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Introduction & Market Context
Itera (ITERA) presented its Q1 2025 interim report on May 9, 2025, highlighting a return to positive growth amid a gradually improving but still soft market environment. The Nordic IT services provider reported modest revenue growth with improved profitability margins compared to both the previous quarter and the same period last year.
According to the presentation, market demand remains soft but is showing signs of improvement after a slowdown over the past couple of years. The company noted no visible impact from increased geopolitical uncertainty in its key industries, though it observed an increased focus on European operations. Itera highlighted that the ongoing shift toward cloud-native and data-driven solutions integrated with AI capabilities is driving substantial growth opportunities.
As shown in the following key financial metrics, Itera demonstrated sequential improvements in both revenue and profitability:
Quarterly Performance Highlights
Itera reported revenue of MNOK 232 for Q1 2025, representing a 2% year-over-year growth compared to MNOK 229 in Q1 2024. The company achieved an organic growth rate of 1%, a notable improvement from -1% in Q1 last year and -4% in the previous quarter. The EBIT margin rose to 9.1%, up from 8.4% in Q1 2024 and 5.6% in Q4 2024, demonstrating strengthening operational efficiency.
The comprehensive financial data shows solid improvement across key metrics:
Earnings per share increased to NOK 0.18, up 3% from NOK 0.17 in the same period last year. The company’s EBITDA margin improved to 12.6%, compared to 12.1% in Q1 2024, while the equity ratio stood at 19.9%, a slight improvement from 19.6% a year earlier.
The company’s revenue and EBIT development over time illustrates the return to growth after recent challenges:
Strategic Initiatives
Itera highlighted several strategic initiatives driving its business forward. The company is actively embracing AI as a transformative force to increase productivity and growth. This includes leveraging GenAI tools, which by 2027 are expected to reduce modernization costs by 70% by explaining legacy business applications and creating appropriate replacements.
The company’s AI strategy is demonstrated through its approach to application assessments, comparing traditional methods with AI-powered alternatives:
A significant focus of Itera’s strategy is its "Enter Ukraine with Itera" initiative, launched in 2023 as a dual-track program encompassing both business and humanitarian objectives. The company has established a strategic partnership with Naftogaz, Ukraine’s largest national energy company, focusing on cooperation in energy and digital technologies.
Itera is also expanding its presence in the defense industry, which it describes as a rapidly growing market for digitalization, largely driven by the war in Ukraine. The company’s defense sector focus includes delivering trusted and secure digital infrastructure, empowering personnel, modernizing facilities, and enhancing interoperability.
The company’s geographical footprint spans across Europe, with a strong Nordic foundation:
Detailed Financial Analysis
Itera’s customer mix shows a high concentration among its top clients, with 87% of revenue coming from existing customers in Q1 2025, down from 94.7% in Q4 2024. New customers contributed 13% of revenue, up from 5.3% in the previous quarter. The company maintained a book-to-bill ratio of 1.0 both for Q1 and for the trailing 12 months, indicating stable demand.
The following chart illustrates the company’s customer distribution:
Itera’s sector development shows a strategic shift in its industry focus. Financial services, while still the largest segment, decreased to 39.4% of revenue in 2025 from 46.5% in 2024. Meanwhile, Energy & Industry increased to 24.2% from 21.5%, and the "Others" category, which includes defense, grew significantly to 24.2% from 19.3%.
The sector breakdown demonstrates this diversification strategy:
The company’s cash flow performance has been strong, with an EBITDA to cash conversion rate of 91.8% in the last 12 months, up 8.3 percentage points from last year. This indicates improved efficiency in converting earnings into cash.
At the end of Q1 2025, Itera had 707 employees, down from 733 at the end of Q1 2024. The company maintains a nearshore ratio of 49%, slightly down from 51% a year earlier, as part of its distributed delivery model.
Forward-Looking Statements
Looking ahead, Itera expects the market for digital transformation to gradually recover in the coming months, supported by new framework agreements. The company is positioning itself to capitalize on opportunities in cloud transformations that enable AI implementation.
Itera identified growth opportunities through its new Rogaland office and by connecting Ukraine and the Nordics to enable the green energy shift and rebuild Ukraine. While the company does not provide specific guidance to the market, it emphasized that profitable growth and cash flow remain key focus areas.
The company’s share price stood at NOK 9.24 at the end of March 2025, representing a 17% decrease including dividends from NOK 11.90 at the end of March 2024. According to current market data, the stock is trading at NOK 9.32, up 2.42% in the most recent session, suggesting a positive market reaction to the Q1 results.
Full presentation:
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