Kudelski Tightens Costs and Refocuses on High-Margin Security as 2025 Revenue Slips

Kudelski SA ( (CH:KUD) ) just unveiled an announcement.

The Kudelski Group reported 2025 revenues and other operating income of USD 371.0 million, down 4.5% year on year, as it accelerated a broad transformation to streamline legacy operations and channel investment toward high-potential digital security, cybersecurity and IoT offerings. Group EBITDA remained negative at USD 15.6 million, but EBITDA excluding restructuring and one-off costs turned slightly positive, cash flow from operations improved in the second half and the company closed the year debt-free with USD 100.4 million in cash.

Core Digital Security delivered USD 229.0 million in revenue, with strong second-half momentum and high-margin new solutions such as watermarking, streaming protection and OpenTV largely offsetting legacy product erosion and lifting segment gross margin above 90%. The cybersecurity unit saw revenues fall to USD 98.5 million as it deliberately exited lower-margin transactional work, while improving gross margins and investing in an AI-enhanced MDR platform and OT security capabilities to support a targeted return to growth.

IoT revenues slipped 6.2% to USD 39.1 million amid a shift from direct sales to higher-quality distribution partnerships and one-off costs tied to replacing early RecovR devices, which temporarily depressed margins. Management expects IoT to return to double-digit revenue growth and margin recovery in 2026, helped by a new, lower-cost generation of RecovR and expanded channels with major auto finance, insurance and warranty providers.

Looking ahead to 2026, Kudelski guides to slightly higher Group revenues and improved EBITDA, with stable Core Digital Security performance, a resumption of growth in cybersecurity and a normalization in IoT. Governance is also evolving, with long-serving director Patrick Foetisch retiring and former KPMG Suisse chairwoman Hélène Béguin nominated to join the board, reinforcing financial and audit expertise as the group pursues its transformation plan.

The most recent analyst rating on (CH:KUD) stock is a Hold with a CHF1.00 price target. To see the full list of analyst forecasts on Kudelski SA stock, see the CH:KUD Stock Forecast page.

More about Kudelski SA

Kudelski Group, listed on SIX as KUD.S, is a global provider of core digital security technologies and solutions for the media, cybersecurity and Internet of Things sectors. Headquartered in Cheseaux-sur-Lausanne, Switzerland and Phoenix, Arizona, the company operates in more than 20 countries, offering software-based security, managed detection and response services, and IoT asset-tracking and protection platforms.

Average Trading Volume: 33,496

Technical Sentiment Signal: Sell

Current Market Cap: CHF66.84M

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