ATOSS will release preliminary Q3 figures on Friday. We expect another strong quarter, which should make the margin guidance look conservative. In detail:
We expect Q3 sales of € 53.3m (+12.9% yoy, eCons: € 53.3m), driven by continued strong momentum in Cloud & Subscription (eNuW: +25% yoy). Visibility remains good with Cloud ARR up 25% at H1 to € 114m and net retention of 111%. Larger enterprise migrations such as Rossmann and Berlin-Chemie should add to this, as contributions from migrations should further increase in Q3. Moreover, the broader rollout of the first ATC agent should support upselling. On the other hand, legacy licenses and maintenance should keep shrinking as planned, pushing the recurring share further up.
On the bottom-line, we see an EBIT at € 18.4m (eCons: € 18.6m), implying a margin of 34.5%. We are deliberately conservative here, as on the one hand ATOSS keeps investing in sales capacity with sales headcount up 12% at H1 and on the other hand renewed geopolitical tensions and higher energy prices could lengthen decision cycles and keep pressure on new logo pricing. Nevertheless, cloud scaling and the internal AI rollout remain intact and management indicated in the Q2 CC, that holding or even exceeding the H1 level (35.1%) would not be a surprise.
On FY26 guidance, management calls for sales of € 210-215m and an EBIT margin of =34%. For sales, our model indicates the mid-range with with € 213m (+12.4% yoy, eCons: € 213m). On EBIT however, we see ATOSS closer to the 35% (eNuW & eCons: 34.9%) despite our conservative H2 estimates, which do not reflect the typical H2 seasonality. An EBIT guidance upgrade with the Q3 release therefore remains a real possibility, in our view.
Beyond FY26, management guides for FY27 sales of € 235-245m (eNuW & eCons: € 242m) and an EBIT margin of =35% (eNuW: 35.4%, eCons: 35.3%). The groundwork for this is already laid. With almost 74% of sales recurring and Cloud ARR growing 25% yoy, a large part of FY27 revenue is already visible. The installed base keeps expanding, which is visible in the strong net retention and driven by upselling and annual price increases. Large enterprise customers are moving to the cloud at higher ticket sizes while ATOSS's moat in complex, highly regulated environments keeps switching costs high. Two new growth levers add to this: the ASES agents, launching at the end of Q4 and monetised through usage-based subscriptions, and the international business, which already accounts for 8% of sales (non-DACH +51% yoy at H1). On the margin side, cloud scaling and the internal AI rollout across development, sales and service should keep cost growth below revenue growth, making the outlook appear comfortable, in our view.
Reiterate BUY with an unchanged € 134 PT based on DCF.
ISIN: DE0005104400
