Q3 results for the quarter ended September 30, 2025:
Topicus delivered another strong quarter for the three months ended September 30, 2025, with free cash flow available to shareholders (FCFA2S) rising sharply to €22.3 million, up €11.9 million from €10.4 million in the same period last year — an impressive 114% increase. Over the first nine months of 2025, FCFA2S climbed €26.7 million to €167.5 million, representing 19% growth compared with the same period in 2024.
This is particularly encouraging for a business like Topicus, which thrives on reinvesting its free cash flow to drive exceptional compound growth. The underlying momentum here is strong — these are exactly the kind of results long-term investors want to see.
Revenue for the quarter reached €387.9 million, up 24% from €312.2 million in Q3 2024. Of that, 3% was organic growth, which may sound modest at first glance but is, in fact, impressive for a company expanding as rapidly as Topicus. Organic growth on top of such a fast-growing base compounds the effects of its acquisitive strategy — there’s a clear multiplier effect emerging between internal and acquired growth engines.
At first glance the income statement paints a less flattering picture, but is a red-herring that should be largely ignored. Topicus reported a net loss of €120.9 million for the quarter, compared to net income of €38.0 million a year earlier. On a per-share basis, this translated into a loss of €0.94 versus prior earnings of €0.28. But these figures are somewhat misleading. The decline is the consequence of an extraordinary cost hitting the income statement - a €221.7 million expense associated with electing to record the Q1 2025 investment in Asseco at cost as a result of the application of the equity method of accounting. Excluding this non-recurring, non-cash adjustment — which reflects a strategic investment rather than an operational cost — Topicus would have posted net income of around €100.8 million, comfortably ahead of last year’s €38.0 million.
It’s also worth keeping in mind that Topicus’s cash flow patterns are seasonally weighted. Many of its businesses invoice annual software maintenance fees in the first quarter, meaning cash inflows are typically front-loaded in the year. As such, extrapolating a single quarter’s results across the full year would give a distorted view of performance and so should be avoided.
Overall, Topicus continues to grow at pace, combining disciplined reinvestment with a powerful acquisition engine. With the extraordinary costs of 2025 behind it and the benefits of recent acquisitions starting to flow through, 2026 is shaping up to be a standout year.
Thanks for these Topicus articles! Great stuff! Im a bit confused about the cashflows. The Compounding Tortoise expects the 2026 fcf to TOI excluding nci 381,2 million euros. Your basecase is for FCF2S is 201 million. Are these both accurate? Is the p/fcf multiple really still over 50 after the drawdown (fully diluted marketcap in euros is about 10,4billion?)? Thanks again!
Valuing this company is not easy. It is more an art than a science, but it is important to grasp what the numbers mean.
Using multiples like P/E and P/FCF for a business like this will lead you to the wrong conclusions. Earnings and FCF are suppressed by the high rates of reinvestment in growth —which is very tax efficient, but distorts these ratios. The denominators are also skewed by the NCI, which is difficult to adjust for - not all of the earnings attributed to minorities will flow to minorities. On a net present value of future cash flow basis, the benefit of reinvesting that capital is more likely to accrue to Topicus long after the minority interests exit.
Finally, those ratios take no account of the primary engine of the business which is acquisitive growth. Exaggerating for effect, I would rather invest in a company trading at 50x earnings but doubling in size every year for the next decade, than a company trading at 10x earnings and growing organically at 3% annually.
Yeah Thats all obviously right. Im just confused how your fcf estimates are so massively different to Compounding tortoise. His ev/fcf is under 27 with todays price while yours is over 50. Of course you cant value companies like this but im thinking what is it that im not understanding here. You both are using euros so thats not the issue
It sounds like he may be using consolidated FCF whereas I am using FCFA2S. If not, on what basis is he accounting for NCI? The FCFA2S are not my numbers - those are numbers published by Topicus itself.
As I said above, no approach is entirely reliable. FCFA2S under estimates the true value accruing to Topicus shareholders - which may explain why it appears to give a 50x ratio when in fact it is far less than that in reality.
What I like is that Topicus is not sugar coating its numbers. There is no financial engineering to make its numbers look better to the market. This stands it apart from most other programmatic acquirers. I very much appreciate honest management, so that ticks a huge box for me.
Given the huge scale of investment made in 2025 (more than the last 4 years combined), the numbers are distorted. Acquisition costs appear in the numbers this year (suppressing earnings and cash flows), while the benefits of those investments will not manifest properly until 2026 and beyond. So there is a lag there. This is another reason the ratios that you are looking at are misleading.
Accounting rules were not made with programmatic acquirers in mind. They don't work for investors in these companies very well.
Think about this. Topicus acquired ~25% of Asseco for 85 zloty per share - this is the value captured in the balance sheet, some of which will reduce due to amortization and depreciation of assets acquired. Meanwhile, the Asseco share price has traded up to 210 Zloty in the space of a few months. If Topicus chose to exit, they would almost 3x their investment - but this isn't captured in its financial reports anywhere. Accountants devalue acquired businesses when their true economic value goes up. This is just one example.
• Revenue increased 24% (3% organic growth) to €387.9 million compared to €312.2 million in Q3 2024.
• Net loss was €120.9 million (€0.94 on a diluted per share basis) compared to net income of €38.0 million in Q3 2024 (€0.28 on a diluted per share basis). The net loss for the period is primarily the result of a €221.7 million expense associated with electing to record the Q1 2025 investment in Asseco at cost as a result of the application of the equity method of accounting. This expense offsets gains recorded through net income and other comprehensive income during Q1 2025, Q2 2025, and Q3 2025. During the period, the Company also recorded income of €60.7 million associated with mark to market adjustments on derivatives related to the Company’s binding agreement to acquire a further interest in Asseco.
• Acquisitions were completed for aggregate cash consideration of €11.4 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €7.8 million resulting in total consideration of €19.2 million.
• Cash flows from operations (“CFO”) increased €16.7 million to €48.4 million compared to €31.7 million in Q3 2024.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €11.9 million to €22.3 million compared to €10.4 million in Q3 2024.
Total revenue for the quarter ended September 30, 2025 was €387.9 million, an increase of 24%, or €75.7 million, compared to €312.2 million for the comparable period in 2024. For the first nine months of 2025 total revenues were €1,115.5 million, an increase of 20%, or €185.5 million, compared to €930.0 million for the comparable period in 2024. The increase for both the three and nine-month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 3% and 4% respectively. Organic growth is not a standardized financial measure and might not be comparable to measures
disclosed by other issuers.
Net loss for the quarter ended September 30, 2025 was €120.9 million compared to net income of €38.0 million for the same period in 2024. On a per share basis, this translated into net loss per basic and diluted share of €0.94 in the quarter ended September 30, 2025 compared to net income per basic and diluted share of €0.28 for the same period in 2024. The net loss for the period is primarily the result of a €221.7 million expense associated with electing to record the Q1 2025 investment in Asseco at cost as a result of the application of the equity method of accounting. This expense offsets gains recorded through net income and other comprehensive income during Q1 2025, Q2 2025, and Q3 2025. During the period, the Company also recorded income of €60.7 million associated with mark to market adjustments on derivatives related to the Company’s binding agreement to acquire a further interest in Asseco. For the nine months ended September 30, 2025 net loss was €9.3 million compared to net income of €93.3 million for the same period in 2024. On a per share basis, this translated into net loss per basic and diluted share of €0.09 in the nine months ended September 30, 2025 compared to net income per basic and diluted share of €0.71 for the same period in 2024.
For the quarter ended September 30, 2025, CFO increased €16.7 million to €48.4 million compared to €31.7 million for the same period in 2024 representing an increase of 53%. Many of the businesses invoice customers for annual software maintenance fees in Q1 each year resulting in a disproportionate amount of cash being received in the first quarter as compared to the remaining three quarters. For the nine months ended September 30, 2025, CFO increased €36.9 million to €304.9 million compared to €268.0 million for the same period in 2024 representing an increase of 14%.
For the quarter ended September 30, 2025, FCFA2S increased €11.9 million to €22.3 million compared to €10.4 million for the same period in 2024 representing an increase of 114%. For the nine months ended September 30, 2025, FCFA2S increased €26.7 million to €167.5 million compared to €140.7 million for the same period in 2024 representing an increase of 19%.
Q3 results for the quarter ended September 30, 2025:
Topicus delivered another strong quarter for the three months ended September 30, 2025, with free cash flow available to shareholders (FCFA2S) rising sharply to €22.3 million, up €11.9 million from €10.4 million in the same period last year — an impressive 114% increase. Over the first nine months of 2025, FCFA2S climbed €26.7 million to €167.5 million, representing 19% growth compared with the same period in 2024.
This is particularly encouraging for a business like Topicus, which thrives on reinvesting its free cash flow to drive exceptional compound growth. The underlying momentum here is strong — these are exactly the kind of results long-term investors want to see.
Revenue for the quarter reached €387.9 million, up 24% from €312.2 million in Q3 2024. Of that, 3% was organic growth, which may sound modest at first glance but is, in fact, impressive for a company expanding as rapidly as Topicus. Organic growth on top of such a fast-growing base compounds the effects of its acquisitive strategy — there’s a clear multiplier effect emerging between internal and acquired growth engines.
At first glance the income statement paints a less flattering picture, but is a red-herring that should be largely ignored. Topicus reported a net loss of €120.9 million for the quarter, compared to net income of €38.0 million a year earlier. On a per-share basis, this translated into a loss of €0.94 versus prior earnings of €0.28. But these figures are somewhat misleading. The decline is the consequence of an extraordinary cost hitting the income statement - a €221.7 million expense associated with electing to record the Q1 2025 investment in Asseco at cost as a result of the application of the equity method of accounting. Excluding this non-recurring, non-cash adjustment — which reflects a strategic investment rather than an operational cost — Topicus would have posted net income of around €100.8 million, comfortably ahead of last year’s €38.0 million.
It’s also worth keeping in mind that Topicus’s cash flow patterns are seasonally weighted. Many of its businesses invoice annual software maintenance fees in the first quarter, meaning cash inflows are typically front-loaded in the year. As such, extrapolating a single quarter’s results across the full year would give a distorted view of performance and so should be avoided.
Overall, Topicus continues to grow at pace, combining disciplined reinvestment with a powerful acquisition engine. With the extraordinary costs of 2025 behind it and the benefits of recent acquisitions starting to flow through, 2026 is shaping up to be a standout year.
Thanks for these Topicus articles! Great stuff! Im a bit confused about the cashflows. The Compounding Tortoise expects the 2026 fcf to TOI excluding nci 381,2 million euros. Your basecase is for FCF2S is 201 million. Are these both accurate? Is the p/fcf multiple really still over 50 after the drawdown (fully diluted marketcap in euros is about 10,4billion?)? Thanks again!
Andy, thank you for your questions.
Valuing this company is not easy. It is more an art than a science, but it is important to grasp what the numbers mean.
Using multiples like P/E and P/FCF for a business like this will lead you to the wrong conclusions. Earnings and FCF are suppressed by the high rates of reinvestment in growth —which is very tax efficient, but distorts these ratios. The denominators are also skewed by the NCI, which is difficult to adjust for - not all of the earnings attributed to minorities will flow to minorities. On a net present value of future cash flow basis, the benefit of reinvesting that capital is more likely to accrue to Topicus long after the minority interests exit.
Finally, those ratios take no account of the primary engine of the business which is acquisitive growth. Exaggerating for effect, I would rather invest in a company trading at 50x earnings but doubling in size every year for the next decade, than a company trading at 10x earnings and growing organically at 3% annually.
I break it down in https://rockandturner.substack.com/p/topicus-pt-2-how-to-value-topicus
I hope this helps.
Yeah Thats all obviously right. Im just confused how your fcf estimates are so massively different to Compounding tortoise. His ev/fcf is under 27 with todays price while yours is over 50. Of course you cant value companies like this but im thinking what is it that im not understanding here. You both are using euros so thats not the issue
It sounds like he may be using consolidated FCF whereas I am using FCFA2S. If not, on what basis is he accounting for NCI? The FCFA2S are not my numbers - those are numbers published by Topicus itself.
As I said above, no approach is entirely reliable. FCFA2S under estimates the true value accruing to Topicus shareholders - which may explain why it appears to give a 50x ratio when in fact it is far less than that in reality.
What I like is that Topicus is not sugar coating its numbers. There is no financial engineering to make its numbers look better to the market. This stands it apart from most other programmatic acquirers. I very much appreciate honest management, so that ticks a huge box for me.
Given the huge scale of investment made in 2025 (more than the last 4 years combined), the numbers are distorted. Acquisition costs appear in the numbers this year (suppressing earnings and cash flows), while the benefits of those investments will not manifest properly until 2026 and beyond. So there is a lag there. This is another reason the ratios that you are looking at are misleading.
Accounting rules were not made with programmatic acquirers in mind. They don't work for investors in these companies very well.
Think about this. Topicus acquired ~25% of Asseco for 85 zloty per share - this is the value captured in the balance sheet, some of which will reduce due to amortization and depreciation of assets acquired. Meanwhile, the Asseco share price has traded up to 210 Zloty in the space of a few months. If Topicus chose to exit, they would almost 3x their investment - but this isn't captured in its financial reports anywhere. Accountants devalue acquired businesses when their true economic value goes up. This is just one example.
I recommend this book: https://www.amazon.co.uk/Accounting-Forward-Investors-Managers-Finance/dp/1119191092
It may help you out of your quandary.
Long story short - financial accounting rules are not designed for investors - don't try to push a square peg into a round hole!
Q3 2025 Headlines:
• Revenue increased 24% (3% organic growth) to €387.9 million compared to €312.2 million in Q3 2024.
• Net loss was €120.9 million (€0.94 on a diluted per share basis) compared to net income of €38.0 million in Q3 2024 (€0.28 on a diluted per share basis). The net loss for the period is primarily the result of a €221.7 million expense associated with electing to record the Q1 2025 investment in Asseco at cost as a result of the application of the equity method of accounting. This expense offsets gains recorded through net income and other comprehensive income during Q1 2025, Q2 2025, and Q3 2025. During the period, the Company also recorded income of €60.7 million associated with mark to market adjustments on derivatives related to the Company’s binding agreement to acquire a further interest in Asseco.
• Acquisitions were completed for aggregate cash consideration of €11.4 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €7.8 million resulting in total consideration of €19.2 million.
• Cash flows from operations (“CFO”) increased €16.7 million to €48.4 million compared to €31.7 million in Q3 2024.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €11.9 million to €22.3 million compared to €10.4 million in Q3 2024.
Total revenue for the quarter ended September 30, 2025 was €387.9 million, an increase of 24%, or €75.7 million, compared to €312.2 million for the comparable period in 2024. For the first nine months of 2025 total revenues were €1,115.5 million, an increase of 20%, or €185.5 million, compared to €930.0 million for the comparable period in 2024. The increase for both the three and nine-month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 3% and 4% respectively. Organic growth is not a standardized financial measure and might not be comparable to measures
disclosed by other issuers.
Net loss for the quarter ended September 30, 2025 was €120.9 million compared to net income of €38.0 million for the same period in 2024. On a per share basis, this translated into net loss per basic and diluted share of €0.94 in the quarter ended September 30, 2025 compared to net income per basic and diluted share of €0.28 for the same period in 2024. The net loss for the period is primarily the result of a €221.7 million expense associated with electing to record the Q1 2025 investment in Asseco at cost as a result of the application of the equity method of accounting. This expense offsets gains recorded through net income and other comprehensive income during Q1 2025, Q2 2025, and Q3 2025. During the period, the Company also recorded income of €60.7 million associated with mark to market adjustments on derivatives related to the Company’s binding agreement to acquire a further interest in Asseco. For the nine months ended September 30, 2025 net loss was €9.3 million compared to net income of €93.3 million for the same period in 2024. On a per share basis, this translated into net loss per basic and diluted share of €0.09 in the nine months ended September 30, 2025 compared to net income per basic and diluted share of €0.71 for the same period in 2024.
For the quarter ended September 30, 2025, CFO increased €16.7 million to €48.4 million compared to €31.7 million for the same period in 2024 representing an increase of 53%. Many of the businesses invoice customers for annual software maintenance fees in Q1 each year resulting in a disproportionate amount of cash being received in the first quarter as compared to the remaining three quarters. For the nine months ended September 30, 2025, CFO increased €36.9 million to €304.9 million compared to €268.0 million for the same period in 2024 representing an increase of 14%.
For the quarter ended September 30, 2025, FCFA2S increased €11.9 million to €22.3 million compared to €10.4 million for the same period in 2024 representing an increase of 114%. For the nine months ended September 30, 2025, FCFA2S increased €26.7 million to €167.5 million compared to €140.7 million for the same period in 2024 representing an increase of 19%.
https://topicus.com/news/constellation-software-inc-and-topicuscom-inc-announce-results-for-topicuscom-inc-for-the-third-quarter-ended-september-30-2025
Yes, very strong results, ignoring the extraordinary Asseco acquisition cost. This is the part that we should focus on:
• Cash flows from operations (“CFO”) increased €16.7 million to €48.4 million compared to €31.7 million in Q3 2024.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €11.9 million to €22.3 million compared to €10.4 million in Q3 2024.