An SME's accounting period closes. The invoice for LOGO's current service opens again. The program may already be installed, but as regulations change, so do the e-invoicing flow, payroll, security, and version. LEM, paid updates, SaaS, and subscriptions tie this staying current to periodic payments. That is what this essay calls “rent”: an explicitly paid service that continues after the initial installation.
In the first three months of 2026, TL 933.6 million of LOGO's TL 1.52 billion net sales came from SaaS services. SaaS revenue grew 32.7% in one year in 31 March 2026 purchasing-power terms; its share of the total rose from 51.4% to 61.5%. The economic value of the network, extending to more than 230 thousand customers and over 1,000 business partners according to the year-end 2025 measure in the annual report, lies here as well: not so much selling the initial installation as continuing to provide an up-to-date service inside the customer's daily workflow.
The investment question is not whether this periodic invoice is growing, but what remains for the partner after the code and marketing written and done to protect that invoice. Net sales grew 11% while operating expenses rose 17%. EBITDA fell from TL 540.7 million to TL 536.0 million; the margin declined from 40% to 35%. The ledger is rented, but the cost of the code workshop still belongs to the landlord.
| 2025 first quarter | 2026 first quarter | |
|---|---|---|
| SaaS service revenue | TRY 703.7 million | TRY 933.6 million |
| Net revenue excluding SaaS | TRY 664.9 million | TRY 585.6 million |
| SaaS share | 51.4% | 61.5% |
SaaS carries the ledger
Non-SaaS net revenue fell from TL 664.9 million to TL 585.6 million in one year. This does not prove that every lira outside SaaS is one-off; it shows that SaaS is carrying the burden of growth. The stronger evidence of the recurring relationship sits in the financial note. Customer contract liabilities carry, together, the portions of LEM, SaaS, subscriptions, after-sales support, and bespoke software projects that have not yet been recognized as revenue.
Short- and long-term customer contract liabilities total TL 2.577 billion. LOGO has collected the money or issued the invoice, but has not yet delivered all of the service in return. This balance is not a simple order book; it contains different services that will become revenue over time. Even so, its size, equal to 42% of first-quarter sales annualized, provides visibility into future revenue. The future inside the cash register is also future labor.
The model's bond does not come from code alone. The place ERP, e-documents, and payroll products occupy in daily workflows works together with a network of more than 1,000 business partners. But this bond is not maintained for free. In the first quarter, R&D expense rose 16% to TL 610.2 million, while marketing expense rose 19% to TL 407.9 million. Senior executive compensation also increased 42% to TL 68.3 million. While the quality of revenue is improving, there is not yet evidence that expense discipline is improving with it.
Management's next promise is tied to the same line. Logo Ödeme Hizmetleri, which received its operating license in February 2026, is expected to materially increase SaaS revenue through an annual package and per-transaction credit model. Since the contribution of financial technologies is not reported separately, it is impossible to measure how much of the 32.7% growth came from this new unit. The promise points in the right direction; its delivery cannot yet be tested.
Rent in the ledger, code on the balance sheet
The factory of a software company is the developer's desk. The salary at that desk is sometimes today's expense, sometimes tomorrow's asset. In the first quarter of 2026, LOGO capitalized TL 262.9 million in development personnel costs. That amount equals 49% of the reported TL 536.0 million EBITDA.
The accounting choice is not a flaw by itself. The cost of a product that will generate revenue for years can also be spread across those years. For the shareholder, the question is sharper: will the code written onto the balance sheet today create pricing power tomorrow, or will it become an asset written off a few years from now? LOGO's net other intangible assets reached TL 2.896 billion. If technology ages, customer choice changes, or the product development budget fails to produce the expected revenue, the damage will appear first in cash flow, then in this recorded value.
The cash flow statement is neither a bull story nor a bear brochure. Operating activities generated TL 469.1 million in cash; net profit attributable to the parent was TL 130.8 million. After TL 306.5 million went to purchases of tangible and intangible assets, TL 162.6 million remained after investment. That is 30.3% of EBITDA. LOGO genuinely generates cash, but it leaves less for its owner than the EBITDA signboard suggests.
| 2026 first quarter | Share of EBITDA | |
|---|---|---|
| Net income attributable to the parent | TRY 130.8 million | 24.4% |
| Cash from operations | TRY 469.1 million | 87.5% |
| Purchases of tangible and intangible assets | TRY -306.5 million | -57.2% |
| Free cash after investment | TRY 162.6 million | 30.3% |
| Capitalised development payroll | TRY 262.9 million | 49.0% |
A flat comparison with last year's TL 955.6 million net profit also leads to the wrong door. In 2025Q1, there was TL 920.2 million in gains from the sale of shares in a subsidiary. In 2026Q1, there was a TL 168.8 million net monetary position loss and TL 79.6 million in tax expense, consisting entirely of deferred tax. An 86% decline in profit is not a collapse in the business; nor is TL 536.0 million EBITDA the owner's free cash.
Leaving through the Romanian door
Total Soft is no longer part of LOGO's consolidated sales story. It is an asset tracked under the equity method, with its sale tied to a timetable. LOGO's 70% stake is carried on the balance sheet at TL 1.410 billion. Total Soft generated TL 609.2 million in revenue and TL 83.1 million in net profit in the first quarter; LOGO's share of the profit was TL 56.4 million.
The exit clock is already set. Avramos Holding's stake rose from 20% to 30% in 2025; it is expected to rise to 85% by the end of 2027, reducing LOGO's stake to 15%. LOGO has a put option on the remaining 15% as of 2030. The balance sheet includes a TL 400.5 million share-sale liability. Adding the TL 1.410 billion stake as if it were cash would therefore ignore the liability side of the contract.
At the other corner of capital allocation sit Ventures and other long-term financial investments. Their total recorded value is TL 716.4 million. Of the USD 11.2 million commitment to Logo Ventures II, USD 9.47 million has been paid; approximately USD 1.73 million remains callable. At the 31 March liability exchange rate, this amounts to approximately TL 76.9 million. In the value bridge, this amount must be deducted, and private venture stakes should not be treated as liquid as listed shares.
The liquidation of the Indian operations, the relinquishing of control in Romania, and the return of focus to Türkiye show that management does not treat geographic growth as sacred. This may be a healthy retreat. Still, it is not known how closely Total Soft proceeds and the venture portfolio will approach their recorded values. A cheapness calculation cannot count an asset that has not yet been collected as cash.
A five-year penalty
On 11 July 2026, the LOGO share stood at TL 136.40, implying a market capitalization of TL 12.958 billion. Subtracting TL 23.2 million in financial debt from cash and short-term financial investments leaves net cash of TL 1.269 billion. Then come TL 716.4 million in long-term financial investments, the TL 1.410 billion Total Soft stake, the TL 400.5 million share-sale liability, and the TL 76.9 million Ventures commitment.
The first valuation asks what the market is assigning to the core Türkiye business. Accepting private assets at their full recorded value produces a core enterprise value of TL 10.039 billion. Dividing this by TL 2.144 billion, the simple annualization of first-quarter EBITDA of TL 536.0 million, gives 4.68 times. Applying a 25% discount to Ventures and Total Soft raises the multiple to 4.93 times; applying a 50% discount raises it to 5.18 times.
The market is therefore assigning the core not one magical multiple, but approximately 4.7 to 5.2 times depending on the assumption for collecting the private assets. That implies a 19% to 21% EBITDA yield. The price is assuming either that the margin will fall further, that code investment will not turn into cash, or that the Romanian and venture assets will not realize their recorded values.
| 50% of Total Soft carrying value | 75% of Total Soft carrying value | 100% of Total Soft carrying value | |
|---|---|---|---|
| 50% of long-term investments | TRY 155/share | TRY 159/share | TRY 162/share |
| 75% of long-term investments | TRY 157/share | TRY 161/share | TRY 164/share |
| 100% of long-term investments | TRY 159/share | TRY 162/share | TRY 166/share |
The second valuation is the SOTP scenario. Under stress, the core receives a 5-times multiple and the two private asset groups receive 50% of their recorded value. The result is TL 12.5 to 12.6 billion of equity and TL 132 to 133 per share, approximately 3% below today's price. The base case uses a 6-times core multiple and a 75% collection rate; it produces TL 15.2 to 15.3 billion of equity, TL 160 to 161 per share, and approximately 18% upside. The recovery scenario, combining 7 times with full collection of recorded value, produces TL 188 to 189.
| Core EBITDA | Long-term investment recovery | Total Soft recovery | Equity value | Per-share range | Versus TRY 136.40 | |
|---|---|---|---|---|---|---|
| Stress | 5.0x | 50% | 50% | TRY 12.5-12.6 billion | TRY 132-133 | about -3% |
| Base | 6.0x | 75% | 75% | TRY 15.2-15.3 billion | TRY 160-161 | about +18% |
| Recovery | 7.0x | 100% | 100% | TRY 17.9-18.0 billion | TRY 188-189 | about +38% |
These are not price targets accurate to the penny. They are scenario ranges that multiply the first quarter by four and see seasonality as limited. Five times is a penalty price with a 20% EBITDA yield for a margin that does not recover and weak cash conversion. Six times, with a 16.7% EBITDA yield, gives the SaaS growing at 32.7% only one round of repricing; it does not buy a margin recovery in advance. Seven times is deserved only if the margin returns to 37% to 40% and post-investment cash conversion improves. The publicly disclosed documents contain no comparable or long-term cash series that can defend 8 to 10 times.
At a fixed 6-times core multiple, the matrix varying Ventures and Total Soft collection rates between 50% and 100% gives approximately TL 155 to 166 per share. This band is above today's TL 136.40. But the fall of the 5-times stress case to TL 132 to 133 also shows that cheapness is not insured.
No insurance for cheapness
The strongest counter-thesis is simple: LOGO is not really at 4.7 to 5.2 times. If you treat the maintenance investment in the code factory as an economic expense, true earnings are much lower. If capitalized development costs remain close to half of EBITDA, marketing grows faster than SaaS, private assets are collected at less than 50%, and the margin falls below 32%, the company that looks cheap today will tomorrow be selling only low-quality EBITDA.
The balance sheet is comfortable, not sterile. TL 140.9 million in trade receivables is past due but has not been impaired. Long-term employee benefit provisions stand at TL 258.4 million. Guarantees, pledges, and mortgages given in favor of other group companies equal 5% of equity. Logo Teknoloji retains control with a 35.40% stake; Class A shares have privileges in nominating half of the board and electing the chair.
Related-party transactions do not appear large enough to break the thesis today. In the first quarter, services provided to related parties amounted to TL 1.948 million, services purchased from the parent to TL 359 thousand, and trade receivables from Total Soft to TL 3.637 million. By contrast, the increase in senior management compensation, far above sales growth, should be watched. The benefit of subscription economics should not accrue only to management while the bill for the code falls only to the shareholder.
Two numbers will stand side by side in the next report. If SaaS growth falls below 15% while the EBITDA margin drops below 32%, servitization is not turning into pricing power. If operating cash from the last four quarters minus tangible and intangible asset purchases remains below 20% of EBITDA, capitalization may be masking economic profit. Any change that reduces Total Soft proceeds, increases the liability, or weakens the 2030 put option would break the SOTP bridge directly.
Verdict
LOGO is Cheap. The verdict does not rest on last year's one-off profit, a superficial price-to-earnings ratio, or treating private assets at their full recorded value as cash. The stress scenario using 50% asset collection produces a result close to today's price; the base scenario using 75% collection and a 6-times core multiple gives TL 160 to 161, approximately 18% value upside. The fixed 6-times matrix gives a range of TL 155 to 166.
This share is not for the investor seeking flawless margins and effortless free cash. It is for the investor who believes the bond inside the SME's workflow is strong, that expense growth can be restrained, and that the code written onto the balance sheet will create economic value, while remeasuring cash conversion, Total Soft proceeds, and the discount on private assets every quarter.
Owning a stake in LOGO means owning not a software box, but the service invoice that opens again when the SME's accounting period closes.