Netcompany Group (NETC) Q1 2026 earnings summary

Executive summary

• Group revenue grew 38.7% year-over-year to DKK 2,413.9m, with 13.1% organic growth in constant currencies, driven by strong UK performance, new contracts, and successful integration of Netcompany Banking Services.

• AI-embedded products, especially agentic AI, and partnerships such as the five-year INEOS Grenadiers deal, are accelerating efficiency and enhancing brand visibility across Europe.

• Adjusted EBITDA margin declined to 14.1% from 17.6% due to lower license revenue and increased AI and product development investments.

• Workforce expanded by 20.8% to 9,845 FTEs, with significant non-organic growth from Banking Services and increased product development focus.

• Net profit increased 18.1% year-over-year to DKK 143.7m.

Financial highlights

• Organic revenue growth was 13.1% in constant currencies; total group revenue up 38.7%.

• Adjusted EBITDA before HQ costs rose 12.1% to DKK 362m; margin before HQ costs declined to 15% from 18.5%.

• Gross profit margin declined to 24.2% from 29.5%, impacted by lower license revenue and Banking Services integration.

• Free cash flow was negative DKK 305m, mainly due to timing of receivables and work in progress on large EU-backed projects, expected to normalize during the year.

• Debt leverage increased to 2.1x; share buyback of DKK 750m initiated.

Outlook and guidance

• Full-year 2026 revenue growth guidance maintained at 15%-20% including Banking Services, and 5%-10% excluding Banking Services.

• Adjusted EBITDA margin guidance for 2026 raised to 16%-19% for the group, 17%-20% excluding Banking Services.

• Revenue visibility improved 10% year-over-year, with public sector visibility up 13%.

• Margin improvement expected from further AI integration and operational efficiencies.

• Management expects normalization of cash conversion through Q2 and Q3.