Welcome everyone to Itera's interim report for the second quarter. We have the same agenda that you have seen before.

I will start with the highlights of the quarter, then a deep dive into the business review section. Then we have our new CFO, Bjarte Pettersen, that will go through the financial review and also outlook.

We also will have a joint session at the end with Q&A. If you have any kind of questions, please use the the chat to to post your your questions.

I'm very happy to to see Bjarte in the new position. The transition from from Bent Hammer has been very smooth.

Bjarte is started actually before he entered formally from the 1st of August, and he's him and the team has also worked very well together in order to make sure that Bjarte is already up and running fully. Thank you, Bjarte.

Looking forward to your presentation as soon in the financial section. Let's go to the the the highlights for for the second quarter.

There are three main messages in this quarter that I will follow, and he will also go more into details in terms of the financial part of it. The first message is actually that we have improved the growth and profitability of Itera.

That's really connected to the operation improvement program that we launched in 2025. We see now a revenue growth in local currency of 7% in this quarter.

We have higher utilization, we have lower overhead costs, and we have also, because of this implementation of the program, we have also decided to divest recruitment business that we acquired in in for 2 years ago, because we find it not that connected to the to the growth of the Itera in this region. We saw some synergies in the customer side and also to having a strong recruitment leg in part of Itera, but now we defined that as a non non-core business.

That's why we in this quarter also had some divestment. Totally, the margin and operating performance has improved.

We also, in the second first quarter, also talked about some customer receivables at Iceland. What we have also done in in the second quarter, we have also written off this customer receivables.

Totally, we will also show you the non the no recurring eller what do we call it? The the non the one-offs for this quarter is actually something that we will go deeper into the in the financial review section.

One of the message is actually to improve growth and profitability. The second message is actually that we see AI-driven demand all over Itera, across Itera, is shifting from experimentation to implementation.

That's also opening larger opportunities for modernization, cloud, data, and managed services. That's the second topic for this this presentation.

The third topic, I will say, is about we have a very strong growth platform in the Cloud and Application Services that continue to show a growth trajectory with 28% gross gross profit in the second quarter. This growth is we showing as a gross profit, not only revenue growth, because in this business, there are some cloud consumption.

The margin margin of some of this cloud consumption might be also challenged by by big players that offer very small margins. In that's why we focus on the the gross profit growth when we measure the growth of Cloud and Application Services.

That continue to show a very strong growth for Itera, and also strengthening the the profitability and margin expansion going forward for Itera. All together, I think we have a very discipline execution, and we see also now a AI-led demand that also provides a quite strong second quarter for Itera.

If I deep dive into the business review section, just show you the figures in brief, Bjarte will go more into details. As I told you, we have 7% growth in constant currency, but reported is 4%.

About 50% of our revenue or business are in in yes in in Sweden, Denmark, and euro, and and and US. These currencies is quite is impacting also the the revenue growth of Itera.

Reported revenue is 4%. We delivered 210 million in in the second quarter compared to 203 million in the same quarter 2025.

If you look at the adjusted EBIT margin, in this quarter, it was 6.8% compared to 2.3% in the same quarter 2025. That's improvement from 2.3% to to 6.8% in terms of adjusted EBIT margin.

We also have quite good operational cash flow of 18.8 6 million in in this quarter. Also, the number of employees is down by 30 people, we are 672 people, but the majority of this reduction is also connected to, I will say, non-billable functions, it doesn't have the impact on on on the growth of Itera.

We are growing by 7% in local currency, while the number of employees is down by 4%. Totally, that will also provide a stronger EBIT.

That's the figure, Bjarte will go more into all kind of details here, I leave the figures until he deep dive that in in the third section. If I look at the market view, as I told you, AI is really moving from experimentation and pilots to enterprise enterprise-wide business transformation.

I guess you also are using AI in your business more and more everyday, and we see quite maturing interest for using AI through all the all the services that Itera provide, from the business consulting guys to the designers, to all the developers, and not at least the operation. There is really coming a real need for this kind of technology or this approach through whole Itera, and also we see the same at the at the customer.

AI in the past, we talked about digital transformation and business transformation, and we see that AI is also really coming into the business, so that AI is also driving the business transformation for our customer. One of the key area that we see is actually modernization, because the customer have a lot of legacy debt, so that is where we see that AI is very suitable with into day in order to to start modernizing this kind of legacy debt or this technology debt.

We also see a faster transformation into cloud and also what we call it digital core renewal. They looking at the system that has been the or the core of the business, now is actually the opportunity to start transforming or modernizing these kind of application.

Agentic AI is actually gaining momentum through whole the value chain of Itera, from the developers is much more productive than in the past, and also operation, and so that's something that we see along the whole value chain of Itera. As you also heard about, we have all these kind of geopolitics and cyber risk, of course that also are stressing the value chain for a lot of the in industries.

We also see that digital sovereignty is also something is a key focus in every sector. We also have this experience from from Ukraine, because that is where we have, vulnerabilities all over the place, so that is something that we bring into into the discussion with the customer.

That's also a really strong topic. We also see that there's a lot of customers that do not want to be that connected to the the US-based global tech giants, there's also opportunity to build a European data and infrastructure industry, we are we are also more robust if there are any kind of threats from the from the West also.

That's also have a impact on the consulting. A lot of the people are also just talking about will the consulting business, be really radical reduced?

We don't believe that, because we see there is a shift in terms of also how we do we deliver service. I come back to that, but also focus more on outcome.

The complexity of this AI is something that are coming all over the place, and not at least also it also have a lot of impact of how the business will transform into a more agentic business going forward. That's the market view, and if you look at Itera, we have we have a position, as in in the Nordics.

We have European presence, by European presence we mean in Central and Eastern Europe. We consist of business divider, designer, technologists, and not at least also AI agents, so that's also something that we see from all over the places of Itera, where AI are implemented, and these AI agents are also something that we we try to reuse across the cross the Itera group.

The AI implementation is really group-wide, and I also see very strong position in terms of how we adapt our offerings, how we are using proof of concept much faster, etc. That's something that are impacting Itera and the industry quite well, and it's very interesting to see the higher productivity that we can deliver to the customer.

Let me, first before I deep dive even more in this section, I just mention that we, if you look at the sector, we have a strong growth in the Financial Services, and that's also connected to the modernization, because it's a lot of the financial the banking and insurance companies, as you might also be a part of by yourself, there's a lot of legacy there in the in the core banking or in the core insurance system. We see there's also opportunities now to utilize AI to really start to modernize these kind of debt that has been there for many many years, cost a lot, and now maybe it's the time to really go into it and transform it into a more modernized platform.

The energy and industry is is also is some percentage share down, that's also connected to renewable. We don't have that exposure in oil and gas, which is growing, but we see some opportunities in oil and gas, we also believe that both renewable and oil and gas will also increase the energy and industry going forward.

The rest, public and organization and others, are more or less at the same level. Going back to the AI transformation, we see some we call a new growth engines.

There we are showing a stage model, the the largest volume is on step one is actually about legacy transformation or modernization, because of this the the customer would like to reduce the technology debt, they would like to eliminate the data silos, there's a lot of data silos, in order to use the right data into the modern, they would like to see how they can tap into this silos and also utilize the data in a more efficient way than in past. That's also applies to the integration complexity, because they integrated and build build work-around solution around this this core systems, and that's also have a lot of depth that might be removed when removed when you actually move into a more AI technology stack.

There in in the in the first step, there is really a larger opportunity that we saw in in in 2025. We will see quite good pipe building up, and some of the the projects are already started, I expect that the legacy transformation will really mature going forward during the the next two, three quarters.

It will take some time before you see the full effect of it, but we have already seen and started a project in in the second quarter that is also reflecting in the in the revenue growth of Itera. The second one is actually the AI enablement, agentic enablement, that we help the customer to to establish the AI agent agents.

We are established the governance and security, and also make sure that they are using AI responsible, and we're also looking at how they should change the software development process or the operating process in order to really utilize the new technology. Then we have the third stage, which is what we call the AI factory and the intelligent operation.

Then you have all the agents that are running, you need to orchestrate it, you need to make sure that you reuse this kind of workflow, and you can also make it fully fledged into the integrated operation. Software development and operation will really be seamless integrated one, and you have the humans and agents that are working together.

Then you have the improvement of your business in terms of new products and services, and not at least also that you are transforming the business transforming and the digital transformer transformation into more agentic AI agentic enterprise going forward, and that's a lot of culture, a lot of new processes that that need to be changed. This is a strong momentum for doing changes along the your business, but not at least also along the value chain that you that you are part of.

A lot of you have discussed, I see a lot of reports here and there that talks about the reduction of the technology partners of the service industry. I don't believe in that, because as I said, there is a value for the customer in terms of faster modernization, longer operating lower operating costs, higher productivity, and better resilience.

Of course, what does it mean for the customer? They can really, because AI is the engine for growth and efficiency, productivity all over the place, not only IT, the digital part, but also the business part.

If you look at the value for a service provider like Itera, we can utilize agents together with the people, it's not only providing people as in the past, you providing competences, but also that are connected to a lot of agents that you bring in or that the customer already have in place. We are talking about, as we talked discussed earlier quarters, we talk about the human agent ratios, for each human there is also a lot of digital agent that support and increase the productivity.

The increasing productivity for Itera is also creating opportunity for more recurring revenue, because you have the people and you have the agents, and then it's more effective to also establish new service line or new revenue line, revenue streams. It's also a possibility to to establish IP and workflows that we can reuse, and we can also discuss, as we also showed you, that the revenue was growing 7%, but the reduction in in in FTEs was 4%.

Major part of it, as I said, was was some kind of non-billable. Of course, we will also have a growth trajectory that is less dependent in a linear matter matter with FTE growth.

Cloud and Application Services is really structured in that way. We have seen that we are growing the top line without increasing the number of FTEs in a in a linear fashion.

This is something that we will see along all Itera going forward. In order to also showcase what we are doing, we're saying that the future of consulting is agentic.

As you see, we we are, when we have engage engagement delivered, we capture the knowledge in terms of AIs, agents that we are using. When we so when we capture these agents, because in the past it was only the people, now it is also a lot of agents that we have developed, and these agent, we can look at how can we reuse these agents across customer.

When we started new project, we really have a more you know effective way, we are higher productivity, there might be some services that are recurring, etc. That is the way we are changing the business model.

When we are looking at at the value chain on the on the first flow row, you will also see that we have also started to build the capabilities. We started for more than one year ago to invest into three products.

One is actually Code Compass, which actually is we call it code intelligence, where you actually look at any kind of legacy system and get full analysis of all the dependency of the code, whatever. What code is working, what this code is needed, whatever.

You have a what what we would like to go continue with, whatever. When you have a very precise documentation used by AI, then you have also opportunity to take the next step to use AI agents to really rebuild or restructure or modernize or build a totally new application.

In the past, it took a lot of time, it cost a fortune to do this one. Now we are using the AI to really have a precise documentation.

When you have the precise documentation, you can use the digital factory with the agents. For each developer, you might have five, six, seven agents that are working alongside, you increase the productivity.

Also, the last part is also how you migrate data from the old system to the new system. These products are really increasing the efficiency, and that is also something IP that we have developed.

When we go to new customer, we can also charge either higher hourly rate and or have some kind of recurring subscription-based revenue stream alongside with the consultants. All these are actually based on our Cloud and Application Services, that is the foundation that these products are built on.

When we meet a client, we connect into the agents that the clients are using, and we are also having added value adding value where we have knowledge across customer that we have delivered in the in before. Not at least also looking at all kind of open-source functionality that are available in the market.

We bring this knowledge when we when we meet the clients. What is also important is actually that we are very proud of that being the first company in Norway that was certified according to ISO 42001, which is the first certification for AI management system.

We took that position in Norway, and we are amongst the first in Europe to achieve that certification. That's extremely important for Itera.

That supports the strategy fully. We had the ambition to be the first, and we managed to be the first.

That is actually verifies that Itera do are utilizing AI in a govern, development, deployed, and monitored according to the standard. These are also combined with other certification we managed to to complete in in in the second quarter in terms of ISO 9001, 14001, and also 45001 connected to quality, environment, and working environment.

Through this certification, we are really having a competitive advantage when we are going into more regulated industries. Not at least, AI are are are increasing the importance of having standards in place, because now you also need to have, control of all the dimension of how we deliver this in a responsible way, but not at least also with high quality, the customer reach the the the goals.

That is also something we achieved in this quarter. Just want to mention that one.

Regarding, talked about the digital resilience or resilience in in in the broad sense, of course, we all see from Ukraine that, for example, energy infrastructure or energy system is a part has become a part of the battlefield. We see the same threats in terms of all kind of cyber attacks towards Norway, because of the agreement between Norway and Ukraine.

These threats we are seeing all over the place. What is nice that actually that Itera really have a strong position, because of the position we have with being in Ukraine for 18 years.

We say that Ukraine is really the real-world laboratory for energy resilience and digital transformation and innovation under extreme conditions. That's why we are, during Arendalsuka and also now ONS in Stavanger this week, really having a lot of discussion with clients in different industries to see how we can increase the resilience of the companies.

What they told us, tell us is actually they would like to learn more from Ukraine, that means the interest for also looking into not only the support, but also getting the the learning from Ukraine and also see how to jointly bring the solution that that they are working in Ukraine to Norway or other part of the region in where we have the same threat. This is actually really connected to the future preparedness in across the industry.

It's really very interesting, unique position that Itera have. The resilience is nothing that only a paper now.

Now it's a threat, and also there is also a lot of opportunities that we need to develop. This is something that also raises the demand for our services.

Before I I end up my part, I just want to look talk about the order intake. As we show you quarter by quarter, we we focus on the share of new customer.

It was 9% of the revenue last 12 months, it's new customer that we didn't have for 12 months ago. If you compare to other competitors, that's a quite large number, we are quite happy with this share of new customer revenue of the revenue, because we would like to grow.

We have also, if you look at the opposite, actually 91% of the existing customer are the 91% of the revenue is coming from the existing customer. As you also see, 71% of the revenue is coming from the top 30 customers in Itera.

It was compared to 73%, it was down 2%. For me, that's okay, actually, because I also would like to develop new customer to make sure that we have a growth potential going forward.

The the the figures here are quite strong, and not at least also, as you see, when the market has been some kind of challenges, we have, of course, we don't have the same growth rate, but we have quite stabilized the growth, and we also see the demand coming from AI. We are really looking at the next quarter how we actually we, as a company, but also the industry, actually maturing into growth pockets going forward.

If we look at the number of employees, we were 672 at the end of this quarter compared to 702. As I told you, most of these people are connected to non-billable functions, and we have a nearshore ratio that is the ratio of the people in Central and Eastern Europe is about 50% of the business.

That's yeah, that that's a part of the operation improvement program. We also recruiting, some people are leaving, but we also would like to we also continue recruiting in pockets where we see the the the the demand is very strong.

That was the the first part. Then I think we can go into the business financial of the business the financial review, Bjarte, please have your place here.

Thank you so much. Pleasure to be here and first Q2 first quarterly reporting from my side.

Happy to join the Itera team and I'm very looking forward to work with all of you. Also with you investors and your analytics.

As mentioned by also Arne, Itera delivered a good quarter with 7% underlying growth and improvements in profitability. Our adjusted EBIT for second quarter reached 6.8%, 4.5% points up from 2025.

Adjusted EBIT for the second half year and for the first half year reached 7.9%, which is up 1.9% from 6% last year. For our consultancy business, the growth is to a large extent within the financial sector, where we historically have our biggest footprint.

We also have a strong profitability development in our Cloud and Application Services, CAS, with 7 with 28% gross margin improvements. Our improvement program has delivered on target and our billable utilization has increased last four quarters in a row.

It's actually also the highest level in eight quarters. We have some non-recurring item this quarter and also for the first half year.

These are related to our strategic decisions, or there are two matters, actually. One is the strategic decision to divest Moseid Headhunting, which was acquired in 2024.

The second one is writing off additional customer receivables on Iceland. These are all described in the report, also in the notes 4 and 5.

Total EBIT effect on non-recurring for the second quarter was 8.6 million and for the first half year was 11.7 million. Looking at the last 12 months revenue, they are quite stable, also in respect of type of revenue.

We had in the second quarter an uplifting 5% reported growth on consultancy revenue. Revenue from subscription, third-party service, and other revenue were stable.

Reported revenue per employee were up 7% in second quarter. Q2 marks a positive shift both for 12 months rolling revenue and adjusted EBIT.

Going forward, we see opportunities that customers are moving from AI pilots and testing to deploy and utilize agent at scale. Given our investments in AI capabilities with Code Compass, Digital Factory, and Atlas Data Fabric, we are well positioned on these areas.

Arne covered this product areas well. These are really agnostic platforms, which enable us to deliver value to the customers even faster.

Other key drivers in the market are digital sovereignty, security, resilience demand across sectors, and we have unique knowledge through our big footprint and experience with Ukraine, especially on the resilience demand that are emerging. On the cost side, we will continue also to focus on improving cost structure and have a cost discipline.

We had a solid cash flow from operation in the second quarter with 18.6 million. Looking at cash flow from operation last 12 months, this is in the lower end and explained by higher working capital from changes in timing of employee tax payments, but also on timing of payments from a couple of fixed-price projects.

Cash flow from investing activities are stable and we have paid out dividends to our shareholders of 16 million in the quarter, which are reported under financial activities. Looking at our cash conversion, it's the working capital that has giving us a temporary dip in the conversion when we look at the last 12 months EBITDA to cash conversion.

These are temporary effects. Of course, the change in employee tax rules and payments in Norway has a permanent lift in the working capital, but in terms of cash conversion, they are temporary.

Is the payment terms from within the projects that we are talking about. Our dividend policy remains the same.

We will have a consistent high distribution of earnings to our shareholders. We paid out 0.2 NOK per share in the second quarter, amounting to 16.2 million.

Now for the outlook. Market and demand remains cautious, but we also see improving pockets of activity.

As mentioned, these are driven by modernization, data platforms, it's within cloud transformation, and also managed services where we have a good footprint now with CAS. It's on digital sovereignty and resilience as we have also mentioned.

AI and agentic AI are emerging as key growth drivers and enabling and accelerating in every open pocket. Operational improvement program is delivered on plan, but we will also continue to embrace the opportunities in the technology to work smarter and keep high cost discipline and utilization.

We will also continue to look at our cost structure going forward, but not in a formalized program that we will report on. On the currency effect, we have a large footprint abroad in Ukraine, in Denmark, and Sweden, Poland, and also in Czechia and Slovenia.

Given that the NOK has strengthened during this year, we have an effect on the top line. This amounts approximately in the second quarter to 3% points, where we can see that our reported growth is 4%, while our constant currency growth and underlying growth is 7%.

We will see this effect continue also in the third quarter and probably also in the fourth quarter. This is, of course, depending on the currency development.

Profitable growth will remain our main focus. This will be supported by enhanced commercial capabilities that we are building into our companies in all our regions.

Thank you. Then I invite Arne back for our Q&A session.

I guess there might be some questions.

Yes, in terms of non-recurring items, we don't have any plan to continue with non-recurring items. This is completed this quarter, right?

Yes.

We do not guide on either revenue growth or EBIT. Of course, ambition is actually to increase, as I said, both the revenue and also the profitability going forward.

We see the AI demand is actually there already. As you said, there is some cautious about the currency impact of the revenue top line, right?

Yeah.

That is what we're telling you, but, of course, we believe that the foundation of Itera, also not at least also the demand we see from AI is something that we are quite positive for the future. Of course, we need to take some quarter in order to see that it materialize in all sectors.

It always takes some time before you have the full effect of AI. From my first quarter to the second quarter, I see the quite fantastic improvement, I will say.

Yeah. Now we don't expect any significant one-offs in Q3 and Q4.

In respect of Iceland, we think now we have taken what should be taken in the P&L in this quarter based on the information that we have. No further one-offs.

We will benefit from our improvement program also in the third quarter and going forward. It has been executed on plan during second quarter.

Most of it has full effect in second quarter, but we also have a tail in third quarter. Also, the divestment of Moseid Headhunting will give us a uplifted margin, a slightly reduced top line.

It was 5 million in revenues last year and but a couple of million in losses. We're positive on the margin side and but, of course, it's a pressure on the top line and especially from the currency.

Last question first, usually the second half is stronger when it comes to cash flow, and that we expect to continue. When it comes to the low cash conversion, as we explain also, these are working capital related, not profitability.

Profitability is good last 12 months. The first item, the change in timing of employee taxes was implemented in the start of the year for whole Norway.

This has an approximate effect on the Q2 numbers of 10 million. That will be a permanent effect on the working capital, but in terms of cash conversion going forward, it will be washed out during a 12 months conversion view.

Then if you look at the second part, the two projects or a couple of projects, as I described, these are also temporary. We have one that we will expect payments for now during third quarter or early fourth quarter depending on third-party delivery in this is a part of the Enter Ukraine program.

Then on the second one is a fixed-price project where we have payment milestones in the end of the period that will be delivered during second quarter 2027, that's at least what's scheduled. These are temporary, but it has an effect on totally approximately 20 million, it's quite big, yeah.

for my

Yeah. Thank you.

This was your first quarter.

Yes.

Good to see you here, and we will come back What is the time? The 4th of November, we have the third quarter, right?

Yes.

Yeah. If you have any kind of questions, please reach out to Bjarte or me.

We will be always available 24/7 for you if you have questions, please reach out and we can see what we can do. Okay.

Thank you for this morning.

Yes.