74Software: Revenue up 5.8% in third quarter, driven by subscription growth
74Software's revenue reached €183.9 million in the third quarter of 2026, up 5.8% on an organic basis and 6.5% on a reported basis. This level is above the €179 million consensus estimate compiled before publication, established by a single analyst.
Growth is driven by a shift in revenue composition. According to the group, growth in both subscription models more than offset the decline in maintenance and support, while licenses and services also declined during the quarter.
The quarter's organic growth rate remains below that of the first nine months, which stands at 7.7% for cumulative revenue of €550.9 million.
Software products up 9.5% on an organic basis
Software products revenue grew 9.5% on an organic basis, to €154.4 million. It represents 84.0% of group revenue, compared to 81.1% a year earlier. Recurring revenue reaches €145.7 million, up 11.9% on an organic basis, or 94.3% of Software products revenue.
Customer-managed subscriptions increase 32.2% on an organic basis, to €68.0 million, and Own-managed subscriptions rise 16.5%, to €40.5 million. Conversely, maintenance and support decline 15.4%, to €37.2 million, due to customer migration to subscriptions.
Licenses fall 19.6% on an organic basis, to €8.7 million, and services decline 10.3%, to €29.5 million. Services now account for only 16.0% of revenue, compared to 18.9% a year earlier. At SBS, this decline reflects, according to the group, the choice to prioritize higher value-added services.
ARR up at Axway and SBS
Axway achieved €87.6 million in revenue, with organic growth of 5.1% for the quarter, compared to 9.4% for the first nine months. Its maintenance and support revenues decline 35.3% and its licenses return to €1.2 million, compared to €2.5 million a year earlier.
SBS reaches €96.7 million, with organic growth of 6.1%. Its Software products increase 13.4%, to €75.8 million, compared to 10.1% over nine months. Customer-managed subscriptions reach €15.5 million, compared to €5.3 million a year earlier.
Annualized recurring revenue (ARR), which measures a level of active contracts, advances in both brands. Axway's ARR stands at €294.2 million (+9.9% at constant exchange rates), supported by API Management (+21.8%) and Managed File Transfer (+12.7%).
SBS ARR reaches €257.3 million (+9.4%), with increases of 13.3% for Integrated Products and 12.5% for Modular Products. Banking Components decline 1.3%.
As of September 30, 2026, net debt amounts to €192.6 million, compared to €181.3 million on June 30 and €193.0 million on December 31, 2025. Over nine months, the group repurchased 641,315 shares for €22.4 million, of which €8.3 million in the third quarter, against an intention of 800,000 shares in 2026.
2026 targets confirmed, fourth quarter more moderate
74Software confirmed its 2026 targets, raised in July: organic revenue growth of 4% to 6%, operating margin on activity of 16% to 18% and free cash flow without leverage effect of approximately 10% of revenue.
The group indicates that this confirmation incorporates more moderate organic growth in the fourth quarter than over the first nine months, due to contract timing and comparison bases. Before publication, seven analysts on average anticipated €740 million in revenue for the fiscal year, compared to €707.2 million published for 2025 in March 2026.
Chief Executive Officer Patrick Donovan stated: "Our priority remains to strengthen cash generation, while maintaining strict cost discipline."
Over the longer term, the group maintains its ambition of revenue close to €800 million and an operating margin on activity of approximately 20% by end of 2028. 2026 annual results will be published on February 24, 2027, after market close.
