Webstep Q1 2025 presentation: Revenue and margins up despite soft market

Introduction & Market Context

Webstep ASA (OB:WSTEP) presented its Q1 2025 interim results on May 23, 2025, led by CEO Kristine Lund and CFO Henning Hesjedal. The Norwegian IT consulting company reported modest growth in revenue and improved profitability despite operating in a challenging market environment characterized by macroeconomic and geopolitical uncertainties.

The company’s stock closed at NOK 25.00 on May 22, 2025, down 0.79% ahead of the earnings presentation, trading well above its 52-week low of NOK 20.00 but below its high of NOK 27.20.

Quarterly Performance Highlights

Webstep reported revenue of NOK 236.4 million for Q1 2025, representing a 2.9% increase from NOK 229.7 million in the same period last year. EBIT improved to NOK 22.6 million, up 5.6% from NOK 21.4 million in Q1 2024, resulting in an EBIT margin of 9.6%, compared to 9.3% a year earlier.

As shown in the following financial summary:

The company highlighted double-digit growth in regional offices, supported particularly by the energy sector, while also noting the approval of a NOK 2.30 dividend per share. Another key achievement was the successful delivery of a team to Aker Digital Alliance.

A more detailed breakdown of the financial figures reveals consistent improvement across key metrics:

The company maintained its financial strength with 444 full-time employees at the end of the period, a slight decrease from 448 in Q1 2024. Despite this minor reduction in headcount, Webstep managed to increase both revenue and profitability.

Strategic Initiatives

Webstep outlined two primary strategic focus areas during the presentation: enhancing collaboration across regional offices under the "One Webstep" initiative and increasing customer focus with greater emphasis on business development.

The strategic roadmap includes organizational and operational changes:

These strategic initiatives are designed to leverage Webstep’s expertise in data engineering, cloud-based architecture, analytics, and AI, areas where the company sees significant market demand despite overall market uncertainty.

Detailed Financial Analysis

Webstep maintains a strong financial position with NOK 101.4 million in cash and cash equivalents as of March 31, 2025. The company has no debt to credit institutions and reports leasing liabilities of NOK 60.6 million, resulting in a net interest-bearing debt of negative NOK 40.4 million. This translates to a NIBD/EBITDA ratio of -1.4, indicating significant financial flexibility.

The following chart illustrates the company’s cash flow and net debt position:

An analysis of Webstep’s customer base reveals that the top 10 customers account for 57% of total revenue, with 64% coming from private sector clients and 36% from public sector clients. The company’s revenue is diversified across several industries, with public administration (22.9%), oil and oil services (18.3%), and energy (12.2%) representing the largest segments.

Forward-Looking Statements

Webstep acknowledged limited market visibility due to ongoing macroeconomic and geopolitical uncertainties, noting slower investment decisions in the private sector while public and energy sectors remain less affected. Despite these challenges, the company secured several significant contracts with strategic importance, including:

• Renewal of the Master Service Agreement (MSA) with Equinor
• Inclusion as a premium-tier subcontractor for Norges Bank’s IT consulting services
• Signing of a framework agreement with Bane NOR

Looking ahead, Webstep remains cautious about the short-term macroeconomic outlook but confident in stable long-term digitalization trends. The company believes it is strongly positioned in a high-value niche with solid growth potential and is targeting a 10% EBIT margin along with healthy top-line growth.

The management emphasized the company’s expertise in data and insight technologies as particularly valuable in the current market, with services in data engineering, cloud-based architecture, analytics, and AI expected to drive future growth despite broader market uncertainties.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.