Nemetschek's Subscription Engine Revs at 35% but Markets Refuse to Play Ball

Nemetschek posts 35% subscription revenue jump and 31.4% EBITDA margin, but shares languish 55% below peak amid tech sector multiple compression.

A dramatic disconnect is playing out at Nemetschek. The Munich-based construction software group has just posted bumper quarterly subscription numbers, yet its shares are languishing more than 55% below the 52-week peak of €137.90. The tech sector’s ongoing multiple compression has overridden what, in isolation, are stellar operational metrics.

Revenue for the first quarter hit €313.1 million on a currency-adjusted basis, a 17% year-on-year jump. The real driver, however, was the company's long-awaited shift to recurring revenue. Subscription and SaaS income surged 35.4% to €248.3 million, while total recurring revenues climbed 21% to €296.9 million. EBITDA rose nearly 30% to €98.4 million, pushing the margin to 31.4% – comfortably within the full-year target range of 32-33%.

Yet the stock cannot catch a bid. After three consecutive losing sessions earlier this week – a slide of roughly 6.6% with no negative company news – the shares stabilised on Friday at €61.20, inching up 0.66%. The price now sits almost 28% below its 200-day moving average, and the relative strength index stands at 89-89.1, a reading that in a normal uptrend would signal overbought conditions. In the current downtrend it more likely flags a dead-cat bounce. Year to date the equity has shed roughly 32% of its value, brushing within 6% of its 52-week trough of €57.60.

The market's scepticism centres not on execution but on valuation. Software names with high earnings multiples have been repriced aggressively across Europe, and Nemetschek, long a premium play in the sector, has been caught in the downdraft. Management's reiterated guidance – organic currency-adjusted revenue growth of 14-15% and an EBITDA margin of 32-33% for the full year – has done little to reassure investors focused on the multiple.

Looking further out, Nemetschek is banking on a cloud-native design platform that bundles BIM collaboration, lifecycle management and AI-powered workflows. Early access to the browser-based environment is slated for 2026, and the company frames it as an open collaboration structure for the entire AEC/O ecosystem. The eventual revenue contribution remains unclear, leaving the stock without a near-term catalyst.

The next major test comes with second-quarter results, due in a few months. If Nemetschek can again demonstrate accelerating SaaS penetration and back up its full-year guidance, the argument that fundamentals have been overshadowed by valuation anxiety may finally gain traction. Until then, the shares are likely to remain caught between strong operating momentum and an unforgiving market mood.