Digital Workforce's accounting change improves transparency, company lowers revenue target

Translation: Original published in Finnish on 3/18/2026 at 8:00 am EET.

Digital Workforce announced on Tuesday that it changes its accounting principles for license sales. In our view, the change makes the company's reporting more comparable with international practices and improves transparency regarding important continuous revenue. At the same time, the company revised its guidance in line with the change and lowered its 2026 revenue target to 40 MEUR, which partly reflects the new reporting method and is, in our opinion, a more realistic level than before. We will update our revenue forecasts in line with the new structure after the Capital Markets Day on Thursday, but this will not affect the earnings level or the valuation of the share.

Accounting change improves transparency and relative profitability

The company has re-evaluated the accounting principles for license sales based on its current business model and customer agreements. Going forward, customer licenses that do not include automation platform maintenance or development services will be recognized on a net basis. This means that revenue will be presented as the difference between the amount paid by the customer and the license fee paid to the vendor, instead of the previous gross treatment. In addition, the timing of revenue recognition will change from the beginning of 2026, so that revenue will be recognized when the contract comes into effect, and will no longer be accrued over the contract period. As a result of the reporting change, approximately 4 MEUR will be removed from the old reported revenue on an annual basis.

Net recognition lowers reported revenue, but the company's absolute sales and EBITDA figures remain unchanged. This leads to an improvement in relative profitability, as the same euro-denominated margin is proportioned against lower revenue. In our view, the change makes it more comparable with international practices and, in particular, improves transparency for important continuous revenue.

The company lowered its strategic period target to a more realistic level

Partly due to new accounting practices, Digital Workforce also specified its targets for the strategy period. The company is now targeting annual revenue of 40 MEUR by the end of 2026, including potential acquisitions. The previous target was 50 MEUR, consisting of 40 MEUR in organic revenue and 10 MEUR in inorganic growth. The decrease in the target is partly due to an accounting change (4 MEUR), and we consider the new target to be more realistic. The company has specified its long-term targets on several occasions in previous years. Before the accounting change, we had forecast 2026 revenue to be 33.7 MEUR.

The profitability target remained unchanged, and the company still aims for an adjusted EBITDA level of over 15% by the end of 2026. Due to the accounting change, achieving this target becomes easier computationally as the revenue base decreases, even though the absolute earnings requirement does not change.

DW specified its 2026 outlook in accordance with the accounting change

The company also published adjusted comparative figures for 2024 and 2025. According to the new reporting method, the adjusted revenue for 2025 is 24.3 MEUR (was 28.7 MEUR reported) and adjusted EBITDA is 1.3 MEUR (5.2% of revenue). Thus, the earnings level remains unchanged, but the reporting change clarifies the true volume and profitability potential of the continuous services business.

The company also specified its financial outlook for 2026 to align with the new accounting practice. Digital Workforce now expects revenue to grow by at least 15% compared to 2025, which, in our understanding, refers to comparable revenue. The company expects adjusted EBITDA to be 7–13% of revenue. Previous guidance predicted at least 15% growth and an adjusted EBITDA margin of 6–12% (according to the old reporting method).

We believe the guidance is roughly in line with the 17.7% growth we previously expected. The company will host an Investor Day on Thursday at 2:00 pm EET, which can be followed here. We will update our revenue forecasts in line with the new structure in connection with the Capital Markets Day, but this will not affect the earnings level or the valuation of the share.