Nemetschek (ETR:NEM) reported continued double-digit revenue growth and a rising share of recurring revenue in the first half of 2026, led by its Build segment and subscription-based offerings, while reiterating its organic full-year outlook and providing an expanded forecast following the July 1 acquisition of HCSS.
Revenue for the first six months rose 11.9% on a reported basis to €640.7 million, or 15.7% at constant currency, Chief Financial Officer Louise Öfverström said during the company’s half-year earnings call. Annual recurring revenue increased 17.4% at constant currency to €1.25 billion, while subscription and SaaS revenue grew 32.4% at constant currency to €514.7 million.
Profitability Affected by Currency and Deal Costs
Second-quarter revenue increased 13% on a reported basis, or 14.5% at constant currency. EBITDA rose 11.5% to €98.6 million, producing a reported margin of 30.1%. Net income increased 20.3% to €66 million, equivalent to earnings per share of €0.57.
For the first half, EBITDA increased 16.5% to €197 million and the reported EBITDA margin was 30.7%. Öfverström said profitability was affected by a transaction-related foreign-exchange effect in the high-single-digit-million-euro range, as well as acquisition-related costs. Excluding only M&A-related costs, the first-half EBITDA margin would have been 31.5%.
The transaction-related effect involved a group company with a functional currency in Hungarian forint holding euro-denominated assets and liabilities. The forint’s significant appreciation during the second quarter resulted in a revaluation charge in the income statement, management said, while a corresponding unrealized currency effect was recorded through equity.
Cash conversion was affected by a one-time change in Bluebeam invoicing timing, tax prepayments, foreign-exchange effects and a smaller impact from multi-year contracts. Excluding those items, first-half cash conversion would have been about 110%, Öfverström said.
Build Segment Drives Growth
The Build segment remained the company’s principal growth engine. First-half segment revenue rose 21.1% on a reported basis and 27.1% at constant currency, supported by new U.S. and international users, particularly at Bluebeam. The segment’s EBITDA margin improved by roughly 520 basis points from the prior year to 39.8% despite continued investment.
CEO Yves Padrines said Bluebeam continued to benefit from network effects, international expansion and investment in data centers. He also said the rollout of Bluebeam Max, the company’s agentic AI suite, had performed better than planned following its broader availability beginning in late May.
Bluebeam Max initially launched in February for large enterprise customers. Padrines said early users reported productivity gains from AI-assisted drawing review, document analysis, quantity takeoff and connections between PDF markups and building information modeling tools. Nemetschek plans to add further features before year-end and said its small acquisition of mbue would help accelerate the Bluebeam Max product roadmap.
Management said the company’s longer-term expectation is for the Build segment, including HCSS after full integration, to sustain organic growth of around 20%. Padrines said Bluebeam could grow above that level while HCSS is expected to grow in the high teens.
Design Transition Continues; Media Remains Challenged
The Design segment generated first-half revenue growth of 7.3% reported, or 9.7% at constant currency, to €279.1 million. Subscription and SaaS revenue in the segment increased 50.4% at constant currency as Graphisoft and Allplan continued converting maintenance customers through multi-year subscription contracts.
Design’s reported EBITDA margin declined to 23.9%, primarily due to the transaction-related currency effect. Excluding that item, management said the margin would have been more in line with the prior year.
Nemetschek said about 65% of Design revenue was subscription-based at the end of the second quarter and expects that figure to reach approximately 70% by year-end and more than 90% by the end of 2027. Management expects the migration to remain a headwind for Design revenue recognition through 2027, with more benefit expected from 2028 onward.
The Manage segment grew 3.9% in the first half, with management citing demand from public-sector and financial customers and a sales pipeline that could support acceleration in the second half. Its EBITDA margin was 7.8%, compared with 9.3% a year earlier, amid investment for future growth.
Media revenue declined 0.7% reported to €59 million, though it increased 3.3% at constant currency. Management attributed the performance to cautious spending, prolonged sales cycles, customer consolidation and reduced content-creation spending in the U.S. market. The segment’s EBITDA margin improved to 29.8% from 28.1%.
Padrines said Nemetschek now expects mid-single-digit revenue growth for Maxon, its Media business, in 2026 rather than the previously anticipated high-single-digit or double-digit growth. The company has introduced products including Redshift Archviz, a rendering solution for architecture, but said meaningful revenue contribution will take time.
Guidance Reiterated; HCSS Adds Revenue but Dilutes Margin
Nemetschek reiterated its organic 2026 outlook for constant-currency revenue growth of 14% to 15% and an EBITDA margin of 32% to 33%.
Following the first-time consolidation of HCSS from July 1, the company expects an additional currency-adjusted contribution of approximately 600 basis points to group revenue growth in 2026. Management said the acquisition is expected to reduce the reported EBITDA margin by around 150 basis points from the midpoint of the organic margin guidance, including acquisition costs, purchase price allocation effects, integration expenses and share-based compensation costs.
The purchase price allocation, particularly the IFRS-required deferred-revenue haircut, is expected to reduce HCSS’s second-half revenue contribution by a mid- to high-€20 million amount. The impact is expected to be front-loaded during the first six months after closing.
Management said HCSS delivered high-teens growth in the first half and that its underlying growth outlook remains unchanged. It expects the acquisition to be non-accretive to earnings per share in 2026, approximately neutral in 2027 and accretive by 2028, with timing dependent on purchase price allocation effects and the non-controlling interest held by Thoma Bravo.
About Nemetschek (ETR:NEM)
Nemetschek SE provides software solutions for architecture, engineering, construction, media, and entertainment markets in Germany, rest of Europe, the Americas, the Asia Pacific, and internationally. It operates through four segments: Design, Build, Manage, and Media. The Design segment offers software solutions primarily under the Allplan, Graphisoft, Solibri, Precast, Vectorworks, SCIA, dRofus, Frilo, and RISA brands for architects, designers, engineers, structural engineers, specialist planners, and landscape designers, as well as developers and general contractors.
