Atos - comment

Management continues to frame the turnaround in simple terms: 2025 as the restructuring year, 2026 as a stabilisation phase, and growth returning from 2027 onward. However, this messaging risks obscuring the underlying trajectory of the business. Our main concern remains that the revenue decline may persist for longer than management anticipates. Revenue has fallen for several consecutive years, and FY2025 still recorded an organic decline of approximately 13%. Much of the improvement to date reflects cost-cutting rather than genuine commercial recovery. We therefore remain concerned that the business has structurally shrunk following the loss of major outsourcing contracts and customers during the crisis.

Linked to this point, we still question what the future shape of Atos will be. The company has sold, or is in the process of selling, several businesses, and a broader break-up of the group cannot be ruled out. Management’s strategic positioning has continued to evolve since the restructuring, leaving some uncertainty around the long-term structure and focus of the group.

For FY2025, Atos reported revenue of approximately €8.0bn, broadly in line with guidance but reflecting the continued contraction of legacy activities as the group exited low-margin contracts and scaled back parts of its traditional outsourcing portfolio. Despite the decline in revenue, profitability improved materially. Operating profit reached about €351m (c.4.4% margin), roughly double the prior year, primarily driven by cost reductions and restructuring measures under the Genesis turnaround plan, including workforce reductions and tighter control of general and administrative expenses.

Free cash flow remained negative at approximately €326m, although this represented an improvement compared with FY2024 as operational efficiency increased and restructuring actions progressed. Management also highlighted a backlog of roughly €10–11bn and stronger order intake in the fourth quarter, which suggests that commercial activity may be stabilising, although this has yet to translate into sustained revenue growth.