GFT delivered a strong Q2, with growth accelerating and profitability improving further. Sales grew 6.1% yoy to € 233m, a clear acceleration vs. Q1 (+3.4% yoy). Meanwhile, adj. EBIT rose 9.9% to € 16.5m at a margin of 7.1% (+0.2pp yoy).
Sales growth was again carried by Americas and APAC, up 16% yoy to € 123m on very dynamic business in Brazil and Colombia. Europe came in at € 110m (-3% yoy), with strong momentum in Spain and Switzerland absorbing continued caution in Germany and the anticipated weak UK business. The latter should have passed its trough in H1 and looks set to return to growth in Q3 against an easy comparable base.
The slight adj. EBIT margin expansion in Q2 was driven by efficiency gains in personnel costs (only +3.9% yoy; FTE: +3% yoy; vs. +6% sales growth), also visible in a high utilisation of 92.8% (Q2 25: 92.3%). The other noticeable margin contributor was declining D&A (-8% yoy), thanks to lower office lease expenses. Reported EBIT rose 32% yoy to € 13m as capacity adjustment costs more than halved.
The order backlog was up 18% yoy to € 484m, following +11% yoy in Q1. The step-up is driven by multi-year SAP contracts and six new next-gen core banking projects, which lifts visibility for H2 and beyond. Even more relevant in our view, management sees client sentiment towards IT services improving, especially towards high value-added services (like modernisation projects), which is exactly GFT's strength.
The FY26 guidance was confirmed (sales: c. € 930m; adj. EBIT: c. € 71m). This implies H2 sales growth of 4.6% yoy and adj. EBIT margin of 8.2% (-0.1pp yoy), which does not look ambitious. Considering that the company expects a further growth acceleration in Q3 and a favourable fx-development, the current momentum certainly supports at least this outlook.
Peer prints point to a market that is better than feared. Sopra Steria raised its FY organic growth target to 2-2.5% (prior: 1-2%) after 5.3% underlying organic growth in Q2, naming financial services among the drivers. Capgemini lifted its FY sales outlook with FS its fastest growing vertical. The takeaway: banking IT budgets appear to be opening up.
In sum, Q2 shows the operational inflection gaining traction: accelerating growth, a wider margin and a backlog that adds visibility. With the UK reset behind and AI-led modernisation demand intact, we reiterate BUY with an unchanged PT of € 32 (DCF-based), following minor estimate change.
ISIN: DE0005800601
