Digital Workforce Q1’26 flash comment: Now we have the much-needed evidence

Translation: Original published in Finnish on 04/22/2026 at 09:04 am EEST

Digital Workforce

Digital Workforce published its Q1 business review this morning, which was better than expected. Revenue grew strongly, driven by acquisitions and also organically, thus clearly exceeding our estimate. Growth also scaled partly to profitability, even though the company simultaneously invested in launching large customer contracts. The company has secured promising new and strategically key contracts in the early part of the year, which also improves confidence for the future.

Revenue exceeded our estimate and also grew strongly organically

Digital Workforce's revenue grew by 45% to 7.6 MEUR in Q1, and clearly exceeded our estimate. Growth was driven by the e18 acquisition, and we estimate organic growth was 22%. A particularly positive aspect is the acceleration of organic growth, which is clearly better than the IT services sector (Q4 +1%). By business line, the "higher-value" Continuous Services grew by 38%, which was better than our estimated 23% growth. Professional Services grew by 55%, performing significantly better than the 16% growth estimate. Growth was driven by the strong performance of the healthcare sector in Finland and the UK, as well as the expansion in Enterprise & Public accounts. Regarding sales, the company has announced several contracts this year, and in addition, several contracts in the UK have not met the announcement threshold. Thus, the sales pipeline still looks good in the short term, and the much-needed evidence can be expected to continue. The company also commented that it is increasingly working with clients' top management on in-depth business transformation, which we believe indicates that the company has moved up the value chain, at least in part.

The operating result exceeded our estimates in Q1

Earnings improved clearly in Q1 and exceeded our estimates The gross margin was 40%, a clear improvement from 34% in the comparison period, and also exceeded the seasonally strong Q4 level (39%). On the other hand, with strong growth and its scaling, this was desirable to say the least. The company commented that it had invested in launching large customer contracts, which, in our understanding, limited the scalability of growth to profitability more significantly. EBITDA was 0.42 MEUR and 0.50 MEUR when adjusted for non-recurring items, which exceeded our estimate of 0.31 MEUR. This corresponds to an adjusted EBITDA margin of 7%. Depreciation was slightly higher than expected, and the lower lines included a larger expense item than anticipated (the company does not elaborate on the lower lines). Thus, earnings per share were EUR -0.02, one cent below our estimate.

Performance is well on track when reflecting on the guidance

Digital Workforce expects the group's revenue to grow by at least 15% in 2026 compared to 2025. Additionally, the company expects adjusted EBITDA to be 6–12% of revenue. Ahead of the Q1 report, we estimated the company's revenue to grow by 17% in 2026, driven by acquisitions (organically 2%), and the adj. EBITDA margin to be 9.4%. With the sales pipeline currently materializing well, there is upward pressure on our short-term estimates.