Cherry (C3RY) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw operational improvements and organizational simplification through Project Blossom, targeting sustainable profitability and EBITDA/EBIT breakeven by 2027.

• Revenue declined 17.8% year-over-year to EUR 20.8 million, mainly due to weak demand in Gaming & Office Peripherals and strategic realignment.

• Digital Health & Solutions (DH&S) segment delivered strong growth, with revenue more than tripling year-over-year, driven by regulatory mandates and delayed telematic infrastructure rollout in Germany.

• Peripherals business is being repositioned for profitable growth, focusing on core input devices, asset-light operations, and a leaner, scalable model.

• Major milestones include improved OPEX control, positive free cash flow, and management board changes to streamline operations.

Financial highlights

• Group revenue for Q1 2026 was EUR 20.8 million, down 17.8% year-over-year due to one-off effects, weak demand, and FX headwinds.

• Adjusted EBITDA improved to minus EUR 600,000 (margin -2.9%) from minus EUR 2 million (margin -8.0%) in Q1 2025, with margin up over 5 percentage points year-over-year.

• Free cash flow was positive at EUR 1.1 million, about EUR 10 million better than last year, mainly from working capital management.

• Gross margin increased to 46.7% from 43.7% year-over-year, reflecting better pricing and product mix.

• Net loss narrowed to EUR 4.0 million from EUR 5.8 million year-over-year, driven by reduced operating costs and lower depreciation.

Outlook and guidance

• No reliable full-year outlook provided due to ongoing M&A process and incomplete 2025 financials; more details expected next quarter.

• Project Blossom targets EBITDA/EBIT breakeven in 2027, with targeted OPEX savings and revenue growth across office, gaming, and security segments.

• DH&S segment is well-positioned in the German e-health market, with recurring revenue and strong regulatory-driven demand.

• Peripherals business transformation aims for a leaner, scalable model with higher margins and cash generation.