Nemetschek stock gains 1.13% as HCSS margin drag persists

Nemetschek reported strong third-quarter growth on Thursday, November 5, while the HCSS acquisition widened the gap between underlying momentum and reported profitability. The company retained its full-year targets, leaving integration and margin normalization as the next key tests for investors.

At 17:37 CET on Thursday, November 12, Nemetschek stock traded at 64.65 euros on Lang & Schwarz, 1.13 percent above the 63.93-euro quote in the previous report published at 12:11 CET the same day. The quote was 0.31 percent below the Xetra close of Thursday, November 12. The move since the previous report is separate from the Xetra daily comparison.

HCSS Lifts Growth And Complexity

According to Nemetschek's Q3 release, group revenue rose 26.6 percent to 371.1 million euros, including HCSS from July 1. Organic revenue growth reached 13.7 percent on a reported basis and 12.5 percent after currency effects.

Annual recurring revenue increased 35.8 percent to 1,462.2 million euros, while subscription and software-as-a-service revenue advanced 52.4 percent to 321.9 million euros. Build revenue climbed 56.6 percent to 190.8 million euros, supported by the first HCSS contribution and continued organic expansion.

Reported Margins Face Acquisition Effects

Third-quarter EBITDA increased 21.8 percent to 115.9 million euros, but the reported margin was 31.2 percent. The organic EBITDA margin reached 34.8 percent. Nemetschek said the HCSS purchase price allocation reduced revenue by approximately 15 million euros in the quarter, while merger, integration and share-based compensation costs also affected earnings.

Reported earnings per share fell to 0.40 euros from 0.48 euros a year earlier. Adjusted earnings per share rose 20.0 percent to 0.66 euros, highlighting the different signals from reported and adjusted results.

Targets Hold Despite Segment Changes

Management continues to expect currency-adjusted organic revenue growth of 14 to 15 percent and an EBITDA margin of 32 to 33 percent for 2026. HCSS is expected to contribute about 600 basis points to group revenue growth, while acquisition effects are expected to dilute the reported margin by about 150 basis points.

The segment outlook is more selective. Manage revenue growth is now expected in the mid-single-digit range instead of the previous low-double-digit view, while Media revenue is expected to remain broadly stable rather than grow at a mid-single-digit rate. The overall group outlook remains unchanged.

European investors are also watching the DAX market environment as software valuations respond to changing growth and margin expectations.

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