Digital Workforce Q4'25: Time to deliver this year

Translation: Original published in Finnish on 2/19/2026 at 8:53 am EET.

We reiterate our Accumulate recommendation and EUR 3.2 target price for the share. Digital Workforce's Q4 figures were slightly softer than we expected overall. The strategy is resonating, and important strategic victories have been achieved early in the year. Now, we are still awaiting clearer confirmation of growth and its scaling into profitability. We find the share's valuation (2026e EV/EBIT 13x EBITDA-% 8%, SOTP EUR 3.4) attractive.

Q4 was weaker than we expected in terms of profitability

Digital Workforce's revenue grew by 21% to 8.6 MEUR in Q4 and was in line with our estimate. Growth was driven by the acquisition of e18, and we estimate organic growth to have been 2%, which is better than the IT services sector (Q3 -2%) but slower than the previous year and the overall potential. Earnings levels improved in Q4 but fell short of expectations. Adjusted EBITDA margin was 9%, above the 4% for the comparison period but below our forecast of 11%. In addition, the company capitalized R&D expenses of 1.3 MEUR last year (0.7 MEUR in H2), which is clearly more than previous estimates and undeniably "embellishes" the full-year result. Thus, EBIT-% adjusted for goodwill amortization would be a more relevant measure of profitability in the future. The company's board is proposing a dividend of EUR 0.09 per share for 2025, which is well above our estimate of EUR 0.04 as well. It is somewhat surprising why dividends are being paid out instead of investing in growth when cash flow is not yet very strong, the balance sheet has limited flexibility, and growth targets are ambitious. In absolute terms, the difference in dividends is not significant, but the message it sends is puzzling. 

Company refined financial targets for 2026

Digital Workforce aims to achieve annual revenue of 50 MEUR by the end of 2026 (was 2025), which still contains inorganic elements. Although the target has been lowered slightly, it is still very ambitious and requires clear acceleration in organic growth and new acquisitions (Q4’26 target 12.5 MEUR, our forecast 9.2 MEUR). In addition, the target is an adjusted EBITDA margin of over 15% by the end of 2026, with a Q4’26 forecast of 12% (Q4’25 8%).

Guidance was in line with forecasts and slightly positive

Digital Workforce expects the group's revenue to grow by at least 15% in 2026 compared to 2025. In addition, the company expects adjusted EBITDA to be 6–12% of revenue, which is slightly positive and indicates that growth scalability is achievable. The company commented that R&D capitalizations will remain below last year's level but will still exceed depreciation. Operational forecast changes were minimal. We forecast the company's revenue to grow by 18% in 2025, driven by an acquisition (organically 5%). In addition, we estimated adjusted EBIT would grow to 2.7 MEUR, which corresponds to 8% of revenue (2025: 1.3 MEUR), with a corresponding adj. EBIT of 7%. Overall, the company's strategy and story are resonating, as evidenced by orders. However, this should be reflected more clearly in accelerated organic growth and scaling to profitability. Our extensive report on the company and its strategy published in December that is still very topical is available to read here.

Valuation picture is attractive

In terms of investment profile, Digital Workforce is still a turnaround company whose turnaround in profitable growth progressed the year before last. There was a slight hiccup at the beginning of last year, and there is still clearly room for improvement in terms of profitable growth. The profitability estimates for 2026 are only partially scaled (EBITDA: 8%), making the valuation picture (2026e EV/EBIT 13x, P/E 13x) attractive. As growth continues and profitability scales, the 2027 multiples (EV/EBIT 10x, P/E 11x, EBITDA 10%) are already very attractive, considering the potential. The current challenging market situation, still-incomplete earnings turnaround, and pressure on valuations from the threat of artificial intelligence disruption limit the strongest enthusiasm for buying. Based on the valuation multiples, the 2026e sum of parts of EUR 3.4, and the DCF calculation (EUR 3.2), we estimate the fair value range of the share to be EUR 3.0-3.8 per share. However, the upper end requires a better outlook and execution.