Welcome to “Stock Analysis”, a new series where we go beyond headlines to understand how businesses really make money. The series focuses on introducing new investment ideas by highlighting often less-followed companies. Each article applies the Quality Stocks Investment Framework to assess business quality, return potential and identify buy zones, providing readers with the tools and context needed to form their own investment decisions.
For paid subscribers, each Stock Analysis goes a step further by opening up the full reasoning behind the investment thesis and decision process:
Detailed TSR calculations, including all underlying assumptions. This allows investors to understand what must go right for the investment to deliver acceptable returns and to stress-test their own expectations against explicit inputs
Explicit bull and bear cases. It helps frame both upside potential and downside risks, making uncertainties visible rather than implicit and supporting more balanced, risk-aware decisions
My analysis beyond the overall verdict. This provides a deeper insight, enabling investors to form an independent view rather than relying solely on a conclusion
For this 1st episode, we turn to Nemetschek, a German software company and a global leader in digital solutions for architects, engineers, and construction professionals.
One Pager
The stock at a glance
The business model
Nemetschek makes money by selling software solutions to architects, engineers, construction companies and media designers, covering the entire lifecycle of a building or infrastructure project, from design and planning to construction and operation. The group operates through multiple specialized brands (such as Allplan, Graphisoft, Vectorworks, Solibri, and Bluebeam), each focused on a specific professional niche.
Revenue is generated primarily through software licenses and subscriptions, with a growing share coming from recurring subscription fees, maintenance contracts and cloud-based services. This diversified, brand-led structure allows Nemetschek to address different customer segments while keeping strong local market positions and high switching costs.
Over the past years, Nemetschek has been actively transitioning from perpetual licenses to a subscription-based model, which improves revenue visibility, customer lifetime value and cash flow predictability. Subscription and SaaS revenues now account for a steadily increasing share of total sales, supporting structural margin expansion as scale effects and pricing power kick in. In addition, Nemetschek monetizes its large installed base through upgrades, cross-selling and complementary services. The result is a business model built on recurring revenue, sticky customers and long-term compounding.
Nemetschek benefits from powerful structural tailwinds, led by the ongoing digitalization of the architecture, engineering and construction (AEC) industry, which remains underpenetrated by software.
Last earnings report
In its Q3 2025 report, Nemetschek reported robust growth with revenues reaching 293.1M€, representing a 15.8% growth YoY. This performance was primarily fueled by a significant 46% surge in subscription and SaaS revenues to 211.1M€. ARR grew 26.4% to 1,077M€. EPS grew faster (+40%) due to margin increase to 0.48€.
The company reaffirmed its upgraded FY 2025 guidance, anticipating revenue growth of 20% - 22% and an EBITDA margin around 31%.
To go beyond the initial analysis, paid subscribers unlock the detailed TSR calculation with underlying assumptions, explicit bull and bear cases and my full analysis beyond the verdict, providing deeper insight into risks, opportunities and the investment decision process
