Netcompany Group (NETC) Q1 2026 earnings summary

Executive summary

• Group revenue grew 38.7% year-over-year to DKK 2,413.9m, with 13.1% organic growth in constant currencies, driven by strong UK performance, new contracts, and successful integration of Netcompany Banking Services.

• AI-embedded products and platforms, especially agentic AI, and a strategic partnership with INEOS Grenadiers, are central to growth and margin improvement, enhancing brand visibility across Europe.

• Adjusted EBITDA margin declined to 14.1% from 17.6% due to lower license revenue and increased investments in AI and product development.

• Net profit increased 18.1% year-over-year to DKK 143.7m.

• Workforce expanded by 20.8% to 9,845 FTEs, with significant growth in product development and AI roles.

Financial highlights

• Organic revenue growth was 13.1% in constant currencies; total group revenue up 38.7% year-over-year.

• Adjusted EBITDA before HQ costs rose 12.1% to DKK 362 million; margin declined to 15% from 18.5% due to lower license revenue and AI investments.

• Free cash flow was negative DKK 305 million, impacted by timing of receivables and work in progress on large EU-backed projects, expected to normalize during the year.

• Gross profit margin declined to 24.2%–24.3% from 29.5%, affected by lower license revenue and Banking Services integration.

• Debt leverage increased to 2.1x; share buyback of DKK 750m initiated.

Outlook and guidance

• Full-year 2026 revenue growth guidance maintained at 15%–20% (including Banking Services), and 5%–10% excluding Banking Services.

• Adjusted EBITDA margin guidance for 2026 raised to 16%–19% for the group, 17%–20% excluding Banking Services.

• Revenue visibility for 2026 improved 10% year-over-year, with public sector visibility up 13%.

• Management remains confident in the outlook, citing a strong pipeline and no signs of deterioration.

• Long-term targets: organic revenue growth of 5%–10% annually and adjusted EBITDA margin above 20% by 2029.