Nemetschek Q1 Earnings Call Highlights

Key Points

• Nemetschek delivered a strong Q1 with reported revenue of EUR 313.1m (+10.7% reported, +17% FX‑adjusted), ARR near EUR 1.2bn (+14.4% reported, +21% FX‑adjusted), subscription/SaaS growth of 27.3% reported, and EBITDA of EUR 98.4m at a 31.4% margin.
• The Build segment was the standout, growing 19.8% reported (29.8% FX‑adjusted) with a 39.5% EBITDA margin and management sees >20% constant‑currency growth for Build in 2026; Nemetschek also announced the HCSS acquisition (expected H2 2026) to widen infrastructure exposure by about 30% and target a combined Build & Construct business of >EUR 1bn revenue and ~40% EBITDA margin by 2028.
• Management confirmed 2026 guidance—currency‑adjusted organic revenue growth of 14–15% and an EBITDA margin of 32–33%—while reporting strong cash generation (Q1 cash conversion 143%), a strengthened balance sheet with net debt of EUR 7.8m and an equity ratio of 47.3%, and noting guidance is organic (excludes M&A).

Nemetschek ETR: NEM reported what management described as a “very successful” start to 2026, with first-quarter results supported by continued strength in its Build segment, a re-acceleration in Design, and expanding profitability. On the company’s earnings call, CEO Yves Padrines said the group carried “remarkable momentum from 2025 into the first quarter of 2026,” while also advancing strategic priorities in artificial intelligence and M&A.

Revenue, ARR and margin expand in Q1

Nemetschek posted reported revenue growth of 10.7% to EUR 313.1 million for the January-to-March period. Padrines said currency headwinds—primarily from a weaker U.S. dollar—reduced reported growth, and that revenue rose 17% on an FX-adjusted basis.

Recurring revenue remained central to the quarter’s performance, consistent with Nemetschek’s ongoing transition to subscription and SaaS. Annual recurring revenue (ARR) grew 14.4% reported and 21% FX-adjusted to “almost EUR 1.2 billion,” Padrines said, calling ARR an indicator of the group’s revenue and cash-flow growth potential.

Subscription and SaaS revenue grew 27.3% reported and 35.4% FX-adjusted, which management highlighted as a key driver of ARR expansion. EBITDA increased faster than revenue, rising to EUR 98.4 million (+22% reported; nearly +30% FX-adjusted), with an EBITDA margin of 31.4%. Padrines attributed margin improvement to “healthy operating leverage,” cost focus, and internal efficiency, even as the company invested in AI and the subscription transition and incurred transaction-related costs tied to the planned HCSS acquisition.

Segment performance: Build stands out, Design re-accelerates

CFO Louise Öfverström detailed Q1 performance across Nemetschek’s four segments:

• Design: Revenue rose 5.7% reported and 9.5% in constant currency to EUR 136.2 million. Öfverström cited strong growth in new units and ongoing progress in subscription and SaaS transition, with subscription/SaaS revenue in the segment up 54.7% FX-adjusted. The segment’s EBITDA margin improved to 25.2% from 23.8% a year earlier.
• Build: Revenue increased 19.8% reported and 29.8% FX-adjusted, which Öfverström called a “stellar performance,” driven by new user growth in the U.S. and internationally. The segment’s EBITDA margin rose to 39.5%, up about 440 basis points year-over-year, despite continued investment.
• Manage: Revenue grew 3.2%. Öfverström said demand and sales performance—particularly in public and financial sectors—provided a foundation for acceleration in coming quarters. EBITDA margin was “broadly stable” at 10.4%.
• Media: Revenue grew 0.8% reported and 6.6% at constant currency to EUR 29.6 million, with ongoing longer customer decision cycles. EBITDA margin increased to 32%. Management noted the prior-year quarter included a non-operating effect related to an insolvency of a service and payment provider.

On the call, Padrines said the Build segment’s growth outlook for 2026 remains strong, stating the company sees “clearly for 2026 above 20% revenue growth at constant currency” for Build.

Subscription transition narrows the ARR vs. revenue growth gap

Öfverström said Nemetschek’s recurring revenues rose 21% FX-adjusted in Q1, pushing the share of recurring revenues to a “new record high” of 95%. As recurring revenue expands, she said the gap between ARR growth and revenue growth “continues to narrow.”

She also highlighted the shift away from legacy revenue streams:

• Maintenance revenues declined by more than 20% year-over-year, “perfectly in line with our plans,” she said.
• License revenues fell 53.7% year-over-year in Q1, reflecting the shift from perpetual licenses to subscription. Licenses accounted for “only 2% of total group revenues,” Öfverström said.

Discussing multi-year contracts used to support migration of maintenance customers to subscription (notably at Graphisoft and ALLPLAN), Öfverström told analysts Q1 saw approximately the same share of multi-year impacts as Q1 2025, describing a “low to mid single digit million” euro tailwind in the quarter.

Cash generation and balance sheet; guidance confirmed

Nemetschek reported continued strong cash generation. Öfverström said cash conversion—operating cash flow relative to EBITDA—was 143% in the seasonally strong first quarter, and the company expects cash conversion to remain above 100% going forward.

She added that the balance sheet strengthened further, with an equity ratio of 47.3% and a net debt position of EUR 7.8 million. Öfverström noted Nemetschek has deleveraged since the July 2024 closing of the GoCanvas acquisition, when net debt was EUR 370 million, “in full in less than two years,” even as it completed smaller acquisitions such as Firmus.ai.

Management confirmed 2026 guidance. Padrines said Nemetschek continues to expect currency-adjusted organic revenue growth of 14% to 15% and an EBITDA margin of 32% to 33%. In response to a question about whether M&A is baked into the revenue outlook, Padrines said, “When we guide, we guide only organically.”

The company reiterated that guidance assumes global economic and industry conditions do not deteriorate significantly, and that geopolitical tensions—“particularly in the Middle East”—do not escalate further or persist for a prolonged period.

HCSS acquisition and AI initiatives highlighted

Padrines also discussed the recently announced definitive agreement to acquire Heavy Construction Systems Specialists (HCSS), with closing expected in the second half of 2026. He said the acquisition would expand Nemetschek’s market opportunity by about 30% in infrastructure and heavy civil construction and create a “global construction AI and technology powerhouse.”

He described HCSS as a leader in heavy construction software in North America with churn “below 2%,” more than 4,000 customers, and around $250 million in mainly recurring subscription-based revenue in 2025. Padrines said HCSS had an EBITDA margin of around 40% under U.S. GAAP and an ARR increase of 21% in 2025. He added that Nemetschek expects the combined Build and Construct segment to generate “clearly more than EUR 1 billion in revenue” by 2028 on a standalone basis, with around 95% recurring revenue and an EBITDA margin of at least 40%.

According to Padrines, the transaction structure is expected to have an impact of about EUR 450 million on net debt, while preserving balance sheet flexibility. He said Nemetschek will own around 72% of the Build and Construct segment after the deal, while Thoma Bravo will hold around 28% as a minority shareholder.

On AI, management pointed to the Q1 launch of Bluebeam’s “agentic AI-based product suite,” Bluebeam Max. In Q&A, Padrines said Bluebeam Max includes a partnership with Anthropic’s Claude, adding that Nemetschek is pursuing broader MCP integrations across its portfolio. He also discussed evolving AI monetization approaches over time, including potential subscription-tiering and future consumption-based token pricing models.

About Nemetschek ETR: NEM

Nemetschek SE provides software solutions for architecture, engineering, construction, media, and entertainment markets in Germany, rest of Europe, the Americas, the Asia Pacific, and internationally. It operates through four segments: Design, Build, Manage, and Media. The Design segment offers software solutions primarily under the Allplan, Graphisoft, Solibri, Precast, Vectorworks, SCIA, dRofus, Frilo, and RISA brands for architects, designers, engineers, structural engineers, specialist planners, and landscape designers, as well as developers and general contractors.

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