Q2 2026 Tieto Oyj Earnings Call Transcript
Key Points
- Tieto Oyj (FRA:TTEB) achieved a significant improvement in profitability, with a 5.5% increase compared to Q2 last year.
- The company completed the divestment of Eleu and HR payroll businesses, aligning with its strategic simplification goals.
- A new €90 million share buyback program was launched, demonstrating a commitment to returning excess capital to shareholders.
- The cost optimization program is on track, delivering annual run rate savings of €115 million, with a target of €130 million by the end of 2026.
- AI integration is progressing well, with 1,500 employees completing the Microsoft Rapid AI Skilling Program, enhancing the company's competitive edge.
- Market conditions weakened further, particularly impacting the technology consulting segment, leading to a revision of the full-year revenue growth outlook.
- Revenue growth was below expectations, with organic growth at 5%, primarily due to a 6% decline in tech consulting.
- The order backlog declined by 4% year-over-year, reflecting a challenging comparison period and softer market demand.
- Customer decision-making delays and postponed transformation programs affected revenue development in the software portfolio.
- The geopolitical uncertainty and AI-driven technology shifts have led to customers postponing larger transformation programs, impacting short-term growth.
Morning and welcome to T's second quarter earnings webcast. My name is Tommy Jarvenpa, the head of investor relations at TAO. In the second quarter, the market weaken further, which impacted our growth.
At the same time we delivered a significant improvement in our profitability, underlining the resilience of our business and the progress we have made over the past year.
This morning our President and CEO Andre Ranges and CEO Tomi Hilainen, we'll walk you through the highlights of the quarter and our financial performance.
After the Q&A after the presentation, we will host a Q&A as usual.
And with that, I would like to hand over to Andre, please go ahead.
Thank you, Tom, and, good morning and welcome to TOS Q2 presentation. As told me earlier on, the second quarter was shaped by 2 distinct developments. On one hand, market conditions became more challenging than expected, particularly in tech consulting.
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