Digital Workforce Q4’24 flash comment: Operationally in line with our expectations and dividend proposal above our forecasts

Translation: Original published in Finnish on 2/19/2025 at 9:11 am EET.

Digital Workforce, the software robotics automation pioneer, published its financial statements report this morning, which on the whole was in line with our expectations. Revenue growth was well driven by the important Continuous Services business, and the adjusted result was in line with our expectations in Q4. As expected, the company provided guidance for revenue and adjusted EBITDA growth in 2025, which should be easy for the company to achieve. In addition, the company announced a dividend payment that was relatively well above our expectations. 

Revenue grew well in Q4 and was in line with our expectations

Digital Workforce’s revenue increased by 10% to 7.0 MEUR and was slightly below our expectations. By business lines, the revenue of Continuous Services increased by 19% to 4.6 MEUR (forecast: 4.5 MEUR), while Professional Services decreased by 2% to 2.5 MEUR (forecast: 2.7 MEUR) during Q4. Both business segments thus again grew almost in line with our forecasts, with the higher-value Continuous Services revenue slightly better than expected. Somewhat surprisingly, the number of employees decreased by 8 to 175 in the quarter. As we understand it, the reduction in headcount is related to restructuring, while the company's delivery capacity will be increased by subcontracting where necessary.

Result in line with our forecasts and dividend payment above expectations

Digital Workforce's adjusted EBITDA was 0.3 MEUR, in line with our forecasts. Adjusted EBITDA included one-off charges of 0.3 MEUR, mainly related to restructuring and minor credit losses. The EBITDA margin was therefore 4%, in line with our forecast of 3-4% in the first half of the year and 4% in Q4. The year-on-year improvement in profitability was supported by the closure of the Danish and Norwegian offices at the end of last year, administrative efficiency measures and revenue growth. There were no surprises in the non-operating expense lines. Thus, EPS were EUR 0.01 for Q4 and EUR 0.05 for the full year 2024. The board of directors proposed a dividend of EUR 0.03 per share and an additional dividend of EUR 0.06 per share, which together exceeded our expectations of EUR 0.03. The company updated its dividend policy a couple of weeks ago, after which we expected the company to distribute a small dividend. However, in the big picture, the dividend is a surprise in the sense that the company also wants to grow through acquisitions. On the other hand, the absolute amount of the dividend is only about 1 MEUR of the 13 MEUR liquid assets at the end of Q4. 

Company guidance for revenue and adjusted EBITDA growth in 2025, as expected.

Digital Workforce expects higher revenue and improved adjusted EBITDA year-on-year in 2025. In our view, the guidance should be easily achievable. Before the financial statements report, we estimated the company's revenue to grow by 13% year-on-year in 2025 and EBITDA to increase to 2.4 MEUR (2024 1.0 MEUR). We do not expect to make any major changes to our forecasts.