The credit rating of RED SOFT LLC (hereinafter, RED SOFT or the Company) has been upgraded mainly due to the Company’s acquisition of a 100% share in Red Soft Center LLC, a related party, major transactions with which put pressure on the Agency’s assessment of the Company’s corporate governance and the aggressiveness of its financial policy. ACRA expects that in 2026 Red Soft will begin disclose its consolidated IFRS financial statements, which ACRA will be able to use in the rating analysis. Coverage and cash flow assessments have also been elevated due to changes in the Agency’s methodology. The liquidity assessment continues to put pressure on the Company’s credit rating.
RED SOFT is a Russian developer and vendor of IT solutions and services and a member of the RSPA Russian software and RUSSOFT. The Company implements integrated projects based on proprietary technology stack and partner solutions. The Company’s product portfolio includes RED OS, RED OS M, RED Database, RED ADM, RED Platform, RED Virtualization, RED Gateway, and other solutions. These products are all included in the Unified Register of Russian Software and Databases.
KEY ASSESSMENT FACTORS
Medium operational profile assessment. ACRA still considers RED SOFT a successful player in the fragmented infrastructure software market. In the Agency’s opinion, demand for the Company’s products and services is characterized by very low volatility due to RED SOFT’s focus on public sector companies regulated by the government as regards the prohibition on the usage of foreign software. Revenue diversification and product uniqueness are assessed as medium. The corporate governance assessment has been elevated to medium thanks to certain changes in the group structure, as well as in the Agency’s methodology. ACRA expects that the Company will continue to increase the level of formalization of strategic processes and disclose its consolidated financial statements, which may cause a positive effect on the scores for the strategy and the financial transparency.
High profitability and medium business size. In the Agency’s opinion, the weighted average FFO before net interest payments and taxes for 2023–2028 may amount to 0.06 bps of Russia’s GDP, which corresponds to the small size of business per the Agency’s methodology.
The FFO margin before net interest payments and taxes amounted to 26% by the end of 2025. The Agency expects that in the forecast period the margin will remain relatively stable and assumes that the weighted average margin for 2023–2028 to be 26.2%.
Low leverage and very high coverage. The Company’s loan portfolio includes two ruble-denominated bonds issues due in 2026, rent obligations, as well as an insignificant remaining part of a loan granted by one of the participants. The Agency believes that the weighted average ratio of rent-adjusted total debt to FFO before net interest payments for 2023–2028 will be less than 1.0x, which corresponds to the highest score per ACRA’s methodology. The quality assessment of the leverage remains medium. The weighted average ratio of FFO before net interest payments to interest payments is assessed as very high. The Agency assumes some increase in the leverage and decline in the coverage within the ranges of current scores.
Liquidity and cash flow. ACRA still assesses the Company’s liquidity as rather low, since in 2026, the Company has reached the peak of debt repayments: in June, it will have to repay two bond issues totaling RUB 250 mln, as well as rent obligations. The assessment is negatively affected by the lack of available credit limits in banks, as well as the pronounced seasonality of sales (most of the Company’s revenue is reflected at the end of year), which may require working capital during the year against the background of limited predictability of incoming cash flows. At the same time, the Agency notes significant cash balances in the Company’s accounts by the end of 2025 (RUB 786 mln).
Last year, the free cash flow (FCF) margin remained positive. ACRA assumes that this indicator may be volatile, given the long sales cycle, budgeting specifics, and dividend payments. The Agency is of the opinion that, under the moderately conservative forecasting approach, the weighted average FCF margin for 2023–2028 will correspond to the medium score per ACRA’s methodology, while the Company will use most of its RAS net profits to pay dividends, which will put some pressure on FCF.
The ratio of capex to revenue grew in 2025 to 10%. ACRA expects that the weighted average ratio of capex to revenue for 2023 to 2028 will be 9.9%, which corresponds to the high score for the sub-factor.
The Agency assumes that due to the transition to IFRS reporting, the Company may refine its approaches to accounting for finance leases and cost capitalization, which may lead to changes in the scores for FFO margin before net interest payments and taxes, leverage and capex-to-revenue, but does not expect that such a change may have a significant impact on the rating level.
KEY ASSUMPTIONS
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The current regulatory environment for IT companies to remain unchanged;
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Maintaining the current base of core clients;
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No significant loans or sureties in favor of related parties;
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Capex-to-revenue at 11–12% in 2026–2028;
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Maintaining access to external liquidity sources.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Better access to external sources of liquidity;
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Weighted average FCF margin consistently above 3%;
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Weighted average FFO margin before net interest payments and taxes exceeding 30%.
A negative rating action may be prompted by:
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Weighted average ratio of FFO before net interest payments to interest payments falling below 6.0x;
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Weighted average ratio of capex to revenue exceeding 20% concurrently with the weighted average FCF margin declining below -5%;
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Issuance of significant loans or sureties to related parties;
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Difficulties in obtaining external liquidity.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): bbb+.
ISSUE RATINGS
Bond of RED SOFT LLC, series 002Р-04 (RU000A106CR1), maturity date: June 5, 2026, issue volume: RUB 150 mln — BBB+(RU).
Bond of RED SOFT LLC, series 002Р-05 (RU000A108VM8), maturity date: June 29, 2026, issue volume: RUB 100 mln — BBB+(RU).
Credit rating rationale. The issues listed above represent senior unsecured debt of RED SOFT. Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Company. In accordance with ACRA’s methodology, the detailed approach is applicable, according to which the recovery rate on the issues belongs to category I, and therefore the credit rating of the issues is equivalent to the credit rating of the Company and is set at BBB+(RU).
REGULATORY DISCLOSURE
The credit ratings have been assigned to RED SOFT LLC and the bond issues of RED SOFT LLC based on the following methodologies: the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of RED SOFT LLC under the national scale for the Russian Federation; the Methodology for Assigning Credit Ratings to Financial Instruments on the National Scale for the Russian Federation to determine the credit rating of the bond issues under the national scale for the Russian Federation; the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.
The credit ratings of RED SOFT LLC under the national scale for the Russian Federation was published by ACRA for the first time on December 23, 2020. The credit ratings of the bond issues under the national scale for the Russian Federation were published by ACRA for the first time: (ISIN RU000A108VM8, RU000A106CR1) — on August 5, 2024.
The most recent publication date of the credit ratings of RED SOFT LLC and its bond issues (ISIN RU000A108VM8, RU000A106CR1) is April 22, 2025.
The credit rating of RED SOFT LLC and its outlook and the credit ratings of the bond issues of RED SOFT LLC are expected to be revised within one year.
The credit ratings were assigned based on data provided by RED SOFT LLC, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the RAS accounting statements of RED SOFT LLC as of December 31, 2025.
The credit ratings are solicited and RED SOFT LLC participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to RED SOFT LLC during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
