Knowit (KNOW) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales were SEK 1,326.2 million, a 14.1% year-over-year decrease, mainly due to fewer employees and lower sub-consultant revenue.

• Solutions showed positive margin trends and improved utilization, while Experience and Insight faced weak margins and utilization, especially in Sweden and Denmark.

• Norway and Finland outperformed, offsetting challenges in Sweden and Denmark.

• Market conditions remain uncertain, with long sales cycles, delayed project starts, and intensified competition across all segments.

• Maintained strong Nordic market position despite a challenging quarter and slow recovery.

Financial highlights

• Adjusted EBITA for Q3 was SEK 57.9 million, margin 4.4% (down from 4.9% last year); net sales for Q3 were SEK 1,326.2 million, a 14.1% decrease year-over-year.

• Adjusted EBITA for January–September was SEK 288.4 million, down 17.5% year-over-year, with a margin of 6.0%.

• Net debt at SEK 792 million, Net Debt/EBITDA at 1.4x, within target of max 2x.

• Cash and cash equivalents increased to SEK 358.4 million as of September 30, 2024.

• Cash flow from operating activities for January–September was SEK 368.7 million, up from SEK 128.5 million.

Outlook and guidance

• Early signs of improvement in Solutions and Connectivity, but overall market remains challenging with tough competition and price pressure.

• No broad-based recovery is visible; focus remains on cost control, efficiency, and margin optimization.

• Well-positioned to benefit from increased demand when the market improves, with actions taken to optimize the organization.

• Public sector budgets in Sweden expected to increase in 2025, but impact will be gradual.

• Strong pipeline and opportunities ahead, especially in Experience, though competition remains fierce.