This article first appeared on GuruFocus.
Release Date: October 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Knowit AB (FRA:KOW) reported improved margins in its three largest business areas: Solutions, Experience, and Connectivity.
The Solutions business area, which accounts for over 50% of total revenue, saw a significant improvement in EEA margin to 9.9%.
The company has successfully replaced lost projects with new ones in the Connectivity business area, maintaining a stable development.
There is a positive trend in utilization across the group’s largest business areas, contributing to improved results.
Knowit AB (FRA:KOW) maintains a solid balance sheet with a leverage ratio of 1.2, well within its financial target.
The company experienced an 8% decrease in sales, with a 3% decrease when adjusted for acquisitions, divestments, and currency effects.
The Insights business area reported a negative margin of 6.5%, impacted by internal restructuring and a slow start to the summer.
There is ongoing price pressure, and the company has not been able to fully compensate for salary revisions.
The average headcount during the quarter decreased by 6%, indicating a reduction in workforce.
The banking and finance sector saw a negative development, primarily due to the divestment of consulting services in Denmark.
Q: Can you provide more details on the positive developments in the public sector and your outlook for 2026? A: We see early signs of increased digitalization in the public sector, particularly in Sweden, with budgets in place for 2026. In Norway, we’ve secured significant contracts, which are contributing to our growth in this sector. (Unidentified_1, CEO)
Q: How does the gap between price and salary development look, and what are the expected impacts? A: We don’t disclose specific rates, but salary increases are between 3% and 4%. While we haven’t had to lower prices, the increase is slight, and we are working to align pricing with salary costs. (Unidentified_2, CFO)
Q: With improving signs in Q3, do you anticipate a return to positive net recruitment earlier than expected? A: Our focus remains on increasing utilization before moving into net recruitment. While some areas have seen net recruitment, we are cautious and will proceed gradually. (Unidentified_1, CEO)
Q: How is the Norwegian market performing, and what are your expectations for Q4 and 2026? A: Norway has been strong, supported by large framework agreements. We continue to see good margins and increased utilization in Sweden, which is promising for future performance. (Unidentified_1, CEO)
Q: Are you planning to offset office rental increases by reducing space due to a reduced headcount? A: We are continuously evaluating our office space needs and are reducing space where possible. Most contracts are five years, so changes will be gradual over the next few years. (Unidentified_1, CEO and Unidentified_2, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.