This article first appeared on GuruFocus .
-
Revenue Growth (Combined Like-for-Like):11.6% year-on-year growth in H1 2026.
-
Q2 Revenue Growth (Combined Like-for-Like):10.4% year-on-year growth.
-
Reported Revenue:CHF 818.3 million in H1 2026, up 68.2% year-on-year.
-
Adjusted EBITDA Margin:24.9% in H1 2026, a 4.5 percentage point improvement year-on-year.
-
Q2 Adjusted EBITDA Margin:28.9%, up 5.4 percentage points year-on-year.
-
Reported EBITDA Margin:22.7% in H1 2026, up 5.2 percentage points versus H1 2025.
-
Net Profit:CHF 54.3 million in H1 2026.
-
Cash Conversion Ratio:69% over the last 12 months.
-
Operating Cash Flow (LTM):CHF 271.6 million; CHF 283.6 million excluding factoring impact.
-
Free Cash Flow (LTM):CHF 211.7 million.
-
Net Debt:CHF 408 million as of June 2026, with a leverage ratio of 1.1.
-
Cost Synergies:CHF 100 million run rate achieved, at the top end of the target.
-
Channel Business Growth:35.6% growth in H1 2026, with adjusted EBITDA margin of 57.2%.
-
Services Business Growth:17.4% growth in H1 2026, with adjusted EBITDA margin of 8.5%.
-
Software and Cloud Direct Growth:1.5% growth in H1 2026; Q2 declined 1.8%.
-
Regional Growth (H1 2026):DACH up 6.8%, Western Europe up 11.7%, Nordics up 26%, North America up 8.6%, APAC up 23%, Latam up 6.9% to CHF 49.3 million, CEE up 16.7% to CHF 42 million.
-
OpEx (Combined Like-for-Like):CHF 632.9 million, broadly flat year-on-year.
-
Net Working Capital Before Factoring:Improved to negative CHF 509.2 million as of June 2026.
-
CapEx (LTM):CHF 71.9 million.
Release Date: August 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
SoftwareONE Holding AG ( SWONF ) delivered strong H1 2026 results with 11.6% year-on-year revenue growth on a combined like-for-like basis.
-
Adjusted EBITDA margin improved significantly to 24.9%, a 4.5 percentage point increase year-over-year, with Q2 2026 margin reaching 28.9%.
-
The company achieved its 100 million Swiss francs run-rate cost synergy target six months ahead of schedule, with integration substantially completed.
-
The channel business showed exceptional growth of 35.6%, with adjusted EBITDA margin expanding by 9.3 percentage points to 57.2%, demonstrating the scalability of the business model.
-
Cash conversion was strong at 69% over the last 12 months, well above the company's 60% target, driven by improved working capital management.
-
All regions contributed to growth, with APAC leading at 23% growth and North America delivering its second consecutive quarter of growth, up 8.6%.
Negative Points
-
Software and Cloud Direct revenue growth slowed to 1.5% in H1 2026, with Q2 declining 1.8% due to a tough comparison base from larger deals in the prior year.
-
H2 2026 growth is expected to moderate as the benefits from accelerated EA to CSP conversion and early renewals in H1 are not expected to repeat at the same pace.
-
The effective tax rate for H1 2026 was high at 42%, impacted by non-capitalized tax losses and non-tax deductible expenses, though a normalized rate of around 30% is expected for the full year.
-
Net debt increased to $408 million as of June 2026, up from $369.3 million at year-end 2025, primarily due to the Crayon acquisition and related costs.
-
The company expects CapEx to increase to approximately 7-8% of revenue in 2027-2028 as it accelerates investments in platforms and internal IT, which could pressure near-term cash flow.
-
The Chief Operating Officer, Oliver Bergstolt, has decided to leave the company, which could create transitional uncertainty during the reorganization.
Q & A Highlights
Q: Given how strong the margin has been in H1, why are you only reiterating the guidance for 2026? What are you expecting to weigh on margin in H2? And regarding the 2030 margin bridge, how much investment is needed to achieve the AI and automation efficiencies, and will the contribution be linear or back-end loaded? A: CEO Raphael Erb stated that the lower end of the range would require several things moving against them at once, which they are not seeing evidence of today. He confirmed they are comfortable landing in the range and will not land at the bottom of the 23% margin. Regarding AI efficiencies, he noted the trajectory to the 28%+ target for 2030 is linear, but the AI-related effects will likely be more visible from 2028 onwards. CFO Hanspeter Schraner added that CapEx will increase to 7-8% of revenue in 2027-28 to fund these investments, but this will be offset by net working capital improvements, making it cash neutral.
Q: Can you quantify the tailwinds from the EA to CSP shift seen in H1 and what to expect in H2? Can higher Microsoft pricing compensate for the tougher comparison base? Also, is it fair to assume a 10%+ margin in the services segment going forward? A: CEO Raphael Erb confirmed that the EA to CSP conversion was accelerated in H1 due to early renewals and Microsoft's price increases effective July, providing a tailwind of around four percentage points overall. This will lead to a deceleration in growth in H2. He also confirmed that the EA to CSP conversion positively impacts the services business, as CSP is always sold as a bundle including a service package, which contributed to H1 growth and will continue to support H2 performance.
Q: What are your thoughts on Microsoft's 2027 incentive changes, specifically the introduction of growth margins and the change in channel partner incentives? A: CEO Raphael Erb stated that the FY27 incentive framework focuses increasingly on growth, benefiting fast-growing partners. Regarding Microsoft's announced 5% margin reduction from October 2026 on products like 365 E1, E3, OneDrive, and SharePoint, he noted that based on discussions with Microsoft, they do not expect a meaningful impact overall. Any reductions should be balanced by other incentive opportunities, and these products make up only a small part of their overall CSP business, making the changes neutral for SoftwareOne.
Q: Your IFRS tax rate was 42% in the first half, but the cash effective tax rate was only 20%. What should we model for the full year tax rate? A: CFO Hanspeter Schraner advised modeling a more normalized tax rate of around 30% for 2026. He noted that while the ambition is to further reduce this rate in the future, given the standalone integration costs, 30% is a reasonable rate for 2026.
Q: Could you explain the logic behind the reorganization and the decision to streamline and reduce the number of regions? A: CEO Raphael Erb explained that the company is moving from the integration phase to a focus on customer value and execution. Elevating regional representation to the executive board brings customers, partners, and markets closer to decision-making. The new structure has three overarching regionsEMEA, Americas, and APACand adds a Chief Channel and Ecosystem Officer to represent the fast-growing and margin-accretive channel business at the executive level.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
