Tecnotree Reports Strong Q1 2025 with Improved Cash Flow and Strategic Market Diversification

Tecnotree, a global leader in digital platforms and services for AI, 5G, and cloud-native technologies, announced its financial results for the first quarter of 2025, reflecting a stable and resilient performance with notable improvements in cash flow and strategic market diversification. Financial Highlights During Q1 2025, Tecnotree demonstrated significant financial progress. The company's free cash flow turned around to a positive EUR 1.0 million from a negative EUR 4.7 million in Q1 2024, supported by enhanced collections and disciplined cost management. Days Sales Outstanding (DSO) dropped dramatically from 216 days to 155 days, contributing to this improvement. Additionally, the Capital Expenditure to Sales ratio decreased from 20.8% in Q1 2024 to 14.7% in Q1 2025, indicating the maturity and stability of Tecnotree's digital product stack. Market Diversification Strategically, Tecnotree made headway in diversifying its order backlog. The company's European and American regions saw an increase in backlog from EUR 8.7 million in Q1 2024 to EUR 12.1 million in Q1 2025. This shift helps manage exposure to volatile currency markets, with the percentage of revenue booked in such currencies falling from 45% to 15%. The company continues to focus on expanding its license-based revenues and driving adoption of its digital platforms under the Open Digital Architecture (ODA) framework. Innovation and Recognition Tecnotree's innovation leadership was acknowledged by several industry bodies. The company is a finalist in the TM Forum Excellence Awards for its ODA implementation with MTN Group, spanning multiple operating companies. It also won the Telecom Vendor of the Year award at the Asia Telecom Awards for its GenAi-led campaign management using the Tecnotree Moments platform. Furthermore, Tecnotree was recognized in the Gartner Market Guide for Revenue Management and Monetization 2025 and, for the first time, in the Gartner Market Guide for CSP Marketplaces. These recognitions validate Tecnotree's vision and investment strategy. CEO's Perspective Padma Ravichander, CEO of Tecnotree, expressed satisfaction with the company's consistent performance and its ability to generate positive free cash flow for four consecutive quarters. She noted that net sales increased by 3.7% year-on-year, driven by high-margin license revenue and geographic diversification. Operating profit remained steady at EUR 4.5 million, demonstrating effective margin management and cost optimization. The company's Europe and Americas backlog grew strongly, and its balance sheet improved with a 28% reduction in DSO days, a EUR 7.4 million decline in trade receivables, and a significant drop in the Capex/Sales ratio. According to Ravichander, the company's brand recognition is growing, highlighted by the TMForum and Gartner accolades in areas like AI, 5G monetization, and enterprise digital services. Tecnotree remains one of the few ODA Heroes, contributing to the adoption of modern open digital frameworks. Confidence in achieving full-year guidance targets for 2025 includes margin expansion, growth in recurring revenues, and further free cash flow improvement. The company expects a robust order book in the near future, supported by a strong bid pipeline. Company Overview Tecnotree is a 5G-ready digital Business Support System (BSS) provider with advanced AI and machine learning (AI/ML) capabilities and multi-cloud extensibility. It leads in TM Forum Open API Conformance with 59 certified Open APIs, including 9 real-world ones, demonstrating its commitment to delivering high-quality experiences and services. Tecnotree's agile, open-source digital BSS stack covers a wide range of business processes and subscription management, creating opportunities beyond just connectivity. The company also offers a Fintech and B2B2X multi-experience digital marketplace via the Tecnotree Moments platform, empowering digitally connected communities across various sectors like gaming, health, education, and OTT. Tecnotree is listed on the Helsinki Nasdaq under the ticker symbol TEM1V. Industry Insights Industry insiders commend Tecnotree's strategic approach to financial stability and market diversification. The improvements in free cash flow and DSO reduction suggest a well-managed transition towards a more sustainable business model. Recognitions by TMForum and Gartner underscore the company's leadership in digital transformation, particularly in AI and 5G monetization. Tecnotree's focus on high-margin license revenue and strategic entry into mature markets align with broader industry trends, positioning it well for continued growth and technological advancement in the ever-evolving digital landscape.