Tieto (TIETO) Q2 2026 earnings summary

Executive summary

• Q2 2026 saw a 5% organic revenue decline, with total revenue at approximately EUR 427 million, mainly due to weaker consulting demand and legacy contract run-offs.

• Profitability improved significantly, with adjusted EBITA margin rising to 14.9% (up 5.5pp year-over-year), driven by cost optimization and operational execution.

• Strategic priorities include cost base reshaping, organizational simplification, and accelerated AI integration and upskilling.

• Divestments of Edlevo and HR & Payroll were completed, and a new EUR 90 million share buyback program was launched.

• Transformation initiatives and international expansion, including acquisitions in Iberia, are supporting resilience and future growth.

Financial highlights

• Q2 2026 revenue was EUR 426.6–427 million, with organic growth at -5% year-over-year.

• Adjusted EBITA/EBITDA improved to EUR 63–63.4 million (14.9% margin), up from EUR 43.7–44 million (9.4%) year-over-year.

• Net debt/EBITDA was 1.0x at quarter-end, with net debt reduced to EUR 388.8–389 million.

• Order backlog declined 4% year-over-year.

• Operating cash flow was EUR 20.8–21 million, with free cash flow boosted by divestment proceeds.

Outlook and guidance

• Full-year 2026 organic growth guidance revised to -5% to -3% (previously -2% to 0%) due to continued market softness.

• Adjusted EBITA/EBITDA margin guidance maintained at 14.8–15.8%.

• Cost optimization program targets EUR 130 million in run-rate savings by end of 2026.

• Tech Consulting and Banktech expected to remain weak in Q3, with Caretech stable and Indtech at or above prior year.