Webstep Q2 2025 presentation: Margin improvement offsets revenue decline

Introduction & Market Context

Webstep ASA (OB:WSTEP) presented its Q2 2025 interim results on August 14, 2025, revealing a company navigating challenging market conditions while maintaining profitability. The presentation, delivered by CEO Kristine Lund and CFO Henning Hesjedal, highlighted how the Norwegian IT consultancy has focused on operational efficiency amid macroeconomic uncertainty and slower private sector investment decisions.

The company’s stock closed at 24.20 NOK on August 13, down 0.82% ahead of the results announcement, reflecting cautious market sentiment. Webstep’s share price has traded between 20.00 NOK and 27.20 NOK over the past 52 weeks.

Quarterly Performance Highlights

Despite facing headwinds in the form of weak demand and soft market conditions, Webstep managed to maintain its profitability through a combination of skilled consultants, flexible salary models, and operational efficiency.

As shown in the following key financial metrics, the company prioritized margin protection over revenue growth:

The Q2 results show revenue of 215.0 million NOK, representing a 6.3% decline from 229.5 million NOK in the same period last year. However, EBIT remained stable at 19.0 million NOK, resulting in an improved EBIT margin of 8.9% compared to 8.3% in Q2 2024.

The detailed quarterly results further illustrate this trend:

Detailed Financial Analysis

Looking at the year-to-date performance, Webstep has demonstrated stronger resilience with a smaller revenue decline and improved profitability metrics compared to the quarterly figures.

For the first half of 2025, revenue reached 451.4 million NOK, down just 1.7% from 459.2 million NOK in the same period last year. More impressively, EBIT increased by 3.2% to 50.3 million NOK, with the EBIT margin expanding to 9.2% from 8.8% a year earlier.

The company’s financial position remains solid, as illustrated in the cash flow and debt overview:

Webstep reported cash and cash equivalents of 54.4 million NOK year-to-date for 2025, with restricted cash of 2.3 million NOK. The company maintains an unutilized credit facility of 110 million NOK, providing additional financial flexibility.

A comprehensive view of Webstep’s customer base reveals a diversified portfolio across multiple sectors:

The company maintains a 63/37 split between private and public sector clients, with the top 10 customers accounting for 58% of total revenue. This diversification helps mitigate risks associated with any single industry or client.

Strategic Initiatives & Contract Wins

During the quarter, Webstep celebrated its 25th anniversary with the launch of a new visual identity and branding. More importantly, the company secured several strategic contract wins that position it well for future growth:

The presentation highlighted major contract acquisitions with strategic importance, including:

• Provider status on a long-term frame agreement for Statnett
• Frame agreement for BaneNOR as sole provider
• Inclusion as sub-provider in a frame agreement with Norwegian Tax
• Contract with Norway Offshore Directorate

Additionally, the company noted that its Data & AI business segment is growing rapidly, gaining market position and mindshare.

Market Outlook & Forward Looking Statements

Webstep’s management provided a cautious but strategic outlook for the remainder of 2025 and beyond:

The company acknowledged limited market visibility due to macroeconomic and geopolitical uncertainty, with private sector investment decisions remaining slower than usual. Segments of the energy market are scaling back and showing signs of price pressure, though Webstep emphasized its commitment to maintaining premium pricing.

Despite these challenges, management reaffirmed its long-term goal of achieving a 10% EBIT margin combined with healthy top-line growth. The company has made significant progress with its sharpened sales organization, improved visibility, and competitive cost base scaled to return to growth.

However, Webstep also noted some churn among consultants, entering the second half of the year with reduced headcount. The full-time equivalent (FTE) count stood at 438 at the end of Q2 2025, down 3% from 451 a year earlier.

The ownership structure remains stable, with the top shareholders maintaining significant positions:

As Webstep navigates the challenging market environment, its focus on operational efficiency, strategic contract wins, and growing its Data & AI business segment appears to be offsetting the impact of revenue decline, allowing the company to maintain and even improve its profitability metrics.

Full presentation:

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