Nemetschek Group Reports Strong Revenue Growth

News Summary

The Nemetschek Group has announced a remarkable 30.5% revenue growth in the second quarter, totaling €290 million. Their EBITDA margin improved to 30.5%, and they reported a significant rise in Annual Recurring Revenue (ARR) to €1.08 billion. Despite market skepticism regarding their high valuation, the company has updated its growth guidance to 20–22%. Key segments driving growth include the Build segment, boosted by the GoCanvas acquisition, and the Design segment, benefiting from increased demand for SaaS contracts. Challenges persist, including integration costs and potential short-term margin strains.

Nemetschek Group Reports 30.5% Revenue Growth in Q2 2025

The Nemetschek Group has announced impressive financial results for the second quarter of 2025, revealing a significant 30.5% increase in revenue. The company reached €290.0 million in revenue, fueled by strong growth in its core segments and strategic initiatives.

Strong Financial Performance

In conjunction with the revenue growth, Nemetschek reported an EBITDA margin of 30.5% for Q2 2025, an increase from 27.0% in Q2 2024. This performance showcases the company’s operational efficiency and ability to enhance profitability. Moreover, the Annual Recurring Revenue (ARR) surged by 38.7%, reaching €1.08 billion, indicative of a robust demand for its software-as-a-service (SaaS) offerings.

Revised Growth Guidance

The company has also raised its full-year growth guidance from an initial estimate of 17–19% to an optimistic 20–22% following this strong quarterly performance. This adjustment reflects management’s confidence in continued growth momentum, especially as international revenue contributions have increased from markets like India and Saudi Arabia.

Growth Across Business Segments

Within the company’s segments, the Build division saw remarkable performance with a 63% currency-adjusted revenue growth, largely due to the successful integration of the GoCanvas acquisition. On the other hand, the Design segment also recorded a commendable growth rate of 18.3%, driven in large part by the rising demand for multi-year SaaS contracts.

Stability in Cash Flow

Despite substantial investments and expansion strategies, Nemetschek maintained a stable free cash flow of €55 million, consistent with the levels reported in Q2 2024. This stability is crucial as the company transitions towards a 92% recurring revenue model, an increase from 83% in 2024. This shift underscores the increasing importance of subscription-based revenue in its business strategy.

Consolidated Earnings and Market Metrics

For the first half of 2025, consolidated EBITDA reached €169.1 million, maintaining a margin of 29.5%. Notably, if not for the impacts related to insolvencies, the adjusted EBITDA margin would have been as high as 31.5%. As a result of these financial metrics, Nemetschek’s stock has been evaluated with a trailing P/E ratio of 78.48 and an EV/EBITDA of 49.09, which is significantly above the sector average of approximately 30x.

Analyst Insights and Market Sentiment

Analysts are exhibiting cautious optimism, maintaining a price target of €122 per share for Nemetschek. However, market skepticism persists due to high valuation multiples and conservative guidance strategies. Potential challenges, including integration costs stemming from the GoCanvas acquisition and impacts from service provider insolvencies, remain a focal point for investors.

Strategic Investments and Future Outlook

Moving forward, Nemetschek is actively expanding its global footprint while investing in innovative technologies, including Agentic AI. These investments are anticipated to boost productivity and uncover new revenue opportunities in automation and analytics, positioning the company well in an AI-driven architecture, engineering, and construction (AEC) sector.

Concluding Remarks

In summary, despite facing short-term risks that could pressure margins, such as integration challenges and macroeconomic factors that might impact demand for construction software, Nemetschek remains a standout player in the SaaS market. The combination of consistent execution and strategic growth initiatives suggests that the company is on track for long-term value appreciation as a high-growth, high-margin leader.

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Additional Resources

• Ainvest: Nemetschek Conservative Earnings Reporting
• Wikipedia: Nemetschek
• Ainvest: Nemetschek Group Growth
• Google Search: Construction Software Industry
• Encyclopedia Britannica: Software