Tecnotree Q3'25 preview: Strong order book should support a pick-up in growth

Source: Inderes

Translation: Original published in Finnish on 10/17/2025 at 7:25 am EET.

Tecnotree will publish its Q3 report on Tuesday, October 28, at around 9.00 am EET. We expect the company's revenue to have grown significantly from a rather subdued comparison period, although the weakening dollar creates a headwind for growth. We expect a clear year-on-year improvement in earnings. In the report, the focus will again be on cash flow and especially the outlook for how much of the order book can be converted into cash flow for the company. Sales prospects are also under review after a strong start to the year in terms of sales.

Preconditions for clear growth

We expect Tecnotree's Q3 revenue to have grown by approximately 6% to 20.1 MEUR from a relatively subdued comparison period. We estimate that growth in constant currencies is slightly faster, but the weakening of the dollar will create a headwind for growth. The Nigerian naira, on the other hand, has recently shown signs of strengthening, and exposure to numerous developed country currencies generally creates uncertainty in forecasts, although exposure to these should be less than in the past. The company's order book is at a record high (Q2'25: 105.7 MEUR) due to the larger deals announced by the company earlier in the year. The strong order book already supports growth to some extent, but we expect this to materialize more clearly in growth in the coming years. Revenue for Q3 is boosted, among other things, by a contract extension with an existing operator customer.

We expect a significant improvement in the result

We expect Tecnotree's Q3 EBIT to have been 8.3 MEUR (Q3'24: 5.0 MEUR), which would correspond to a strong EBIT margin of around 41% (Q3'24: 26%). The improvement would thus be significant compared to the previous year. In addition to revenue growth, the company's efficiency measures implemented last year should support profitability development, and based on the company's previous comments, these measures should further lighten the cost structure towards the end of the year. In our forecasts, the earnings level is stable in Q3 and Q4, whereas last year the earnings were clearly more weighted towards the end of the year. However, the seasonality of the result has varied significantly in history, which also causes uncertainty in the Q3 forecasts.

In any case, due to the poor quality of earnings, the main focus is again on cash flow. Tecnotree has guided its free cash flow for 2025 to be over 4 MEUR. During the first six months, the company's cash flow was 2.1 MEUR (excluding currency translation effects), and the company is thus on track with its guidance. In our view, cash repatriation may accelerate towards the end of the year, which would clearly help the company to meet its guidance. In any case, the quarterly timing of cash flow is naturally subject to significant uncertainty, partly due to changes in working capital. To our knowledge, the company's recently announced deals include the right to some degree of advance payments, which could support cash flow, but the exact timing of these is not known.

Estimates in line with guidance

In addition to cash flow guidance, Tecnotree has guided for its 2025 revenue to grow by a low to high single-digit percentage at constant exchange rates. The company expects the EBIT margin to improve by at least 2%. Our forecast expects Tecnotree's reported revenue to grow by 3% this year to 73.8 MEUR, which would mean a mid-to-high single-digit growth rate at constant exchange rates.We expect Tecnotree’s reported revenue to grow by 3% to 73.8 MEUR this year, which, at fixed exchange rates, would still represent high single-digit growth in our view. We expect EBIT to land at 26.2 MEUR, which would mean an EBIT margin of 35.5% (2024: 33.3%), in line with guidance.

In the report, we are again interested in following the steps of how the company's strong order book will eventually materialize into cash flow. The next more concrete piece of information on this will be next year's cash flow guidance, which we will presumably only receive next year. Monitoring the order flow and sales outlook in general is also of interest, as the company has not announced any major deals since the large deals in H1.