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Stock Markets April 28, 2026 01:41 AM

Zalaris Q1: Modest revenue gain as managed services cushions consulting slump

Payroll and HCM provider posts slight top-line growth but reports lower adjusted EBIT and misses revenue consensus

By Nina Shah
Zalaris Q1: Modest revenue gain as managed services cushions consulting slump

Zalaris ASA reported first-quarter revenue of NOK 372 million, a 0.5% increase year-over-year, driven by growth in managed services which offset a notable drop in consulting activity. Adjusted EBIT declined to NOK 42 million from NOK 52 million a year earlier, and reported EBIT was NOK 29.3 million. Revenue missed an analyst consensus of NOK 405 million. The company added NOK 75 million in annual recurring revenue through new multi-year HR and payroll contracts.

Key Points

  • Zalaris posted Q1 revenue of NOK 372 million, a 0.5% year-over-year increase, led by managed services growth.
  • Adjusted EBIT fell to NOK 42 million from NOK 52 million a year earlier; reported EBIT was NOK 29.3 million.
  • New long-term HR and payroll contracts will add NOK 75 million to the company’s annual recurring revenue.

Zalaris ASA, the Norway-based payroll and human capital management provider, posted first-quarter revenue of NOK 372 million, a marginal increase of 0.5% compared with the same quarter last year. Management attributes the stable top-line outcome to stronger sales in managed services that offset weaker consulting activity.

Adjusted earnings before interest and taxes (EBIT) for the quarter were NOK 42 million, down from NOK 52 million in the prior-year period. The company reported statutory EBIT of NOK 29.3 million for the quarter.

Reported revenue of NOK 371.90 million came in below the consensus figure of NOK 405 million cited by one analyst. Within the top line, managed services revenue expanded by 7.9% in the quarter, while consulting revenues declined by 15% in local currency terms.

On the commercial front, Zalaris secured new long-term HR and payroll agreements during the quarter that collectively represent NOK 75 million in annual recurring revenue (ARR). The company stated that these signed contracts will add NOK 75 million to ARR going forward.

The chief executive pointed to the continued transition toward recurring managed services as the underpinning of the company's relatively steady performance in the period. That shift toward a larger proportion of predictable, contract-based revenue was highlighted as the reason the company could offset weakness in consulting.

Financial snapshot

  • First-quarter revenue: NOK 372 million, up 0.5% year-over-year.
  • Adjusted EBIT: NOK 42 million, down from NOK 52 million year-over-year.
  • Reported EBIT: NOK 29.3 million.
  • Revenue versus consensus: NOK 371.90 million reported versus NOK 405 million consensus from one analyst.

Contracts and revenue mix

New long-term HR and payroll contracts signed in the quarter add NOK 75 million to annual recurring revenue. Managed services growth of 7.9% helped offset a 15% decline in consulting activity in local currency.

Outlook context

The company framed the quarterly results as reflective of a structural shift toward recurring managed services revenue. While the consulting segment contracted materially in the quarter, the expansion in managed services and the booked ARR from new contracts were presented as stabilizing elements for future revenue streams.

Risks

  • Consulting activity contracted by 15% in local currency, creating near-term pressure on overall revenue - impacts the consulting and professional services segment.
  • Reported revenue missed an analyst consensus of NOK 405 million, indicating sensitivity to demand and analyst expectations - relevant to equity and investor sentiment.
  • Adjusted EBIT declined year-over-year, which highlights margin and profitability pressures if revenue mix does not continue to shift toward higher-margin recurring services - impacts corporate profitability and investor returns.

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