Digia Q1'26 flash comment: Quarter slightly weaker than expected this time
Summary
- Digia's Q1 revenue increased by 5% to 56.4 MEUR, but this was below expectations due to a smaller-than-anticipated contribution from Savangard, despite organic growth of 1%.
- Adjusted EBITA fell by 17% to 4.0 MEUR, missing the 5.1 MEUR estimate, with profitability impacted by larger-than-expected investments and non-recurring costs from change negotiations.
- Digia reiterated its guidance for 2026, expecting revenue growth and EBITA at or above the comparison period's level, with continued focus on M&A for inorganic growth.
- The company plans to provide further strategic details at its upcoming Capital Markets Day in May.
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Translation: Original published in Finnish on 4/29/2026 at 9:00 am EEST.
| Estimates | Q1'25 | Q1'26 | Q1'26e | Q1'26e | Consensus | Diff-% | 2026e | |||
| MEUR/EUR | Comparison | Actualized | Inderes | Consensus | High | Low | Act. vs. Inderes | Inderes | ||
| Revenue | 53.8 | 56.4 | 57.8 | -3% | 222 | |||||
| Organic growth-% | 0.20% | 1.10% | 0.10% | 1 pp | 0.70% | |||||
| EBITA (adj.) | 4.8 | 4 | 5.1 | -21% | 22.2 | |||||
| EBIT | 3.9 | 2.5 | 3.5 | -29% | 18.5 | |||||
| EPS (adj.) | 0.13 | 0.12 | 0.14 | -17% | 0.62 | |||||
| EPS (reported) | 0.1 | 0.07 | 0.09 | -22% | 0.62 | |||||
| Revenue growth % | 0.20% | 4.90% | 7.60% | -2.7 pp | 2.5% | |||||
| EBITA-% (adj.) | 9.00% | 7.10% | 8.80% | -1.7 pp | 10.0% | |||||
Source: Inderes
This morning, Digia published its Q1 business review, which showed figures that were slightly softer than expected. Although revenue grew organically, Savangard's contribution was smaller than anticipated. Profitability was under slightly more pressure than expected, likely due to investments. The company remains cautious in its comments regarding the market situation. As expected, the company also reconfirmed its guidance for 2026. Ultimately, one weaker quarter does not change our overall view of a company with high-quality earnings growth, given years of strong execution and no structural changes for the worse.
Revenue grew organically, but Savangard's contribution was smaller than expected
Digia's Q1 revenue increased by 5% to 56.4 MEUR, which was below our expectations. Organic growth appears to have been 1%, higher than our forecast. The number of working days was the same as in the comparison period. Thus, revenue from Savangard, acquired in Poland, was significantly below our forecast relative to its size, contributing only 2 MEUR. However, the share of international business rose to 20.8% in Q1 (Q1’25: 11.7%). The continuing service and maintenance business accounted for 50% of revenue, remaining at the same level as in the comparison period. The number of employees decreased by 11 from the previous quarter, and we will determine later today whether this figure already includes the 31 employees to be laid off as a result of the change negotiations.
Profitability was slightly below our expectations, likely due to investments
Digia's adjusted EBITA decreased by 17% to 4.0 MEUR (Q1'25: 4.8 MEUR) and was below our 5.1 MEUR estimate. EBITA margin was 7.1%, down from 9.0% in the comparison period and below our estimate of 8.8%. The Q1 result included 0.7 MEUR in non-recurring costs from change negotiations conducted earlier in the year. In line with the strategy, the company also made investments in productization, harnessing artificial intelligence, international growth, and enhancing its expertise. However, the scale of these investments was apparently larger than we expected. The company does not report cost lines in more detail in its business reviews, so we cannot delve deeper into these costs and "investments." EPS was EUR 0.07 in Q1, and EUR 0.12 when adjusted for PPA amortization and one-off items from change negotiations.
Digia reiterated its guidance as expected
Digia's guidance for 2026 calls for revenue growth and an EBITA at or above the level of the comparison period. Prior to the Q1 report, our full-year 2026 estimates were 226 MEUR in revenue (3.9% growth) and 23.2 MEUR in adjusted EBITA (10.3%). The company has historically been active in M&As, and we expect it to continue pursuing inorganic growth when a suitable acquisition target is found.
The company will hold a Capital Markets Day in May, during which we expect the company to provide more details on its new strategy period priorities and actions to achieve its targets.