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• Organic Revenue Development: Down by 2% year-over-year, ending within the revised guidance range.

• Recurring Revenues: Grew by 5%, exceeding the guided goal by 4 percentage points, now accounting for almost three-quarters of total revenues.

• Adjusted EBITDA: EUR225 million, within the revised guidance range, but down year-over-year.

• EBITDA Margin: 19%, 3 percentage points below last year.

• Free Cash Flow: EUR66 million, exceeding the revised guidance.

• Net Debt: Increased from EUR700 million to EUR773 million.

• R&D Expenses: Slight increase, with R&D expenses as a percentage of revenue remaining high at 22%.

• AIS Segment Revenue: Decline of 5% due to a decrease in one-time revenues; recurring revenues increased by 3%.

• Hospital Segment Revenue: Grew by 1% year-over-year, driven by growth in recurring revenues.

• Pharmacy Segment Revenue: Overall revenues remained at the prior year level, with a strong margin above 30%.

• Dividend Proposal: Legal minimum dividend of EUR0.05 per share.

• Warning! GuruFocus has detected 7 Warning Signs with CMPUY.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CompuGroup Medical SE & Co KgaA (CMPUY) enhanced its market position through strategic acquisitions, including Freo and AmbulApps, which expand their product offerings and strengthen their presence in northern Europe and France.

• The company received a C5 attestation, demonstrating significant progress in IT security, which is crucial for maintaining trust in digital health solutions.

• Recurring revenues grew by 5% in 2024, exceeding the guided goal, and now account for almost three-quarters of total revenues, showcasing the resilience of their business model.

• CompuGroup Medical SE & Co KgaA (CMPUY) is committed to innovation, with ongoing investments in AI and cloud-based solutions, such as the AI-driven phone assistant CGM1 and CGM STELLA.

• The company has secured a strategic partnership with CVC Capital Partners, which is expected to catalyze the next phase of innovation, growth, and transformation in healthcare.

Negative Points

• Organic revenue development in 2024 was down by 2%, attributed to a decline in one-off revenues, which impacted overall financial performance.

• Adjusted EBITDA decreased year-on-year, with a margin 3% points below the previous year, indicating challenges in maintaining profitability.

• Free cash flow was below the prior year level, affected by higher tax payments and restructuring payouts, although it exceeded revised guidance.

• The AIS segment experienced a revenue decline of 5% due to a decrease in one-time revenues, impacting the segment's overall performance.

• Net debt increased from EUR700 million to EUR773 million, raising concerns about the company's leverage, which is now above 3 times EBITDA of the last 12 months.