Nemetschek Group Reports Strong Financial Performance

News Summary

The Nemetschek Group has showcased remarkable financial growth, with a 30.5% revenue increase year-over-year, reaching €290 million in revenue. The company also experienced a 46.3% rise in EBITDA, hitting €88.5 million, and announced an upward revision in growth projections. With a strong shift towards Software as a Service and successful acquisitions, Nemetschek’s subscription model now contributes significantly to its revenue. Despite facing potential challenges ahead, the company aims to drive growth through innovation and international expansion, while rewarding shareholders with a proposed dividend increase.

Nemetschek Group Reports Strong Q2 2025 Earnings with Significant Revenue Growth

The Nemetschek Group has reported impressive earnings for the second quarter of 2025, highlighting a substantial revenue growth of 30.5% year-over-year, amounting to €290 million. This remarkable increase reflects the company’s ongoing transformation and strength in the architecture, engineering, and construction (AEC) software sectors.

In addition to revenue growth, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 46.3%, reaching €88.5 million for the quarter. Furthermore, Nemetschek’s annual recurring revenue (ARR) has set a new record of €1.08 billion, which is an increase of 38.7% compared to the same period last year. The positive financial results have prompted the company to raise its full-year revenue guidance to a growth projection of 20-22%, up from the earlier forecast of 17-19%.

Subscription Model Drives Growth

The growth of Nemetschek can be attributed mainly to the transition towards a Software as a Service (SaaS) model, resulting in a strong adoption of subscription services. Currently, 92% of the company’s revenue is derived from subscription models, with SaaS revenue alone soaring by 72.5% to reach €208.5 million.

The company’s Build segment experienced remarkable growth of 63% (currency-adjusted), primarily aided by the acquisition of GoCanvas. Meanwhile, the Design segment showed a more modest increase of 18.3%. This diversification in growth metrics underscores the solid demand for Nemetschek’s range of solutions, bolstered by trends in the AEC software sector, which is valued at $11.11 billion and projected to expand at a compound annual growth rate (CAGR) of 8.8% through 2030.

Strategic Partnerships and Market Positioning

Nemetschek is implementing a competitive strategy that includes forming interoperability partnerships, exemplified by a collaboration with Autodesk in 2024. This approach distinguishes the company from other competitors who operate mainly within proprietary ecosystems. The company is also eyeing growth opportunities in the Asia-Pacific region, where AEC software adoption is forecasted to grow at 11% CAGR. This positioning aids Nemetschek as it enhances its operations in markets like India and Saudi Arabia.

Valuation Insights and Concerns

While Nemetschek currently has a trailing price-to-earnings (P/E) ratio of 78.48 and an EV/EBITDA ratio of 49.09, these figures are considerably higher than industry counterparts such as Autodesk (EV/EBITDA of ~25x) and Trimble (8.7x). This raises concerns regarding the sustainability of these high valuations, particularly as analysts anticipate a 13% revenue CAGR through 2028, along with an estimated 67% growth rate in earnings per share (EPS), projected from €0.45 in 2025 to €0.75 in 2026.

However, risks to Nemetschek’s valuation include potential margin dilution due to GoCanvas integration and sensitivity to economic factors that could impact construction activities. The company is expecting approximately 450 basis points contribution to revenue from the GoCanvas acquisition, meanwhile aiming for a full-year EBITDA margin target of around 31%.

Focus on Innovation and Shareholder Returns

CEO Yves Padrines emphasized that the company is dedicated to focusing on AI innovation, efficient subscription execution, and international expansion, all of which are core drivers of their growth strategy amid global uncertainties. In a sign of financial strength, the company also proposed an increase in their dividend from €0.48 to €0.55 per share, underlining their commitment to rewarding shareholders as the company continues its growth trajectory.

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Additional Resources

• Nemetschek Group Q2 2025 Revenue Growth
• Wikipedia: Nemetschek
• Nemetschek Group Q1 Results
• Google Search: Nemetschek Group
• Nemetschek Group Tops $1 Billion
• Encyclopedia Britannica: Software
• Nemetschek: SaaS Powerhouse
• Google News: AEC software