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Tieto's Interim Report 3/2026: Strong profitability - growth investments accelerating
Tieto Corporation INTERIM REPORT 27 October 2026 9:00 a.m. (EET)
- Organic growth -11%, including a 7 pp. negative impact from known headwinds
- Strong adjusted EBITA margin of 18.0%, reflecting solid execution of cost optimization - continued cost discipline
- Strategy execution progressing as planned - decisive transformation and increased growth investments building the foundation for future growth
- Agreement to divest Tieto Indtech's Pulp, Paper and Fibre software business announced
- Full-year growth and profitability outlook for 2026 updated on 26 October
- Juuso Pajunen appointed as Chief Financial Officer, joining the company in January 2027
The full interim report with tables is available at the end of this release.
|
| 7-9/2026 | 7-9/2025 | 1-9/2026 | 1-9/2025 |
| Revenue, EUR million | 389.6 | 454.2 | 1 264.5 | 1 388.1 |
| Organic growth1), % | -11 | 4 | -6 | -1 |
| Acquisitions and divestments, % | -6 | 0 | -5 | 0 |
| Foreign exchange rates, % | 2 | 0 | 2 | 0 |
| Total growth, % | -14 | 4 | -9 | -1 |
| Organic growth adjusted for working days4), % | -11 | 4 | -7 | -1 |
| Operating profit/loss (EBIT), EUR million | 56.5 | 56.5 | 247.7 | 16.4 |
| Operating margin (EBIT), % | 14.5 | 12.4 | 19.6 | 1.2 |
| Adjusted2) operating profit (EBITA3)), EUR million | 70.2 | 87.8 | 199.6 | 181.3 |
| Adjusted2) operating margin (EBITA3)), % | 18.0 | 19.3 | 15.8 | 13.1 |
| Cash flow from operating activities, EUR million5) | 2.8 | 44.7 | 108.3 | 193.4 |
| Interest-bearing net debt, EUR million | 490.6 | 551.9 | 490.6 | 551.9 |
Full-year outlook for 2026 updated on 26 October
Tieto expects its organic1) growth to be in the range of -6% to -5% (revenue in 2025: EUR 1 852.3 million). The company estimates its full-year adjusted operating margin2) (adjusted EBITA3)) to be 15.5-16.0% (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 information includes cash flow from divestments and the contribution from the court ruling in Tieto Banktech
CEO comment by Endre Rangnes:
Building a stronger foundation for growth
"Our third-quarter performance reflects Tieto's ongoing year of transition. We have been carrying out far-reaching changes across the company, strengthening execution around our strategic priorities and building the foundations for sustainable growth. At the same time, market conditions have been more challenging than anticipated, and rapid changes in customer needs have required a broader transformation of Tech Consulting. In the quarter, their combined effect was visible in softer revenue development, while our actions to strengthen the company continued to support strong profitability.
Our organic growth was -11% in the third quarter. This included a negative impact of 7 percentage points from known headwinds: a year-on-year impact of 5 percentage points from a court ruling in the third quarter of 2025 and 2 percentage points from legacy contracts. In parts of the consulting market, soft demand continued as geopolitical uncertainty and rapid developments in AI have led some customers to reassess the timing and scope of technology projects. In Tech Consulting, we have implemented targeted competence and capacity adjustments to address the shift in market demand as part of its transformation. Lower volumes in parts of Tieto Banktech and Indtech also weighed on growth. In light of the weaker-than-anticipated organic growth in the third quarter, we are lowering our full-year organic growth outlook.
At the same time, our focused execution is delivering tangible results. Adjusted EBITA margin reached 18% in the third quarter. Reflecting this strong performance, we have raised our full-year adjusted EBITA margin outlook. By the end of September, our cost optimization programme had delivered EUR 125 million in annualized savings, close to the EUR 130 million target for year-end. This demonstrates the impact of our cost actions and our continued discipline in building a more competitive cost base. Alongside this work, we are simplifying our portfolio and sharpening our focus on scalable businesses. The announced divestment of Tieto Indtech's Pulp, Paper and Fibre software business is the latest step in this process.
In Tech Consulting, we have reshaped the business for the next phase. We have implemented a new operating model with clear ownership and accountability across geographies, and strengthened our customer focus and service mix. This has involved reducing capacity by around 1 000 people while upskilling around 5 000 colleagues to align our capabilities with changing customer needs. We have also expanded our sales force, harmonized sales processes and incentives, and improved pipeline management. With these foundations in place, we are selectively rebuilding capacity in areas of growing demand. We plan to recruit up to 1 000 consultants with AI and data capabilities during the next 12 months.
Across our software businesses, a solid order backlog, particularly in Banktech, is expected to translate increasingly into revenue in the coming quarters. The legacy contract headwinds will be fully behind us by the end of 2026, and our selective expansion in Europe is progressing, supported by a strong pipeline and recent wins. At the same time, AI is opening new opportunities as customers look to embed new technologies in business-critical software and workflows. Our deep domain expertise and mission-critical software, combined with our capabilities in AI, cloud and data, position us well to help customers capture this potential. Our recognition as a Microsoft Frontier Partner and Premier Partner status in Snowflake's AI Data Cloud Services Partner Program create new opportunities for joint go-to-market activities for the benefit of customers.
As our growth initiatives gain traction, we expect organic growth to improve gradually from the current levels. With the major elements of our transformation in place and our growth initiatives progressing across the Group, we believe Tieto will deliver solid organic growth in 2027. Our work during this transition year is creating a stronger foundation for that next phase, and we remain confident in our long-term ambitions."
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, % |
|
| 7-9/2026 | 7-9/2025 | 7-9/2026 | 7-9/2025 | 7-9/2026 | 7-9/2025 | ||
| Tieto Tech Consulting | 152.7 | 187.8 | -19 | -11 | 23.8 | 24.6 | 15.6 | 13.1 |
| Tieto Banktech | 133.5 | 154.1 | -13 | -18 | 24.1 | 43.3 | 18.1 | 28.1 |
| Tieto Caretech | 53.9 | 54.8 | -2 | -1 | 17.9 | 17.4 | 33.1 | 31.7 |
| Tieto Indtech | 54.3 | 63.2 | -14 | -3 | 9.7 | 11.9 | 17.9 | 18.9 |
| Eliminations and non-allocated costs | -4.7 | -5.8 | - | - | -5.2 | -9.4 | - | - |
| Group total | 389.6 | 454.2 | -14 | -11 | 70.2 | 87.8 | 18.0 | 19.3 |
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 27 October at 10.00 a.m. EET (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 Q3 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 the 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
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 13 000 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 traded on the NASDAQ exchange in Helsinki and Stockholm. www.tieto.com