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Among our highlights for April 2025 were strong Q1 figures – especially in the security and cloud segments and in Spain.

First quarter comfortably beats expectations with 4.8% annual growth

Sales through distribution across Europe performed much better than expected in Q1 2025, hitting 4.8% year-on-year (YoY) growth (including telecoms). The value market did better (7.5% YoY) than volume (3% YoY), although the latter is picking up. The better-than-predicted revenue figures overall were driven in part by a surge in component sales, as well as personal systems (7% YoY) and software and services (9%). Spain (20% YoY growth) and the Nordics (14%) were both standouts, with only the UK (-4% YoY) slipping into negative territory in Q1.

Spain off to a flier with 20% Q1 growth

Spain continued its impressive recent growth, with sales through distribution hitting nearly 20% YoY growth in the first quarter of 2025. That’s more than double the 7.5% we forecast. Personal systems (20%), software and services (21%) and telecoms (49%) performed particularly well. A weak Q1 2024 also helped to boost comparative sales. The figures reflect strong national economic growth in the country as a whole, despite a recent power blackout that may have wiped over €1bn from the economy.

LFD revenue and unit sales sink in Q1

The coming year is set to be among the most challenging on record for forecasting in the large format display (LFD) market, as uncertainty around US tariffs and their impact on demand persist. LFDs are currently exempt from reciprocal tariffs, although a baseline 10% tariff is still in play, and there are suggestions that more charges will be applied to semiconductors, which are a key component for manufacturers. The uncertainty comes at a bad time for the market, with Q1 2025 revenue performance some way below previous years. Revenue sales growth slumped -10.9% YoY while unit sales dropped -1.7% YoY. Average sales price (ASP) continues to decline across all categories except interactive.

Network security and infrastructure protection drive positive start to 2025 for cybersecurity market

Against a backdrop of tightening regulations but also the imminent release of €390m of Digital Europe Programme (DEP) funds, the cybersecurity industry got off to a good year in Q1. Network security has been the standout, recording revenue growth of 11% YoY in Q4 2024 and then 22% in the first three months of 2025. A great deal of this is being driven by Germany, which heavily enforces the GDPR and whose organisations are also investing in NIS 2 compliance programmes. Sales there were up 18% YoY in Q4 and then 30% in Q2 2025. Infrastructure protection is another success story, with revenue growth up 24% YoY in Q4 and then 16% in Q1 2025. However, endpoint protection fared less well, down -12% YoY in Q4 2024 and a further -7% YoY in Q1.

Cloud sales off to strong start to the year

Sales of infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS) offerings grew in the double digits annually between March 2023 and February 2024. IaaS and PaaS revenue sales growth reached 21% on average over the period with SaaS at 19%. The year-on-year (YoY) growth figure hit 28% for IaaS/PaaS in January before slumping slightly in February to 14%. For SaaS it went from 27% to -1%, although we expect things to pick up again in March, as they usually do cyclically. As of February, office applications comprised the largest share of SaaS revenue (41%).

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