In the case of consultants, it’s a bad thing when the headcount shrinks, as billable hours decrease at the same time. Assuming everyone has been at an 80-90% utilization rate.
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This trend will certainly have some impact on the job descriptions and number of consultants. Still, I think it’s a bit overemphasized to say it would lead to a 1:1 reduction in consultants. The role of an IT consultant—and specifically an application development consultant—includes so much more than just producing lines of code that it’s misleading to oversimplify it like that.
Besides, AI’s greatest advantages are currently elsewhere: monotonous and repetitive so-called “grunt work” is the type of work where AI holds a greater advantage over humans. Replacing creative work with AI is a bit premature and, in my opinion, a strange goal in the first place. Although, of course, from a cost perspective, it’s nice to get rid of high-paying jobs if a company’s only criterion is looking at expenses.
Disclaimer: In my own work as an IT consultant, AI models (in their various forms) have had a very marginal impact on the actual role so far. I do follow this development actively, but the varying perceptions of AI’s impact are across a very broad spectrum right now, and often too optimistic in the short term, even if they might significantly overshoot in the long term.
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I never, of course, take a position on the content I publish; the smiley was mainly due to the fact that we once again received the previous month’s figures and information to share with you so quickly. But thank you for the feedback; the use of emojis in IR is such a sensitive matter that it’s probably best to refrain from them altogether.
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I think you’re doing great, Emmi. In your own style, and there’s room for emojis too. Don’t get discouraged. The message gets across in everyone’s own way.
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Thank you so much, Harri, and likewise! I’ve always been of the opinion that IR can be a bit more relaxed than what we’ve traditionally been used to, but it’s a skill that must be carried out with great care.
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Analyst’s pre-release comments on Gofore’s Q2 results. 
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Publication of Gofore’s Half-Year Report 2024 and Webcast
Gofore Plc will publish its half-year report on Thursday, 15 August 2024, at approximately 9:00 a.m. The report will be presented in a live webcast on 15 August 2024 at 1:00 p.m.
The webcast will be held in English and can be followed at
Half-year financial report H1/2024.
Welcome! A recording will also be available at the same link after the broadcast.
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We wish Teppo a speedy recovery! 
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Gofore Plc Half-year Report 1 January–30 June 2024: Second quarter adjusted EBITA 12.7%, increased from the previous year
April–June 2024
- Profitability improved compared to the comparison period. Adjusted EBITA EUR 6.1 (5.4) million, 12.7% (11.3%).
- Net sales grew by 0.9% despite lower demand, amounting to EUR 48.0 (47.6) million. Organic growth -3.1%.
- The utilization rate improved slowly but showed a trend-like improvement during the quarter.
- There was one more working day in April–June than in 2023.
- Customer prices fell exceptionally by -1.0% due to price competition, while the average salary increased by +0.1%.
- The number of personnel increased to a total of 1,453 (1,396). Total capacity was 1,511 (1,489).
January–June 2024
- Net sales grew by 0.5% and were EUR 97.2 (96.7) million.
- Adjusted EBITA EUR 12.9 (13.7) million, 13.2% (14.2%) of net sales.
- Customer prices decreased by -0.1%, while average salary development was +0.8%.
CEO Mikael Nylund:
Gofore’s profitability improved in the second quarter compared to a year ago, and adjusted EBITA was 12.7%. Our net sales were 48 million euros, so we did not succeed in growth this time; instead, we remained at the previous year’s level and saw slightly negative organic growth.
The challenging period, driven by the generally weak economic situation and lasting for a year already, has taught us how to operate in a new kind of situation. The cornerstones of our strategy – deep partnership with customers and a comprehensive service offering for digital transformation – still work well. We have also learned to manage our operational efficiency, especially the utilization rate, in a situation where there are more frequent and continuous changes in customer projects than before. Our profitability target has not allowed us to engage in the fiercest price competition, which has partly curtailed our growth. We believe this has been the right choice for long-term success.
Customer demand picked up in the second quarter. More public sector tenders were published in the spring than at the beginning of the year. We saw a lot of framework-agreement-style tenders for expert services, especially in the social and healthcare sector. In the private sector, some customers have continued the consolidation of their supplier networks and revision of price levels that began at the start of the year. The situation for industrial customers was varied and very customer-specific. Some industrial customers managed to improve their performance, while others are still at a demand trough caused by global markets. Overall, the demand for Gofore’s services developed in a positive direction.
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Our half-year report has been published. Welcome to join the livestream at 1:00 PM to hear more! Invitation link a couple of posts above 
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A short summary:
Gofore’s revenue grew slightly in the second quarter to 48.0 million euros from 47.6 million euros the previous year. Adjusted EBITA rose to 6.1 million euros, and reported operating profit improved to 5.2 million euros. Project turnover weakened the utilization rate, and customer prices decreased for the first time in a long while. Gofore did not provide guidance on its earnings development. According to CEO Nylund, customer demand developed positively, but customers’ cost-saving decisions continued to have a negative impact.
https://x.com/Sijoittajalokas/status/1823975146102624433
Few likes on the “earnings posts” and it’s quiet in the thread otherwise… 
I can’t say that Gofore performed poorly, but investors have had and will likely continue to have high expectations for the company. The high valuation of the stock has often been mentioned, but I personally remain a shareholder.
The company’s communication is always excellent.
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Margins held up well etc. If looking for negatives for April-June 2024:
Organic growth -3.1%.
Customer prices decreased -1.0%
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Regarding Gofore, I have frequently come across the view that it is considered expensive.
Based on Inderes’ forecasts, the P/E is 16 and EV/EBIT is 12 for this year.
With double-digit growth and profitability in a better cycle, along with good returns on capital, I guess you have to pay a bit of a premium for it?
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That is true, but on the other hand, you currently have to pay, for example, a premium of about 25% based on the EV/EBIT multiple compared to Siili, which also has strong potential for double-digit growth with a good ROE% once a better cycle begins. It’s then up to everyone’s own assessment whether they believe Gofore’s higher-quality performance is worth paying that much more for.
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And at least I personally only realized after buying that the “main customer’s” (i.e. the public sector’s) available funds are unlikely to increase in the future.
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@Joni_Gronqvist and Mikael Nylund discussed, among other things, Gofore’s Q2 and the company’s future.
Topics:
00:00 Q2’24
02:34 Demand by customer sector and abroad
04:30 Market activity and dynamics
07:50 Customer price development and price competition
08:57 New projects and tenders
09:46 Consolidation of the supplier network
11:45 Outlook for the rest of the year
13:40 Upcoming strategy update
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Regarding the valuation discussion; Gofore’s better margins lower the investor’s risk, as a weak market environment still translates to profit, whereas for a low-margin company like Siili, the earnings might be missed entirely in a bad year. Personally, I don’t look at ROE, as this isn’t a balance sheet game, so the figures aren’t necessarily even comparable between companies.
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Exactly, the question here is specifically whether one is willing to pay a premium for Gofore’s more stable performance. I would think that at the moment, we are quite far into this weak cycle, and for example, Inderes is forecasting a net profit of 3.9 million euros for Siili. We aren’t very close to a situation where the result would turn negative, even though there have been some really bad years in the industry lately. Gofore is a lower-risk and higher-quality company, but is the difference in their performance so great that, from an investment perspective, it’s worth paying 25% more for it? That likely depends on each individual’s own view and investment strategy.
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Here is a new company report on Gofore, written by Joni, known from the Alokas haastattelee (Beginner interviews) thread.
We reiterate our Reduce recommendation for Gofore and lower our target price to EUR 24 (prev. 26.0), reflecting forecast changes. Gofore is not immune to the market situation, as revenue declined organically and profitability fell slightly short of expectations in Q2. The market situation remains difficult, although there are also bright spots and large tenders are underway in both customer segments. We forecast the company to continue its better-than-sector and especially more profitable growth in the coming years, even though the weak economic cycle slows down development. The stock’s valuation (2024e adj. EV/EBIT 13x and P/E 17x) is overall neutral.
Quoted from the report:
As a whole, however, the company commented that demand for services has developed in a positive direction. As the market situation picks up, it will happen more slowly than previously expected. This is in line with our earlier thoughts that the longer the weakness persists, the deeper it penetrates the order books of Gofore and other companies, and the eventual recovery will occur more slowly.
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Danske Bank published its updated view on Gofore. Recommendation BUY, target price €26.50.
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