Digia Q2 2025 slides: Revenue growth continues amid profit pressure

Introduction & Market Context

Digia Plc (HEL:DIGIA) presented its Half-Year Financial Report for January-June 2025 on August 7, 2025, highlighting continued revenue growth amid challenging market conditions. The Finnish IT services provider reported that its growth rate of 3.2% in Q2 outpaced the broader IT services market, despite customers showing investment caution and delays in decision-making.

The company’s stock fell 6.93% following the presentation, closing at €7.22, as investors reacted to the significant decline in profitability despite the revenue growth.

Quarterly Performance Highlights

Digia reported Q2 2025 net sales of €53.7 million, representing a 3.2% increase compared to the same period last year, with organic growth accounting for 1.3%. The Digital Solutions business area was the primary growth driver, expanding 10% year-over-year.

As shown in the following chart of quarterly net sales:

However, profitability metrics declined substantially. Q2 EBITA operating profit fell to €3.12 million (5.8% margin) from €4.13 million (8.1% margin) in Q2 2024, representing a 26% decrease. The company attributed this decline to slower-than-targeted revenue growth and €1.1 million in non-recurring costs, including €0.4 million related to the Savangard acquisition and €0.7 million in restructuring expenses.

The following slide details the EBITA analysis:

Despite profitability challenges, Digia highlighted several key achievements for the quarter, including strong customer satisfaction with a Net Promoter Score of 61 for key accounts and a 10% increase in sales compared to Q2 2024.

The company’s key operational and strategic achievements are summarized in this slide:

Strategic Initiatives

Digia’s presentation emphasized its ongoing strategy implementation focused on "Unlock your intelligence," which combines genuine customer partnerships with a comprehensive AI-enhanced offering. The company secured several significant new deals during Q2, including a €2 million AI contract with TRAFICOM and a €4 million agreement with HSL for ticketing and payment services development.

The following slide details the new customer agreements:

A key strategic development was Digia’s international expansion through the acquisition of Savangard, a Polish IT services company specializing in integration, API, and software development services. This acquisition, completed on June 3, 2025, expands Digia’s market presence in Europe and contributes to increasing its international revenue share to 14.6%, up from 11.9% in the comparison period.

The company’s international growth strategy is illustrated in this slide:

Digia also strengthened its AI capabilities during the quarter, becoming Finland’s first Google (NASDAQ:GOOGL) Agentspace partner and launching its context-aware agent platform DoAi!. Additionally, the company introduced the Digia Business Operations Center, a 24/7 service ensuring efficient operation of customer business processes.

Detailed Financial Analysis

For the first half of 2025, Digia reported net sales of €107.5 million, up 1.7% from H1 2024. However, H1 EBITA declined to €7.67 million (7.1% margin) from €9.74 million (9.2% margin) in the previous year, representing a 21.2% decrease. Net earnings per share for H1 2025 were €0.16, down 28% from €0.22 in H1 2024.

The company maintained a solid financial position with an equity ratio of 43.7% and interest-bearing net liabilities of €25 million, resulting in a net gearing of 29.7%. Return on investment stood at 10.1%, down from 15.4% in the comparison period.

The comprehensive financial data is presented in this table:

Digia’s business model continues to balance service business (49.2%) and project business (50.8%), with the company noting that its large share of service and maintenance business provides stability to operations.

Forward-Looking Statements

Digia maintained its guidance for 2025, projecting that net sales will grow from €205.7 million in 2024 and operating profit (EBITA) will either increase or remain on par with 2024’s €21.2 million. The company expects its restructuring measures to yield annual savings of €2.4 million.

The presentation emphasized Digia’s position as a "strong, evolving company" with nine consecutive years of profitable growth. Management highlighted the company’s strategic focus on digital evolution, particularly in automated and AI-assisted processes and services.

As summarized in this slide showing the company’s H1 2025 performance:

Digia aims to reach 15% international revenue share by the end of 2025, a target that appears achievable given the current 14.6% level following the Savangard acquisition. The company continues to position itself as an "Integration Powerhouse in Northern Europe," with nearly 400 integration professionals across Finland, Poland, and Sweden.

While Digia faces near-term profitability challenges, its strategic investments in international expansion, AI capabilities, and service offering enhancements appear aimed at securing long-term growth and competitive positioning in an evolving IT services market.

Full presentation:

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