EQS Group - Whistleblowing set to kick in strongly in H2

After repeated delays, the German whistleblowing regulation came into law on 1 July and pent-up demand is now set to flow through into new customers and growing recurring revenues. Those customers present a pipeline of warm leads for selling EQS’s broader suite of cloud-based products and services, particularly in the Compliance segment, underpinning management’s medium-term ambitions for the top line and EBITDA margins, targeted at €130m and 30% respectively on a time frame of FY26 or FY27. We have edged up our FY23 and FY24 estimates to reflect the momentum and greater degree of confidence in the rest of H223. The shares continue to trade well below the level indicated by our DCF.