Wavestone: Net Profit for 2025/26 Increases, Margin Goal for 2027/28 No Longer Confirmed
Wavestone closed its 2025/26 fiscal year with a net profit of €82.1 million, up 8%, and a record net cash position of €121.4 million. However, the firm has revised its strategic outlook downward: it is no longer able to confirm its recurring operating margin target of 15% by the end of 2027/28, citing mixed operational performance from the past year and continued cautious market conditions in Europe. For 2026/27, Wavestone aims for 'low single-digit' organic growth and a recurring operating margin of around 13%.
Moderate Revenue Growth, Strong Cash Position
Wavestone generated revenues of €954.3 million in 2025/26, marking a +1% organic growth compared to the previous year. The utilization rate decreased to 72% from 73% a year earlier, while the average daily rate remained stable at €938. The order book slightly improved to 4.4 months from 4.2 months previously.
Financially, the balance sheet situation has significantly improved: free cash flow reached €118.9 million (compared to €63.2 million in 2024/25), an increase of 88% mainly due to better working capital management. Equity rose to €702.5 million from €633.4 million. Net cash reached €121.4 million, up from €25.6 million at the end of March 2025.
Net Result Supported by Reduced Financial Expenses, Stable Recurring Operating Margin at 12.6%
Recurring operating profit stood at €119.9 million, up 1%, with a stable recurring operating margin of 12.6%. After amortization of client relationships (€7.2 million related to the Q_PERIOR merger) and other operating expenses, operating profit reached €111.5 million, up 2%.
The net profit increase of +8% to €82.1 million is notably due to improved financial charges: the cost of net financial debt dropped from -€3.2 million to -€0.5 million, reflecting the improvement in the firm's financial structure. The net margin came in at 8.6%, up from 8.0% a year earlier. Diluted earnings per share increased to €3.34 from €3.09 previously. A dividend of €0.50 per share will be proposed at the general meeting, up 9%.
Downward Revision of Goals, New Strategic Plan 'Lead the Shift' Set for 2030
Wavestone has abandoned its previous target of a 15% recurring operating margin by the end of 2027/28, with the delay of this milestone reflecting the operational challenges of the past year and the slow market recovery. For 2026/27, the firm targets 'low single-digit' organic growth and a recurring operating margin of around 13%.
Beyond operational adjustments, Wavestone has unveiled its new strategic plan 'Lead the Shift' aiming for 2030, addressing changes in geopolitics (global fragmentation) and AI. The firm plans to invest up to €100 million in operational expenses in AI and allocate up to €800 million for acquisitions. Wavestone acknowledges that this transformation could lead to the discontinuation of up to 15% of its current activities by 2030, offset by expected growth in AI offerings. On the managerial front, the change in CEO, initially planned, is postponed by two years: Pascal Imbert remains CEO alongside Karsten Höppner and Benoît Darde as deputy CEOs.
