TeamViewer tumbles 20% after cutting revenue outlook on 1E drag

Investing.com -- TeamViewer shares plummeted nearly 20% Wednesday after the company said it expects full-year revenue to come in at the lower end of its previous guidance range of 778 million to 797 million euros ($907 million–$929.5 million), citing weakness in its recently acquired 1E unit.

The company said 1E, which it bought in December 2024 and specializes in IT issue detection software, delivered lower-than-expected annual recurring revenue due to “ongoing transformation and persistent macroeconomic challenges.”

Third-quarter revenue rose 4% on a constant currency basis, while sales from 1E fell 8%.

The group’s adjusted EBITDA reached $87.7 million, about 5% above the consensus estimate cited by Morgan Stanley.

In addition to a subdued European economy, TeamViewer said “ongoing macro challenges” in the U.S.—1E’s largest market—led to slower decision-making and fewer deals.

“Ongoing initiatives to turn around this part of the business will take time to materialize, affecting our short-term growth outlook,” CFO Michael Wilkens said.

The company now expects annual recurring revenue between 780 million and 800 million euros, down from its previous target of 815 million to 840 million euros. It also trimmed its 2026 revenue growth forecast to 2%–6%.

To cushion the impact, TeamViewer plans further cost reductions, while raising its 2025 adjusted EBITDA margin forecast to 44% from 43%, supported by tighter cost control.

"Heading into 3Q25, TeamViewer’s stock has continued to trade as if the market saw a downgrade as a matter of time, and we think investors remain deeply sceptical over the ability of the company to re-accelerate growth," Morgan Stanley analyst George Webb said.

"We see the equity story as continuing to face growth-oriented headwinds," they noted.