Yesterday's publication of ATOSS' FY25 annual report once again confirmed the exceptional quality of the business model and the structural strengths underpinning its long-term growth story. While the release contained no major surprises after the preliminary figures in January, it provides additional insight into the drivers behind ATOSS' recurring revenue engine and its expanding AI-enabled platform.
FY25 marked another record year with group sales up 10.9% yoy to € 189m, while EBIT reached € 68.1m, corresponding to a 36% margin and thus exceeding the already lifted target of 34%. Recurring revenues (Cloud & Subscriptions + Maintenance) rose 18% yoy to € 132m and now account for 70% of total sales. At the same time, Cloud & Subscription revenues expanded by 28% yoy to € 92.7m and represent almost half of group revenues. These figures clearly highlight the continued success of ATOSS' transition toward a highly scalable SaaS-based model.
Beyond the headline numbers, the report particularly underscores the strength of ATOSS' recurring growth mechanics. Cloud ARR increased 28% yoy to € 101m, while the cloud order backlog rose 27% yoy to € 109m, providing a high level of revenue visibility entering FY26. Importantly, this growth is not only driven by new and migrated customer wins (60%) but also by consistent upselling within the installed base (40%), reflecting the company's effective land-and-expand strategy and the mission-critical nature of its WFM solutions.
Another key takeaway is the increasing role of AI within the ATOSS platform. The company continues to integrate AI-driven functionality across forecasting, scheduling and workforce analytics processes, thereby further enhancing the value proposition of its software suite. In our view, this development strengthens ATOSS' competitive positioning, as intelligent automation and predictive planning capabilities are becoming increasingly important differentiators in WFM solutions.
Despite ongoing investments into sales capacity, international expansion and AI development, ATOSS continues to deliver best-in-class profitability. The scalable SaaS model, combined with strong pricing power and disciplined cost management, enables EBIT margins comfortably in the mid-30% range (FY26e: 34.7%). At the same time, the company's strong balance sheet remains a key strategic asset, with liquidity of more than € 120m providing ample flexibility for organic investments, dividends and potential bolt-on acquisitions.
Overall, the FY25 annual report once again reinforces our view that ATOSS represents a rare combination of structural growth, exceptional margins and high earnings visibility. With its expanding recurring revenue base, growing AI capabilities and strong balance sheet, the company remains one of the highest quality software compounders in the European market.
We therefore reiterate BUY with a new € 148 PT (old: € 152) based on DCF.
ISIN: DE0005104400
