Transcom Holding AB (publ): Second quarter report 2025
Q2 2025 highlights
• Revenue decreased to €175.4M (€180.7)
• EBITDA excluding non-recurring items decreased to €14.6M (€16.8)
• EBITDA margin excluding non-recurring items decreased to 8.3% (9.3%)
• Operating cash flow increased to €16.1M (€6.2)
• Net debt/EBITDA was 4.3 (4.3)
Jan-Jun 2025
• Revenue decreased to €366.2M (€369.9)
• EBITDA excluding non-recurring items decreased to €37.2M (€38.7)
• EBITDA margin excluding non-recurring items decreased to 10.2% (10.5%)
• Operating cash flow increased to €36.6M (€25.0)
• Net debt/EBITDA was 4.3 (4.3)
Comments by the CEO: Transcom Remains Resolute as it Continues to Transform in Q2 2025, with Solid New Business Growth and Significant Optimization of both Portfolio and Cost Base
Transcom continued to operate in a complex and uncertain global environment during the second quarter of 2025. While revenue for Q2 decreased slightly to €175.4 million (€180.7), and EBITDA excluding non-recurring items saw a decrease to €14.6 million (€16.8) with a corresponding margin of 8.3% (9.3%), our operating cash flow demonstrated resilience, increasing to €16.1 million (€6.2). This improvement in operating cash flow is mainly attributable to positive development of the net working capital.
Our strategic focus remains unwavering. We continue to see strong and growing demand for our offshore solutions across India, Egypt, Tunisia, and the Philippines. This is in line with our anticipation of the growing demand in these markets and validates our proactive expansions, most notably in our world class sites in New Cairo, Egypt and Gurugram, India. The lion share of our expansions has come exclusively in the offshore realm with more than 1,000 new seats added with margins in these markets at much stronger levels than the group average.
As our investment in sales and marketing has been heavily focused on these geographies, we are seeing excellent traction in both countries with wins of several marquis logos. In the first half of the year, we have closed 101 wins and added 46 new logos. This includes brands from the US and EMEA markets as well as some migration from existing partners seeking to further optimize their cost structures. It should also be noted these awards have come with expected investments required to launch and ramp the services, which has contributed to the temporary strain on our margin. These ramp costs are transient by nature and will normalize as we complete the ramp ups over the coming months. The traction in sales wins sets a solid foundation for further growth.
The eCommerce & Tech sector continues to be our largest sector, representing 46% of total revenue over the last twelve months. In our English-speaking segment, revenue showed a modest growth of 0.6%, driven largely by higher volumes from eCommerce & Tech contracts. The European segment reported decline in revenue, which is primarily a function of our ongoing strategy to retire lower profitability contracts.
As we continue to transform our business, we understand the importance of balancing transformation impacts to the top line needed to deliver a sustained improvement to our margins. Aligning the timing of exited business with the growth driven by new business is difficult to plan with precision. As such the phasing of our new business ramps is slightly misaligned with the revenue being replaced and this has been the top driver of the softer than planned performance for the second quarter. However, with visibility of this, we have proactively undertaken a broad cost savings program, specifically targeting the optimization of both overhead expenses and site capacity across Europe. The cost of this program, approximately €6 million, is reflected in our reported non-recurring items for Q2 2025. These initiatives will serve to strengthen our go-forward margins to ensure term sustainability, and we are confident that the remaining two quarters of 2025 will reflect the benefits of these actions and improved margins. It is important to note that we continue to see only negligible impacts on revenue stemming from AI. The market is moderating its approach to AI and focusing on investments in people-oriented solutions, like agent-assist AI, language and accent translation and conversational insights.
Transcom's commitment to delivering digitally enabled and AI-driven solutions remains at the forefront of our strategy. We are confident that our focus on AI solutions with clear use-cases and demonstrable ROI will continue to resonate with the market as we deliver improved customer outcomes at lower costs. We continue to build a solid pipeline of opportunities, bringing forward compelling proposals and advanced Total Cost of Ownership (TCO) commercial models. We are confident in our ability to continue delivering value to our clients. This notion is reinforced by our strong pipeline, which is substantially better than any time in the past twenty-four months, as is our win rate for new opportunities. Further our in-year revenue sold as of the end of the quarter was also much better than 2024 for both European and English segments, despite Europe continuing to see a sluggish environment on the buy side which we attribute to ongoing macroeconomic uncertainty and clients in certain sectors managing through financial pressure of their own.
Lastly, I would like to extend my sincere appreciation to our existing and new clients for their continued trust in Transcom, as well as to our global team for their unwavering dedication and hard work. This hard work has been instrumental in driving our new business growth and progress toward our transformational activity to improve our profitability in this ever-evolving CX landscape.
Brian Johnson, President & CEO
Earnings call
Transcom will host a webcast at 15:00 CET on August 21, 2025. The webcast will be held in English. The presentation will be available on https://transcom.com/about-us/investor-relations.
Presentation details
Date/Time: Thursday, August 21, 15:00 CET
Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q2-2025-results-presentation
Important note: Please register via the link above at least 5-10 minutes prior the webcast in order to obtain the webcast link. If you register in advance, you will be sent an email reminder an hour prior to the webcast.
For further information, please contact
Snejana Koleva, Chief Financial Officer
Phone: + 46 (0)70 508 3830, email: snejana.koleva@transcom.com
Helene Ruda, Head of Sustainability and Corporate Communications
Phone: +46 (0) 70 311 7560, email: helene.ruda@transcom.com
About Transcom
Transcom provides AI and digitally enhanced customer experience (CX) services to some of the world's most ambitious brands. More than 300 clients globally, including disruptive e-commerce players, category redefining fintechs, and technology legends rely on us for on-, off-, and nearshoring services. Transcom’s over 30,000 employees work in over 85 contact centers and work-at-home networks across 29 countries, creating brilliant experiences in customer care, sales, content moderation and backoffice services. We help our clients drive their brands forward, customer satisfaction up and operating costs down. For more information, visit www.transcom.com.