Digia

The big picture remains unchanged, and the company appears to be one of the sector’s winners and a long-term earnings growth engine.

This morning, Digia published its Q1 business review, which showed figures that were slightly softer than expected.

The Savangard acquisition will drive revenue growth of 8%. In addition, we estimate that profitability is good, although investments limit its development.

In Finland, revenue growth picked up towards the end of the year, surpassing that of the other Nordic countries for the first time in a long while.

Annual savings of around 2.4 MEUR support the improvement of profitability.

The Q4 earnings season in the IT services sector showed positive signs for the first time in a long while.

In our view, the adjustment measures are a logical continuation of the company's new strategy period, the initial phase of which emphasizes operational renewal and efficiency improvement.

Digia's last year, and Q4 in particular, were good in terms of figures, especially considering the market headwinds. The company's guidance was slightly cautious, which can be explained by front-loaded investments in the new strategy period.