Anticipates Challenges Ahead for Software Provider Intershop in Upcoming Year

Intershop Faces a Rocky 2025 amidst Market Challenges

Software provider Intershop expects a tough year ahead - Anticipates Challenges Ahead for Software Provider Intershop in Upcoming Year

Intershop, a Jena-based e-commerce software supplier, is navigating through a bumpy 2025. While they've managed to begin the year without significant losses, the CEO, Markus Klahn, acknowledges a predicted revenue drop of 5-10% for the year, with a slightly positive result before interest and taxes (EBIT) [1].

"We're keeping our heads above water, with a positive operating result and improvement compared to the previous year," Klahn stated at the presentation of the first-quarter results in Jena [1]. The result hovered around the 100,000 euros mark. Efficiency improvement measures seem to be working, according to Klahn, the CEO of the listed company.

Intershop's focus shifts to software rental

The market scenario remains tough on Intershop. The decline in revenue is mainly due to the outsourcing of service areas, such as software installation, to partners [1].

Compared to the same period in 2024, revenue decreased by 4% to 9.1 million euros from January to March's end. However, earnings from rental software, a focus for Intershop, recorded a 5% surge to 5.2 million euros [1]. The after-tax result stood nearly at the previous year's level, posting a loss of approximately 100,000 euros [1].

Layoffs and cost-cutting measures

Intershop, known for creating software for internet portals facilitating business-to-business commerce online, underwent a restructuring last year, leading to the elimination of around 40 of approximately 300 jobs [1].

In the year 2024, Intershop's revenue amounted to 38.8 million euros. The final figure showed a nominal loss of 400,000 euros, a drop from the loss of 3.1 million euros in 2023 [1].

IntershopE-commerceSoftwareJenaRevenue decline

Current Challenges Facing Intershop

Intershop Communications AG, headquartered in Jena, Germany, faces several hurdles currently:

1. Revenue Decline and Spending Caution: Intershop witnessed a 4% decrease in revenues to EUR 9.1 million in Q1 2025, primarily due to a 18% fall in service revenues and ongoing spending restraint from clients [1][2]. This market environment calls for careful management to foster growth.
2. Incoming Cloud Orders Dip: Although cloud revenues showed some resilience, incoming cloud orders decreased by 17% compared to the previous year, totaling EUR 3.9 million in Q1 2025 [1]. This indicates difficulties in converting leads into successful orders, potentially due to economic uncertainty.
3. Currency Effects: The company reported a significant impact from currency fluctuations, which affected net new ARR by 43% before adjustments; when adjusted, the decline was 10% [1]. This demonstrates the exposure of their revenue to external factors like currency movements.
4. Technology Integration and Development: Intershop is making investments in AI innovations and developing integrations with platforms like Microsoft Dynamics 365 to boost its offerings [4][5]. This requires substantial development efforts and strategic partnerships, which can pose challenges but also present growth opportunities.

Revenue Impact

Though Intershop's cloud business has shown some resilience, with revenues rising by 5% to EUR 5.2 million and cloud ARR increasing by 14% to EUR 20.4 million in Q1 2025 [1], the overall revenue decline and subdued incoming cloud orders suggest that Intershop faces challenges in translating its growth potential into tangible revenue growth across all segments. Despite these challenges, the company has maintained a balanced EBIT, illustrating effective cost management during this period [1].

Future Strategies

To tackle these hurdles, Intershop is focusing on strategic innovation and partnerships, such as the deployment of AI solutions to enhance customer experiences in B2B commerce [5]. This strategy aims to foster digital transformation and strengthen their competitive edge in the market, which could potentially help offset revenue challenges by providing more value to clients.

[1] https://www.deutsche-boerse.com/dbag/investments/notices-to-shareholders-and-calendar/intershop-annual/annual-report-2024.html[2] https://www.computerwoche.de/a/news/software/intershop-2025-steht-vor-trocken-lohnen-und-sanierung/16515552[3] https://www.handelsblatt.com/unternehmen/it-internet/statistiken-mehr-deutsche-unternehmen-machen-aus-ihrem-internet-geschaeft-dreifachso-profite/26633736.html[4] https://www.intershop.com/newsitems/newsitem/Intershop-Communications-expands-AI-expertise-and-partnership-with-BlueYonder/[5] https://www.intershop.com/newsitems/newsitem/Intershop-Communications-and-Microsoft-co-create-next-generation-B2B-commerce-experience/

1. Intershop, despite the CEO's positive statements about maintaining a positive operating result and improvement compared to the previous year, is projected to experience a 5-10% revenue drop in 2025.
2. The decline in Intershop's revenue is primarily due to the outsourcing of service areas, such as software installation, to partners, which reduced revenues by 18%.
3. While earnings from rental software increased by 5%, overall revenue decreased by 4%, indicating challenges in translating growth potential into tangible revenue growth across all segments.
4. Intershop aims to tackle these hurdles by focusing on strategic innovation and partnerships, such as deploying AI solutions to enhance customer experiences in B2B commerce, which could potentially help offset revenue challenges by providing more value to clients.

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