Tieto (TIETO) Q2 2026 earnings summary

Executive summary

• Q2 2026 saw revenue decline by 8% year-over-year to approximately €427 million, with organic growth at -5% due to weaker consulting demand and legacy contract run-offs, but profitability improved significantly, with adjusted EBITA/EBITDA margin rising to 14.9% (up 5.5pp year-over-year), driven by cost optimization and operational discipline.

• Strategic focus included cost optimization, AI integration, organizational simplification, and targeted expansion, with continued investment in employee upskilling and customer-facing capabilities.

• Transformation initiatives accelerated, including divestments of Edlevo and HR & Payroll, and a new €90 million share buyback program was launched.

• Profitability improved across all business segments despite challenging market conditions, supported by strong execution on cost controls and transformation initiatives.

Financial highlights

• Q2 2026 revenue was €426.6 million (Q2 2025: €463.1 million); organic growth -5% year-over-year, mainly due to a -6% decline in Tech Consulting.

• Adjusted EBITA/EBITDA reached €63.4 million (14.9% margin), up from €43.7 million (9.4%) year-over-year, driven by cost optimization.

• Net profit for Q2 was €84.7 million, with EPS of €0.73.

• Net debt reduced to €388.8 million, with leverage at 1.0x EBITDA.

• Order backlog declined 4% year-over-year, reflecting a strong prior-year comparison and softer demand.

Outlook and guidance

• Full-year 2026 organic growth outlook revised to -5% to -3% (previously -2% to 0%) due to continued market softness, especially in Tech Consulting.

• Adjusted EBITA/EBITDA margin guidance maintained at 14.8–15.8%, supported by ongoing cost optimization.

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

• Tech Consulting expected to remain weak in Q3 and Q4; software businesses have strong backlog visibility for H2.