Q.beyond AG's Q1 Results Show Promising Profitability

q.beyond AG has released its Q1 results, which reveal notable improvement in profitability. Overall sales reported a slight decrease of 1.5% year-on-year to €46.6 million due to an accounting change. However, reflecting adjustments, the management indicates a 2% growth. The Consulting segment led with a 4.2% increase, while its gross margin rose by 5.1 percentage points to 13.5%, attributed to enhanced near- and off-shoring and better resource utilization.

The Managed Services segment also saw a slight improvement in gross margin to 21.5%, contributing to an overall gross profit margin increase of 1.8 percentage points. This led to an EBITDA increase of 16.7%, reaching €2.3 million, despite a €0.3 million insolvency-related one-off expense, yielding a 5% margin.

The company achieved a significant conversion of EBITDA to free cash flow at 78%, totaling €1.8 million. With a net cash position of €28.3 million, q.beyond AG is well-positioned for potential acquisitions, with expectations of at least one deal this year in sectors like healthcare or energy, or to support regional expansion.

The management reaffirmed its FY25 guidance, projecting sales of €184-190 million and EBITDA of €12-15 million. The reiteration of the 'BUY' rating underscores confidence in q.beyond's 2025 outlook, with a target price maintained at €1.30.