach and plan, so we have a high visibility of the numbers. And the the funnel will will get us will get us the high funnel will get us to a growth this year. Yeah. Having said that, in summary, what we what we like to achieve, industry focus will give us business and higher margin, AI orchestration.

13:50 With that, we will be relevant for our we we are relevant. We will be relevant, and we'll have new portfolio and new business and internationalization, let's say, further further growth opportunities European wide, and this is also what the the customer from us from us are expecting. Yeah. Thank you very much for your time, and we're 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 and a session. If you would like to ask your questions via audio line, please click the raise hand button. And if you're dialing in by phone, please press star key 9 to raise your hand and star key 6 to unmute yourself. Additionally, you're also welcome to post your questions in our chat, and I will read them out loud for you.

14:40 We have already received risen hands by mister. You may unmute yourself now. Can you hear me now? Yes. Now we can hear you. It's a bit powered with the start broadcast button. Anyways, hi, guys. Thanks for the presentation. I was just wondering, looking at the at the guidance, especially on the bottom line, which continues to be 10 to 16 mil, what needs to happen for you to reach the upper end of this range? Because, honestly, looking at the q one now and also the environment, I had a hard time see seeing you at 15 plus million EBITDA this year.

15:34 So the the range is is the range we we picked is we we like to have a range where we where we are, let's say, prepared for whatever will happen with the with the German or European economy. So and at the lower end, I think we are well we are well defended. We're very defended with our current business model. And at the higher end, everything must must must work out. So there there are especially so for instance, when we when we look at clients which have a which have a where we get, let's say, as an example, that way, we get kickbacks from the from the vendors, and we have special deals.

16:24 So this will be the this will help us to get the the higher end. So there are certain elements in it, but everything must must must work out to get the 60,000,000. Okay. I understand. Have thoughts about that. Good to hear that you, you know, feel well well protected on the on the lower end. In the last calls, you you you you mentioned that you you already have, like, your ethical rules around 300 agents in place, which you most of them use this internally, but already had some leads for external monetization. How how is this going so far? I think the the low hanging fruits have been harvest, So all what concerning reporting so the most of the agents so low hanging fruits had been harvest.

17:19 Most of the agents are in managed service and in in central for other in, let's say, in the shared service shared service part for reporting reporting, patching, and process automation. So low hanging fruits have been identified, have been harvest. Now we we tackle, let's say, the more complex, complicated agents. So this is this is a track right now. But it's evolving all over the all over the the company. I think everyone or most of the people, I must say, have have at least have at least understand the potential. And now it's it's if we all know that if an agent if we build an agent, they have to run the governance. They have this the agent have to be compliant and so on and so on and so on. So it's getting getting a little bit more complicated, but potential is still there.

18:20 K. And maybe you mentioned m and a that also that you that you had, like, a failed deal you said in in in in the first quarter. What what's your I mean, how how confident can we be that you that you you will you will add some inorganic growth throughout the year? And can you maybe remind us of maybe the scope of that? Yeah. You should you could be very confident. This is our strategic plan, so we will execute on this. The one who failed, it's it's it's as leaders, you have to say often more no than yes. So and if the for example, the price is not right, then we said no.

19:10 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. It's I would not I would not allow myself to give an answer right now, but there will be there will be an impact. And the most important thing is not, let's say, the number right now as long as the the potential for the future. So as I as I'd like to explain, we are targeting for health care. We are targeting the 2,000 hospitals in Germany, Switzerland, and Austria because most of them, they they they're behaving like a midsize company like the German Mittelstand.

20:01 Yes. They are public owned some some cases, but they still behave like that. And it's the same same as two of the 700 in Germany, at least. So this is a potential we see in the next years also the plus the transformation, let's say, pressure they have. And this is much more important. It's much more important than the than the figures right now. Okay. But but health care is clearly crystallizing as the priority there I'm hearing I'm hearing out of this. Yep. Okay. Yeah. Thanks thanks a lot, guys. That was very helpful. I will connect it to you. Yep. Thank you. Thank you so much also from my side. We have another recent hand by mister.

20:48 You may unmute yourself now. Yeah. Good afternoon, everybody. Two questions. Can you hear me, sir, if you're okay? Yeah. We hear you. I heard a weird sound, but okay. First, what costs arise 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? And then 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.

21:45 Yeah. For consulting, it always depends on the mixture on the revenue mixture we are showing. I don't have the q three figures in my head, but I would assume there are there are there's revenue in it, which is which is which is not so profitable as in as in q one. So for example, if you have if you have license in it or, let's say, one timer, which are not so which are not so profitable. And what I what I can say for q one, it's it's it's it's real it's real consumption, which which we have driven. So this leads us this is what we like to see. This leads us to the to the higher margin.

22:37 So there's a structural effect in it when you compare the q three to the q one figures. Okay. Thanks. And concerning concerning AI investments, We believe the the majority is done. What we are now figuring out is which models to use. For example, we have we have started with Copilot Microsoft Copilot. This works out for for some part of the company, and traffic is now on top of it. So, Claude, and now we have both. Maybe we have a third one. And so I think the most the major part is done, and now it's about optimization of the several of the several systems and then do it. And do we need to to provide every employee with an with a k I AI tool, or do we provide our employees with agents they can use so we will optimize that? So my answer would be majority is done.

23:49 Alright. Thank you very much. Thank you, mister Kinderman. We have another question by mister Friedrich Nielsen. You may unmute yourself now. Thank you. Can you hear me? Yes. I was just wondering why you choose to add a new nearshore hub in Romania rather than expanding in Spain or Latvia, for example. Two reason. One is language, at least for the two reason. One, the first reason is language. We we have a lot of clients, and I showed you the prolongation we did in q four last year, q one this year, so the contract prolongation. And there are several others to come which have a service desk element in it, service desk portfolio.

24:40 And we got a lot of pressure from our clients also cost wise. We were looking for an answer to reduce the cost. One is for sure human resource. The other one is AI. The midsized company are not ready to use full AI powered service desk. So we will build up one half half, one with Romanians German Roman German speaking Romanian resources plus AI, and therefore, we we cover the the service desk portfolio. This is reason number one. And reason number two is that we and Nora mentioned it, that we are very successful in the SAP business right now.

25:30 Our assumption is that this will be that that this will be at least midterm to long term. So we see that we need to to provide our customers with with services, application management service, we run the applications for them. But we see also the cost pressure also when the customers are are globally the setup is globally European wide. And you find Romania have have a they have a good SAP skilled workforce. And these were the main two reasons. It it to be honest, it it took us some some discussions because of complexity.

26:16 You mentioned it, the third one, But now we are convinced that this is the right answer for this kind of two portfolios, so service test and SAP application management. I see. Great. Could you perhaps give us some approximate estimation of the costs related to international expansion in AI, as you mentioned, is holding back the earnings in the quarter? It's it's a figure, what is it, several million per quarter. It was in q three, q four, and q one. So let's say between 2,000,000 to €3,000,000 more or less.

27:03 Okay, great. And just lastly, you mentioned also discussions about the joint venture in health care. I mean, what size are we talking about? And is it a greenfield? Or is it you're going into something that's already up and running with quite some revenue? Could you talk? Yes. This will be a company which is up and running, which is very, very well positioned, let's say, in the health care segments for hospitals. And therefore therefore, we we like to form a joint venture that we will take over the majority of the shares, let's say, 51%. And then we will as we did for logging here, I'm not quite sure if you know this case.

27:49 So we have we have built a joint venture five years ago and the same setup, 51% lie is this q.beyond, and then we drive with the other partner the business forward. And this we like to do in in health care, and this we like to do in energy. Revenue is always around, for the beginning, let's say, 10 to 20,000,000 for the targets. And then we like to develop this develop this revenue with the joint venture partner further. Great. I understand. That's all for me. Thank you very much. Yes. Thank you. Thank you so much, Mr. Nielsen. Well, there are no more risen hands or further questions in our chat box. So 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, mister Rickson and missus Voltas, for your presentation and your time.

28:53 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. Bye.