GICS Sector : Technology
Qt Group Oyj develops, productizes, and licenses software development tools under commercial and open source licenses Finland, Norway, Germany, the United States, Japan, China, South Korea, France, the United Kingdom, and India.It offers Qt Design Studio, a user interface design and development tool for applications; Qt Creator, a cross-platform integrated development environment for application development; and Qt Framework that contains C++ library classes and APIs offers cross-platform development solutions.The company also provides professional, consulting, training, partner, and support services.
Qt Group's Q3 2025 revenues came in at EUR 40.7 million, a 3.4% decline in comparable currencies, while the EBITA margin was 10.5%, lower than expected due to a softer market. The EPS was 0.06, significantly lower than the estimated 0.665. The year-to-date net sales growth was -1%, but 1% in comparable currencies. The cash balance increased due to the seasonality of the business, with a EUR 32.4 million cash flow year-to-date.
Publication Date: Nov -16
The company's headcount increased by 64 year-on-year, with a focus on R&D, product management, and customer-facing organization. The acquisition of IAR added EUR 1.7 million to personnel expenses in Q3, impacting the EBITA margin. The integration of IAR is ongoing, with opportunities for cross-selling and new customers.
The market has been slower to recover than expected, with larger deals being fewer this year. Customers are downsizing due to current market conditions and calculating their license needs carefully. The company expects the market to get better in the long term but anticipates Q4 to be under pressure due to the lack of large deals.
With a P/E Ratio of 16.77 and an EV/EBITDA of 11.24, the stock seems reasonably valued. The ROE is 27.38%, indicating a good return on equity. Analysts estimate next year's revenue growth at 20.7%, which could lead to a re-rating of the stock if achieved. The current valuation metrics suggest that the market has already priced in some of the challenges faced by the company.
The company's guidance for 2025 is 3% to 10% year-on-year growth in comparable exchange rates and a margin of 20% to 30%. The management is cautious about Q4 and the next year but believes they are at the bottom of the downturn. The expected return to normal profitability in 2026 is a positive sign.
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Qt Group Oyj's 10.43% growth in License Sales and Consulting is driven by increasing adoption of its cross-platform software development framework, particularly in the automotive and industrial automation sectors. Growing demand for digital transformation, IoT, and AI solutions also contributes to the growth, as companies seek to enhance their product offerings and stay competitive.
Qt Group Oyj's 10.27% maintenance growth is driven by increasing adoption of digital transformation, rising demand for automation and IoT solutions, and growing need for efficient software development. Additionally, the company's strong presence in the automotive and industrial sectors, coupled with its expanding partner network, contribute to its growth momentum.
A cross-platform application development framework for building embedded systems and IoT devices
A cross-platform application development framework for building desktop, mobile, and web applications
A UI design and development tool for creating user interfaces and designing user experiences
A software framework for building industrial automation systems and IoT devices
A software framework for building in-vehicle infotainment systems and automotive electronics
Custom consulting services for Qt-based projects, including architecture, design, and implementation
Training and education services for Qt developers, including online courses and on-site training
Qt Group Oyj faces moderate threat from substitutes, as there are limited alternatives to its software solutions, but customers may still opt for open-source alternatives or develop in-house solutions.
Qt Group Oyj's customers have low bargaining power due to the company's strong brand reputation and the specialized nature of its products, making it difficult for customers to negotiate prices or terms.
Qt Group Oyj's suppliers have moderate bargaining power, as the company relies on a few key suppliers for its hardware components, but it also has some flexibility to switch suppliers if needed.
Qt Group Oyj faces low threat from new entrants, as the company's strong brand reputation, patented technology, and high barriers to entry make it difficult for new companies to enter the market.
Qt Group Oyj operates in a highly competitive market, with several established players competing for market share, which increases the intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 14.36% |
| Debt Cost | 12.07% |
| Equity Weight | 85.64% |
| Equity Cost | 12.11% |
| WACC | 12.10% |
| Leverage | 16.77% |
Value: 0.9
Growth: 5.3
Quality: 7.1
Yield: 3.1
Momentum: 6.5
Volatility: 8.0
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Value: 1.3
Growth: 8.0
Quality: 6.8
Yield: 0.0
Momentum: 9.5
Volatility: 3.0
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Value: 0.0
Growth: 8.9
Quality: 9.4
Yield: 3.1
Momentum: 2.0
Volatility: 4.3
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Value: 3.2
Growth: 9.6
Quality: 8.8
Yield: 0.0
Momentum: 0.5
Volatility: 1.0
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Value: 6.0
Growth: 1.2
Quality: 4.5
Yield: 5.6
Momentum: 0.5
Volatility: 1.7
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Value: 2.2
Growth: 9.1
Quality: 4.5
Yield: 0.0
Momentum: 0.5
Volatility: 0.3
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