NYAB Q4’25 preview: Margins and outlook in focus

NYAB will release its Q4 report on Thursday, February 12. We expect the company to report strong revenue growth, driven by the continued high activity in the Swedish market and the Consulting segment's full-quarter contribution. We expect operating margins to remain under slight pressure due to the lingering effects of the front-loaded capacity build-up carried out in the first half of 2025, but relatively flat compared to last quarter. Our key focus areas for the report are the market outlook for 2026, the development of the order backlog following recent large contract wins, comments on the latest bolt-on acquisition, and the seasonal release of working capital.

We expect revenue growth to moderate quarter-on-quarter but remain at a high level

We forecast NYAB’s Q4 revenue to reach 156 MEUR, representing a 33% year-on-year increase (Q4’24: 117 MEUR), and we expect the Consulting segment to contribute 27 MEUR (~23% of y/y growth). We estimate the Civil Engineering segment to grow organically by 10% (y/y), and we expect both country units to contribute to the top-line growth. In Sweden, we expect growth to continue to be supported by robust market conditions within the power and infrastructure sectors. In Finland, we note that the weak Q3 growth was primarily driven by timing effects in the project portfolio, and we expect project timings to support growth in Q4 instead. We will also continue to look for further signs or comments of a volume recovery after a period of subdued activity.

The group's book-to-bill ratio dipped to 0.8x in Q3, indicating that order intake lagged behind project execution and pointing to moderating growth levels over the coming quarters. While our revenue estimates already reflected this moderation, we note that recent order intake has been encouraging. Specifically, NYAB secured two significant railway modernization contracts in Sweden totalling approximately 57 MEUR (22 MEUR and 35 MEUR) in late 2025 and early 2026. We believe these orders, which are large relative to the company’s historical average project size of 4 MEUR, contribute to materially de-risk our revenue estimates for 2026. On top of this, NYAB awaits two significant Phase 2 contracts to be formally awarded: one regarding Uppsala Tramway (potential total order value: ~447 MEUR over four years) and a more recent one with Svenska Kraftnät (~136 MEUR over three years). As noted in earlier comments, winning any of these contracts would put upward pressure on our estimates.

Margin optimization continues amid lingering capacity expansion effects

Moving down the income statement, we estimate EBIT to amount to 11.9 MEUR in Q4, translating to an EBIT margin of 7.6% (Q4’24: 10.5%). The year-on-year margin contraction is expected to reflect the consolidation of the lower-margin Consulting segment and the growing pains associated with the rapid workforce expansion in early 2025. As we noted in conjunction with the Q3 report, the front-loaded investment in staff capacity had a greater impact on utilization and margins than we initially expected, and we anticipate these effects to linger into Q4 as the expanded workforce is gradually absorbed into the project portfolio. In the Consulting segment, we will monitor whether the margin improvement seen in Q3 (4.5%) can be somewhat sustained as the company prioritizes profitability over growth in this division. We increased our Q4 EBIT margin estimate (to 4.1% from 3.4%) for the Consulting business following the stronger-than-expected margin in Q3, but expect a small contraction quarter-on-quarter due to seasonality in its profitability in recent years. On the bottom line, we expect losses from associates and net financials to remain stable relative to the previous quarter as well as the comparison period. Given this overall picture and after taxes, we estimate net profit to reach 8.9 MEUR (Q4’24: 9.3 MEUR).

We also expect a strong cash flow performance in Q4. Seasonally, the final quarter of the year is typically among the strongest for NYAB due to the release of working capital accumulated during the high-activity summer months. A robust cash position at year-end would further support NYAB’s financial flexibility and ability to fund its growth strategy (organic and M&A) while distributing a good dividend yield.

Recent larger contract wins de-risk 2026

A key watchpoint in the Q4 report for us will be the company’s comments on the market outlook for 2026, particularly in Finland, where signs of recovery have been gradual. We believe the recent Class A approval in Fingrid’s supplier register and planned transmission grid investments provide a positive backdrop for a potential revenue pick-up in the Finnish Civil Engineering segment going forward. In Sweden, we believe the outlook remains favorable, supported by overall high tender activity and the green industrial transformation in the north. Any comments from management on when they expect the margin pressures from the capacity build-up to ease during 2026 will also be of interest.

For FY2026, we forecast revenue of 614 MEUR (+12% y/y) with an EBIT margin of 6.3% (FY25e adj. EBIT: 6.0%*). This reflects a moderation of the very high organic growth seen in 2025, where NYAB will face tougher comparables, while the M&A contribution from Dovre ceases as it was consolidated from the start of 2025. At the same time, we estimate that this moderation of top-line growth to enable improved optimization of margins. In addition, considering recent communicated orders, we also feel that the visibility in our revenue estimates have strengthened for 2026.

* Excluding the impact of one-off costs in Q1’25