Tecnotree Continues to Deliver Stable Q1 2025 Performance With Improved Free Cash Flow and Strategic Market Expansion
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ESPOO, Finland — Tecnotree, a global digital platform and services leader for AI, 5G, and cloud-native technologies, today announced its financial results for the first quarter of 2025, demonstrating resilient financial performance with significant improvement in free cash flow and strategic progress in market diversification.
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Net sales of EUR 16.9 million (16.3) +3.7% Year on Year, in constant currency, EUR 17.1 million, +4.6% Year on Year.
Operating profit of EUR 4.5 million (4.4) +2.3% Year on Year.
Operating margin of 26.9% (27.2%).
Foreign exchange losses reduced to EUR 1.4 million (1.7).
Net income EUR 1.5 million (1.6) -5.6% Year on Year.
Gross cash flow from operations EUR 6.4 million (1.0).
Positive free cash flow of EUR 1.0 million (-4.7).
Earnings per share EUR 0.1 (0.1).
Order book at the end of the period EUR 70.3 million (74.8).
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Tecnotree recorded a consistent cashflow performance, supported by enhanced collections and disciplined cost management. DSO (Days Sales Outstanding) reduced significantly to 155 days from 216 days in the comparative quarter, contributing to the free cash flow turnaround. Capex to Sales ratio was reduced to 14.7%, from 20.8% in Q1 2024, reflecting the maturity and stability of Tecnotree's digital product stack.
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Strategically, Tecnotree made significant progress in diversifying its order backlog geographically. The company increased its Europe & Americas backlog to EUR 12.1 million from EUR 8.7 million in Q1 2024, while purposefully managing exposure to frontier market risks. As a result, the portion of revenues booked in volatile currencies fell sharply to 15%, down from 45% in the previous year.
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In line with its transformation towards a stable, recurring revenue model, Tecnotree maintained its Annual Recurring Revenue (ARR) at EUR 7.6 million. The company continues to focus on expanding license-based revenues and driving adoption of its digital platforms under the ODA (Open Digital Architecture) framework.
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Tecnotree's innovation leadership was further recognized by industry bodies such as TMForum and Gartner for its advancements in AI, 5G network monetization, and enterprise digital platforms. Tecnotree is nominated as a Finalist in the TM Forum Excellence Awards for Excellence in ODA implementation with MTN Group for its implementation across multiple Opcos. Tecnotree also won the Telecom Vendor of the Year for its implementation of the Tecnotree Moments platform for GenAi led campaign management at the Asia Telecom Awards. Further Tecnotree was recognised in the Gartner Market Guide for Revenue Management and Monetisation 2025. Tecnotree was also for the first time recognised in the Gartner Market Guide for CSP Marketplaces, validating our vision and investment strategy once again.
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Padma Ravichander, CEO of Tecnotree said, 'I am particularly pleased to highlight our consistent performance and focus to generate four consecutive quarters of positive free cash flow of EUR 1.0 million, a substantial improvement from the negative EUR 4.7 million in the same period last year. Our Net sales demonstrates a resilient start to 2025 with a 3.7% year-on-year increase, driven by a strategic focus on high-margin license revenue and geographic diversification. Our Operating profit remained stable at EUR 4.5 million, reflecting successful margin management amid ongoing cost optimization initiatives. The Order backlog in Europe and the Americas grew strongly, reflecting success in market diversification, while our focus on reducing frontier market exposure and optimizing working capital contributed to a healthier balance sheet. DSO days fell by 28%, trade receivables declined by EUR 7.4 million year-on-year, and Capex/Sales reduced significantly, demonstrating the maturity of our digital product stack.
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Our brand recognition continues to strengthen, with TMForum and Gartner accolades in areas such as AI, 5G monetization, and enterprise digital services. Tecnotree remains among the few ODA Heroes, leading the adoption of modern open digital frameworks. With confidence in achieving our 2025 full-year guidance targets, including margin expansion, growth in recurring revenues, and further free cash flow improvement, Tecnotree is well-positioned for sustainable long-term value creation. Our bid pipeline remains strong and we expect to see the order book bounce back in the near term.'
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Tecnotree is a 5G-ready digital Business Support System (BSS) player, with AI/ML capabilities and multi-cloud extensibility. Tecnotree leads the way on the TM Forum Open API Conformance with 59 certified Open APIs including 9 real-world open APIs, a testament to the company's commitment to excellence, and continuously striving to deliver differentiated experiences and services to both CSPs and DSPs. Our agile and open-source digital BSS Stack comprises the full range (order-to-cash) of business processes and subscription management for telecom and other digital services industries creating opportunities beyond connectivity. Tecnotree also provides Fintech and B2B2X multi-experience digital marketplace to its subscriber base through the Tecnotree Moments platform to empower digitally connected communities across gaming, health, education, OTT, and other vertical ecosystems. Tecnotree is listed on the Helsinki Nasdaq (TEM1V).
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