Atos 2024 results: Revenue down 5.4%, restructuring boosts net income to €248m

Atos, a global leader in digital transformation, high-performance computing, and cloud services, has reported its full-year 2024 financial results, reflecting the impact of an ongoing restructuring and changing market conditions. The company’s revenue declined by 5.4% organically to €9,577 million, influenced by previously established contract terminations, scope reductions, and weaker demand across key regions. Despite these setbacks, Atos managed to post a net income of €248 million, marking a sharp contrast from its €3.4 billion loss in 2023, mainly due to financial restructuring gains.

The company faced challenges across both its business divisions, Eviden and Tech Foundations, which posted revenue declines of 6.7% and 4.1%, respectively. The financial performance was also affected by a decline in operating margin, which fell to 2.1% (€199 million), down 210 basis points from the previous year. This decline was largely attributed to an increased allocation of selling, general, and administrative (SG&A) costs and provisions for underperforming contracts following negotiations with clients.

What Impact Did Restructuring Have on Atos’ Profitability?

Atos’ financial restructuring played a significant role in improving net income, which rose to €248 million, primarily due to a €3.5 billion financial gain from restructuring measures. These measures included a €2.7 billion debt-to-equity conversion and IFRS 9 debt revaluation, which significantly reduced the company’s overall financial burden. However, a €2.3 billion impairment charge on goodwill and other non-current assets reflected a decline in the company’s enterprise value.

Free cash flow for 2024 stood at €-2,233 million, driven by the end of one-off working capital optimization measures and increased capital expenditures of €239 million, mainly for high-performance computing (HPC) contracts. As part of its financial stabilization efforts, Atos successfully reduced its net debt to €275 million, a significant improvement from €2.2 billion in 2023, thanks to a €3 billion capital increase.

How Did Atos’ Business Divisions Perform?

The company’s two business segments, Eviden and Tech Foundations, faced operational hurdles that led to revenue declines. Eviden, which focuses on digital transformation and cybersecurity, posted revenue of €4,604 million, down 6.7% organically. The decline was attributed to contract terminations, scope reductions, and weaker market conditions in North America, the UK, and the Nordics. While Big Data & Security (BDS) remained stable, with growth in Advanced Computing in Denmark and Germany, it was not enough to offset declines in other segments.

Tech Foundations, which provides IT infrastructure and digital workplace services, recorded a 4.1% decline in revenue, bringing its total to €4,972 million. This drop was driven by reduced business process outsourcing (BPO) activities and a deliberate scaling back of value-added resale (VAR) services. Despite these challenges, Tech Foundations benefited from contract renewals and renegotiations, which provided some level of financial stability.

Which Regions Experienced the Most Significant Revenue Declines?

Atos experienced a mixed regional performance, with North America and the UK & Ireland facing the most substantial revenue declines. North America saw a 12.3% drop, attributed to contract terminations and reduced volumes in healthcare, finance, and media. The UK & Ireland posted a 14.9% decline, primarily due to contract completions in the public sector and reduced IT service demand.

Despite these declines, Benelux and the Nordics posted a 4.6% revenue increase, thanks to growth in Big Data & Security, particularly in Denmark’s supercomputing market. Central and Southern Europe showed smaller revenue declines, influenced by reduced spending in the transport, logistics, and banking sectors.

Did Atos Experience a Recovery in Q4 2024?

Atos saw a recovery in its commercial activity during the fourth quarter, supported by an improvement in client confidence following the completion of financial restructuring. Order entry for Q4 reached €2.7 billion, bringing the book-to-bill ratio to 117%, up by 9 points compared to Q4 2023.

Eviden recorded a Q4 book-to-bill ratio of 111%, driven by strong demand for application management and cybersecurity services. Key contracts included an application management services deal with a European Ministry of Economy, a cybersecurity contract with a U.S. retailer, and a High-Performance Computing upgrade for a European research institution.

Tech Foundations posted a Q4 book-to-bill ratio of 122%, boosted by multi-year strategic contract renewals in digital workplace and hybrid cloud services for clients in the financial services, public sector, and transport industries.

What Are Atos’ Strategic Plans for the Future?

Atos is set to unveil its long-term transformation strategy on May 14, 2025, at its Capital Markets Day, where it will outline its next steps in restructuring and operational efficiency. The company is also actively pursuing potential asset sales, including discussions regarding the sale of its Advanced Computing business to the French government for up to €625 million. Additionally, Atos has initiated the sale process for its Mission Critical Systems business, which could further reshape its financial structure.

With its financial restructuring largely completed and operational stabilization efforts in place, Atos aims to strengthen its commercial momentum and return to sustainable growth. However, the company will need to navigate ongoing market uncertainties, competitive pressures, and shifting technology demands to solidify its recovery.

How Are Investors Reacting to Atos’ Financial Performance?

Atos’ ability to reduce its debt burden and improve net income has been viewed positively by investors, although revenue declines and margin pressures remain concerns. The company’s stock performance will likely be influenced by its execution of commercial recovery strategies and restructuring efforts. The upcoming Capital Markets Day will be a crucial moment for investors, as they seek clarity on Atos’ mid-term strategic vision and operational priorities.