Following Columbus's Q2 2026 Interim Report published on 19 August, we have updated our investment case.

Q2 2026 marked a return to growth, with revenue up 2% to DKK 420m after several quarters of decline. Growth was led by Norway, where service revenue rose 52% on major contract wins, alongside Data & AI at 40% and EIM at 28%, while Dynamics 365 turned positive again at 1%. Sweden and Denmark, which together account for just over half of service revenue, declined 8% and 12% respectively and have yet to turn. EBITDA was DKK 17m, corresponding to an unchanged margin of 4.0% and below the company's own expectations for the quarter, bringing the H1 margin to 5.1% against 7.4% in H1 2025.

The central question in the case has therefore shifted. After several quarters of asking whether growth would return, the question now is whether the returning growth will lift margins. Efficiency improved to 65% from 63% and is, according to management, far more evenly distributed across practices than a year ago, with fewer weak units dragging the average. Average FTEs were reduced to 1,422 from 1,492. Yet the combined contribution margin fell to 18% in H1 from 22%, reflecting fierce competition on large new project wins, pricing pressure in the Scandinavian markets, and the lower initial margins that large multi-year engagements carry during their first months. Management is explicit that hourly rates have not been cut, but equally explicit that pricing in Scandinavia is under pressure while the UK, US and German markets run at healthy levels.

Columbus maintains its full-year guidance of 0-5% organic growth and an 8-10% EBITDA margin. The revenue side looks achievable at the low end, but the margin side implies an H2 EBITDA margin of roughly 11-15% against 5.1% in H1 and around 7% in H2 2025. That is a steep step-up and, in our view, the single most important risk in the case. Management points to four levers: growth itself, tighter margin management on new and larger contracts, further efficiency gains towards the 70% target, and continued discipline on enabling costs.

The most interesting structural development in the quarter concerns how Columbus monetizes its work. Management describes technology-enabled consultants as materially more productive than 18 months ago and argues that time is ceasing to be a meaningful indicator of value delivered. Columbus is therefore moving part of its business from time and material towards fixed price and outcome-based contracts, some of them advanced outcome-based structures. This reframes the AI story from an internal efficiency argument into a revenue model argument, and management expects it to be margin-positive. It is early, and fixed price brings its own delivery risk, but it is the clearest new building block for a structurally higher margin that Columbus has articulated so far.

Among the other risks in our updated case, we highlight that the Q2 report no longer restates the long-term ambitions of 10% revenue growth and a 15% EBITDA margin, which were still named in the Q1 report as unchanged with the timeline under review. The new strategy is expected in early November 2026 and is now the key event for reassessing the long-term trajectory. We also highlight that the shift towards AI-led delivery raises the bar on talent, requiring new profiles alongside retention of existing capabilities, and that AI disruption and competitive intensity remain concerns until Columbus demonstrates sustained growth and scaling AI use cases.

On valuation, Columbus trades at 0.9x EV/Sales (2026E) on guidance midrange, below Nordic IT peers at around 1.3x, with the discount reflecting a lower margin profile of 8-10% guided EBITDA against a peer median near 15% for 2026E. On EV/EBITDA, Columbus trades at 10.1x versus peers at around 8.5x. The premium partly reflects Columbus being earlier in its margin recovery, with operational gearing left to harvest, and partly a higher enterprise value, as net debt has risen since Q1 on working capital tied up in new major contracts.

Management's shareholder value focus, demonstrated through the 2025 strategy review on ownership and consolidation and through continued capital returns via dividend and an ongoing share buyback, could act as an anchor on current share price levels. A re-rating, however, requires evidence that returning growth is margin-accretive.

For further insights into the Q2 2026 results and the outlook for the remainder of the year, you can watch the event we hosted with management: https://www.inderes.dk/videos/columbus-presentation-of-interim-report-q2-2026

Disclaimer: HC Andersen Capital receives payment from Columbus for a Digital IR subscription agreement. /Michael Friis, 31/08-2026, 09:00.