Gofore - Go for or No go?

Stocks
1142

Good point. It is undeniably true that in the “physical world” design represented by Huld (mechanics, industrial design), market salary and billing rates are typically lower than in demanding software consulting. This explains part of the difference.

From an investor’s perspective, however, the question is not merely operational, but strategic. If the situation is examined within the framework of established strategy theories, several potential risks can be identified that management must control in a heterogeneous portfolio:

1. Positioning and Competitive Advantage
At the core of strategy is choice. If Gofore shifts from premium-priced digital transformation towards a broader industrial service house, there is a risk of a “stuck in the middle” situation as described by Michael Porter. In this scenario, the company would not compete purely on cost-efficiency but might lose the pricing power gained from specialization.

2. Customer Relationship Management
In B2B marketing theories (e.g., Hutt & Speh or George S. Day), the differences in purchasing processes and so-called “buying centers” structures are emphasized. A CIO and a Head of Product Development value different qualities in a supplier. Prahalad & Hamel would speak here of core competence (core competence): is Gofore’s core competence credibly scalable to these new buyer personas without blurring the brand promise and sales focus?

3. Resource Allocation and Dynamic Capabilities
Following Christensen’s Innovator’s Dilemma, it is worth considering whether lower-margin business diverts resources away from higher value-added consulting. In the terms of Teece, Pisano & Shuen, this concerns dynamic capabilities: can two different cultures and earning logics be integrated into a value-creating whole (Stabell & Fjeldstad), or will they remain separate silos?

Financial Implications

Even if we accept lower billing as a characteristic of the industry, it has a direct impact on Gofore’s investment narrative and objectives:

  1. Profitability Burden: If a significant portion (e.g., 10-20%) of revenue were to operate permanently at a lower EBITA level, it would be mathematically more challenging for the group to achieve its overall 15% target without significant overperformance from its core business.

  2. Financing Capacity (M&A): The financial market values absolute cash flow (EBITDA). Lower productivity per FTE means weaker accumulation of EBITDA euros relative to revenue. This directly impacts the company’s debt servicing capacity and thus its investment capacity for future acquisitions.

It would therefore be essential to understand whether Gofore’s profile is permanently shifting from a “high value-added boutique firm” towards a “broad-based volume firm,” and how this might reflect in the company’s long-term valuation multiples.

Thank you for your important observation.

8 Likes
1143

Thanks @pörssipiia for your observations and tips for our strategy table, including regarding literature references.

Regarding Huld, it’s worth waiting a moment longer before making bigger conclusions about the profitability of the parts that have joined the group or the change in profitability drivers as part of the group.

As @Hippos mentioned, there’s probably no reason to treat and evaluate Huld as a one-dimensional entity that now either changes or doesn’t change the entire group’s value creation fundamentals. In itself, a commendable reflection on the integration of different cultures and earning logics, but the diversity of companies adds a bit of complexity to this matter. We should return to this matter at some point later.

12 Likes
1144

Here are Joni’s comments regarding the change negotiations related to the Huld integration.

Gofore announced yesterday that the change negotiations related to the Huld integration program resulted in the termination of employment for 14 individuals in administrative roles. Overall, the elimination of overlapping roles, reduction of other administrative redundancies, and streamlining of administration are estimated by the company to bring annual savings of approximately EUR 1.3 million. In the November change negotiation announcement, the company estimated that the negotiations would lead to the dismissal of a maximum of 17 individuals, which would result in savings of approximately EUR 1.4 million. Thus, the negotiations appear to have proceeded largely as planned.

7 Likes
1145

Gofore’s CFO changes:

9.12.2025 14:15:01 EET | Gofore Plc | Changes in board/management/auditing

Gofore Plc
Stock Exchange Release
9.12.2025 at 2:15 p.m.

Changes in Gofore’s Management Team: CFO to change

Teppo Talvinko, Chief Financial Officer and member of the Management Team of Gofore Plc, has announced his resignation from his position. Talvinko will leave his duties as CFO and member of the Management Team as agreed in February 2026, after the publication of the 2025 financial statements release.

”I want to warmly thank Teppo for his valuable and long-term work in leading Gofore’s financial administration. Teppo has played a significant role in developing our financial administration processes and reporting functions over the past five years. On behalf of myself and Gofore, I wish Teppo all the best in the future,” says CEO Mikael Nylund.

Gofore has started the recruitment process for a new CFO and aims to announce the appointment during December.

5 Likes
1146

November Business Review:

Working-day adjusted, Gofore’s pro forma revenue also seemed to grow from November of the previous year.

11 Likes
1147

Here are Frans’s comments on Gofore’s November. :slight_smile:
Gofore’s revenue, adjusted for working days, was organically at last year’s level, which is positive after a somewhat longer downward trend. Reported revenue grew strongly by 15% driven by the Huld acquisition. Overall capacity and revenue per specialist also developed positively and better than our expectations. The company commented that there was good demand, especially in the Intelligent Industry sector, which is important to it. More broadly, private sector demand appears to be continuing on a slow but gradually improving trend, while demand in the public sector, which is important to the company, still involves clear uncertainty due to cost-saving needs. The critical turn of the year for the IT services sector will also be a kind of watershed for Gofore, providing much additional visibility into next year’s development. November’s development was positive, but overall our forecasts remain unchanged and uncertainty remains high.

11 Likes
1149

More good news for the end of the year!

19 Likes
1150

More good news :slight_smile:

11 Likes
1151

Congratulations Gofore :slight_smile: Saara is really a great person <3

17 Likes
1152

Thanks Harri! Kind of sorry about this, a little. :heart:

19 Likes
1153

Here are Frans’s comments as Gofore gets a new CFO. :slight_smile:

4 Likes
1154

Still time for one more piece of good news before the holidays!

27 Likes
1155

Here are Luiro’s comments on Gofore’s recent acquisition in Germany. :slight_smile:

Gofore announced that it is acquiring the German IT consulting company Esentri AG. The acquisition effectively more than doubles Gofore’s size in the DACH region to over 200 experts and approximately EUR 25 million in revenue. Strategically, the deal seems like a good fit, and its valuation also appears reasonable at first glance, so the preliminary conditions for shareholder value creation seem to be in place. At the group level, the scale of the acquisition remains quite moderate. We will incorporate the impact of the acquisition into our forecasts at the latest when the Q4 report is published.

8 Likes
1156

”Gofore pays the majority sellers 30 percent of the initial purchase price in Gofore shares and 70 percent as cash consideration”
”The subscription price per share is 13.17 euros and is based on the volume-weighted average price of Gofore’s share during the 30 trading days preceding 15 December 2025 (inclusive). As the share issue is carried out to implement the acquisition, there is a weighty financial reason for directing the share issue.”

Ensuring commitment in acquisitions is certainly worthwhile, but how profitable is it to use one’s own share as a means of payment in acquisitions at a price of €13.17?

kuva

16 Likes
1157

At SEB’s Nordic Seminar, Gofore’s CEO emphasised that that the company is currently much better equipped in terms of profitability vs a year ago. Furthermore, the recent acquisitions return Gofore to a growth track, meaning the 15-year journey from a tiny consultant to a leading mid-sized IT service provider in Finland is ready for a new chapter.

Summary by AI.

Gofore’s status in January 2026 is a combination of successful profitability improvement and significant strategic expansions. After the challenging period and cost-saving measures of 2025, the company’s underlying profitability has strengthened, and two major acquisitions – Huld and Esentri – have returned the company to a growth track. With Huld, Gofore has emerged as a key player in defense and space technology, while the acquisition of the German Esentri has doubled the DACH region business and opened doors to the Central European public sector.

Although the Nordic countries lag behind other Western countries in the utilization of AI, Gofore sees this transition as a major opportunity. The company believes that in the AI era, customers will increasingly need deep consulting and architectural renewal, which maintains service demand despite the increase in efficiency. Gofore’s goal is to be the strategic partner that guides companies through the AI transition on a global scale.

10 Likes
1158

Gofore has made it into Hesari (paywall).

The meat of the story is summarized in this short quote. Otherwise, the article covers the discussion and criticism it has caused within the company, refers to the state’s assistance (export promotion in the region in question), and speculates whether Gofore’s weakening order backlog is leading to money becoming more important than values.

“Finnish listed software company Gofore has prepared a bid to the United Arab Emirates government for a significant development project, contrary to the recommendation of the company’s ethical assessment and sustainability director.

The conflict is significant because Gofore markets itself with a value proposition according to which it is a ”pioneer of the ethical digital world”. This is written in large letters at the beginning of the company’s website.”

Edit: Gofore is, of course, just one part of a continuum. Previously, for instance, Solita made headlines for a similar topic in 2019 and Nixu in 2008

12 Likes
1159

Here is the statement we just published on the matter:

20 Likes
1160

A vague press release that sidesteps the actual conflict of values and shifts the focus to the fact that the law was broken regarding the leak.

7 Likes
1162

I understand that emotions run high in situations like these, but directly sharing the company’s internal Slack messages with third parties is also just so unethical, damn it.

29 Likes
1164

There could be some quite hefty fines for breaching an NDA, plus potential damages on top of that. Some people only learn the hard way.

4 Likes