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 Strong Revenue Growth in Q2 2025

The Nemetschek Group has achieved a remarkable 30.5% revenue growth in the second quarter of 2025, reaching €290.0 million. This significant increase showcases the company’s robust performance amidst various market uncertainties. Analyst expectations and investor sentiment indicate cautious optimism, even as high valuation multiples and conservative guidance strategies contribute to market skepticism.

Impressive Financial Metrics

In addition to the strong revenue growth, Nemetschek reported an EBITDA margin of 30.5% for Q2 2025, marking a healthy increase from 27.0% in the same period last year. The Annual Recurring Revenue (ARR) also surged an impressive 38.7%, amounting to €1.08 billion this quarter. The company’s solid financial performance prompted it to revise its initial full-year growth forecast of 17-19% upward to 20-22%.

Segment Performance Highlights

The Build segment notably benefited from the recent acquisition of GoCanvas, resulting in a staggering 63% currency-adjusted revenue growth. Meanwhile, the Design segment experienced growth of 18.3%, spurred by increased demand for multi-year SaaS contracts. Together, these segments indicate the company’s expansion strategy is effectively driving revenue and diversifying its offerings.

Through this growth, Nemetschek maintained stable free cash flow at €55 million, which is consistent with Q2 2024 levels. The transition to a 92% recurring revenue model further reflects the company’s commitment to long-term stability, up from 83% in 2024.

SaaS Growth and EBITDA Insights

Another highlight from the quarterly report is the remarkable 72.5% growth in SaaS revenue. This increase underscores the strength of the company’s high-margin contracts. For the first half of 2025, the consolidated EBITDA reached €169.1 million, with a margin of 29.5%. Had it not been for insolvency-related impacts, the adjusted EBITDA margin would have been as high as 31.5%.

Valuation and Market Sentiment

The company’s shares currently have a trailing price-to-earnings (P/E) ratio of 78.48 and an enterprise value to EBITDA (EV/EBITDA) ratio of 49.09, both significantly higher than the sector average of approximately 30x. Analysts have set a price target of €122 per share, suggesting potential upside despite prevailing market concerns.

Global Expansion: New Markets and Future Growth

Nemetschek’s strategic move into international markets is already yielding results, with increased revenue reported from regions like India and Saudi Arabia. Investments in Agentic AI are also anticipated to boost productivity and create new revenue streams in areas such as automation and analytics. These initiatives demonstrate a dedicated approach to innovation and market leadership.

Addressing Market Challenges

Amid this growth, the company faces several short-term challenges, including integration costs associated with GoCanvas and some impacts related to service provider insolvency. Analysts suggest that the current market skepticism may lead to a potential mispricing opportunity for investors. They express confidence that Nemetschek is well-positioned for long-term growth, particularly in the AI-driven architecture, engineering, and construction (AEC) sector.

Conclusion: Path Forward for Nemetschek

Overall, Nemetschek’s consistent execution coupled with its strategic growth initiatives portray it as a high-growth, high-margin SaaS leader. As the company continues to innovate and expand, it aims to enhance integrations and address market pressures, positioning itself favorably for sustainable long-term value appreciation.

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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