SoftwareOne Earnings Call: Growth Returns Amid Key Risks

SoftwareOne Holding Ltd. ((CH:SWON)) has held its Q4 earnings call. Read on for the main highlights of the call.

SoftwareOne Holding Ltd.’s latest earnings call mixed optimism with caution as management highlighted renewed growth, robust margins and early wins from the Crayon integration, while also acknowledging weak net profit, tax headwinds and regional underperformance. Investors heard a confident long‑term story, but near‑term execution and balance sheet risks still weigh on the equity case.

Combined Scale Reinforces Market Position

SoftwareOne and Crayon now generate combined gross sales of CHF 14.0 billion and serve more than 70,000 clients across over 70 countries, supported by 13,000 employees. This broad footprint with 10,000 plus vendors and 12,000 channel partners underpins leading positions in software asset management and strong reach across hyperscalers and independent software vendors.

Return To Growth And Q4 Acceleration

The group delivered like‑for‑like revenue growth of 1.4% for 2025, signaling a return to positive territory after a tougher prior year. Momentum strengthened into year‑end, with fourth‑quarter revenue up 11% and total reported revenue expanding 22.5% year on year once the Crayon acquisition is included.

Strong Profitability And Margin Discipline

Profitability remained a core strength, with an adjusted EBITDA margin of 20.9% for the year, an improvement of 0.5 percentage points versus 2024. Fourth‑quarter adjusted EBITDA margin was even stronger at 23.4%, giving management confidence to reiterate its medium‑term ambition of sustaining margins above 23% by 2026.

Synergy Realisation Ahead Of Integration Plan

Management emphasized that Crayon‑related cost synergies are tracking ahead of plan, with CHF 43 million of run‑rate savings delivered by the end of 2025. Total run‑rate cost synergies reached CHF 64 million by the end of March 2026, keeping the company on course toward its CHF 80–100 million target and CHF 100 million run‑rate ambition.

Channel And Services Drive Structural Growth

Channel revenue grew 18.7% for the full year, with Asia‑Pacific accounting for about 60% of that activity and acting as a key growth engine. Services, particularly in cloud, data and AI, showed solid momentum and made a meaningful contribution to the group’s margin improvement as the business mix shifts toward higher‑value offerings.

Strategic Win As Google Cloud Distributor

In a notable strategic milestone, SoftwareOne became the first global authorized distributor for Google Cloud at the end of February 2026. The agreement initially spans 10 markets and is expected to underpin a multi‑year expansion of the company’s channel business, with management flagging the distribution deal as structurally margin‑accretive over time.

Liquidity Cushion And Moderate Leverage

The company ended the year with cash and cash equivalents of CHF 419.1 million, providing a sizeable liquidity buffer. Net debt stood at CHF 369.3 million, translating into leverage of 1.3 times on an IFRS basis and 1.2 times like‑for‑like, levels that management described as comfortable given stable cash generation and synergy delivery.

Progress Resolving Problematic Receivables

SoftwareOne reported progress on a long‑standing public‑sector receivable inherited from Crayon in the Philippines, collecting roughly USD 21.5–22 million in March 2026. Management expects this inflow to substantially close out the legacy issue, easing investor concerns that had surrounded this specific exposure for several reporting periods.

Dividend Signals Confidence In Cash Generation

The board proposed a dividend of CHF 0.15 per share, totaling around CHF 33 million for shareholders. This represents a payout of 37% of reported adjusted net profit, or about 71% when excluding Crayon transaction and integration costs, underlining confidence in underlying cash flows despite the temporary drag from acquisition‑related charges.

North America Drag Highlights Execution Risk

North America remained a clear weak spot, with revenue in the region down 12.6% year on year in 2025 as go‑to‑market execution challenges and changes in Microsoft incentives weighed on performance. Management has launched turnaround measures, but acknowledged that the timing of a sustained recovery still represents a key risk to the overall growth trajectory.

Net Profit Squeezed By Elevated Tax Rate

Despite solid operating metrics, net profit for the period was only CHF 1.4 million, reflecting a sharp squeeze below the EBITDA line. Income tax expense reached CHF 28.1 million, implying an effective tax rate of 95% compared with an expected group rate of around 23%, driven largely by nondeductible items and unrecognized tax losses.

Acquisition‑Driven D&A And Impairments

Depreciation, amortization and impairments climbed to CHF 123.7 million from CHF 72.7 million, reflecting the balance sheet impact of recent acquisitions and integration. Total impairments of CHF 17.8 million included an CHF 8 million goodwill write‑down in Latin America, CHF 6 million on right‑of‑use assets and CHF 3.8 million on intangibles tied to portfolio actions.

Material Adjustments And One‑Off Charges

Reported EBITDA continued to be heavily adjusted, with total add‑backs of CHF 69.4 million in 2025, most of which related to CHF 48.3 million of Crayon transaction and integration costs. Excluding these, adjustments were CHF 21.1 million, below the company’s CHF 30 million ceiling, yet the overall reliance on adjustments remains a watch‑point for investors assessing underlying earnings quality.

Rising Net Debt And Higher Financial Costs

Financial liabilities increased to CHF 788.4 million, including a CHF 575 million term loan and CHF 100 million drawn under the revolving credit facility, leading to a move from net cash to net debt of CHF 369.3 million. Net financial expense rose to CHF 54.4 million, driven by higher interest on the enlarged debt stack and increased costs associated with factoring programs.

LATAM Weakness And Targeted Market Exits

Latin America revenues fell 4.4%, prompting management to sharpen its footprint by exiting four nonstrategic markets, namely Argentina, Uruguay, El Salvador and Nicaragua. The region also saw an CHF 8 million goodwill impairment as the company refocuses on core territories and reallocates capital to higher‑return opportunities.

Receivables Quality, Factoring And Legal Scrutiny

The acquired trade receivables portfolio included implied bad debt of CHF 33 million, mainly on balances older than 181 days, while nonrecourse factoring expanded to roughly CHF 282 million, contributing to negative net working capital of CHF 564.4 million. Management also flagged preliminary legal proceedings related to potential forgery around first‑half 2024 receivables, noting that internal and statutory audits support the adequacy of existing provisions.

Guidance And Outlook Emphasise Margin And Synergies

Looking to 2026, SoftwareOne guided to mid‑single‑digit like‑for‑like revenue growth with adjusted EBITDA margins above 23%, supported by cloud solution provider activities, multi‑vendor expansion and AI‑driven services. Management expects growth to be weighted to the second half, including a return to revenue growth in North America, while reaffirming synergy targets of CHF 80–100 million, keeping recurring EBITDA adjustments below CHF 30 million and maintaining capex near CHF 65.5 million.

SoftwareOne’s earnings call painted the picture of a business gaining scale, defending margins and extracting synergies, yet still working through tax, regional and balance sheet challenges. For investors, the story hinges on whether management can convert operational momentum and strategic partnerships into cleaner earnings and sustainable growth in the coming years.