CM.com N.V. (AMS:CMCOM): Navigating Short-Term Volatility to Unlock Long-Term AI-Driven Growth

CM.com N.V. (AMS:CMCOM) has emerged as a pivotal player in the Conversational Commerce sector, leveraging AI innovation to redefine customer engagement. However, its 2025 half-yearly results and revised forecasts have sparked bearish sentiment, with declining revenue and EPS estimates clouding investor optimism. This article examines whether the company's long-term strategic vision and industry tailwinds justify a cautious yet bullish stance on its future prospects.

Mixed Financials: A Tale of Two Halves

In H1 2025, CM.com reported total revenue of €124.3 million, a 7% decline year-over-year, driven by a 12% drop in Q2 revenue to €62.4 million. While transactional businesses faced headwinds—1.8 billion messages sent in Q1 (down 10% YoY) and €675 million in payments processed (down 2% YoY)—the company demonstrated resilience in margin expansion. Gross profit remained flat at €40.3 million for H1 2025, but the gross margin improved to 32.4%, up from 30.0% in H1 2024. EBITDA grew to €7.8 million, and free cash flow turned positive at €2.1 million, a stark contrast to the negative €1.3 million in H1 2024.

The bearish narrative is fueled by normalized EBITDA declines and a revised full-year EBITDA guidance range of €22–27 million, with performance expected at the lower end. CEO Jeroen van Glabbeek attributed this to the absence of one-off revenue drivers like the 2024 WhatsApp campaign and a focus on higher-margin, recurring revenue streams. Annual Recurring Revenue (ARR) grew 6% to €34.5 million, underscoring the company's shift toward sustainable business models.

Strategic Reinvention: The AI-First Imperative

CM.com's long-term growth hinges on its transformation into an AI-First enterprise. The launch of its Agentic AI platform, HALO, marks a pivotal shift. HALO automates workflows in compliance, HR, legal, and finance, reducing operational costs while enabling predictive analytics. With 100+ clients already adopting HALO—including Bamigo and Energie.be—the platform is positioned to drive scalable, high-margin revenue.

The company's focus on AI-driven innovation aligns with broader industry trends. The global CM & CRM Devices Market is projected to grow at a 10.5% CAGR, reaching USD 12.3 billion by 2033, driven by AI integration, omnichannel communication, and demand for personalized customer experiences. CM.com's strategic investments in Voice AI and a ticketing resale platform further diversify its offerings, reducing reliance on volatile transactional businesses.

Bearish Risks: Short-Term Pain for Long-Term Gain?

The EPS decline and revenue contraction highlight near-term challenges. CM.com's Q2 2025 EBITDA of €3.9 million fell below normalized expectations, and operating expenses (OPEX) dipped slightly to €16.0 million. The company's debt refinancing in Q1 2025—comprising an €80 million credit facility and a €20 million share issue—provides financial flexibility but raises concerns about capital allocation efficiency.

Investors must also weigh the risks of transitioning to an AI-centric model. While HALO's 30% monthly growth is promising, scaling AI platforms requires upfront R&D and operational costs, which could pressure margins. Additionally, the absence of one-off revenue drivers like the WhatsApp campaign creates uncertainty in short-term performance.

Valuation and Investment Thesis

Despite the bearish sentiment, CM.com's long-term fundamentals remain compelling. The company's gross margin improvement (32.4% in H1 2025 vs. 30.0% in H1 2024) and positive free cash flow signal operational efficiency. Its focus on high-margin AI and recurring revenue aligns with the industry's shift toward automation and cloud-based solutions.

Investors should monitor HALO's adoption rate, ARR growth, and EBITDA recovery in H2 2025. The company's strategic alignment with the $12.3 billion CM & CRM market and its ESG-driven initiatives (e.g., energy-efficient data centers) further strengthen its competitive moat.

Conclusion: A Cautious Bull Case

CM.com N.V. is navigating a transitional phase, where short-term revenue volatility contrasts with long-term AI-driven growth. While the bearish sentiment is justified by declining EPS and flat gross profit in H1 2025, the company's strategic reinvention—anchored by HALO, Voice AI, and a focus on recurring revenue—positions it to capitalize on the $12.3 billion market opportunity.

For investors, the key is to balance near-term caution with long-term optimism. A buy-and-hold strategy could be appropriate for those willing to weather the short-term headwinds and benefit from CM.com's AI-driven transformation. However, active monitoring of quarterly metrics and market sentiment is essential, as the path to EBITDA recovery in H2 2025 remains critical.