Sitowise Q2 2025 earnings mixed, shares fall

Finnish engineering services provider Sitowise reported mixed second-quarter results for 2025 on Wednesday, with revenue growth decelerating and costs pressuring margins.

The company said total revenue increased 4% year-over-year to €124.7 million in Q2, below the €130.2 million consensus estimate compiled by Reuters. Operating profit fell 8% to €14.2 million, as higher staffing and project costs offset gains from new contracts. Net profit declined 12% to €9.8 million, compared with €11.1 million in the same period last year.

Sitowise attributed the underperformance to delayed project commencements and elevated wage inflation in its core Nordic markets. The company maintained its full-year guidance, forecasting revenue between €500 million and €520 million and operating profit of €55 million to €60 million.

Shares in Sitowise slipped 3.2% to €18.45 in early trading on the Nasdaq Helsinki, underperforming the broader OMX Helsinki 25 index, which was down 1.1%. The decline followed a 6% drop in the stock over the past month as investors priced in concerns over margin sustainability amid rising operational costs.

Analysts at Nordea downgraded the stock to 'hold' from 'buy', citing weaker-than-expected profitability trends and limited near-term catalysts. The brokerage trimmed its price target to €20 from €24, though it acknowledged Sitowise's strong order backlog of €215 million as a potential offsetting factor.

The mixed results reflect broader challenges in the Nordic engineering sector, where firms are grappling with labor shortages and inflationary pressures. Sitowise, which specializes in infrastructure and industrial projects, has warned that wage growth in the region could persist through 2025, further squeezing margins.