Tietoevry has raised its planned cost savings for 2026 to €130 million while signaling that organic revenue will be flat to slightly negative next year, underscoring a strategic shift toward margin repair rather than revenue expansion.
The Nordic IT services provider reported a 2% decline in organic revenues for the fourth quarter of 2025. Management flagged continued softness in its Tech Consulting business alongside ongoing legacy run-off in its Banktech and Caretech operations, which together weighed on the top line.
Despite the revenue weakness, adjusted EBITA margin improved markedly. The company posted an adjusted EBITA margin of 16.2% in Q4 2025, a rise of 3.8 percentage points compared with the prior year. Tietoevry attributed this jump to the effects of its broader structural cost reset.
As part of that reset, the company has trimmed its workforce by roughly 10% year-on-year, reducing headcount by about 1,600 full-time positions. It also said it has moved to a simplified operating model, with clearer accountability in the Tech Consulting division as part of efforts to improve efficiency.
Looking to 2026, Tietoevry anticipates organic growth in a range between -2% and 0%. Management noted that around 3 percentage points of that outlook reflect structural headwinds from legacy run-off and base effects. At the same time, the company is guiding to an adjusted EBITA margin band of 14.8% to 15.8% for 2026, up from 13.8% in 2025.
Management said the margin improvement for 2026 is expected to be driven by the additional cost savings now targeted and by the easing of the IFRS 5 burden that weighed on prior results. The emphasis on cost discipline and margin recovery forms the core of the companys near-term outlook.
Analyst reaction included a target-price revision from Kepler Cheuvreux, which raised its price objective on Tietoevry to €18 from €16 while retaining a Hold rating. The broker highlighted that the margin reset is proceeding positively but emphasized that a revenue recovery has not yet appeared and that identifiable catalysts are limited.
What this means
- Tietoevry is prioritizing profitability improvements over top-line growth in the near term.
- Cost reductions and a simplified operating model are central to managements plan to lift margins.
- Legacy run-off in Banktech and Caretech, and weakness in Tech Consulting, continue to pressure revenues.