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Investing.com -- Sopra Steria reported a 2.9% organic revenue decline in the third quarter, falling short of market expectations of a 1.5% decrease. Shares in the company dropped 3.2%.
The technology consulting firm’s revenue missed analyst estimates by 1-2%, with the UK region being the main underperformer, posting a 9.5% organic decline versus expectations of a 1% drop.
This weakness was attributed to delays in ramping up a major defense program, which the company said has now been launched and should drive growth beginning in 2026.
Despite the disappointing results, Sopra Steria maintained its full-year 2025 guidance of organic revenue growth between -2.5% and +0.5%, and confirmed expectations for positive organic growth in the fourth quarter.
The France region performed better than anticipated with flat growth, as the company noted improving trends in aeronautics, defense, and public sectors. This region is expected to return to positive growth in the fourth quarter.
Meanwhile, the Europe reporting unit declined 3.4% organically, worse than the expected 1.5% decrease. The Other Solutions segment showed a modest 0.4% organic decline.
The company’s workforce increased approximately 1% quarter-over-quarter but decreased about 1.5% year-over-year. Employee attrition rose slightly to 15.3% compared to 14.4% in September 2024.
Sopra Steria is currently searching for a new CEO, focusing on external candidates following Cyril Malargé’s departure to join Alten.
To achieve the midpoint of its full-year guidance, the company would need to deliver approximately 6-6.5% organic revenue growth in the fourth quarter. Analysts suggest Sopra Steria is more likely to land near the lower end of its guidance range, with current market consensus projecting a 1.9% decline for the full year.
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