Information Technology
74Software: Sustained Momentum Reinforces Long-Term Objectives
Press Release
Paris, July 24, 2025
74Software: Sustained Momentum Reinforces Long-Term Objectives
74Software's Board of Directors, chaired by Pierre Pasquier, approved today the financial statements for the first half of 2025, which were subject to a limited review by the statutory auditors . Consequently, 74Software announces:
Patrick Donovan, Chief Executive Officer, stated:
"Our H1 results confirm our strong start to the year and demonstrate both the strength of our strategic direction and our ability to execute in-line with our stated plans. As noted in our Q1 press release, the solid early execution front-loads part of the year’s commercial activity— especially in the Axway business. We remain fully committed to our full-year guidance and, more broadly, to our 2027 and 2028 ambitions. Axway is now firmly established as a subscription-first business, while SBS is rapidly scaling its modular banking platforms and expanding its SaaS footprint. With recurring revenue accelerating and capital deployment tightly managed, 74Software is becoming a more structured, resilient, and forward-looking group — built to deliver long-term value creation."
Comments on H1 2025 activity
74Software delivered a strong first-half performance, confirming its ability to execute on its strategic roadmap and capitalize on the operational integration initiated following the transaction closing in September 2024. Revenue growth was solid in both brands, while profitability improved as planned — reflecting the strength of the Group’s model and the improved execution driven by Axway’s infrastructure software expertise and SBS’s leadership in banking software.
Following a particularly dynamic Q1, the second quarter allowed the Group to consolidate its gains, maintain commercial selectivity, and further shift toward a recurring, scalable revenue model. Axway has now largely transitioned, while SBS continues to advance its own transformation, expanding SaaS deployments and rebalancing its revenue mix in favor of product revenue. Key highlights for the period include:
The Group enters H2 with improving visibility, disciplined execution, and a clear focus on delivering its full-year objectives. Integration of support functions between Axway and SBS is now largely complete, and joint commercial initiatives are steadily expanding across selected regions.
Comments on H1 2025 operational performance
In the first half of 2025, the Group generated revenue of €344.0 million, reflecting total growth of 6.2% and organic growth of 6.5% year-on-year. This performance was supported by both brands, with Axway contributing €160.8 million in revenue and organic growth of 8.9%, and SBS contributing €184.2 million with 5.0% organic growth (compared to proforma H1 2024).
In the first half of 2025, Product revenue reached €280.0 million, up 12.9% organically, reflecting strong execution across both Axway and SBS. The Group continued to benefit from rising demand for subscription-based offers, with both customer-managed and own-managed subscriptions posting growth above 20%. Maintenance revenue declined as anticipated, while license activity increased but remained low at 6.4% of total revenue. Product revenues accounted for 81% of total revenue (up from 77% in H1 2024) and recurring revenues were at 75% of total revenue (up from 71% in H1 2024), confirming 74Software’s successful transition toward a product- and subscription-led model.
Axway generated €143.3 million in product revenue, up 10.5% organically. Recurring activities made nearly the entire contribution, driven by a 29.5% increase in customer-managed subscriptions and 6.8% growth in own-managed deployments, reflecting continued momentum in hybrid environments. License revenue decreased by 34.9% as the company continues to phase out new license sales. Maintenance and support dropped by 20.6% due to the continued shift of the customer base towards subscription models. Services revenue was slightly lower, down 2.2%, and represented 11% of Axway’s total.
SBS recorded €137.7 million in product revenue, up 16.3% organically, with strong performance across all product categories. Own-managed subscriptions rose by 35.2%, customer-managed subscriptions by 25.5%, and maintenance and support increased by 4.2%, supported by a growing installed base. License revenue climbed 21.2%, reflecting continued expansion of integrated and lending solutions. Recurring revenue now represents 64% of SBS’s business (up from 58% in H1 2024), with services accounting for 25% and licenses for 11%. This illustrates SBS’s continued shift from a service-led to a product-led business model.
Group-wide, Services generated €64.0 million in the first half, or 18.6% of total revenue, down 14.6% compared to last year. This decrease mainly reflects SBS’s repositioning, while Axway’s service contribution remained stable. The difference in service trends between the two businesses stems from their respective models. Axway relies on lighter implementation cycles, whereas SBS delivers more comprehensive banking transformation programs.
At the end of June 2025, ARR for Axway stood at €255.9 million, reflecting an organic growth of 11.8% year-on-year. SBS also continued to expand its ARR to €233.3 million, up 10.9% organically year-on-year. These solid performances confirm the effectiveness of both companies’ strategic repositioning and reinforce the Group’s revenue predictability and resilience.
Comments on H1 2025 product line performance
Axway , a recognized leader in application infrastructure and middleware, delivered solid momentum in the first half of 2025. All product lines contributed to growth, supported by strong commercial execution and increasing demand for cloud-based solutions:
SBS , a trusted provider of banking and financing software, posted solid growth in all product lines, confirming the strength of its modular and targeted approach as it continues its shift toward a product-led model:
Comments on H1 2025 profit on operating activities
In H1 2025, profit on operating activities reached €41.3 million, representing a margin of 12.0% of revenue, compared with 6.1% in H1 2024. This sharp improvement reflects strong gross profit expansion, driven by a more favorable revenue mix and tight cost control across operating expenses with all lines showing year-on-year efficiencies. Gross margins increased—particularly at Axway—thanks to strong bookings in customer-managed subscriptions, which generated significant upfront revenue at high margins.
Comments on H1 2025 net profit
Profit from recurring operations reached €28.4 million, after accounting for the amortization of allocated intangibles and share-based expenses. This marks a substantial improvement from the H1 2024 proforma figure of €10.5 million.
Share-based expenses increased, reflecting the inclusion of SBS in the new long-term incentive program, the Group’s strong share price performance, and higher employer social security rates in France. The purchase price allocation (PPA) related to the SBS acquisition has now been finalized. Amortization of allocated intangibles has been restated for 2024 on a pro forma basis and is expected to total €12–13 million for full-year 2025.
After including other operating income and expenses, such as restructuring charges and non-recurring items totaling €8.9 million, operating profit amounted to €19.5 million, compared with €2.6 million on a proforma basis in H1 2024.
Net profit for the half-year came to €5.8 million (1.7%), a significant turnaround from the €15.6 million loss recorded on a proforma basis in the prior year.
Basic earnings per share stood at €0.20, compared with a loss of €0.54 per share in the first half of 2024 (proforma).
Financial position on June 30, 2025
74Software made strong progress in its deleveraging effort during H1 2025. Free cash flow was particularly robust, supported by seasonal inflows from maintenance and subscription renewals, as well as the first-time implementation of a factoring program on selected receivables. Unlevered free cash flow reached €76.4 million, enabling €42 million in debt repayments and boosting cash balances. As a result, net debt stood at €191.8 million (before IFRS 16), with a leverage ratio of 1.83x and a gearing ratio of 0.37x—achieving the full-year leverage target of below 2.0x well ahead of schedule. This deleveraging is expected to reduce interest expenses going forward. Due to seasonal patterns in cash collection, the leverage ratio is expected to remain below 2.0x through year-end, though without material further improvement.
Shareholders’ equity stood at €512.8 million (72.8% of total capital) at June 30, 2025.
Change in the workforce
At June 30, 2025, the Group employed 4,679 full-time equivalents, compared with 4,787 at year-end 2024. This 2.6% reduction reflects continued disciplined workforce management across both Axway and SBS, aligned with the Group’s operational efficiency focus.
Targets & Ambitions
Following a strong first half, 74Software confirms its full-year 2025 guidance, underpinned by solid execution and front-loaded bookings. The Group continues to target revenue growth between 2% and 4%, reaching approximately €700 million, with an operating margin between 14% and 16%. Due to the first-time introduction of the factoring program, unlevered free cash flow is now expected to be at least 10% of revenue, and the leverage ratio is projected to remain below 2.0x.
Looking ahead, 74Software reiterates its ambition to surpass €750 million in revenue by 2027 with an operating margin above 17%, and to reach around 20% by 2028 — in line with its trajectory toward a scalable, profitable, and product-led growth model.
[ NEW TIME ] Today, Thursday, July 24, 2025, 6.00 p.m. (CEST):
2025 HALF-YEAR RESULTS - VIRTUAL ANALYST CONFERENCE
Please note that the meeting will be held in English.
Financial Calendar
Thursday, October 30, 2025, before market opening: Publication of Q3 2025 Revenue
Thursday, February 26, 2026, after market closing: Publication of 2025 Full-Year Results
Glossary and Alternative Performance Measures
Axway ARR : Annual Recurring Revenue – Expected annual billing amounts from all active maintenance and subscription agreements.
SBS ARR : Annual Recurring Revenue – Monthly recurring revenue (MRR) for the last month of the reporting period multiplied by 12. Where contracts are affected by seasonality or contracted volume-based elements, the last 12 months of revenue are aggregated in determining ARR. Expected recurring revenue from contracts signed but not yet active are not included in ARR.
NPS : Net Promoter Score – Customer satisfaction and recommendation indicator for a company.
Organic growth : Growth in revenue between the period under review and the prior period, restated for consolidation scope and exchange rate impacts.
Profit on operating activities : Profit from recurring operations adjusted for the non-cash share-based payment expense, as well as the amortization of allocated intangible assets.
Proforma : Proforma measures assume the acquisition of SBS happened at the beginning of the respective reporting period.
Restated revenue : Revenue for the prior year, adjusted for the consolidation scope and exchange rates of the current year.
Unlevered free cash flow : Free cash flow before exceptional items and before net interest expense.
About 74Software
74Software is an enterprise software group founded through the combination of Axway and SBS – independently operated leaders with unique experience and capabilities to deliver mission-critical software for a data driven world. A pioneer in enterprise integration solutions for 25 years, Axway supports major brands and government agencies around the globe with its core line of MFT, B2B, API, and Financial Accounting Hub products. SBS empowers banks and financial institutions to reimagine tomorrow's digital experiences with a composable cloud-based architecture that enables deposits, lending, compliance, payments, consumer, and asset finance services and operations to be deployed worldwide. 74Software serves more than 11,000 companies, including over 1,500 financial service customers. To learn more, visit 74Software.com
Contacts - Investor Relations:
Arthur Carli - +33 (0)1 47 17 24 65 - acarli@74software.com
Chloé Chouard - +33 (0)1 47 17 21 78 - cchouard@74software.com
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1 The interim consolidated financial statements were subject to limited review procedures.
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