Tieto (TIETO) Q3 2026 earnings summary

Executive summary

• Q3 revenue fell 14% YoY to €389.6m; organic growth was -11%, including 7 pp of known headwinds. Adjusted EBITA was €70.2m, with an 18.0% margin.

• Cost discipline supported profitability as transformation, portfolio simplification and growth investments continued.

Financial highlights

• Reported growth was -14%, comprising -11% organic growth, -6% from acquisitions and divestments, and +2% from FX.

• Adjusted EBITA was €70.2m vs €87.8m, with margin at 18.0% vs 19.3%; operating profit was €56.5m, flat YoY.

• Net profit was €40.1m vs a €69.4m loss; EPS was €0.36 vs a €0.59 loss.

• Operating cash flow was €2.8m vs €44.7m; free cash flow was -€18m vs €217m, including €201m net disposal cash flow in Q3'25.

• Order backlog was €2,009m, down 1.6% YoY; CAPEX was €14.3m vs €12.7m.

Outlook and guidance

• FY26 organic growth guidance was lowered to -6% to -5% from -5% to -3%; adjusted EBITA margin guidance rose to 15.5%-16.0% from 14.8%-15.8%.

• Q4 Tech Consulting growth is expected to improve slightly, Banktech to return to growth, and Indtech to improve slightly; Caretech legacy runoff remains a headwind.

• Solid organic growth is expected in 2027, with software growth improving toward year-end as legacy headwinds fade; consulting growth is expected to remain weak.

• Long-term targets for 2027-2028 include revenue CAGR above 5%, adjusted EBITA margin above 16% by 2028 and net debt/EBITDA below 2.