Techstep (TECH) Q2 2026 earnings summary

Executive summary

• Q2 2026 marked a strategic shift with the launch of the Techstep Improvement Programme, focusing on margin improvement, accelerated sales, and cost reductions, alongside a completed group-wide ERP implementation to streamline operations.

• Revenues grew 12% year-over-year to NOK 228.8 million, driven by device sales, but profitability declined due to lower margins, delayed health sector rollouts, and discontinued solutions.

• Execution priorities included market repositioning, cost base reset, automation, and financial restructuring with new bank facilities, a bridge loan, and a planned rights issue to strengthen liquidity.

• Commercial momentum continued, but profitability was impacted by a shift in revenue mix toward lower-margin hardware and project delays.

• Net gross profit margin dropped 11 percentage points year-over-year to 22.7%.

Financial highlights

• Q2 2026 revenue was NOK 228.8 million, up 12% year-over-year on a pro forma basis, but net gross profit fell 25% to NOK 52 million, with margin at 22.7%.

• Adjusted EBITA was NOK -12.9 million, down from positive NOK 0.4 million in Q2 last year.

• Net loss for the quarter was NOK 30.5 million.

• Cash and equivalents at quarter-end were NOK 4.6 million, with cash flow from operations negative NOK 6.0 million.

• Own Software revenue declined 35% year-on-year; advisory and services revenue increased 6% but with lower gross profit.

Outlook and guidance

• The Techstep Improvement Programme targets an annualised cost base of NOK 218 million by end-2026, with full effect expected by April 2027.

• Strategic ambition to grow indirect channel to 40% of gross profit by 2029, up from 15% in 2025.

• Focus remains on converting delayed pipeline into recurring, higher-quality gross profit and expanding margins.

• Benefits from ERP implementation and cost initiatives expected to materialize in coming quarters.

• Emphasis on disciplined execution and measurable improvements in profitability and cash generation.