Transcom Holding AB (publ): Third quarter report 2025
Q3 2025 highlights
• Revenue stable at €181.6M (€181.7)
• EBITDA excluding non-recurring items increased to €27.7M (€23.9)
• EBITDA margin excluding non-recurring items increased to 15.2% (13.1%)
• Operating cash flow decreased to €17.2M (€21.7)
• Net debt/EBITDA was 4.1 (4.3)
Jan-Sep 2025
• Revenue decreased to €547.8M (€551.6)
• EBITDA excluding non-recurring items increased to €64.9M (€62.6)
• EBITDA margin excluding non-recurring items increased to 11.8% (11.4%)
• Operating cash flow increased to €53.8M (€46.7)
• Net debt/EBITDA was 4.1 (4.3)
Comments by the CEO: Strong Margin Expansion in Q3 Demonstrates Transformation Progress
Transcom delivered a strong performance in the third quarter, demonstrating the positive effects of our ongoing transformation initiatives. While operating in a continued complex global environment, our revenue was stable at €181.6 million, nearly flat compared to €181.7 million last year. Organic growth was 1.1%, but this was offset by negative currency impacts of 1.2%. Additionally, the new business sales have been strong throughout 2025 with multiple simultaneous ramps underway re-establishing a trajectory of healthy top line growth which will continue Q4 and 2026.
Our ongoing focus on profitability improvement has yielded excellent results. EBITDA, excluding non-recurring items, increased to €27.7 million up from €23.9 in Q3 2024. This accompanied by a healthy improvement in our EBITDA margin as well, at 15.2% up from 13.1% compared to the same period last year. This strong margin performance is a direct result of the cost-saving and optimization programs we initiated earlier in the year. Additionally, this is fuelled by new business growth from both the English Speaking and European markets. We are in the process of ramping up for multiple new client partners across the globe, with nearly two thirds of the growth being delivered near and offshore, which will further fuel both top line growth and further margin expansion in the coming months and year.
As we shared in Q2, we were confident these actions would strengthen our margins simultaneous to our investments required to ramp our newly awarded business. Our proactive cost savings program includes a wide range of initiatives covering the entire overhead cost base and is well on track to deliver the targeted impact of €6 million cost savings already in 2025.
Both geographical segments and our largest sector eCommerce & Tech showed growth as well as improved profitability. Our ongoing strategy to optimize our business through intelligent sales in key verticals delivered near and offshore, while continuing to reduce and contain costs is demonstrated in these results. Our application of advanced AI and digital technologies has been pivotal in enabling these positive outcomes.
Our Net debt/EBITDA leverage ratio also improved, decreasing to 4.1 in Q3 2025 down from 4.3 in Q3 2024. Our operating cash flow decreased to €17.2 million down from €21.7 in the same period last year, driven mainly by higher accounts receivables following higher revenues. However, these impacts were partly offset by our improved EBITDA. We also saw lower net financial items amounting to -€6.9 million compared to -€11.8 million in the previous year, largely due to foreign exchange gains and lower Euribor rates.
Our strategic focus remains unwavering. We continue to see strong demand for our offshore solutions, all of which have seen substantial growth. This is in line with our long-held view that demand for talent in these markets would continue to grow and this validates our decision to build proactively to ensure on time delivery to meet that demand. We have established new world class sites in New Cairo, Egypt, Gurugram, India and Manila, Philippines. The lion share of our expansions has come exclusively in the offshore realm with more than 1,000 new seats added which, of course, deliver much stronger margin levels than the group average. As our investment in sales and marketing has been heavily focused on these geographies and we are seeing excellent traction in the quality client partnerships fuelling our future growth in our preferred delivery locations. In the first three quarters of the year, we have closed 135 wins which includes awards from 60 entirely new client relationships. This includes marquis brands from the US and EMEA markets as well as some significant expansion from existing client partners.
Our commitment to delivering digitally enabled and AI-driven solutions remains at the forefront of our strategy, focusing on AI solutions with clear use cases and demonstrable ROI. This is not only a key reason for the successes we have seen in being awarded new business, but it is also enabling our cost optimization efforts. As we continue to grow, the foundations we are putting in place are what will ensure that as we scale, we can do so with less overhead expense as we continue to implement methods of supporting our delivery with ever greater efficiency.
Our sales pipeline continues to grow and is substantially greater than at this time last year. 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. However, we have also seen excellent growth in the Healthcare vertical in the US market which is in line with our strategy. While the European segment reported decline in revenue, this (as previously reported) is a direct function of our ongoing strategy to retire lower profitability contracts. It is important to note that we continue to see only negligible impacts on capacity demand stemming from AI. The market is moderating its approach to AI as it adjusts to the reality of the potential and refocusing investments in people-oriented solutions, augmented by AI. These are most notable in the area of language and accent translation and drawing value from the power of analytics and insights the latest generation of AI can offer.
We are confident in our ability to continue delivering value to our clients. This notion is reinforced by our strong pipeline, which is substantially greater than Q3 last year despite Europe continuing to weather a sluggish environment due to macroeconomic uncertainty and clients in certain sectors managing through financial pressures of their own.
I want to thank our global team for their dedication. Their hard work has been crucial in implementing our transformation and delivering this strong improvement in profitability. I also want to officially welcome Cecilia Bergendahl, who has now fully transitioned into the permanent CFO role. We remain confident in our strategy and our ability to continue delivering value to our clients in this ever-evolving CX landscape.
Brian Johnson, President & CEO
Earnings call
Transcom will host a webcast at 9 AM CET on October 28, 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: Tuesday, October 28, 9:00 AM CET
Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q3-2025-results-presentation
Important note: Please register via the link above at least 5-10 minutes prior to 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
Cecilia Bergendahl, Chief Financial Officer
Email: cecilia.bergendahl@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 80+ 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.