Netgem: Revenue Declines by 6% in 2025 but the Company Maintains €1.5M in Net Profit
The video entertainment technology group closed 2025 with a revenue decrease of 6% to €31.7M, facing a decline in the subscriber base of its traditional clients and an early exit from its equipment activities. However, Netgem preserved its profitability with a net result of €1.5M and accelerated its pivot towards high-potential digital services: innovative streaming and AI solutions. This move represents a bet on the future amidst present uncertainties.
2025 Financial Results: A Tale of Two Speeds
Netgem's 2025 results reveal two distinct speeds. Consolidated revenue stood at €31.7M, down 6% compared to €33.8M in 2024. This decline resulted from two factors: the contraction of the subscriber base among some traditional telecom operators and especially a 26% decline in non-recurring revenues from equipment sales, which fell from €10.2M to €7.4M. Concurrently, recurring revenues continued to grow by 3%, from €23.6M to €24.3M, now representing 77% of overall activity. This growth contrasts with the general decline and materializes the group's reorientation towards stable and predictable service models. The net income attributable to the group was €1.5M, a 25% decrease from €2.0M in 2024, while the recurring operating income (ROC) reached €1.9M (down 10%). EBITDA saw a more marked decrease of 30%, from €8.4M to €5.9M, reflecting the operational challenges of a transition year.
Maintaining Positive Gross Margin Amidst Challenges
Netgem managed to maintain a positive gross margin at €22.8M (compared to €23.6M in 2024), but this maintenance masks a more nuanced reality: the gross margin declined by 3%. More tellingly, operational and human resource expenses increased by 11%, from €15.2M to €16.9M, impacting profitability. This increase reflects the investments made by the group to fund its transformation: integration of Gamestream teams in the first half of the year, investments in product innovation, and development of new solutions. The group's self-financing capacity stood at €5.6M, supporting this reinvestment dynamic. Facing cyclical tensions and market wait-and-see attitudes in telecommunications, Netgem also initiated OPEX reduction measures from the first half of the year, an initiative presented as preserving net income despite a challenging context.
2026 Outlook: Accelerating Strategic Pillar Deployment
The outlook for 2026 rests on the accelerated deployment of two strategic pillars. First, the PLEIO streaming platform, which embodies the group's new commercial approach around Watch, Stream, and Play. In late 2025, Netgem launched innovative products such as Cloud Gaming and Fast Channels, these free IP channels funded by targeted advertising, aiming at a price-sensitive young clientele. The successful launch in the UK with B2C clients and Altnet operators validated the commercial potential. For 2026, the group plans an accelerated rollout through its current distributors and new operators expected in the first half of the year. In France, a partnership announced on March 11 with Bouygues Telecom for the launch of a Fast Channels package offers additional visibility. The effective launch with operator Vialis since March 12 confirms execution capability. The second pillar, the ECLAIR (Media Services) division focused on generative AI. Despite a sluggish audiovisual servicing market due to budgetary restrictions, Netgem has redirected its activities towards AI services, already generating significant initial revenues from its automated subtitling solution TheSubtil.ai in the second half of 2025. The renewal of several major preservation contracts provides additional stability. In terms of cash flow, Netgem records a robust net position of €5.6M before IFRS 16 impact, supported by a cash flow generation of €2.6M in 2025. Investments moderated to €1.7M (compared to €4.7M in 2024), focused on the Pathé agreements within Eclair and investment in Bary, a company specializing in AI and subtitling. The board of directors proposes maintaining a stable dividend of €0.05 per share, offering a yield of 6.8% based on the average price three months to March 25, 2026. This balance between shareholder distribution and strategic investment demonstrates the group's confidence in its prospects, even as the execution of its transformation remains a major challenge for the coming quarters.
