Virtualware · Euronext Growth Paris · Flash note · 30 July 2026
Virtualware
Operating leverage
In our recent initiation we commented that the 2026 guidance of +30% revenue and a 20–25% EBITDA margin “requires personnel-cost discipline (slowing from +22.5% to single digits)”. Management guided to headcount growth of +5% in R&D and +10% in commercial roles. In 1H26 they delivered a 3.0% increase in total personnel cost against a 65.4% increase in revenue. This is one of the most important takeaways from the 1H26 results, and it is the clearest evidence yet that the cost base can now be leveraged. Revenue grew €1.03m yoy; personnel and other operating expenses together consumed €0.19m of it; supplies consumed a further €0.21m on higher hardware content. EBITDA improved by €0.44m.
The order book is now on the balance sheet
This is, in our view, the most under-appreciated disclosure in the interim accounts, and it is not mentioned in the board report. Long-term accruals — deferred income — rose from €1.03m to €4.44m year on year. Short-term accruals rose from €1.43m to €1.67m. Total accruals of €6.11m compare with €2.46m a year ago, against a business guiding to €5.7–6.0m of annual revenue
Net cash position arrives a year earlier than we thought
Deleveraging from €2.68m gross debt to €0.94m, net cash - our initiation modelled net debt of €1.15m at end-2026 and a move to net cash during 2028. We were wrong; Virtualware reached net cash in 1H26. Financial debt has been cut by 65% year on year. Including the €150k loan to Hermeneus World, the associated company, the group's net position is the “nearly €2 million” the board report describes. Against our previous model this is a swing of approximately €3.65m at the 2026 year-end, equivalent to roughly €0.80 per share before the liquidity discount, or €0.64 after it. This is the largest single component of our target price increase
Lift our target price to €8.00 implying 61% upside
Our methodology is unchanged: an EV/revenue multiple drawn from the peer set, applied to forward revenue, less a 20% discount for liquidity and micro-cap execution risk. We continue to use 7×, at the mid-point of the listed comparators (PTC/Vuforia ~7×, Unity Industry ~6×) and above the private XR training peers. The €0.58 increase in the target breaks down as approximately €0.44 from the net cash position and €0.14 from the revenue upgrade.
| Year to 31 Dec | 25A | 26E EERP | 27E EERP | 28E EERP | 29E EERP |
|---|---|---|---|---|---|
| Revenue (Euro Mil) | 4.32 | 6.15 | 7.18 | 7.93 | 8.66 |
| Net profit (Euro Mil) | -0.26 | 0.80 | 1.30 | 1.51 | 1.85 |
| EPS (Euro) | -0.06 | 0.18 | 0.29 | 0.33 | 0.41 |
| EPS (% YoY) | - | 401% | 63% | 16% | 23% |
| PEx (@ 4.98) | - | 28.4 | 17.4 | 15.0 | 12.2 |
| ROE (%) | -12% | 27% | 30% | 26% | 24% |
| P/B(x) | 10.3 | 7.5 | 5.3 | 3.9 | 3.0 |
| Net debt to equity (%) | 122% | -83% | -86% | -84% | -82% |
1H26 results have a number of positives
Revenue rose 65.4% to €2.60m while personnel costs rose just 3.0%. EBITDA swung from –€62k to €375k (14.4% of revenue) and the group returned to net profit of €133k. Debt has been cut from €2.68m to €0.94m and the group now holds €1.71m of net cash, roughly a year ahead of our model. The swing from a negative H1 2025 margin to 14.4% puts the group ahead of the recovery path we assumed at initiation.
| H1 2026 | H1 2025 | Change | |
|---|---|---|---|
| Net turnover | 2,600 | 1,572 | +65.4% |
| Supplies (COGS) | (269) | (57) | n.m. |
| Gross margin (incl. inventory movement) | 91.0% | 96.4% | –5.4pp |
| Personnel costs | (1,641) | (1,593) | +3.0% |
| Other operating expenses | (795) | (652) | +21.8% |
| In-house work on assets (capitalised) | 273 | 357 | –23.6% |
| Operating subsidies in P&L | 156 | 293 | –46.7% |
| EBITDA | 375 | (62) | +€437k |
| EBITDA margin | 14.4% | –3.9% | +18.3pp |
| Depreciation & amortisation | (222) | (210) | +5.9% |
| Operating profit / (loss) | 153 | (272) | +€425k |
| Net profit / (loss) | 133 | (299) | +€432k |
| Net financial debt / (cash) | (1,707) | 1,602 | –€3.31m |
We lift 2026E revenue forecast to €6.15m from €6.02m, above the top of the company's €5.7–6.0m guidance range. We are comfortable sitting above guidance given H1 delivered €2.60m and the implied H2 growth rate embedded in guidance looks conservative against the deferred income position. We raise the gross margin assumption versus our previous model while still reflecting the compression seen in H1.
| 2025A | 2026E Old | 2026E New | Chg | 2027E Old | 2027E New | Chg | |
|---|---|---|---|---|---|---|---|
| Revenue | 4.32 | 6.02 | 6.15 | +2.2% | 7.14 | 7.18 | +0.6% |
| Gross margin | 92.7% | 88.2% | 89.5% | +1.3pp | 87.6% | 88.5% | +1.0pp |
| EBITDA | 0.67 | 1.17 | 1.37 | +17.5% | 2.00 | 1.96 | –1.8% |
| EBITDA margin | 15.6% | 19.4% | 22.3% | +2.9pp | 28.0% | 27.4% | –0.7pp |
| Net profit | (0.26) | 0.58 | 0.80 | +36.5% | 1.30 | 1.30 | –0.4% |
| EPS (€) | (0.06) | 0.13 | 0.18 | +36.5% | 0.29 | 0.29 | –0.4% |
| Net (cash) / debt | 2.70 | 1.15 | (2.50) | –3.65 | 0.07 | (3.71) | –3.78 |
| Net debt / equity | 122% | 41% | –83% | n.m. | 2% | –86% | n.m. |
One key catalyst in our recent initiation was a shift in revenue mix: “platform rises from ~45% of revenue toward 52% in 2026 and 60% in 2027, visibility improves and gross margin stays structurally high.” H1 2026 went the other way. Services grew at more than twice the rate of subscription. Because H2 has historically been the services-heavy half — subscription was approximately 38% of H2 2025 revenue — a full-year 2026 subscription mix in the 43–48% range now looks more likely than the 52% we projected. On this evidence the 65% growth rate is services-led, not platform-led.
| H1 2026 | H1 2025 | YoY | |
|---|---|---|---|
| Viroo SaaS | 1,254 | 876 | +43.2% |
| Simumatik SaaS | 58 | 16 | +264.8% |
| Subscription subtotal | 1,313 | 892 | +47.2% |
| Viroo Services | 1,064 | 531 | +100.5% |
| Simumatik Services | 224 | 111 | +101.0% |
| Services subtotal | 1,287 | 642 | +100.6% |
| Other | – | 38 | –100.0% |
| Total revenue | 2,600 | 1,572 | +65.4% |
| Subscription as % of revenue | 50.5% | 56.7% | –6.3pp |
Our valuation methodology is unchanged: an EV/revenue multiple drawn from the peer set, applied to forward revenue, less a 20% discount for liquidity and micro-cap execution risk. We continue to use 7×, at the mid-point of the listed comparators (PTC/Vuforia ~7×, Unity Industry ~6×) and above the private XR training peers.
We lift our target price on the back of higher revenue outlook
| Revised target price | ||
|---|---|---|
| 1 | 2026E revenue (€m) | 6.15 |
| 2 | EV/revenue multiple | 7.0× |
| 3 | Implied enterprise value (€m) | 43.1 |
| 4 | Net cash / (debt) (€m) | 2.50 |
| 5 | Implied equity value (€m) | 45.6 |
| 6 | Shares in issue (m) | 4.542 |
| 7 | Undiscounted value per share (€) | 10.04 |
| 8 | Liquidity / execution discount | 20% |
| 9 | Target price (€) | 8.03 |
| 10 | Target price, rounded (€) | 8.00 |
Research signature
| Issuer | Virtualware |
| Listing | Euronext Growth Paris |
| Bloomberg / ISIN | ES0105704003 |
| Shares on issue | 4,542,000 |
| 52-week High / Low | €4.16 - €8.15 |
| Date | 30/7/2026 |
| Rating | BUY |
| Target price | €8.00 |
Disclaimers
General disclaimer and remuneration model. European Equity Research Partners, S.L. (“EERP”) is an independent equity research firm domiciled in Spain and subject to European Union regulation. This report constitutes issuer-sponsored research. It has been commissioned by the issuer under analysis and prepared and published by EERP in consideration of a fee payable by the issuer under contract. That remuneration is not linked to the content, conclusions or direction of the research. EERP does not accept payment in securities, options or warrants. This report has been prepared in accordance with Regulation (EU) No 596/2014 (MAR) and Delegated Regulation (EU) 2016/958. EERP does not provide investment services requiring authorisation under MiFID II, investment banking services or personalised financial advice; any other service relationship with the issuer is governed and disclosed in accordance with EERP's Conflicts of Interest Policy.
Accuracy of content. All information used in this report has been compiled from publicly available sources that EERP believes to be reliable; however, its accuracy and completeness are not guaranteed and the information has not been independently verified. The opinions expressed are those of EERP's research department as at the date of publication. Forward-looking estimates and statements are based on assumptions and forecasts of future results and involve risks and uncertainties, so that actual results may differ materially from current expectations.
Exclusion of liability. To the fullest extent permitted by applicable law, and save in cases of wilful misconduct or gross negligence, EERP shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses arising out of or in connection with the access to, use of or reliance on the information contained in this report.
No personalised advice. This report is for information purposes only and does not constitute investment advice or a personalised recommendation for any investor, nor an offer or solicitation to buy or sell securities. The value of investments may go down as well as up and past performance is no guarantee of future results. The securities mentioned may not be eligible for sale in all jurisdictions or to certain categories of investors.
Conflicts of interest and proprietary dealing. EERP maintains a restrictive policy on personal account dealing and conflicts of interest. EERP does not conduct investment business on its own account and does not hold proprietary positions in the securities under coverage. Its directors, employees and contractors may hold positions in those securities or in related securities, subject to EERP's internal policies. Full conflicts-of-interest disclosures and the applicable methodology are available at www.europeanequityresearch.com.
Independence of the research. The conclusions, recommendations and target prices are solely those of EERP: they are not negotiated with the issuer, are not conditioned on the commercial relationship or its direction, and are not approved or amended by the issuer prior to publication. This report is directed at institutional and professional investors. Distribution in the following jurisdictions is subject to the conditions set out below.
Distribution restrictions. This report has been prepared under European Union law and is directed at institutional and professional investors within the European Union. It has not been prepared in accordance with the laws of any other jurisdiction, and EERP is not authorised or registered outside the European Union. Accordingly, this report is not prepared for, and is not for distribution to or use by, any person or entity in any jurisdiction where such distribution, publication or use would be contrary to local law or regulation, or would require any registration or authorisation that EERP does not hold — in particular the United States, the United Kingdom and Australia, among other jurisdictions. It is the responsibility of each recipient to inform themselves of, and to observe, any such restrictions.
Recommendation history and updates. This recommendation differs from our previous recommendation on this issuer, dated 22 June 2026, in that the target price is raised from €7.42 to €8.00. The rating is unchanged at BUY and the valuation methodology is unchanged. EERP publishes a quarterly update on each issuer under coverage and a flash note within 24 hours of any material corporate event, for as long as the coverage agreement remains in force. The definition of our ratings, the investment horizon and the sensitivity of the target price to our valuation inputs are available free of charge at https://www.europeanequityresearch.com/research. The key risks to this recommendation are set out in our initiation of 22 June 2026 and are unchanged. EERP recommendations on this issuer over the previous twelve months: 22 June 2026, Simon Powell, BUY, target price €7.42, market price at dissemination €5.58, twelve month validity; 30 July 2026, Simon Powell, BUY, target price €8.00, market price at dissemination €4.98, twelve month validity
Prices, review and dissemination. All prices used in this report are closing prices on Euronext Growth Paris. The reference price for Virtualware is €4.98 as at the close on 28 July 2026. Production was completed on 30 July 2026 at 11:19 CET and disseminated shortly thereafter. A draft of this report was made available to the issuer prior to publication for verification of factual accuracy only. No changes were made to the conclusions, the recommendation or the target price as a result.
www.europeanequityresearch.com · Copyright 2026 European Equity Research Partners, S.L. (EERP).