Itera (ITERA) Q1 2023 earnings summary

Executive summary

• Q1 organic revenue grew 31% YoY to NOK 230.3m; gross profit rose 34% to NOK 217.1m and EBIT increased 27% to NOK 33.2m.

• Growth was supported by digital-transformation demand, improved pricing and utilisation, currency effects, and increased use of the scalable delivery model.

• Headcount reached 731, up 14% YoY and by 33 employees during the quarter; order intake equated to a 1.3 book-to-bill ratio.

Financial highlights

• EBITDA increased 22% to NOK 40.8m; EBITDA margin was 17.7% vs. 18.9% YoY. EBIT grew 27% to NOK 33.2m; EBIT margin was 14.4% vs. 14.9%.

• Net income from continuing operations was NOK 24.5m, up 22% YoY; continuing-operations EPS rose to NOK 0.30 from NOK 0.25.

• Operating cash flow was NOK 7.9m vs. an outflow of NOK 0.4m; cash and equivalents were NOK 49.7m at quarter-end. Rolling 12-month operating cash flow reached NOK 84.3m.

• Personnel expense per employee rose 19% YoY, or 13% in constant currency, reflecting wage inflation, Norway’s extra social security taxes, bonuses and a slightly lower nearshore ratio.

Outlook and guidance

• 2023 investment priorities include expansion in Sweden and Central and Eastern Europe, with readiness to accelerate growth in Ukraine; long-term organic headcount ambition is 200–350 net FTEs annually.

• Management expects medium- to long-term digital-transformation demand to remain strong, while acknowledging potential short-term slowdown and longer sales cycles.

• Gradual profitability improvement is expected through 2023, supported by managed services and greater volumes of cloud migration and modernisation engagements.

• Continued high growth is expected, market permitting, with profitability and cash flow prioritized over growth at any cost.