Strong Q4 as FY25p is largely in line with est.

FY25p sales came in at € 183m (eNuW: € 184m; eCons: € 184m), up 1.4% on a comparable basis when eliminating accounting changes affecting € 13m of FY24 sales. This implies Q4p sales of € 48.2m (-5.9% reported), showing sequential improvements vs. Q2 and Q3. While the company did not provide segment details, we expect Consulting to have shown another strong quarter driven by improved utilization.

Preliminary EBITDA came in at € 12.3m (eNuW: € 12.1m; eCons: € 12.7m), implying an 6.7% margin (+1.2pp yoy). While the FY figure was to a certain extent supported by one-off effects to the tune of € 2.6m (adjusted margin of 5.3% or -0.2pp yoy), the Q4 operating EBITDA was in line with Q4’24 at € 4.2m, but at an improved margin of 8.7% (+0.5pp yoy). In addition to the improvements in Consulting, we see the increased near- and off-shoring ratio, now at 20%, as one of the main drivers for this. Until YE’27, we expect QBY to increase this ratio to 30%, which alone should translate into a gross margin improvement of 2pp (eNuW).

FCF came in at € 5.5m (company definition: change in liquidity), resulting in a comfortable net cash position (excluding lease liabilities) of € 42m, or € 0.34 per share leaving ample room for potential M&A (eNuW: at least one acquisition in FY26). Moreover, management reiterated in yesterday’s press release the aim to distribute dividends and buy back shares following the proposed capital reduction at today’s EGM.

Overall, the company achieved its revised FY25 targets, including positive net income (€ 2.5m) in a continued tough environment. We expect management to issue a new guidance for FY26 with the release of the final FY25 report end of March. In our view, FY26 will remain a challenging year for the IT-service industry, yet outgrowing the broader economy with 5.8% market growth (Bitkom). In our view, QBY should be able to slightly outperform given the high potential in Managed Services and a structurally improving delivery mix, that shifts more and more toward higher-value consulting, AI-enabled services and vertical-specific solutions, which tend to be more resilient and margin accretive even in cautious IT spending environments. In sum, QBY should grow sales by 7% to € 197m and continue to expand profitability as we see EBITDA to come in at € 16.6m (8.4% margin, all eNuW).

Overall, the solid Q4 has shown that the case, which is focused on steady margin expansion and cash generation, remains fully intact. On the other hand, the stock is currently trading at a mere 3.9x FY26e EV/EBITDA, which compares to an 8.0x peer group median. Reiterate BUY with an unchanged € 1.30 PT based on DCF.