Q2 2026 Itera ASA Earnings Call

August 28, 2026

Speaker #1: Actual review, and also Outlook. We will also have a joint session at the end with Q&A. So, if you have any kind of questions, please use the chat to post your questions.

Arne Mjøs: Go through the financial review and also outlook. We also will have a joint session at the end with Q&A. If you have any kind of questions, please use the chat to post your questions. I am very happy to see Bjarte in a new position. The transition from Bent Hammer has been very smooth. Bjarte started actually before he entered formally from 1 August. He and the team has also worked very well together in order to make sure that Bjarte is already up and running fully. Thank you, Bjarte. Looking forward to your presentation as soon in the financial section. Let us go to the highlights for the second quarter. There are three main messages in this quarter that I will follow and he will also go more into details in terms of the financial part of it.

Speaker #1: I'm very happy to see Bjarte in a new position. The transition from Ben Tamer has been very smooth, so Bjarte actually started before he entered formally from the 1st of August, and he and the team have also worked very well together in order to make sure that Bjarte is already up and running fully.

Speaker #1: So thank you, Bjarte, and looking forward to your presentation as soon as we get to the financial section. So let's go to the highlights for the second quarter.

Speaker #1: There are three main messages in this quarter that I will follow, and he will also go more into details in terms of the financial part of it. But the first message is actually that we have improved the growth and profitability of Itera.

Arne Mjøs: The first message is actually that we improve the growth and profitability of Itera. That is really connected to the operation improvement program that we launched in 2025. We see now a revenue growth in local currency of 7% in this quarter. We have high utilization, we have lower overhead cost. We have also because of this implementation of the program, we have also decided to divest recruitment business that acquired for two years ago because we find it not that connected to the growth of the Itera in this region. We saw some synergies in the customer side and also to having a strong recruitment link in part of Itera, but now we define that as a non-core business. That is why we in this quarter also had some divestment. Totally the margin and operating performance has improved.

Arne Mjøs: The first message is actually that we improve the growth and profitability of Itera. That is really connected to the operation improvement program that we launched in 2025. We see now a revenue growth in local currency of 7% in this quarter. We have high utilization, we have lower overhead cost. We have also because of this implementation of the program, we have also decided to divest recruitment business that acquired for two years ago because we find it not that connected to the growth of the Itera in this region. We saw some synergies in the customer side and also to having a strong recruitment link in part of Itera, but now we define that as a non-core business. That is why we in this quarter also had some divestment. Totally, the margin and operating performance has improved.

Speaker #1: That's really connected to the operation improvement program that we launched in 2025. So, we see now a revenue growth in local currency of 7% in this quarter.

Speaker #1: We have high utilization, we have lower overhead cost, and because of the implementation of this program, we have also decided to divest the recruitment business that was required for two years ago.

Speaker #1: Because we find it not that connected to the growth of Itera in this region. We saw some synergies on the customer side and also in having a strong recruitment leg as part of Itera, but now we define that as a non-core business.

Speaker #1: So that's why, in this quarter, we also had some divestment. So, overall, the margin and operating performance has improved. We also, in the first quarter, talked about some customer receivables in Iceland.

Arne Mjøs: We are also in this first quarter also talked about some customer receivables at Iceland. What we have also done in the second quarter, we have also written off these customer receivables. Totally, we will also show you the no recurring, what do we call it? The one-offs for this quarter is actually something that we will go deeper into in the financial review section. One of the message is actually improve growth and profitability. The second message is actually that we see AI-driven demand all over Itera, across Itera is shifting from experimentation to implementation. That is also opening larger opportunities for modernization, cloud data, and managed services. That is the second topic for this presentation.

Speaker #1: So what we have also done in the second quarter, we have also written off this customer receivables. So totally we will also show you the non the no recurring a lot of the what do we call it the one-offs for this quarter is actually something that we will go deeper into the in the financial review section.

Speaker #1: So one of the messages is actually to improve growth and profitability. The second message is that we see AI-driven demand all over Itera. Across Itera, there is a shift from experimentation to implementation.

Speaker #1: So that's also opening larger opportunities for modernization, cloud data, and managed services. So that's the second topic for this presentation. The third topic I will say is about how we have a very strong growth platform in the cloud and application services.

Arne Mjøs: The third topic I will say is about we have a very strong growth platform in the cloud and application services that continue to show growth trajectory with 28% gross profit in the second quarter. This growth is shown as a gross profit, not only a revenue growth, because in this business there are some cloud consumption. The margin of some of these cloud consumption might be also challenged by big players that offer very small margin. That is why we focus on the gross profit growth when we measure the growth of cloud and application services. That continue to show a very strong growth for Itera and also strengthening the profitability and margin expansion going forward for Itera.

Speaker #1: That continue to show growth trajectory with the 28% gross profit in the second quarter. And this growth is we show as a gross profit, not only revenue growth, because in this business there are some cloud consumption so and the margin margin of some of these cloud consumption might be also challenged by big players that offer very small margin.

Speaker #1: So that's why we focus on the gross profit growth when we measure the growth of cloud and application services. That continues to show me very strong growth for Itera, and also strengthens the profitability and margin expansion going forward for Itera.

Speaker #1: So, altogether, I think we have very disciplined execution, and we also now see AI-led demand that provides a quite strong second quarter for Itera.

Arne Mjøs: So all together, I think we have a very disciplined execution and we see also now an AI-led demand that also provides a quite strong Q2 for Itera. If I deep dive into the business review section, just show you the figures in brief. Bjarte will go more into details. As I told you, we have 7% growth in constant currency, but the reported is 4%. About 50% of our revenue or business are in Sweden, Denmark, and Euro and US. So these currencies is impacting also the revenue growth of Itera. So reported revenue is 4%. So we delivered NOK 210 million in Q2 compared to NOK 203 million in the same quarter 2025. If you look at the adjusted EBIT margin in this quarter, it was 6.8% compared to 2.3% in the same quarter 2025.

Speaker #1: If I deep dive into the business review section, I'll just show you the figures in brief. Bjarte will go into more detail. As I told you, we have 7% growth in constant currency.

Speaker #1: But the reported is 4%. About 50% of our revenue or business is in Sweden, Denmark, the Euro area, and the US. So these currencies are quite impactful and are also impacting the revenue growth of Itera.

Speaker #1: So reported revenue is 4%. So we delivered 210 million in the second quarter compared to 203 million in the same quarter 2025. If you look at adjusted EBIT margin in this quarter, it was 6.8% compared to 2.3% in the same quarter 2025.

Speaker #1: So that's an improvement from 2.3% to 6.8% in terms of adjusted EBIT margin. We also have a quite good operational cash flow of NOK 18.86 million in this quarter.

Arne Mjøs: So that's improvement from 2.3% to 6.8% in terms of adjusted EBIT margin. We also have a quite good operational cash flow of NOK 18.6 million in this quarter. Also the number of employees is down by 30 people. We are 672 people, but the majorities of this reduction is also connected to, I will say, non-billable functions. So it doesn't have the impact on the growth of Itera. So we are growing by 7% in local currency, while the number of employees is down by 4%. So in totally, that will also provide a stronger EBIT. So that's the figure. So Bjarte will go more into all kind of details here. So I leave the figures until he deep dive that in the third section. If I look at the market view, as I told you, AI is really moving from experimentation and pilots to enterprise-wide business transformation.

Speaker #1: And also the number of employees is down by 30 people. We have 672 people. But the majority of this reduction is also connected to, I will say, non-billable functions.

Speaker #1: So it doesn't have an impact on the growth of Itera. We are growing by 7% in local currency, while the number of employees is down by 4%.

Speaker #1: So, totally, that will also provide a stronger EBIT. So, that's the figures. Bjarte will go into all kinds of details here, so I'll leave the figures until he deep dives into that in the third section.

Speaker #1: If I look at the market view, as I told you, AI is really moving from experimentation and pilots to enterprise-wide business transformation. And I guess you also are using AI in your business more and more every day.

Arne Mjøs: I guess you also are using AI in your business more and more every day, and we see quite maturing interest for using AI through all the services that Itera provide, from the business consulting guys to the designers, to all the developers, and not at least the operation. So there's really coming a real need for this kind of technology or this approach through whole Itera, and also we see the same at the customer. AI, in the past, we talked about digital transformation and business transformation, and we see that AI is also really coming into the business. So the AI is also driving the business transformation for our customer. One of the key area that we see is actually modernization, because the customer have a lot of legacy debt.

Speaker #1: And we see quite a maturing interest for using AI throughout all the services that Itera provides, from the business consulting guys to the designers, to all the developers, and not least the operations.

Speaker #1: So there's really coming a real need for this kind of technology or this approach throughout all of Itera, and we also see the same at the customer.

Speaker #1: So, AI—in the past, we talked about digital transformation and business transformation, and we see that AI is also really coming into the business.

Speaker #1: So the AI is also driving the business transformation for our customer. And one of the key areas that we see is actually modernization. Because the customer has a lot of legacy debt, that is where we see that AI is very suitable today in order to start modernizing this kind of legacy debt, or this technology debt.

Arne Mjøs: So that is where we see that AI is very suitable in today in order to start modernizing this kind of legacy debt or this technology debt. We also see a fastest transformation into cloud and also what we call a digital core renewal. So looking at the system that has been the core of the business, now is actually the opportunity to start transforming or modernizing this kind of application. So agentic AI is actually gaining momentum through whole the value chain of Itera from the developers is much more productive than in the past, and also operation. So that's something that we see along the whole value chain of Itera. As you also heard about, we have all this kind of geopolitics or cyber risk, of course, that also are stressing the value chain for a lot of the industries.

Speaker #1: And we also see a faster transformation into cloud, and also what we call a digital core renewal. So, they are looking at the system that has been the core of the business—now is actually the opportunity to start transforming or modernizing these kinds of applications.

Speaker #1: So agentic AI is actually gaining momentum throughout the whole value chain of Itera, from the developers being much more productive than in the past.

Speaker #1: And also operations, and so that's something that we see along the whole value chain of Itera. As you also heard about, we have all these kinds of geopolitics or cyber risks.

Speaker #1: Of course, that is also stressing the value chain for a lot of the industries. So we also see that digital sovereignty is also something that is a key focus in every sector.

Arne Mjøs: So we also see that digital sovereignty is also something is a key focus in every sector. We also have this experience from Ukraine, because that is where we have vulnerabilities all over the place. That is something that we bring into the discussion with the customer. That's also a really strong topic. We also see that there's a lot of customer that do not want to be that connected to the US-based global tech giants, so there's also opportunity to build European data and infrastructure industry. We are also more robust if there are any kind of threats from the West also. That also have an impact on the consulting. A lot of the people are also talking about will the consulting business be really radical reduced?

Speaker #1: And we also have this experience from Ukraine, because that is where we have, you know, vulnerabilities all over the place. So that is something that we bring into the discussion with the customer.

Speaker #1: So, that's also a really strong topic. We also see that there are a lot of customers who do not want to be that connected to the US-based global tech giants.

Speaker #1: So there's also an opportunity to build a European data and infrastructure industry, so we are also more robust if there are any kind of threats from the West as well.

Speaker #1: And that also has an impact on consulting. A lot of people are also talking about whether the consulting business will be really radically reduced.

Speaker #1: We don't believe that, because we see there is a shift in terms of also how we deliver services. I come back to that. But also, the focus and complexity of this AI is something that is coming all over the place and, not at least, also has a lot of impact on how the business will transform into a more agentic business going forward.

Arne Mjøs: We don't believe that because we see there is a shift in terms of also how we deliver service, I come back to that, but also focus more on outcome. The complexity of this AI is something that are coming all over the place, and not at least also it also have a lot of impact of how the business will transform into a more agentic business going forward. That's the market view. If you look at Itera, we have a position as you know in the Nordics. We have European presence. By European presence, we mean in the Central and Eastern Europe. We consist of business dividers, designer technologies, and not at least also AI agents.

Speaker #1: So that's the market view, and if you look at Itera, we have a position, as you know, in the Nordics. We have European presence—by European presence,

Speaker #1: We mean in Central and Eastern Europe. We consist of business developers, designers, technologists, and not least, also AI agents. So that's also something that we see from all over the places of Itera.

Arne Mjøs: That's also something that we see from all over the places of Itera, where AI are implemented, and these AI agents are also something that we try to reuse across the Itera group. The AI implementation is really group-wide, and I also see very strong position in terms of how we adapt our offerings, how we are using proof of concept much faster, et cetera. That's something that are impacting Itera and the industry quite well, and it's very interesting to see the higher productivity that we can deliver to the customer. Let me, before I deep dive even more in this section, I just mentioned that if you look at the sector, we have a strong growth in the financial services.

Speaker #1: AI is implemented across the Itera Group, and these AI agents are also something that we try to reuse within the group. So, the AI implementation is really group-wide, and I also see a very strong position in terms of how we adapt our offerings and how we are using proof of concept much faster, etc.

Speaker #1: So that's something that is impacting Itera and the industry quite well. And it's very interesting to see the higher productivity that we can deliver to the customer.

Speaker #1: Let me, before I deep dive even more into these sections I just mentioned, say that if you look at the sector, we have strong growth in financial services.

Speaker #1: And that's also connected to the modernization, because there's a lot of the financials, of the banking and insurance companies, as you might also be a part of by yourself.

Arne Mjøs: That's also connected to the modernization because there's a lot of the financial, the banking, and insurance companies, as you might also be a part of by yourself. There's a lot of legacy there in the core banking or the core insurance system. We see there's also opportunities now to utilize AI to really start to modernize this kind of debt that has been there for many, many years. It cost a lot, and now maybe it's the time to really go into it and transform it into a more modernized platform. The energy and industry is also some percentage share down. That's also connected to renewable. We don't have that exposure in oil and gas, which is growing, but we see some opportunities in oil and gas. We also believe that both renewable and oil and gas will also increase the energy and industry going forward.

Speaker #1: There's a lot of legacy there in the core banking or the core insurance systems. So we see there's also opportunities now to utilize AI to really start to modernize this kind of debt.

Speaker #1: That has been there for many, many years. So, it cost a lot, and now maybe it is the time to really go into it and transform it into a more modernized platform.

Speaker #1: The energy and industry segment is also showing some percentage share down. That's also connected to renewables. We don't have that exposure in oil and gas, which is growing, but we see some opportunities in oil and gas.

Speaker #1: So, we also believe that both renewable and oil and gas will increase in energy and industry going forward. And the rest—public, organization, and others—are more or less at the same level.

Arne Mjøs: The rest of public and organization and others are more or less at the same level. Going back to the AI transformation, we see some new growth engines. There we are showing a stage model. The largest volume on step 1 is actually about the legacy transformation or modernization. Because of this, the customer would like to reduce the technology depth. They would like to eliminate the data silos. There is a lot of data silos. In order to use the right data into the model, they would like to utilize the data in a more efficient way than in the past. That also applies to the integration complexity because they integrated and built a workaround solution around this core system, and that also has a lot of depth that might be removed when you actually move into a more AI technology stack.

Speaker #1: Going back to the AI transformation, we see something we call new growth engines. There, we are showing a stage model. So, the largest volume is on step one, which is actually about legacy transformation or modernization.

Speaker #1: Because of these, the customer would like to reduce the technology debt. They would like to eliminate the data silos. There are a lot of data silos.

Speaker #1: So in order to use them right, data into the model, they will utilize the data in a more efficient way than in the past. That also applies to the integration complexity.

Speaker #1: Because they are integrated, a bit of a workaround solution exists around this core system. And that also has a lot of depth that might be removed when you actually move into a more AI technology stack.

Speaker #1: So, in the first step, there is a really large opportunity that we saw in 2025. So I will see quite a good pipe building up.

Arne Mjøs: In the first step, there is a really larger opportunity that we saw in 2025. We will see a quite good pipe building up and some of the project already started. I expect that the legacy transformation will really mature going forward during the next 2, 3 quarters. It will take some time before you see the full effect of it, but we have already seen and started on project in Q2 that is also reflecting in the revenue growth of Itera. The second one is actually the AI enablement, agentic enablement that will help the customer to establish its AI agents via establishing governance and security, and also make sure that they are using AI responsibly. We are also looking at how they should change the software development process or the operating process in order to really utilize the new technology.

Speaker #1: And some of the projects are already started, so I expect that the legacy transformation will really mature going forward during the next two to three quarters.

Speaker #1: It will take some time before you see the full effect of it. But we have already seen a start on the project in the second quarter.

Speaker #1: That is also reflected in the revenue growth of Itera. The second one is actually the AI enablement—agentic enablement—that we help the customer to establish these AI agents via establishing governance and security, and also making sure that they are using AI responsibly.

Speaker #1: And we are also looking at how they should change the software development process of the operating process in order to really utilize the new technology.

Speaker #1: Then we have the third stage, which is what we call the AI factory and the intelligent operation. Then you have all the agents that are running, and you need to orchestrate it.

Arne Mjøs: Then we have the third stage, which is what we call the AI factory and the intelligent operation. Then you have all the agents that are running. You need to orchestrate it. You need to make sure that you reuse this kind of workflow, and you can also make it full fetch into the integrated operation. Software development and operation will really be seamlessly integrated one. You have the humans and agents that are working together. Then you have the improvement of your business in terms of new products and services, and not at least also that you are transforming the business transforming and the digital transformation into more agentic, AI agentic enterprise going forward. That is a lot of culture and a lot of new processes that need to be changed.

Speaker #1: You need to make sure that you reuse these kinds of workflows. And you can also fully flesh them out into the integrated operation, so software development and operations will really be seamlessly integrated.

Speaker #1: And you have the humans and agents that are working together. And then you have the improvement of your business in terms of new products and services, and not at least also that you are transforming the business—transforming, and the digital transformation into a more agentic, AI agentic enterprise going forward.

Speaker #1: And that's a lot of culture and a lot of new processes that need to be changed. So this is a strong momentum for making changes throughout your business.

Arne Mjøs: This is a strong momentum for doing changes along your business, but not at least also along the value chain that you are part of. A lot of you have discussed, I see a lot of reports here and there that talks about the reduction of the technology partners of the service industry. I do not believe in that because, as I said, there is a value for the customer in terms of faster modernization, lower operating costs, higher productivity, and better resilience. Of course, what does it mean for the customer? They can really, because AI is the engine for growth and efficiency, productivity all over the place, not only IT, the digital part, but also the business part. If you look at the value for a service provider like Itera, we can utilize agents together with the people.

Speaker #1: But not at least also along the value chain or that you are part of. A lot of you have discussed—I see a lot of reports here and there that talk about the reduction of the technology partners of the service industry.

Speaker #1: I don't believe in that because, as I said, there is value for the customer in terms of faster modernization, longer operating times, lower operating costs, higher productivity, and better resilience.

Speaker #1: Of course, what does it mean for the customer? They can really, because AI is the engine for growth and efficiency—productivity all over the place.

Speaker #1: Not only IT, the digital part, but also the business part. If you look at the value for a service provider like Itera, we can utilize agents together with the people.

Speaker #1: So it's not only providing people as in the past. You're providing competences, but also those that are connected to a lot of agents that you bring in, or that the customer already has in place.

Arne Mjøs: It is not only providing people as in the past, you are providing competencies, but also that are connected to a lot of agents that you bring in or that the customer already have in place. We are talking about, as we discussed earlier quarters, we talk about the human-agent ratio. For each human, there is also a lot of digital agent that support and increase the productivity. The increasing productivity for Itera is also creating opportunity for more recurring revenue because you have the people and you have the agents, and then it is more effective to also establish new service line or new revenue streams. It is also possibility to establish IP and workflows that we can reuse. We can also discuss, as we also showed you, that the revenue was growing 7%, but the reduction in FTEs was 4%.

Speaker #1: So, we are talking about, as we discussed earlier quarters, we talk about the human agent ratio. So, for each human, there is also a lot of digital agents that support and increase the productivity.

Speaker #1: So, the increasing productivity for Itera is also creating opportunities for more recurring revenue, because you have the people and you have the agents. And then it's more effective to also establish new service lines or new revenue streams.

Speaker #1: It's also a possibility to establish IP and workflows that we can reuse. And we can also discuss that we also showed you that the revenue was growing 7%, but the reduction in FDs was 4%.

Speaker #1: A major part of it, as I said, was some kind of non-billable. But of course, we will also have a growth trajectory that is less dependent in a linear manner on the FDE growth.

Arne Mjøs: A major part of it, as I said, was some kind of non-billable. We will also have a growth trajectory that is less dependent in a linear matter with the FTE growth. Cloud and application services is really structured in that way. We have seen that they are growing the top line without increasing the number of FTEs in a linear fashion. This is something that we will see along all Itera going forward. In order to also showcase what we are doing, we are saying that the future of consulting is agentic. As you see, when we have engagement deliver, we capture the knowledge in terms of AIs, agents that we are using.

Speaker #1: Cloud and application services is really structured in that way. We have seen that they are growing the top line without increasing the number of FDs in a linear fashion.

Speaker #1: So this is something that we will see across all of Itera going forward. And in order to also showcase what we are doing, we are saying that the future of consulting is agentic.

Speaker #1: As you see we are when we have engaged engagement deliver we capture the knowledge in terms of AI agents that we are using. So when we so when we capture these agents because in the past it was only the people.

Arne Mjøs: When we capture these agents, because in the past it was only the people, now it is also a lot of agents that we have developed. These agents, we can look at how can we reuse these agents across customer. When we start a new project, we really have a more effective way. We have higher productivity. There might be some services that are recurring, et cetera. That is the way we are changing the business model. When you are looking at the value chain on the first row, you will also see that we have also started to build the capabilities. We started for more than one year ago to invest into three products.

Speaker #1: Now, it is also a lot of agents that we have developed, and these agents we can look at how can we reuse across customers.

Speaker #1: So, when we start a new project, we really have a more, you know, effective way. We have higher productivity. There might be some services that are recurring, etc.

Speaker #1: So that is the way we are changing the business model. When we are looking at the value chain on the first lower row, you will also see that we have started to build capabilities.

Speaker #1: We started for more than one year ago. To invest into three products. One is actually code compass. Which actually is we call it code intelligence where you actually look at any kind of legacy system and get full analysis of all the dependency of the code whatever what is code is working what is code is needed whatever.

Arne Mjøs: One is actually called Compass, which we call it code intelligence, where you actually look at any kind of legacy system and get full analysis of all their dependency, all their code, whatever, what code is working, what code is needed, what we would like to continue with, whatever. When you have a very precise documentation used by AI, then you have also the opportunity to take the next step to use AI agents to really rebuild or restructure or modernize or build a totally new application. In the past, it took a lot of time. It cost a fortune to do this one. Now we are using the AI to really have the precise documentation. When you have the precise documentation, you can use the Digital Factory with the agents. For each developer, you might have five, six, seven agents that are working alongside to increase the productivity.

Speaker #1: So, you have a—what we would like to do is to continue with whatever. So, when you have very precise documentation used by AI, then you also have the opportunity to take the next step: to use AI agents to really rebuild, restructure, modernize, or build a totally new application.

Speaker #1: In the past, it took a lot of time and cost a fortune to do this. Now, we are using AI to really have precise documentation.

Speaker #1: When you have the precise documentation, you can use the digital factory with the agents for each developer. You might have five, six, seven agents that are working alongside.

Speaker #1: So you increase the productivity, and also, the last part is how you migrate data from the old system to the new system. So these products are really increasing the efficiency, and that is also some IP that we have developed.

Arne Mjøs: And also the last part is how you migrate data from the old system to the new system. These products are really increasing the efficiency, and that is also something IP that we have developed. When we go to a new customer, we can also charge either higher hourly rate or have some kind of recurring subscription-based revenue stream alongside with the consultants. All these are actually based on our cloud and application services. That is the foundation that these products are built on. When we meet the client, we connect into the agents that the clients are using, and we are also adding value where we have knowledge across the customer that we have delivered before. Not at least also looking at all kind of open source of functionalities that are available in the market.

Speaker #1: So, when we go to a new customer, we can also charge either a higher hourly rate or have some kind of recurring subscription-based revenue stream alongside the consultants.

Speaker #1: And all these are actually based on our cloud and application services; that is the foundation that these products are built on. So when we meet a client, we connect into the agents that the clients are using.

Speaker #1: And we are also having added value, adding value where we have knowledge across customers that we have delivered before. And not at least also looking at all kinds of open-source functionality that are available in the market.

Speaker #1: So, we bring this knowledge when we meet the clients. What is also important is that we are very proud of being the first company certified according to ISO 42001.

Arne Mjøs: We bring this knowledge when we meet the clients. What is also important is that we are very proud of being the first company in Norway that was certified according to ISO/IEC 42001, which is the first certification for AI management system. We took that position in Norway, and we are amongst the first in Europe to achieve that certification. That is extremely important for Itera to support the strategy fully. We had the ambition to be the first, and we managed to be the first. That actually verifies that Itera utilize the AI in a governed, developed, and deployed, and monitored according to the standard. These are also combined with other certification we managed to complete in Q2 in terms of ISO 9001, 14001, and also 45001, connected to quality environment and working environment.

Speaker #1: Which is the first certification for AI management systems. So we took that position in Norway, and we are among the first in Europe to achieve that certification.

Speaker #1: That's extremely important for Itera, that support the strategy fully. So we had the ambition to be the first, and we managed to be the first.

Speaker #1: And that actually verifies that Itera utilizes AI in a governed way, developed, deployed, and monitored according to the standard. And these are also combined with other certifications we managed to complete in the second quarter.

Speaker #1: In terms of ISO 9001, 14001, and also 45001, connected to quality, environment, and working environment—so through these certifications, we are really having competitive advantage when we are going into more regulated industries.

Arne Mjøs: Through this certification, we are really having competitive advantage when we are going into more regulated industries. Not at least, AI are increasing the importance of having standards in place, because now we also need to have control of all the dimension of how we deliver this in a responsible way, but not at least also with high quality, so the customer reach the goals. That is also something we achieved in this quarter. I just want to mention that one. Regarding, I talked about the digital resilience, or resilience in the broad sense. Of course, we all see from Ukraine that, for example, energy infrastructure or energy system has become a part of the battlefield. We see the same threat in terms of all kind of cyber attacks towards Norway because of the agreement between Norway and Ukraine.

Speaker #1: And not at least, AI is increasing the importance of having standards in place because now you also need to have, you know, control of all the dimensions of how you deliver these in a responsible way. But not at least, also with high quality so the customer reaches the goals.

Speaker #1: So, that is also something we achieved in this quarter—I just want to mention that one. Regarding, I talked about the digital resilience, or resilience in the broad sense.

Speaker #1: Of course, we all see from Ukraine that, for example, energy infrastructure or the energy system has become a part of the battlefield.

Speaker #1: We see the same threat in terms of all kinds of cyber attacks. Threats to Norway because of the agreement between Norway and Ukraine. So these threats we are seeing all over the place.

Arne Mjøs: These threats we are seeing all over the place. What is nice that Itera really have a strong position because of the position we have, being in Ukraine for 18 years. We say that Ukraine is really the real-world laboratory for energy resilience and digital transformation and innovation under extreme conditions. That is why we are doing Arendalsuka and also now ONS in Stavanger this week, really having a lot of discussion with clients in different industries to see how we can increase the resilience of the companies. What they tell us is they would like to learn more from Ukraine.

Speaker #1: What is nice is that actually Itera really has a strong position because of the position we have had in Ukraine for 18 years. So we say that Ukraine is really the real-world laboratory for energy resilience and digital transformation.

Speaker #1: And innovation under extreme conditions. So that's why we are doing Arendalsuka and also now ONS in Stavanger this week, really having a lot of discussions with clients in different industries to see how we can increase the resilience of the companies.

Speaker #1: And what they told us tell us is actually they would like to learn more from Ukraine. That means the interest for also looking into not only the support but also getting the learning from Ukraine and also see how to jointly bring the solution that they are working in Ukraine to Norway or the part of the region in where we have the same threats.

Arne Mjøs: That means the interest also looking into not only the support, but also getting the learning from Ukraine and also see how to jointly bring the solution that they are working in Ukraine to Norway or the part of the region where we have the same threats. This is actually really connected to the future preparedness across the industry. Really very interesting, unique position that Itera has. The resilience is nothing that only a paper now. Now it is a threat, and there is also a lot of opportunities that we need to develop. This is something that also raises the demand for our services. Before I end up my part, I just want to talk about the order intake. As we show you quarter by quarter, we focus on the share of new customer.

Speaker #1: So this is actually really connected to future preparedness across the industries. Really very interesting and unique position that Itera has. So, the resilience is something that is only on paper now.

Speaker #1: Now is a threat, but there is also a lot of opportunity that we need to develop. So, this is something that also raises the demand for our services.

Speaker #1: Before I end my part, I just want to talk about the order intake. As we have shown you quarter by quarter, we focus on the share of new customers. It was 9% of the revenue in the last 12 months from new customers that we didn't have 12 months ago.

Arne Mjøs: It was 9% of the revenue last 12 months, this new customer that we did not have 12 months ago. If you compare to other competitors, that is a quite large number. We are quite happy with this share of new customer revenue of the revenue because we like to grow. We have also, if you look at the opposite, actually 91% of the revenue is coming from the existing customer. As you also see, 71% of the revenue is coming from the top 30 customers. In Itera, it was compared to 73%, so it was down 2%. For me, that is okay, actually, because I also would like to develop new customers to make sure that we have a growth potential going forward. The figures here are quite strong and not at least also as you see, when the market has been some kind of challenges.

Speaker #1: And if you compare to other competitors, that's a quite large number. So we are quite happy with this share of new customer revenue of the revenue.

Speaker #1: Because we like to grow we have also to look at the opposite. Actually 91% of the existing customer are the 91% of the revenue is coming from the existing customer.

Speaker #1: And as you also see, 71% of the revenue is coming from the top 30 customers. In Q2, it was compared to 73%, so it was down 2%.

Speaker #1: For me, that's okay. Actually, I would also like to develop new customers to make sure that we have growth potential going forward.

Speaker #1: But the figures here are quite strong and, at least, as you see, when the market has had some kind of challenges.

Speaker #1: Of course, we don't have the same growth rate, but we have quite stabilized the growth. And we also see the demand coming from AI.

Arne Mjøs: We do not have the same growth rate, but we are quite stabilized the growth. We also see the demand coming from AI. We are really looking at the next quarter, how we as a company, but also the industry actually maturing into growth pockets going forward. If you look at the number of employees, we were 672 at the end of this quarter compared to 702. As I told you, most of these people are connected to non-billable functions. We have a nearshore ratio that is the ratio of the people in Central and Eastern Europe is about 50% of the business. That is a part of the operational improvement program. We are also recruiting, so some people are leaving, but we also continue recruiting in pockets where we see the demand is very strong. That was the first part.

Speaker #1: So we are really looking at the next quarter, how we—as a company, but also as an industry—are actually maturing into a growth focus going forward.

Speaker #1: If you look at the number of employees, we were 672 at the end of this quarter compared to 702. And as I told you, most of these people are connected to non-billable functions.

Speaker #1: And we have a natural ratio; that is the ratio of the people in Central and Eastern Europe, about 50% of the business. So that’s, yeah, that’s a part of the operation improvement program.

Speaker #1: But we are also recruiting. So some people are leaving, but we also would like to—and we are also continuing to recruit in pockets where we see the demand is very strong.

Speaker #1: So, that was the first part. Then I think we can go into the financials of the business—the financial review. Bjarte, so please, the floor is yours.

Arne Mjøs: I think we can go into the business financial review, Bjarte. Please, have your place here.

Speaker #1: Thank you so much. First of all, it's a pleasure to be here and to deliver my first quarterly report. I'm happy to join the Itera team, and I'm very much looking forward to working with all of you.

Bjarte Petersen: Thank you so much. First of all, pleasure to be here and first quarterly reporting from my side. Happy to join the Itera team and I am very looking forward to work with all of you and also with you investors and your analytics. As mentioned by Arne, Itera delivered a good quarter with 7% underlying growth and improvements in profitability. Our adjusted EBIT for Q2 reached 6.8%, 4.5 percentage points up from 2025. Adjusted EBIT for the H2 and the H1 reached 7.9%, which is up 1.9% from 6% last year. For our consultancy business, the growth is to a large extent within the financial sector, where we historically have our biggest footprint. We also have a strong profitability development in our cloud and application services, CaaS, with 28% gross margin improvements. Our improvement program has delivered on target.

Speaker #1: And also with your investors and your analytics. As mentioned by Arne, Itera delivered a good quarter with 7% underlying growth and improvements in profitability.

Speaker #1: Our adjusted EBIT for the second quarter reached 6.8%, which is 4.5 percentage points up from 2025. Adjusted EBIT for the second half-year and the first half-year reached 7.9%, which is up 1.9% from 6% last year.

Speaker #1: For our consultancy business, growth is to a large extent within the financial sector, where we historically have our biggest footprint. We also have strong profitability development in our Cloud and Application Services (CAS).

Speaker #1: With a 28% gross margin improvement, our improvement program has delivered on target, and our billable utilization has increased for the last four quarters in a row. It's actually also at the highest level in eight quarters.

Bjarte Petersen: Our billable utilization has increased last four quarters in a row, is actually also the highest level in eight quarters. We have some non-recurring item this quarter and also for the H1. These are related to our strategic decisions, or there are two matters actually. One is the strategic decision to divest Mosaic Headhunting, which was acquired in 2024. The second one is writing off additional customer receivables on Iceland. These are all described in the report, also in the notes 4 and 5. Total EBIT effect on non-recurring for Q2 was NOK 8.6 million, and for the H1 was NOK 11.7 million. Looking at the last 12 months revenue, they are quite stable also in respect of type of revenue. But we have, in Q2, an uplifting 5% reported growth on consultancy revenue.

Speaker #1: We have some non-recurring items this quarter and also for the first half of the year. These are related to our strategic decisions, or actually, there are two matters involved.

Speaker #1: One is the strategic decision to divest Mosaic Headhunting, which was acquired in 2024. The second one is writing off additional customer receivables on Icelands.

Speaker #1: These are all described in the report, also in notes 4 and 5. The total EBIT effect for the non-recurring items for the second quarter was NOK 8.6 million.

Speaker #1: And for the first half-year, it was NOK 11.7 million. Looking at the last 12 months' revenue, they are quite stable, irrespective of type of revenue.

Speaker #1: But we had, in the second quarter, an uplifting 5% reported growth in consultancy revenue. Revenue from subscription, third-party services, and other revenue were stable.

Bjarte Petersen: Revenue from subscription, third party service and other revenue were stable. Reported revenue per employee were up 7% in Q2. Q2 marks a positive shift, both for 12 months rolling revenue and adjusted EBIT. Going forward, we see opportunities that customers are moving from AI pilots and testing to deploy and utilize agentic AI at scale. Given our investment in AI capabilities with the Code Compass, Digital Factory, and Atlas Data Fabric, we are well-positioned on these areas. Arne covered these product areas well. These are really agnostic platforms which enable us to deliver value to the customers even faster. Other key drivers in the market are digital sovereignty, security resilience demand across sectors, and we have unique knowledge through our big footprint and experience with Ukraine, especially on the resilience demand that are emerging.

Speaker #1: Reported revenue per employee was up 7% in the second quarter. Q2 marks a positive shift both for 12-month rolling revenue and adjusted EBIT. Going forward, we see opportunities as customers are moving from AI pilots and testing to deploy and utilize agents at scale.

Speaker #1: Given our investments in AI capabilities with the Code Compass digital factory and Atlas data fabric, we are well positioned in these areas. And Arne covered these product areas well.

Speaker #1: These are really agnostic platforms, which enable us to deliver value to the customers even faster. Other key drivers in the market are digital sovereignty, security, resilience, and demand across sectors. We have unique knowledge through our big footprint and experience with Ukraine, especially on the resilience demand that is emerging.

Speaker #1: On the cost side, we will continue also to focus on improving cost structure and have cost discipline. We had a solid cash flow from operations in the second quarter, with NOK 18.6 million.

Bjarte Petersen: On the cost side, we will continue also to focus on improving cost structure and have a cost discipline. We had a solid cash flow from operation in Q2 with NOK 18.6 million. Looking at cash flow from operation last 12 months, this is in the lower end and explained by higher working capital from changes in timing of employee tax payments, but also on timing of payments from a couple of fixed-price projects. Cash flow from investing activities are stable, and we have paid out dividends to our shareholders of NOK 16 million in the quarter, which are reported under financial activities. Looking at our cash conversion, it is the working capital that has giving us a temporary dip in the conversion when we look at the last 12 months EBITDA to cash conversion. These are temporary effects, of course.

Speaker #1: Looking at cash flow from operation last 12 months this is in the lower end and explained by higher working capital. From changes in timing of employee tax payments but also on timing of payments from a couple of fixed price projects.

Speaker #1: Cash flow from investing activities is stable, and we have paid out dividends to our shareholders of NOK 16 million in the quarter, which are reported under financial activities.

Speaker #1: And looking at our cash conversion, it's the working capital that has given us a temporary dip in the conversion when we look at the last twelve months EBITDA to cash conversion.

Speaker #1: These are temporary effects. Of course, the change in employee tax rules and payments in Norway has a permanent lift in the working capital. But in terms of cash conversion, they are temporary.

Bjarte Petersen: The change in employee tax rules and payments in Norway, it has a permanent lift in the working capital. But in terms of cash conversion, they are temporary. So is the payment terms within the projects that we are talking about. Our dividend policy remains the same. We will have a consistent high distribution of earnings to our shareholders. We paid out NOK 0.2 per share in Q2, amounting to 16.2 million. Now for the outlook. Market and demand remains cautious, but we also see improving pockets of activity. As mentioned, these are driven by modernization, data platforms. It is within cloud, the transformation. Also managed services, where we have a good footprint now with CaaS. It is on digital sovereignty and resilience, as we have also mentioned. AI and agentic AI are emerging as key growth drivers and enabling and accelerating in every open pocket.

Speaker #1: So, the payment terms are from within the projects that we are talking about. Our dividend policy remains the same. We will have a consistent, high distribution of earnings to our shareholders.

Speaker #1: We paid out NOK 0.20 per share in the second quarter, amounting to NOK 16.2 million. Now for the outlook: market and demand remain cautious, but we also see improving pockets of activity.

Speaker #1: And as mentioned, these are driven by modernization data platforms, within cloud transformation, and also managed services, where we have a good footprint now with CAS.

Speaker #1: It's on digital sovereignty and resilience that we have also mentioned. AI and agentic AI are emerging as key growth drivers and enabling and accelerating in every open pocket.

Speaker #1: The operational improvement program is delivered on plan, but we will also continue to embrace opportunities in technology to work smarter and maintain high cost discipline and utilization.

Bjarte Petersen: Operational improvement program is delivered on plan, but we will also continue to embrace the opportunities in the technology to work smarter and keep high cost discipline and utilization. We will also continue to look at our cost structure going forward, but not in a formalized program that we will report on. On the currency effect, we have a large footprint abroad, in Ukraine, in Denmark, and Sweden, Poland, and also in Czechia and Slovenia. Given that the NOK has strengthened during this year, we have an effect on the top line. This amounts approximately in Q2 to 3 percentage points, where we can see that our reported growth is 4%, while our constant currency growth and underlying growth is 7%. We will see this effect continue also in Q3 and probably also in Q4.

Speaker #1: We will also continue to look at our cost structure going forward, but not in a formalized program that we will report on. On the currency effect, we have a large footprint abroad—in Ukraine, in Denmark, and Sweden.

Speaker #1: Poland, and also in Czechia and Slovenia. So, given that the NOK has strengthened during this year, we have an effect on the top line.

Speaker #1: So, and this amounts approximately in the second quarter to 3 percentage points. You can see that our reported growth is 4%, while our constant currency growth and underlying growth are 7%.

Speaker #1: We will see this effect continue also in the third quarter, and probably also in the fourth quarter. But this is, of course, dependent on the currency development.

Bjarte Petersen: But this is of course dependent on the currency development. Profitable growth, it will remain our main focus. This will be supported by enhanced commercial capabilities that we are building into our companies in all our regions. Thank you. Then I invite Arne back for our Q&A session.

Speaker #1: Profitable growth will remain our main focus. This will be supported by enhanced commercial capabilities that we are building into our companies in all our regions.

Speaker #1: Thank you. So, now I invite Arne back for our Q&A session.

Speaker #2: Yeah, I guess there might be some questions.

Arne Mjøs: Yeah. I guess there might be some questions.

Speaker #3: Yes, we do have some questions. This came in in Norwegian, so I will translate. When does management expect the one-time costs to be fully completed?

[Company Representative] (Itera): Yes, we do have some questions. This came in Norwegian, so I will translate. When does management expect the one-time cost to be fully completed? Will you confirm that the margin target will be achieved this autumn?

Speaker #3: And will you confirm that the margin target will be achieved this autumn?

Speaker #2: Yes, in terms of non-recurring items, we don't have any plans to continue with non-recurring items. So this is completed this quarter, right?

Arne Mjøs: Yes, in terms of non-recurring items, we do not have any plan to continue with non-recurring items. This is completed this quarter, right?

Speaker #3: Yes.

Speaker #2: And we do not guide on either revenue growth or EBIT. Of course, the ambition is actually to increase, as you said, both the revenue and also the profitability going forward.

Bjarte Petersen: Yes.

Arne Mjøs: We do not guide on either revenue growth or EBIT. Of course, ambition is actually to increase, as you said, both the revenue and also the profitability going forward. We see the AI demand is actually there already. As you said, there is some cautious about the currency impact of the revenue top line, right?

Speaker #2: And we see the AI demand is actually there already. But as you said, there are some questions about the currency impact on the top-line revenue, right?

Speaker #2: So that is what we are telling you. But of course, we believe that the foundation of Itera, and not least also the demand we see from AI, is something that we are quite positive about for the future.

Bjarte Petersen: Yeah.

Arne Mjøs: That is what we are telling you. Of course, we believe that the foundation of Itera, also not at least also the demand we see from AI is something that we are quite positive for the future.

Speaker #3: Yes.

Speaker #2: But of course, we need to take some quarters in order to see that it materializes across all sectors. So it always takes some time before you have the full effect of AI.

Bjarte Petersen: Yes.

Arne Mjøs: But of course, we need to take some quarter in order to see that it materialize in all sectors. So it always takes some time before you have the full effect of AI. But from my first quarter to the second quarter, I see the quite fantastic improvement, I will say.

Speaker #2: But from my first quarter to the second quarter, I see quite a fantastic improvement, I would say. Now, we don't expect any significant one-offs in Q3 and Q4.

Bjarte Petersen: No, we don't expect any significant one-offs in Q3 and Q4. In respect to Iceland, we think now we have taken what should be taken in the P&L in this quarter based on the information that we have. So no further one-offs. We will benefit from our improvement program also in the third quarter and going forward. It has been executed on plan during second quarter, and most of it has full effect in second quarter, but we also have a tail in third quarter. Also the divestment of Mosaic Headhunting will give us an uplift in the margin, a slightly reduced top line. But it was 5 million in revenues last year, but a couple of million in losses. So we are positive on the margin side, but of course it's a pressure on the top line and especially from the currency.

Speaker #2: And in respect of Iceland, we think now we have taken what should be taken in the P&L in this quarter, based on the information that we have.

Speaker #2: So, no further one-offs. We will benefit from our improvement program, also in the third quarter and going forward. It has been executed on plan during the second quarter.

Speaker #2: And most of it has full effect in the second quarter, but we also have a tail in the third quarter. Also, the divestment of Mosaic Headhunting will give us an uplifted margin.

Speaker #2: A slightly reduced top line, but you know, it was $5 million in revenues last year, but a couple of million in losses. So we are positive on the margin side.

Speaker #2: But of course, it's a pressure on the top line, especially from the currency.

Speaker #3: Thank you so much. The answers were so good that you did answer two other questions as well in that. But we do have one last one here.

[Company Representative] (Itera): Thank you so much. The answers were so good that you did answer two other questions as well in that. But we do have one last here. Cash flow from operations was solid in Q2, but cash conversion for the last 12 months declined to 58%. What are the main drivers behind the lower cash conversion, and what should investors expect for working capital and cash generation in the H2 2026?

Speaker #3: Cash flow from operations was solid in Q2, but cash conversion for the last 12 months declined to 58%. What are the main drivers behind the lower cash conversion?

Speaker #3: And what should investors expect for working capital and cash generation in the second half of 2026?

Speaker #2: Well, you know, last question first. Usually the second half is stronger when it comes to cash flow, and we expect that to continue. When it comes to the low cash conversion, as we explained, these are working capital related.

Bjarte Petersen: Well, last question first. Usually the H2 is stronger when it comes to cash flow, and that we expect to continue. When it comes to the low cash conversion, as we explained also, these are working capital related, not profitability. Profitability is good last 12 months. The first item, the change in timing of employee taxes was implemented in the start of the year for whole Norway. This has an approximate effect on the Q2 numbers of NOK 10 million. That will be a permanent effect on the working capital. But in terms of cash conversion going forward, it will be washed out during a 12 months conversion view. Then if you look at the second part, the two projects or a couple of projects as I described, these are also temporary.

Speaker #2: Not profitability. Profitability is good. Last 12 months. The first item—the change in timing of employee taxes—was implemented at the start of the year for the whole of Norway.

Speaker #2: This has an approximate effect on the Q2 numbers of NOK 10 million. That will be a permanent effect for all the working capital. But in terms of cash conversion going forward, it will be washed out during a 12-month conversion view.

Speaker #2: And then if you look at the second part, the two projects— or a couple of projects, as I described—these are also temporary. We have one that we will expect payments for now, during the third quarter or early fourth quarter.

Bjarte Petersen: We have one that we will expect payments for now during Q3 or early Q4, depending on the third-party delivery. This is part of the Enter Ukraine program. The second one is a fixed price project where we have payment milestones at the end of the period that will be delivered during the second quarter 2027. That is at least what is scheduled. So these are temporary, but it has an effect on totally approximately NOK 20 million, so it is quite big.

Speaker #2: Depending on third-party delivery, this is part of the Enter Ukraine program. And then, the second one is a fixed price project where we have payment milestones at the end of the period.

Speaker #2: That will be delivered during the second quarter of 2027. That's at least what's scheduled. So these are temporary, but it has an effect in total of approximately 20 million.

Speaker #2: So it's quite big.

Speaker #3: Yeah, thank you. That was all.

Speaker #2: That's all for now. Yeah. Thank you. This was your first quarter. Good to see you here. And we will come back—what is the time? The 4th of November.

[Company Representative] (Itera): Thank you. That was all the questions.

Arne Mjøs: That is all folks. Yeah, thank you. This was your first quarter.

Bjarte Petersen: Yes.

Arne Mjøs: Good to see you here, and we will come back. What is the time? The 4 November we have the Q3, right?

Speaker #2: We have the third quarter, right? Yeah. So if you have any kind of questions, please reach out to Bjarte or me. We will be always available, 24/7, for you if you have questions, or please reach out and we can see what we can do.

Bjarte Petersen: Yes.

Arne Mjøs: Yeah. If you have any kind of questions, please reach out to Bjarte or me. We will be always available 24/7 for you if you have questions. Please reach out, and we can see what we can do. Okay. Thank you for this morning.

Speaker #2: Okay. Thank you for this morning.

Bjarte Petersen: Yes.

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Q2 2026 Itera ASA Earnings Call

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