Earnings call transcript: Tinexta Q2 2025 sees strong cybersecurity growth

Tinexta SpA reported a robust performance for the second quarter of 2025, with significant growth in its cybersecurity segment. Revenue increased by 16% year-over-year to €39 million, while adjusted EBITDA rose by 13% to €39 million. The company’s stock responded positively, with a 1.61% increase, closing at €14.53. According to InvestingPro data, Tinexta maintains a "GOOD" overall financial health score of 2.63, with particularly strong momentum metrics. The company’s market capitalization stands at €761.54 million, and analysis suggests the stock is currently trading above its Fair Value.

Key Takeaways

• Revenue surged 16% year-over-year, driven by cybersecurity growth.
• Adjusted EBITDA increased by 13%, underscoring operational efficiency.
• Stock price rose 1.61% following the earnings release.
• Tinexta maintained its guidance for the year, projecting strong second-half performance.
• The company launched a new cybersecurity product and expanded its digital trust operations.

Company Performance

Tinexta’s performance in Q2 2025 was marked by a strong showing in the cybersecurity sector, where revenue grew by 46%. This growth was complemented by strategic acquisitions, such as LinkVerse in the healthcare sector, and a focus on expanding digital trust operations. Despite macroeconomic uncertainties affecting the business innovation market, Tinexta managed to maintain a consistent headcount and optimize its data center and cloud strategies.

Financial Highlights

• Revenue: €39 million, up 16% year-over-year
• Adjusted EBITDA: €39 million, up 13%
• Reported EBITDA: €33 million, up 29%
• Net Profit Adjusted: €8.4 million
• Free Cash Flow Adjusted: €48 million, up 86%

Outlook & Guidance

Tinexta reaffirmed its guidance for the year, expecting revenue growth between 11-13% and EBITDA growth between 15-17%. The company anticipates more than 70% of its EBITDA will be generated in the second half of the year. The leverage ratio is expected to be between 2.1-2.3x.

Executive Commentary

Joseph Mastragustino, Chief Investor Relations Officer, emphasized the company’s strong pipeline and anticipated EBITDA concentration in the latter half of the year. "More than 70% this year of group EBITDA will be generated in the second half," he stated. Antonio O’Donnell highlighted the company’s selective approach to market opportunities, saying, "We are approaching the market in a more selective way."

Risks and Challenges

• Macroeconomic uncertainties in the business innovation market could impact future growth.
• The cybersecurity sector, while growing, is highly competitive and subject to rapid technological changes.
• Maintaining operational efficiency amidst expansion efforts poses a challenge.
• Potential integration risks associated with recent acquisitions like LinkVerse.

Q&A

During the Q&A session, analysts inquired about deferred revenue in the Digital Trust segment and the company’s challenges within the Business Innovation market. Tinexta’s management confirmed that overall guidance remains intact and highlighted their strategic focus on high-growth areas like cybersecurity.

Full transcript - Tinexta SpA (TNXT) Q2 2025:

Conference Operator, Chorus Call: This is the Chorus Call conference operator. Welcome, and thank you for joining the T Nexpa Group Consolidated Results at the 06/30/2025 Presentation. As a reminder, all participants are in listen only mode. After the presentation, At this time, I would like to turn the conference over to Mr.

Joseph Mastragustino, Chief Investor Relations Officer. Please go ahead, sir.

Joseph Mastragustino, Chief Investor Relations Officer, Kinectis: Good afternoon, and good morning to those joining from abroad. Thank you for joining Kinectis twenty twenty five First Half Results Presentation. O’Donnell will be joining us in a few minutes, but in the meantime, I will kick it off. As a reminder, all the remaining all the relevant documentation of the first half twenty twenty five results can be downloaded from our company website in the Investor Relations section. For the purpose of this call, I will cover the key strategic items of the call, and then we will go over the first half twenty twenty five results and from the financial point of view as well as the business units’ performances, providing you with a deep dive.

The last part of the call will be dedicated to Q and A. And as a reminder, a recording of this conference call will also be available on our company Web site, and it will be posted upon completion of this call. At this point, I will kick it off by turning to Page five of the presentation, which you can find, as we said, on the Investor Relations section of the company website. Let’s go over some key group financial data. In particular, as of the 06/30/2025, revenues were up 16% versus prior year, growing, you know, double digit versus the prior year.

Interesting is also the growth in terms of EBITDA adjusted, which came in short of a million and 40,000,000. It came in at 39 to be exact, growing 13% versus the prior year. EBITDA on a reported basis was $33,000,000 growing 29% versus prior year following the considerable lower number of one offs and non recurring. The net profit on an adjusted basis came in at $8,000,000 The net financial position was strongly improving versus the fiscal year twenty twenty four number coming in at over 300,000,000 I think it’s worthy you’ve mentioned that the free cash flow on an adjusted basis was very strong, growing 86% versus the prior year and reaching almost 50,000,000 in the 2025. We will discuss more deeply on the components of free cash flow later in the financial section of the presentation.

Turning to Page six, we’re highlighting that FirstHage results came in double digit in terms of growth with an expected acceleration in the second half. Let’s deep dive directly on EBITDA, which as we said, came in at $39,000,000 growing 13%, and that performance was mainly driven by the growth in cybersecurity with the integration of Connectiva Defense, which is performing very well. A shift to contribution in the digital trust area is still light, expected to come in in the latter part of the year or more precisely at the end of the year in terms of business innovation. And, yes, the performance is still lagging given the persistent macroeconomic uncertainty. In terms of BI, in particular, in Italy, we’re still witnessing some general delays in supply finance in Italy, but we’re due to recover in the second age given the very strong pipeline.

EBITDA on a reported basis was $33,000,000 growing 29%, as we said, driven by lower one offs and non recurring. EBITDA adjusted margin was just shy under the prior year at 17% and the EBITDA reported margin was higher at 14% versus the 12.6% of the prior year. EBIT on a reported basis was negative 19,000,000 due to some impairment of goodwill related to acquisitions, which we will detail later, and they’re also available on our financial statements report. Adjusted was 18,300,000.0. Net profit adjusted was 8,400,000.0, while net profit on a reported basis was negative 7,500,000.0.

Again, we will see what is moving, going down the p and l when Antonio will go down on the on the financial statement section. Net net financial position, again, 300,000,000. The decrease in the net financial debt in the semester is attributable to the increase of the free cash flow and the positive adjustments from adjustments that we we recorded during the first half. Free cash flow adjusted was 48,000,000, and one h cash generation was driven by favorable net working capital dynamics, decreasing CapEx as we had anticipated back in March, and lower cash taxes. Net financial position over LTM EBITDA adjusted was 2.6 times versus the two two point seventy nine on a pro form a basis on 12/31/2024.

Brief highlights on the business unit. Digital Trust grew around 5% on top line, flattish to partially positive, one and a half percent growth in EBITDA. Margin is still attractive at 28%. Cybersecurity, very strong growth, 46% versus prior year on the revenue base, and EBITDA was over a 130%. Margin’s strong at 14%.

BI sees a growth in terms of revenue while we see a decline in terms of EBITDA, and we will discuss that later. In terms of recent events and updates, we we highlighted there was a transfer of Defense Tech shareholders’ equity into Connector Defense Holdings by Star Life. This is basically a just a corporate governance aspect that we can see. There was, very importantly, the exercise of the call option for the 25% stake in ABS, which was paid only €1, and and that followed the subsequent exit of founding manager. Also recently, and it was still recorded in the first half, the acquisition by Kinexta Infotry of the digital subdivision LinkVerse, which expands, therefore, the operations of digital trust in the private and public health care sector.

Lastly, from a connected defense point of view, we recently launched a proprietary Cypher, which was developed by Connector Defense, and it has the so called dual use functionalities working both for companies as well as institutions. Let me turn to page seven where most of the comments is here or the comments of the of the numbers have been highlighted. Maybe it’s important to highlight, you know, the growth again of of EBITDA, which is still being around, you know, double digit levels. Page eight, I think it’s important to remind the market that over and therefore stakeholders and shareholders in general that the overall expected second age, given the performance of first age, is gonna be very, very important in terms of percentages. You’re looking at another important year where the second age performance will be around more than 70% in terms of, you know, weight in terms of EBITDA.

You can see that here, basically, in the first half, we we grew versus the prior year, both in terms of EBITDA and also in terms of revenue. Let me stop there and turn it to Odone for page 10 on the results and the key news as he does. Thank you, Joseph. Good afternoon, everybody. As is already introduced by Joseph, here at page 10, you see how the group was able to perform a double digit growth both in revenue and EBITDA, basically, almost aligned to to our expectation.

If we we walk through for each division, and I will be dive later on, we have digital traffic is growing 5.4% in term of revenue and 1.5% in term of EBITDA. Obviously, these figures have been impacted as already anticipated during q q one by the fact that I shared during 2024 deliver most of the sales of one off product and license during q one, while this year, they are expecting to to be deliver down the road during the the during the year. If we are going to neutralize this effect, and I think this is very important, basically, digital process, especially Incocepts are growing basically at the same pace that was projected at the beginning of the year. Cybersecurity overall is delivering very strong results. We have the revenue going up by 46%, especially mainly driven by the grow by by the mainly driven by the results of Kinecta Defense.

You know, former cybersecurity business delivered flat revenue, but a significant increase in EBITDA that grew in the range of 18%. So the first the first half is is very positive, and, basically, it’s happening everything we were waiting to to happen during the plan presentation. Business innovation, the revenue is up both in in absolute value as well as in organic way. In terms of profitability, we are a bit slightly below our plan, mainly driven by the fact that compared to our initial expectation, the level of revenue coming from ADF and from the next innovation hub, from the finance and grants part, know, the the revenue was was there and also the the profitability expected while we are a little bit late in digital innovation and and ESG. But, again, for us, it’s a phasing subject.

If we walk through page 11, you see here, we we try to segregate the digital class without the Ashecia. So if we exclude what happened in Ashecia, we are going up 2,600,000.0 of EBITDA that is exactly in the range of 8%. So it’s exactly what we’re expecting. As you said, we we expect this couple of billion of EBITDA to to be delivered between ’3, q four. Cybersecurity, as I mentioned, if we exclude, obviously, the next for defense is improving mainly by the cost reduction as already anticipated during q one.

And to walk through the business innovation, we have the the marginality of financing grant basically align with our with the with previous year despite a higher level of revenue while we are suffering on as a as a phasing in the first part of the year, both in ESG activity as well as digital innovation, but most of this delay is planned to be recovered in the second part of the year. So and then we adapt we are adding up the the the result of Le Novice that last year was not consolidated in q one, and, the next step that has been consolidated starting from August 24. Overall, the revenue is going up 13.3%. It’s moving from thirty four thirty four point four to 39%. If you go if we go at the at the p and l, you know, the the the part the the business related part of the p and l is, I I mentioned here, you see, you know, EBITDA going up at 39%, 16.6% EBITDA margin.

You have to remember that the most important part of the business is happening in in in especially in cybersecurity and business innovation, the second part of the year. Last year, we delivered a 17% EBITDA. The the the the business innovation is the main driver with a decline a timing or a decline of four point percentage compared to previous year. Nonrecurring costs are below previous year. The the this cost includes 5,000,000 cost mainly related to internal reorganization where we are we we are going to lower our recurring costs.

We we did some action in order to lower our people related recurring costs and, you know, on an organic basis, basically, the the number of FTEs is not is not far it is basically equal to the previous year. So we are planning to be in a more federal position approaching the second half of the year. When we look at the depreciation, amortization provision, we have to keep in consideration that here we have a a change in in application of an an accounting principle. It’s a change that we we decide to apply also after having change the the auditors that we we change starting from this this year. What’s happened here?

As you know, during the May or the month of May, the Tinex and basically Tinexa Innovation Hub decided to exercise the call of underperformance related to the 25% of the ABS. So we performed this step. So the the founders are now out. And so we had basically a gain of that passes through the the p and l, a gain of €12,000,000 that are has been included in as a profit in the financial in the financial aid in the financial aid. In the meantime, we adjusted for an amount of €50,000,000, the the goodwill that we have that we had on on ADX.

So, basically, it’s a balance sheet part where we have lower debt and lower growth rate. In the meantime, we had to, like, reclassify compared to the the the pre the the q one reporting, but all figures here that have been restated. So, basically, the cancellation of the put of a share that was €6,000,000 that that declined our debt has also been recorded now as a a profit that still is accounting in financial charges. The remaining part of the the the write down has been basically driven by the increase of the weighted average cost of capital. We rectify we have a we rectify our amount of goodwill in September of of €1,600,000.

Overall, if we combine that, you know, the profit that we get from the put cancellation as well as the adjustment of the goodwill, more or less, we are in the the range of €19,000,000. So on the net profit, it’s not impacting so much, but you can imagine that it’s quite reasonable if you decline that also the goodwill is gonna is gonna lower. So this is the main driver of these figures that has been quite significantly different from the previous year. For the rest, I think that, obviously, in this first in this first half, we have counted two and a half million euro more in the net of financial interest driven by the fact that this this year with this year, we have the full debt in the first half of the acquisition of ADS and the acquisition of the Nasdaq. While last year, we had in the books only the debt related to the acquisition of ADS.

And then and then the second part of the year started to counting the the interest for the acquisition of the fence. If we move to page 13, we have basically the adjustments on on on our p and l. The the we have a lower adjustment compared to to to previous year, and no recurring service costs are partially related this year to rebranding activities, while no recurring personal cost, like I mentioned before, are related to optimization reorganization optimization of the cost basis. I think I already talked about, you know, the changes that we have in, you the current write down as adjustment of of non controlling Ethan. But and, again, these are the most important part.

We are booking into our channel €12,600,000 of amortization driven by the purchase price allocation as well as the 12.2 and 12.4 of last year. The balance sheet, the balance sheet has been further impacted by a very strong first half cash generation. As as we were expecting after a a weak 2024 driven by, like we said very clearly, no recurring, I would say, CapEx that allow us to invest in some project evolution as well as they have had in the the reconfiguration, I would say, of all the our data center and the the cloud approach and whatever. So now we we we are running basically more recurring CapEx, and this has had a a a impact on the the cash generation. So the net invested capital dropped almost €50,000,000 from the end of the year.

Very strong in the net working capital organic net working capital decrease as well as, you you know, the decrease in in fixed assets despite the increase of 8,000,000, which is driven by the acquisition of Lindtress by Kinecta Infos. Net financial position, like I said, was it has been lowered by more than 20,000,000 on top of the the free cash flow the very strong free cash flow generation. We had the the distribution of dividends. We had the the that the acquisition of 8,000,000 of Liquette, but on the contrary, we had the opportunity to to improve their financial position. So by the elimination, the put adjustments between Asia and ABS.

You can move to page 15. Like I mentioned before, you you can see here on the right part of the page, a very, very positive improvement of the the the cash generation. And if we look even at at the LTM on LTM days, we we I think we we we delivered the best LCM ever cash flow generation where we picked 64,000,000 million euro that if if you consider that this has been also combined with a weak 24 is absolutely a very positive result. I would like to underline also that different sector, the next of the fence now we can remain that the next of the fence has delivered a very strong q one in cash generation. And, you know, this is something we were looking very carefully, and this is a strong support to to our decision of invest in defense tech, and we were able to free this capability of cash generation.

You know, I I would say that the page fifteen and and seventeen, I I I would say, have been already mostly already commented commenting the the results. Here, you know, at page 17, you see that over the last year, you know, the the the group invested more than €70,000,000 in appreciation that we are talking about the SensTech and Lindbergh, basically, in the last twelve months, while we had a put adjustment of almost of around €40,000,000. Now, you know, despite this acquisition, we have a net financial position that is now at 2.6 time the the METVA, and still we are entering in the part of the area where we are going to deliver most of the METVA. I move now to page 19, talking about digital trust. Like I said, before, the core part of the business is progressing well, and we have some good news.

Legal invoice up 12%, and I would say, following also part of the investment we we made the last year, you know, the online sales are growing on a 10% a 10% base. That is definitely a very strong result that is supporting, you know, the marginality, but as well as the the cash the cash collection. Traffic on both platform grew 8% due to the recurring revenues, subscription and renew renewal from loyal loyal clients. So, again, on DTM, still a very positive result. Legal said, the revenues are down 7%, but like I said, they are driven by the delay in sales of our shared TTI products in The Middle East, North Africa, for which we do expect to to materialize during the the cycle.

So the the the the growth that, you know, is 1.5% could appear as as disappointing. But, if you take apart this time issue related to Azure. Yeah. The the the and then we have seen from the product rate of growth, we we are on track. So the security, as already shared during the client presentation, we very well we very well knew that the most of the recovery of stability would have been driven by a cost a cost control.

Definitely, you know, level of growth of the market on the the two are are arenas where we are playing are not so exciting, but in in the part of traditional cybersecurity and but, you know, we were able to still improve our profitability for 4.1 to €4,800,000. If we talk about the defense tech, the defense tech is delivering exactly aligned with what we were expecting. You know, we we anticipated also during the investor presentation in March that the our projection was supported by a strong a very strong backlog, and this is going to you said, during q one, it’s happened also during q q two. The the probe the EBITDA margin is lowering as we anticipate we as we knew well in advance still at the moment of the the acquisition due to a different niche between basically, we are operating even more and more as a main contractor. Sometimes we have to resell other or other components that are delivering lower margins in percentage, but not true value.

We are growing exactly as expected. So the the level of backlog is very strong. We are reinforcing our our capability to deliver the projects in the solar part. If we talk about business innovation, already anticipated that, you know, in this area, we were expecting, actually, during q one, a little bit more revenue coming from AVS project to be delayed from the ’24 to early twenty five. This occurred, but not at the level we were expecting.

In AVF, in in the French market, you know, now is, unfortunately and it is one of the reasons why we basically updated our good our goodwill value is that the market in this area has has dropped. The the success rate of the filing is went down from 65% the three years before the acquisition. And then when they they transferred into political struggling, you know, this kind of success rate has dropped to the range of 42, 43%. So we are approaching after having laying off the fund worth. We are approaching approaching the market that when the market was growing 70 per was having a 78%, you know, volumes were the drivers.

Now we are approaching the market in a more selective way, try in a more selective way, to improve the the success rate by through a more selective selection of of project to to be treated. If we move to the entire market, what we are of service here, definitely, as always, the second part of the year will be the key part of our profitability. We are observing here that compared to initial projection, the level of rev we are observing a switch between four point zero to five point zero solution for the customer are switching there. So we have already on hand, basically, the backlog that we need to deliver the results. Now it’s, you know, a run that we are performing together with our clients to complete the project, to complete the investment, and to deliver what’s needed by the end of the year.

So before leading to Georgia for the guidance, you know, like I said, I I do not we do not see major issues in delivering digital trust results. We have the open point of when the asset, yeah, is going to deliver. In cybersecurity, overall, it’s almost, you know, we are we we do believe that the forecast is is, you know, continuing from to the first half that is gonna be very solid. On the business innovation, you know, we we already factorizing to our guidance, you know, the the best result of AGF even though not aligned with the our our initial initial projection. But overall, we are seeing that if we are able to deliver the orders we have on hand for five point zero, we should be almost in the range of our projection.

So I will leave now to Joseph for the closing remarks. Yep. And thanks for joining. So to wrap it up on page 23, let’s quickly go over the financial guidance. Given all of the above, we confirm guidance in terms of revenue growing 11 to 13% versus prior year, of which seven to 9% organic.

EBITDA is confirmed as well growing 15 to 17% versus the prior year, of which 10 to 12% organic, while we actually register an improvement of the leverage ratio, which now is a leverage ratio, I mean, meant as NFT over EBITDA adjusted, which is now foreseen at 2.1 times to 2.3 times versus the 2.2, 2.4 times communicated back in March. I think the levers behind that have been extensively discussed during this call and obviously referred to the put exercises of the call option at a very attractive rate in terms of APS. I will stop there. Ask the operator to open to Q and A, and we are available for any doubts and any further developments.

Conference Operator, Chorus Call: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Session. The first question is from Russell Poynton with Edison Group.

Go ahead.

Russell Poynton, Analyst, Edison Group: Good morning. Sorry, good afternoon, Danae and Joseph. Just a couple of questions, if I may. First of all, in terms of especially when you said there has been this deferred revenue effect, I I just wondering if you could just get some background to why that revenue has been deferred. I appreciate it’s you know, it it does move around a bit, but is is something from a customer perspective, etcetera?

And then I’d say it’s just a question on the the overall guidance. If I if I’m reading it correctly, you sound a bit less it sounds that the guidance is is going to be delivered in a slightly different way than you probably anticipated at the start of the year with business information being a bit behind and, you know, digital trust and and cyber doing pretty well. Is is is that

Conference Operator, Chorus Call: right? Thanks.

Joseph Mastragustino, Chief Investor Relations Officer, Kinectis: So, Russell, let’s wrap up on on Acelsa. It’s basically the short the short revenue. Yes. This is a calendar aspect in the sense that they were supposed to close during their their fiscal year closing, which corresponded to March 31, which they did not. And therefore, we are expecting a full recovery by the end of the year.

Again, these are just contracts that were supposed to come in. They did not, and they’re expected to come in in the latter part of the year. In terms of so we we said this in q one, and we’re confirming it again now. In terms of the guidance, you know, what we’re saying is that overall, our numeric base, you know, the the ranges are fully in effect. So we have confirmed both, you know, revenues and EBITDA, and then the leverage ratio instead is just a function of the put call option adjustment, favorable adjustment that we registered.

Notwithstanding the fact that BI is a bit behind in the first stage, we have a very strong pipeline. It’s all about the delivery in the latter part of the year, the latter being mostly the ’34. Let’s be very, very clear on that. And, again, more than 70% this year of group EBITDA will be generated in two h, full stop.

Russell Poynton, Analyst, Edison Group: Okay. Thanks, Jessica.

Conference Operator, Chorus Call: As a reminder

Joseph Mastragustino, Chief Investor Relations Officer, Kinectis: You’re welcome.

Conference Operator, Chorus Call: As a reminder, if you wish to register for a question, please press star and one on your telephone. Again, if you wish to ask a question, please press star and one on your telephone.

Joseph Mastragustino, Chief Investor Relations Officer, Kinectis: Given that there are no more questions, thank you very much for the attention, and we’ll keep you self posted on any further news. Bye. Bye. Thank you.

Conference Operator, Chorus Call: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

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