TietoEVRY (TIETOS) Q3 2024 earnings summary

Executive summary

• Profitability improved in Q3 2024, with adjusted EBITDA/EBITA margin rising to 13.5% despite a 1% revenue decline, supported by active cost management and operational efficiency.

• Strategic review of Tech Services advanced to exclusive negotiations with a non-industrial buyer.

• Order backlog grew 8% year-over-year to EUR 3,205 million, driven by record banking backlog.

• Software segments (Banking, Care, Industry) showed resilience and growth, while Create and Tech Services experienced revenue declines.

• Major agreements included AI-driven healthcare solutions, payment expansion, and strategic partnerships.

Financial highlights

• Q3 2024 revenue was EUR 655 million, down 1% year-over-year; organic growth -1%.

• Adjusted EBITA/EBITDA margin improved to 13.5%; adjusted EBITA was EUR 88 million.

• Free cash flow reached EUR 26 million; operating cash flow EUR 58 million.

• Net debt at quarter-end was EUR 900 million; net debt/EBITDA at 2.1x.

• Order backlog increased by 8% to EUR 3,205 million.

Outlook and guidance

• Full-year 2024 organic growth guidance revised to around -2% (previously 0–3%) due to market softness.

• Profitability guidance narrowed to 12.3–12.7% (from 12.0–13.0%).

• Market weakness expected to persist into 2025, with efficiency measures ongoing.

• Q4 growth expected to be weak, with negative sales growth and headwinds from ransomware settlements.