ATOSS Software (ETR:AOF): A High-Growth, Insider-Backed Play in the German Software Sector

ATOSS Software (ETR:AOF) has emerged as a compelling long-term investment in the German software sector, driven by its robust earnings growth, resilient EBIT margins, and strong insider alignment. With a 10.7% forecast earnings growth for 2025 [1], a transition to cloud-based SaaS driving margin expansion, and insider ownership of approximately 22% [2], the company is well-positioned to capitalize on the digital transformation tailwinds reshaping the industry.

Attractive Earnings Growth and Cloud Transition

ATOSS Software’s projected 10.7% earnings growth in 2025 [1] marks a significant acceleration from its 6% average annual revenue growth over the past decade. This optimism is underpinned by the company’s strategic shift to SaaS, which has already driven a 30% year-over-year revenue increase in its Cloud and Subscriptions division [3]. By H1 2025, cloud revenue accounted for 48% of total sales [3], reflecting a structural shift toward recurring revenue streams. Analysts project this momentum to continue, with EPS growth expected to mirror the 10.6% CAGR [1] and a 12.2% annual revenue growth rate.

Despite challenges in license and hardware sales—software license revenue fell 44% year-on-year [3]—the company reaffirmed its full-year revenue target of €190 million [1], citing strong cloud adoption and improved EBIT margins.

Strong EBIT Margins and Operational Efficiency

ATOSS Software’s EBIT margin of 34% in H1 2025 [3] slightly exceeded its full-year guidance of at least 31% [2], even as the second-quarter margin dipped to 33.6% from 37.3% in the same period last year [4]. This resilience highlights the company’s operational discipline, particularly in a market marked by economic headwinds. For context, the 2024 full-year EBIT margin stood at 37% [1], demonstrating a consistent ability to maintain profitability during transitions.

The company’s focus on cloud services, which carry higher margins than traditional on-premise software, is a key driver. With cloud revenue now representing nearly half of total sales [3], ATOSS Software is poised to benefit from recurring revenue and reduced customer acquisition costs.

Insider Alignment and CEO Compensation

ATOSS Software’s insider ownership of ~22% [2]—led by CEO Andreas Obereder’s 21.59% stake as of 2023 [2]—creates a strong alignment of interests between management and shareholders. Obereder, who has served as CEO since 1999, has seen his ownership stake decrease from 50% to 21.59% over time [2], yet his significant holding ensures continued focus on long-term value creation.

Compensation for Obereder and the executive team is also reasonable relative to peers. His total compensation of ~€1.3 million [1] aligns with the average for companies of similar size in Germany [1], and the remuneration structure for 2024 included fixed and variable components (50-75% fixed, 25-50% variable) [1]. This structure ties executive pay to performance metrics like EBIT and strategic goals, further reinforcing accountability.

Strategic Rationale for Long-Term Investors

ATOSS Software’s combination of high-growth potential, margin resilience, and insider alignment makes it an attractive play in the German software sector. The company’s cloud transition is not only boosting profitability but also insulating it from the volatility of traditional software sales. Meanwhile, its insider ownership and reasonable executive pay structure underscore a governance model that prioritizes shareholder interests.

With a 41.24% upside potential based on analyst price targets [4] and a projected return on equity of 49.7% in three years [1], ATOSS Software offers a compelling risk-reward profile for investors seeking exposure to the SaaS revolution in Europe.

**Source:[1] ATOSS Software Future Growth [https://simplywall.st/stocks/de/software/etr-aof/atoss-software-shares/future][2] Mid-Cap Marvel (Part 2): ATOSS Software [https://www.stockopine.com/p/mid-cap-marvel-part-2-atoss-software][3] ATOSS Software SE Achieves Double-Digit Growth in H1 2025 [https://www.webdisclosure.com/article/atoss-software-se-achieves-double-digit-growth-in-h1-2025-Yn4NHx04moQ][4] ATOSS Software (AOF) Stock Forecast & Price Target [https://www.tipranks.com/stocks/de:aof/forecast]