Tieto's Interim Report 1/2026: Strong profitability and solid performance in software businesses
Idag, 08:00
Tieto's Interim Report 1/2026: Strong profitability and solid performance in software businesses
Tieto CorporationINTERIM REPORT29 April 20269:00 a.m. (EEST)
- Growth -3%, affected by 2 pp. negative impact from known headwinds – software businesses delivered healthy underlying growth
- Adjusted EBITA improved by 4.1 pp. to 14.7%, driven by cost optimization programme and strong margins in software businesses
- Tieto Tech Consulting impacted by weak market conditions – additional cost saving measures initiated
- Strategic transformation continues, including large-scale AI upskilling and strengthening of strategic partnerships
The full interim report with tables is available at the end of this release.
1–3/2026 | 1–3/2025 | |
Revenue, EUR million | 448.3 | 470.8 |
Organic growth1), % | -3 | -4 |
Acquisitions and divestments, % | -3 | 0 |
Foreign exchange rates, % | 1 | 0 |
Total growth, % | -5 | -4 |
Organic growth adjusted for working days4), % | -3 | -3 |
Operating profit (EBIT), EUR million | 79.6 | 26.0 |
Operating margin (EBIT), % | 17.8 | 5.5 |
Adjusted2) operating profit (EBITA3)), EUR million | 66.0 | 49.8 |
Adjusted2) operating margin (EBITA3)), % | 14.7 | 10.6 |
Cash flow from operating activities, EUR million5) | 84.8 | 97.3 |
Interest-bearing net debt, EUR million | 376.6 | 708.0 |
Full-year outlook for 2026 unchanged
Tieto expects its organic1) growth to be in the range of -2% to 0% (revenue in 2025: EUR 1 852.3 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA3)) to be 14.8–15.8% (13.8% in 2025).
1) Adjusted for currency effects, acquisitions and divestments
2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability
3) Profit before interests, taxes, amortization of acquisition-related intangible assets, goodwill and other intangible asset impairment
4) Company estimate
5) Comparative figure includes cash flow for the divested Tech Services business and Bekk Consulting
CEO comment by Endre Rangnes
Our strategic transformation is gaining momentum
"We delivered strong profitability in the first quarter, driven by the persistent execution of our cost optimization programme and strong margins in our software businesses. Adjusted operating profit improved by 4.1 percentage points to 14.7%. Our growth followed the trajectory we saw in the previous quarter. Organic growth of -3% reflects continued market weakness in our consulting business and the phasing out of legacy contracts in Tieto Banktech and Tieto Caretech, which had a negative impact of 2 percentage points on Group growth. Underlying growth in software businesses was healthy. Our order backlog remained solid, up by 8%.
Tieto Tech Consulting’s transformation progressing with concrete actions and new leadership
We continue to execute the strategic transformation in Tieto Tech Consulting in line with the plan presented at our Capital Markets Day in November 2025. The business is shifting its ambitions to be a local player with global deliveries, and in parallel we are renewing our competences to strengthen capabilities related to new technologies. We have initiated several measures supporting these changes, including a large-scale AI upskilling programme for 5 000 consultants with a view to accelerating the business’ roadmap to enable customers’ transformation and our engineering productivity. The strategic transformation coupled with first-quarter revenue falling somewhat short of our expectations is driving acceleration of the competence shift and further efficiencies through continued SG&A reductions as well as downsizing and transferring of delivery capacity to align to demand. To accelerate this transformation and performance improvement, we have today also announced a leadership change in Tieto Tech Consulting.
Executing our strategic priorities
The execution of the company’s strategic priorities progressed during the quarter. The recently announced strategic partnership with Microsoft is another milestone in our customer focus agenda. With the support of the partnership, covering all of Tieto’s businesses and markets, we will take a major step in bringing AI capabilities and solutions to customers. In addition to the AI upskilling of 5 000 consultants, the partnership will cover, for example, co-selling of AI solutions and software development efficiency and quality.
As a significant step towards our aspiration to strengthen Tieto’s footprint in Europe, we signed a framework agreement with Orange Business which will become a significant provider of capacity and related managed services for our company. We expect this collaboration to deliver efficiency through standardized services, and it will play an important role in our customer deliveries and business continuity.
We have continued to develop our business portfolio. The acquisition of OpenSpring and GrupoOnetec in Iberia, supporting our international expansion plans, was closed in January. We also continued the simplification of the company. In addition to the divestment of Bekk Consulting, closed in February, Tieto signed an agreement to sell two of Tieto Indtech’s software businesses.
AI as a strategic growth and quality driver
AI continues to be a key driver of efficiency and transformation for our customers, while security concerns and skills shortages are sustaining demand for external expertise. Tieto is well positioned to exploit the opportunities opened up by AI, as our software products, managing business-critical data, are deeply embedded in core processes across verticals, including highly regulated industries. Based on the current market view, vendors focused on software and services for complex business-critical processes will have elevated opportunities to create value through AI with lower disruption risks. AI is already embedded in our products across businesses, as well as in deliveries and modernization agendas. With our strong software asset foundation and large installation base, we continue to serve as a reliable partner in our customers’ AI journey and will remain a relevant player in the market.
As I always say, it all starts with our customers. With AI, we aim to elevate and enrich customers’ business with AI solutions from proofs-of-concept to use cases in production and scale, creating real value and lasting impact. These efforts will be fortified by our partnerships with leading technology catalysts – and our own talents will play a key role in making the benefits tangible."
Financial performance by segment
Revenue, EUR million | Revenue, EUR million | Growth, % | Organic
| Adjusted operating profit, EUR million | Adjusted operating profit, EUR million | Adjusted operating margin, % | Adjusted operating margin, % | |
1–3/2026 | 1–3/2025 | 1–3/2026 | 1–3/2025 | 1–3/2026 | 1–3/2025 | |||
Tieto Tech Consulting | 185.2 | 215.0 | -14 | -7 | 21.3 | 26.1 | 11.5 | 12.1 |
Tieto Banktech | 140.9 | 136.9 | 3 | 1 | 24.4 | 15.4 | 17.3 | 11.2 |
Tieto Caretech | 57.5 | 57.3 | 0 | -2 | 15.0 | 14.1 | 26.0 | 24.7 |
Tieto Indtech | 70.7 | 67.5 | 5 | 2 | 10.7 | 8.0 | 15.1 | 11.8 |
Eliminations and non-allocated costs | -6.1 | -6.0 | — | — | -5.5 | -13.7 | — | — |
Group total | 448.3 | 470.8 | -5 | -3 | 66.0 | 49.8 | 14.7 | 10.6 |
For further information, please contact:
Tomi Hyryläinen, Chief Financial Officer, tel. +358 50 555 0363, tomi.hyrylainen (at) tieto.com
Tommi Järvenpää, Head of Investor Relations, tel. +358 40 576 0288, tommi.jarvenpaa (at) tieto.com
A webcast for analysts and media will be held on 29 April at 10.00 a.m. EEST (9.00 a.m. CET, 8.00 a.m. UK time). Endre Rangnes, President and CEO, and Tomi Hyryläinen, CFO, will present the results online in English. The live webcast can be followed via this link: Tieto Q1 webcast or on the company's website.
To take part in the questions and answers session after the presentation you will need to dial in by phone. You can access the webcast by registering on this link.After registration you will be provided phone numbers, user ID and a conference ID to access the conference.
The event is recorded and it will be available on demand later during the day. Tieto publishes its financial information in English and Finnish.
Tieto Corporation
DISTRIBUTION
Nasdaq Helsinki
Nasdaq Stockholm
Oslo Børs
Principal Media
Tieto is a leading software and digital engineering services company with global market reach and capabilities. We provide customers across different industries with mission-critical solutions through our specialized software businesses Tieto Caretech, Tieto Banktech and Tieto Indtech as well as Tieto Tech Consulting business. Our around 14 000 talented vertical software, design, cloud and AI experts are dedicated to empowering our customers to succeed and innovate with latest technology.
Tieto’s annual revenue is approximately EUR 2 billion. The company’s shares are listed on the NASDAQ exchange in Helsinki and Stockholm, as well as on Oslo Børs. www.tieto.com
Ämnen i artikeln
Tieto's Interim Report 1/2026: Strong profitability and solid performance in software businesses
Idag, 08:00
Tieto's Interim Report 1/2026: Strong profitability and solid performance in software businesses
Tieto CorporationINTERIM REPORT29 April 20269:00 a.m. (EEST)
- Growth -3%, affected by 2 pp. negative impact from known headwinds – software businesses delivered healthy underlying growth
- Adjusted EBITA improved by 4.1 pp. to 14.7%, driven by cost optimization programme and strong margins in software businesses
- Tieto Tech Consulting impacted by weak market conditions – additional cost saving measures initiated
- Strategic transformation continues, including large-scale AI upskilling and strengthening of strategic partnerships
The full interim report with tables is available at the end of this release.
1–3/2026 | 1–3/2025 | |
Revenue, EUR million | 448.3 | 470.8 |
Organic growth1), % | -3 | -4 |
Acquisitions and divestments, % | -3 | 0 |
Foreign exchange rates, % | 1 | 0 |
Total growth, % | -5 | -4 |
Organic growth adjusted for working days4), % | -3 | -3 |
Operating profit (EBIT), EUR million | 79.6 | 26.0 |
Operating margin (EBIT), % | 17.8 | 5.5 |
Adjusted2) operating profit (EBITA3)), EUR million | 66.0 | 49.8 |
Adjusted2) operating margin (EBITA3)), % | 14.7 | 10.6 |
Cash flow from operating activities, EUR million5) | 84.8 | 97.3 |
Interest-bearing net debt, EUR million | 376.6 | 708.0 |
Full-year outlook for 2026 unchanged
Tieto expects its organic1) growth to be in the range of -2% to 0% (revenue in 2025: EUR 1 852.3 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA3)) to be 14.8–15.8% (13.8% in 2025).
1) Adjusted for currency effects, acquisitions and divestments
2) Adjustment items include restructuring costs, capital gains/losses, impairment charges and other items affecting comparability
3) Profit before interests, taxes, amortization of acquisition-related intangible assets, goodwill and other intangible asset impairment
4) Company estimate
5) Comparative figure includes cash flow for the divested Tech Services business and Bekk Consulting
CEO comment by Endre Rangnes
Our strategic transformation is gaining momentum
"We delivered strong profitability in the first quarter, driven by the persistent execution of our cost optimization programme and strong margins in our software businesses. Adjusted operating profit improved by 4.1 percentage points to 14.7%. Our growth followed the trajectory we saw in the previous quarter. Organic growth of -3% reflects continued market weakness in our consulting business and the phasing out of legacy contracts in Tieto Banktech and Tieto Caretech, which had a negative impact of 2 percentage points on Group growth. Underlying growth in software businesses was healthy. Our order backlog remained solid, up by 8%.
Tieto Tech Consulting’s transformation progressing with concrete actions and new leadership
We continue to execute the strategic transformation in Tieto Tech Consulting in line with the plan presented at our Capital Markets Day in November 2025. The business is shifting its ambitions to be a local player with global deliveries, and in parallel we are renewing our competences to strengthen capabilities related to new technologies. We have initiated several measures supporting these changes, including a large-scale AI upskilling programme for 5 000 consultants with a view to accelerating the business’ roadmap to enable customers’ transformation and our engineering productivity. The strategic transformation coupled with first-quarter revenue falling somewhat short of our expectations is driving acceleration of the competence shift and further efficiencies through continued SG&A reductions as well as downsizing and transferring of delivery capacity to align to demand. To accelerate this transformation and performance improvement, we have today also announced a leadership change in Tieto Tech Consulting.
Executing our strategic priorities
The execution of the company’s strategic priorities progressed during the quarter. The recently announced strategic partnership with Microsoft is another milestone in our customer focus agenda. With the support of the partnership, covering all of Tieto’s businesses and markets, we will take a major step in bringing AI capabilities and solutions to customers. In addition to the AI upskilling of 5 000 consultants, the partnership will cover, for example, co-selling of AI solutions and software development efficiency and quality.
As a significant step towards our aspiration to strengthen Tieto’s footprint in Europe, we signed a framework agreement with Orange Business which will become a significant provider of capacity and related managed services for our company. We expect this collaboration to deliver efficiency through standardized services, and it will play an important role in our customer deliveries and business continuity.
We have continued to develop our business portfolio. The acquisition of OpenSpring and GrupoOnetec in Iberia, supporting our international expansion plans, was closed in January. We also continued the simplification of the company. In addition to the divestment of Bekk Consulting, closed in February, Tieto signed an agreement to sell two of Tieto Indtech’s software businesses.
AI as a strategic growth and quality driver
AI continues to be a key driver of efficiency and transformation for our customers, while security concerns and skills shortages are sustaining demand for external expertise. Tieto is well positioned to exploit the opportunities opened up by AI, as our software products, managing business-critical data, are deeply embedded in core processes across verticals, including highly regulated industries. Based on the current market view, vendors focused on software and services for complex business-critical processes will have elevated opportunities to create value through AI with lower disruption risks. AI is already embedded in our products across businesses, as well as in deliveries and modernization agendas. With our strong software asset foundation and large installation base, we continue to serve as a reliable partner in our customers’ AI journey and will remain a relevant player in the market.
As I always say, it all starts with our customers. With AI, we aim to elevate and enrich customers’ business with AI solutions from proofs-of-concept to use cases in production and scale, creating real value and lasting impact. These efforts will be fortified by our partnerships with leading technology catalysts – and our own talents will play a key role in making the benefits tangible."
Financial performance by segment
Revenue, EUR million | Revenue, EUR million | Growth, % | Organic
| Adjusted operating profit, EUR million | Adjusted operating profit, EUR million | Adjusted operating margin, % | Adjusted operating margin, % | |
1–3/2026 | 1–3/2025 | 1–3/2026 | 1–3/2025 | 1–3/2026 | 1–3/2025 | |||
Tieto Tech Consulting | 185.2 | 215.0 | -14 | -7 | 21.3 | 26.1 | 11.5 | 12.1 |
Tieto Banktech | 140.9 | 136.9 | 3 | 1 | 24.4 | 15.4 | 17.3 | 11.2 |
Tieto Caretech | 57.5 | 57.3 | 0 | -2 | 15.0 | 14.1 | 26.0 | 24.7 |
Tieto Indtech | 70.7 | 67.5 | 5 | 2 | 10.7 | 8.0 | 15.1 | 11.8 |
Eliminations and non-allocated costs | -6.1 | -6.0 | — | — | -5.5 | -13.7 | — | — |
Group total | 448.3 | 470.8 | -5 | -3 | 66.0 | 49.8 | 14.7 | 10.6 |
For further information, please contact:
Tomi Hyryläinen, Chief Financial Officer, tel. +358 50 555 0363, tomi.hyrylainen (at) tieto.com
Tommi Järvenpää, Head of Investor Relations, tel. +358 40 576 0288, tommi.jarvenpaa (at) tieto.com
A webcast for analysts and media will be held on 29 April at 10.00 a.m. EEST (9.00 a.m. CET, 8.00 a.m. UK time). Endre Rangnes, President and CEO, and Tomi Hyryläinen, CFO, will present the results online in English. The live webcast can be followed via this link: Tieto Q1 webcast or on the company's website.
To take part in the questions and answers session after the presentation you will need to dial in by phone. You can access the webcast by registering on this link.After registration you will be provided phone numbers, user ID and a conference ID to access the conference.
The event is recorded and it will be available on demand later during the day. Tieto publishes its financial information in English and Finnish.
Tieto Corporation
DISTRIBUTION
Nasdaq Helsinki
Nasdaq Stockholm
Oslo Børs
Principal Media
Tieto is a leading software and digital engineering services company with global market reach and capabilities. We provide customers across different industries with mission-critical solutions through our specialized software businesses Tieto Caretech, Tieto Banktech and Tieto Indtech as well as Tieto Tech Consulting business. Our around 14 000 talented vertical software, design, cloud and AI experts are dedicated to empowering our customers to succeed and innovate with latest technology.
Tieto’s annual revenue is approximately EUR 2 billion. The company’s shares are listed on the NASDAQ exchange in Helsinki and Stockholm, as well as on Oslo Børs. www.tieto.com
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