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CM.com kicks off the Q1 earnings season. It reported increased profitability on declining revenue. Yet ARR increased YoY, and overall message volume remained flat.
Founded in 1999, the company has been a leader in conversational commerce for many years, especially around payments, ticket sales, and other forms of fan engagement. It also went public in 2020, which means we can use its publicly available numbers to update our gameboard for the industry.
The Good
Profitability Up, Even as Revenue Dips
CM.com reported a 63% YoY increase in EBITDA and a 5% YoY increase in gross profit— while lowering OPEX by 4%. The company also refinanced its debt and reduced its balance sheet obligations.
ARR Growth Holding
Annual recurring revenue rose 8% YoY to €34.4M. This is a bright spot considering overall revenue dropped 3% in the quarter due to transactional volatility. ARR growth outpaced topline decline. This matters more as CM.com pivots toward recurring software revenue.
AI Product Launch and Traction
The company launched its Agentic AI platform, HALO, in Q1. CM.com claims nearly 100 customers have signed since the release, including logos like Bamigo and Energie. This is one of the largest product pushes in recent history, and it shows early traction in positioning AI as a business lever.
The Interesting
Messaging Volume Declined, but Gross Margin Improved
Despite a 10% YoY drop in total messages sent (1.8B vs. 2.0B), gross margin improved to 33%. That points to a product mix shift or better margin discipline in pricing or routing. This raises the question: Is CM.com becoming less volume dependent and more margin aware? If so, it is a solid sign of moving toward behaving as a software company.
Recurring Revenue Rising Despite Flat or Falling KPIs
While ARR grew 8%, transactional indicators didn’t: message volumes (-10%), payments processed (-2%), and even overall revenue (-3%). Ticket volume rose 13%, but it’s a smaller piece of the business. The disconnect between ARR and usage metrics signals that pricing, bundling, or vertical strategy is evolving—but it’s not yet fully clear how.
Spoilage happens when customers prepay but don’t consume. It fattens gross margin in the short run yet predicts churn later. If CM.com’s wider margin is coming from unused message or payment credits, it’s a warning sign that borrowed goodwill needs paying back with real value.
The Unknown
Can HALO Drive Real, Scalable Revenue?
Is HALO product revenue or bundled into existing relationships? There’s no ARR or euro figure tied to the product yet. With CM.com going all-in on AI-first messaging, how fast that turns into monetizable outcomes will determine how credible the pivot really is.
Finally
CM.com posted a profitable quarter despite a topline dip. EBITDA rose 63%, gross margin widened, and ARR grew 8%. The HALO launch gives it a fresh narrative in AI, and early adoption looks promising. But the core of the business is still volume driven, and volumes are soft. Messaging fell 10%, payments fell 2%, and revenue fell 3%. The company is talking like a platform SaaS company but operating in a CPaaS margin world. Whether HALO becomes a revenue engine or just a wrapper around a transactional business will define what CM.com is in 2025. There’s movement, but direction remains uncertain.