Know IT Q2 2025 presentation slides: Revenue decline continues amid strategic acquisitions

Introduction & Market Context

Know IT AB (STO:KNOW) presented its Q2 2025 interim results on July 18, 2025, revealing continued revenue challenges despite some positive operational developments. The company’s stock closed at SEK 127.4 prior to the presentation, showing a modest gain of 0.47% on the day, but remains significantly below its 52-week high of SEK 182.

The Nordic IT consultancy continues to navigate a challenging market environment characterized by mixed conditions across the region. CEO Per Wallentin and CFO Marie Björklund emphasized the company’s focus on improving utilization rates and strategic acquisitions to position for future growth.

Quarterly Performance Highlights

Know IT’s financial performance in Q2 2025 showed a continued downward trend, with net sales decreasing by 11.3% year-over-year to SEK 1,490.5 million from SEK 1,681.3 million. Adjusted EBITA fell more significantly to SEK 54.0 million from SEK 94.2 million in the same period last year, with the adjusted EBITA margin contracting to 3.6% from 5.6%.

As shown in the following quarterly financial overview:

This decline represents a continuation of the challenging trend observed in Q1 2025, when the company reported a 10% year-over-year decrease in sales. The longer-term revenue and EBITA development illustrates this persistent downward trajectory:

The company highlighted several factors affecting performance, including:

• Varying market conditions across Nordic countries, with Norway remaining stable, Sweden showing improvement, and continued challenges in Finland and Denmark
• Difficulty in balancing price movements with salary increases
• Ongoing pressure in the telecom sector, particularly related to a significant client

Business Area Performance

Know IT operates through four business areas, all of which experienced revenue and profit declines in Q2 2025:

1. Solutions (Nordic market leader in systems development):

- Sales: SEK 802.9 million (down from SEK 933.2 million in Q2 2024)

- EBITA: SEK 54.3 million (down from SEK 68.0 million)

- EBITA margin: 6.8% (down from 7.3%)

- Employees: 1,646 (down from 1,812)

- The company noted improving utilization rates and selective recruitment in growth areas

2. Experience (largest digital agency in the Nordic region):

- Sales: SEK 267.4 million (down from SEK 320.3 million)

- EBITA: SEK 6.3 million (down from SEK 19.3 million)

- EBITA margin: 2.4% (down from 6.0%)

- Employees: 770 (down from 846)

- Improving utilization rates but facing tough price competition

3. Connectivity (supporting connected world):

- Sales: SEK 200.9 million (down from SEK 206.7 million)

- EBITA: SEK 13.4 million (down from SEK 16.6 million)

- EBITA margin: 6.7% (down from 8.0%)

- Employees: 687 (down from 710)

- Continued challenges from telecom sector downturn, but new assignments creating optimism

4. Insight (management consultants):

- Sales: SEK 229.1 million (down from SEK 232.6 million)

- EBITA: SEK 8.6 million (down from SEK 15.1 million)

- EBITA margin: 3.8% (down from 6.5%)

- Employees: 539 (down from 548)

- Profitability impacted by ongoing optimization and restructuring efforts

Strategic Initiatives

Despite financial challenges, Know IT highlighted two strategic acquisitions aimed at strengthening its position in key growth sectors:

1. Milso: A company with 20 professionals experienced in the defense sector, with significant clients including FMV (Swedish Defense Materiel Administration). This acquisition is positioned as an enabler for stronger partnerships in the defense sector.

2. Insicon: A fintech solutions provider with approximately 50 consultants and over 15 years of experience. The acquisition enhances Know IT’s fintech offering through Insicon’s platform targeting insurance, banking, and finance sectors.

Both acquisitions represent strategic moves to strengthen Know IT’s presence in sectors identified as future growth areas, particularly as the company’s defense sector has shown growth, increasing to 5% of sales from 3% previously.

Client Segment Analysis

Know IT maintains a diversified client base across multiple sectors, which the company views as a strength in an uncertain market. The following chart illustrates the distribution of sales by client segment:

Key observations regarding client segments include:

• Public sector remains the largest segment at 36% of sales (unchanged from previous year)
• Retail and service companies (17%) and industry (15%) segments remain stable
• Banking, finance, and insurance declined slightly to 9% (from 10%)
• Telecommunications continued its negative trend, falling to 6% (from 7%)
• Defense sector showed notable growth, increasing to 5% (from 3%)

The company emphasized that clients remain focused on business-critical projects supporting digital transformation, even during economic uncertainty.

Forward-Looking Statements

Looking ahead, Know IT management highlighted several key focus areas:

• Continuing to improve utilization rates, particularly in Solutions and Experience business areas
• Leveraging strategic acquisitions in defense and fintech to drive future growth
• Capitalizing on improving market conditions in Sweden while addressing challenges in Finland and Denmark
• Balancing price pressures with salary increases
• Selective recruitment in growth areas while maintaining readiness to expand when market conditions improve

The company’s net debt position stands at SEK 647 million with a Net Debt/EBITDA ratio of 1.3, slightly higher than the 1.2 ratio reported in Q1 2025. This financial position provides some flexibility for further strategic initiatives while maintaining a relatively conservative balance sheet.

In summary, while Know IT continues to face revenue and profitability challenges, management is focusing on operational improvements and strategic positioning in growth sectors to prepare for eventual market recovery. The effectiveness of these strategies will depend on broader market conditions and the company’s ability to translate improved utilization into stronger financial performance.

Full presentation:

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