Knowit's New CEO Buys Time With Margin — and Quietly Shelves the Roll-Up

A 5.1%→6.7% EBITA jump on flat revenue is a cost story, not a growth story; the real tell is a serial acquirer saying M&A is 'not really high on our agenda'

KNOW.ST · Earnings Call · 2026-10-23

The quarter that flattered, and the question that didn't get answered

Fredrik Walde Ekerhovd's first outing as Knowit CEO was, on the numbers, a clean win. Revenue of roughly SEK 1.2 billion was down 0.2% year over year — and with a 3% currency tailwind, that is a modest organic decline — while adjusted EBITA rose to SEK 81.7 million from SEK 62.5 million, lifting the margin to 6.7% from 5.1%. The company got there with fewer people: “We maintained revenues at last year's level, despite having 7% fewer employees compared with the same quarter last year.” — Fredrik Walde Ekerhovd, President and CEO · 2026-10-23 That is a genuinely efficient quarter, driven by utilization, hourly rates and cost control rather than by demand. The reason to be careful is that the quarter's headline is a margin comparison against a soft base, and the growth engine underneath is narrow. Norway is the standout; Sweden improved late in the quarter; Denmark shows "encouraging signs"; Finland, in the CEO's own words, still has "work to do before we can point to a sustained positive trend." Norway matters enough that it is one of the highest-momentum words in this company's own keyword set — Norway — but the management team was quick to puncture the obvious inference.

Net recruitment is the honest indicator, and it is still negative

For a consulting business, headcount momentum is the cleanest forward signal, and Knowit's is unambiguous. Asked about the path back to hiring, the CEO conceded it is not imminent: “Year to date, we have a negative net recruitment, and it is a little bit hard for us to predict when we will see that change. We do not think that will change even in Q4.” — Fredrik Walde Ekerhovd, President and CEO · 2026-10-23 The CFO then closed the loop on the most tempting bull case — that strong Norway performance implies Norway is already adding people: “No, actually, Norway is not yet at a positive net recruitment.” — Marie Björklund, Chief Financial Officer · 2026-10-23 So net recruitment stays in the deck as a thing being managed rather than a thing improving. Where hiring is happening, it is narrow and demand-pulled: defense, cybersecurity, and a few pockets where public money is flowing. That is the honest shape of this recovery — margin first, headcount later, and only if the market lets it.

The reorganisation is the actual event of the quarter

Effective October 1st, Knowit moved to a country-led model — Sweden, Norway, Finland, Denmark, with Products kept separate. This is the last quarter the old segments exist: Solutions at SEK 613 million and a 9.3% margin, Knowit Experience at SEK 222 million and 5%, Connectivity at SEK 129 million and 8.2%, Insight at SEK 185 million and 2.1%, Products at SEK 82 million and 16.2%. Management attached hard numbers: SEK 100 million of annual savings, full effect from Q3 2027, against SEK 70 million of restructuring costs, SEK 7.5 million of which landed this quarter. The CEO framed it as more than a cost program:

This transformation is about more than cost savings. It is about creating a stronger platform for growth, improving the client proximity, and enabling teams to work more effectively across capabilities.
Fredrik Walde Ekerhovd, President and CEO · 2026-10-23

Investors should treat the cost line as the reliable part. The savings are described as mainly overlapping roles and legal-entity simplification — personnel, not premises — and management insists it can be taken out without hitting the top line, which is a promise that will need verifying as the new country led organization beds in. Pro forma numbers for the new structure have been promised for Q4, available in Excel. Until then, comparability is genuinely poor.

What is growing, and what management stopped promising

The one theme where Knowit has a real tailwind is defense sector demand — described as "very good" with room to improve "in the years to come," and echoed loudly across the Nordic/European industrials reporting this week, from Saab's backlog to ATEA's defense sector sales. Public sector rose to 43% of revenue from 39%, which cuts both ways: stability, but a mix shift toward slower-paying, tender-driven work. The soft spots are equally consistent. Connectivity's telecom clients "are taking longer to commit," so capacity is being redirected toward defense and nearshore Polish delivery. In retail and services, one major client postponed assignments — the classic single-client concentration risk in a Nordic services shop. Insight's improvement to a 2.1% margin from a loss is real but thin: the CFO noted the assignments are short, which "limits the visibility." And AI? Everybody has it. Knowit's pitch — clients moving "beyond experimentation and pilot projects towards large-scale AI implementation" — is precisely the industry-wide AI at scale narrative being sold this week by the likes of EPAM and the large Indian and Nordic IT services peers. It is credible, and Knowit's data-plus-creative positioning in Experience is differentiated, but it is not yet a number in the P&L. The company's own keywords lean on commercial momentum and client wins, not AI revenue.

The quiet strategic pivot nobody asked hard about

Knowit's history is acquisitive. Yet the CEO, pressed on a balance sheet with net debt at 1.1x EBITDA — and effectively zero excluding IFRS leases — said: “For the time being, doing M&A or acquisitions is not really high on our agenda.” — Fredrik Walde Ekerhovd, President and CEO · 2026-10-23 The CFO softened it to "selective acquisitions," while listing buybacks and dividends as tools in the box. For a company whose prior identity was partly built by buying businesses, that is a meaningful change in capital allocation — and it will invite the question of whether Knowit is a compounder pausing to digest, or a business that has run out of obvious targets. One small crack: asked why elimination costs at the reported EBITA level came in below expectations, the CFO replied, “I think I'm going to have to get back to you on that.” — Marie Björklund, Chief Financial Officer · 2026-10-23 Not sinister, but in a quarter where every basis point of margin improvement is the whole story, an unexplained bridge item is worth flagging.

Bottom line

The bull case is now simple and testable: SEK 100 million of savings on a roughly SEK 5.6 billion revenue base with a 6.1% trailing twelve-month adjusted EBITA margin is a large lever, and the company has the balance sheet to wait for demand to return. The bear case is that flat revenue with 7% fewer heads is arithmetic that only works once — utilization and rates cannot carry many more quarters without volume, and net recruitment staying negative through Q4 says management doesn't see the volume yet. The business area reporting ends here; from Q4 we get a cleaner, country-level read on whether Knowit is building a growth platform or just a leaner version of the same business. I'd want the pro forma pack and one more quarter before calling it a turn.