Original-Research: ATOSS Software SE (von NuWays AG): BUY

Original-Research: ATOSS Software SE - from NuWays AG

29.10.2026 / 09:00 CET/CEST

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Classification of NuWays AG to ATOSS Software SE

Company Name: ATOSS Software SE

ISIN: DE0005104400

Reason for the research: Update

Recommendation: BUY

Target price: EUR 134

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

Margin lever pulled harder than expected; guidance upgraded; chg.

ATOSS released Q3 figures on Friday that were mixed on sales but outstanding

on profitability. The EBIT margin guidance upgrade we had flagged as a real

option in our preview materialised, but the step was larger than we and

eCons expected. In detail:

Q3 sales grew 11.3% yoy to EUR 52.6m (eNuW: EUR 53.3m). Cloud & Subscriptions

kept its strong pace, up 26% yoy to EUR 29.5m (eNuW: +25%). The shortfall came

from the non-recurring side. Perpetual licence sales halved yoy to EUR 0.9m,

while consulting stayed flat at EUR 10.2m. As a result, the recurring share

rose further to c. 74%. Underlying KPIs remain solid: Cloud ARR grew 25% yoy

to EUR 119m and net retention stood at 112% (ASES: 116%). Order momentum,

however, slowed against a strong comparable base as growth in Cloud &

Subscription order backlog decelerated to 8% yoy (H1: 14%). FY FY27,

management eyes for new ACV growth of 3-7%.

Margin was the clear highlight. Q3 EBIT jumped 22.6% yoy to EUR 21.1m (eNuW: EUR

18.4m; eCons: EUR 18.6m), implying a margin of 40.0%, up 3.6pp yoy, putting

the 9M margin at 36.8%. The drivers are structural with headcount flat yoy,

as ATOSS uses natural attrition in R&D and G&A while rolling out AI tools

across development, sales and customer service. Sales capacity is being

upskilled rather than expanded. All cost ratios came in well below budget,

with S&M at 18.0% of sales vs a planned 20.3%.

Guidance upgraded, as expected. As flagged in our preview, management lifted

the FY26 EBIT margin target, but by 3pp to c. 37% (old: >=34%; eNuW old:

34.9%). On sales, management sees the lower end of the EUR 210-215m range,

solely due to weaker perpetual licences, while recurring continues to

outperform, which is in our view the more important read. The implied Q4

margin of c. 37-38% compares with 40% in both Q4 25 and Q3 26, so the new

target again looks beatable, in our view (eNuW new: 37.8%).

Looking ahead. For FY27, management now expects sales at the lower end of

the EUR 235-245m range, citing lower perpetual and consulting revenues. On

margin, CFO Leiber indicated 36-37% as possible, well above the formal >=35%

target, with long-term potential above 40%. Importantly, the quality of

revenues keeps improving as visible in the continuously strong NRR, also

supporting margins. In our view, the slightly lower top line is therefore a

fair trade-off: what ATOSS loses in low-margin and one-off revenues, it more

than makes up for in profitability and visibility.

Action. We lift our FY26e EBIT and raise our margin estimates for the coming

years, reflecting the structural efficiency gains from flat headcount and

AI-driven process optimisation, as well as the upgraded guidance. At the

same time, we trim our sales estimates slightly to account for the faster

decline in perpetual licences and lower consulting revenues, while our

recurring revenue forecasts remain largely unchanged. Overall, the print

confirms ATOSS as a structural margin story with strong cash generation.

Reiterate BUY, PT EUR 134 based on DCF.

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