S&P revises SUSE outlook to negative

S&P said it revised its outlook for SUSE SA to negative from stable and affirmed its B+ issuer rating.

“SUSE's credit metrics will remain under pressure in fiscal 2024 before a potential rebound in fiscal 2025. We forecast SUSE's adjusted EBITDA will remain largely flat in fiscal 2024 due to the company's continued investment in sales and marketing to support the recovery of top-line growth, somewhat offset by lower nonrecurring costs. This will result in the company's S&P Global Ratings-adjusted debt to EBITDA remaining higher than 6x, which is our downside rating trigger.

S&P warned it could downgrade SUSE if it fails to complete its “top-line growth and margin expansion plan, leading to sluggish EBITDA and persistently weak FOCF.”

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