GFT Technologies Q2 2025 Earnings: Revenue Up 1.1%, Net Income Down 40%

GFT Technologies reported Q2 2025 earnings with revenue of €219.6m, up 1.1% YoY, and net income of €6.38m, down 40% YoY. Profit margin decreased to 2.9% from 4.9% in Q2 2024 due to higher expenses. EPS was €0.24, down from €0.41 in Q2 2024. Revenue is forecast to grow 7.7% p.a. on average during the next 3 years.

Title: GFT Technologies SE Reports Strong Q2 2025 Performance Despite Currency Headwinds

GFT Technologies SE (WBO:GFT) reported its second-quarter 2025 earnings, showcasing resilience in the face of currency headwinds and market challenges. The company reported a revenue of EUR 142 million for the first half of 2025, representing a 3% growth and a strong 7% growth in constant currency [1]. Despite these positive numbers, the company's 2025 revenue guidance has been adjusted to around EUR 808-815 million, representing a 2% growth and a 5% improvement in constant currency. The adjusted EBT guidance for 2025 is expected to be around EUR 65 million, with a 7.3% adjusted margin [1].

The UK market presented a significant challenge, with a 14% year-over-year revenue reduction to EUR 160 million in 2024, and further declines expected in 2025. The strong EUR had a negative impact of EUR 20 million on the 2025 revenue guidance [1]. The company also faced a one-off provision release in Brazil in 2024, which significantly impacted its EBT, reducing it to EUR 19 million [1].

Regional performance varied significantly, with Europe down 6%, Latin America up 21%, North America up 14%, the UK down 19%, and APAC up 24% [1]. The acquisition of Mega Work in Brazil added EUR 4 million in revenue and EUR 500,000 in EBT adjusted with a 22% margin in 2025 [1].

GFT Technologies SE is committed to becoming an AI-centric company, with significant achievements in AI and digital transformation projects, including a multi-million euro AI contract for Neuro Robotics in Germany [1]. The company successfully won 82% of new clients with its GNAI product links, indicating strong market acceptance and growth potential [1].

However, the company faced several challenges. The continuous decline in profitability in its software solutions segment required high capital investment for modernization [1]. Capacity adjustments and restructuring costs in the UK and software solutions segments have burdened the company's financial performance, with significant one-off expenses expected in 2025 [1].

During the earnings call, Jochen Ruetz, CFO, and Marco Santos, CEO, addressed various questions. Ruetz clarified that the full extent of project risks and necessary adjustments became clear only recently, with most impacts expected in the second half of 2025, particularly in the UK due to a dry pipeline and project delays [1]. Santos noted that the SAP business presents a strong growth opportunity, especially with upcoming migrations, and the company aims to leverage AI to enhance this offering globally [1].

Ruetz also addressed the external reasons for the problems faced in the UK market, stating that the UK market has shifted towards offshore and nearshore services, reducing demand for on-site professionals. The company is addressing this by aligning with its five-year strategy to enhance offshore capabilities [1]. There is no risk of spillover; instead, the company aims to replicate successful models from other regions in the UK [1].

In conclusion, GFT Technologies SE reported a resilient performance in Q2 2025, despite facing currency headwinds and market challenges. The company's strategic markets showed strong growth, and its AI advancements are a significant asset. However, the company faces challenges in the UK market and software solutions segment, requiring strategic turnaround initiatives and significant investment in modernization.

References
[1] https://www.gurufocus.com/news/3004534/gft-technologies-se-wbogft-q2-2025-earnings-call-highlights-resilient-growth-amidst-fx-challenges