Zalaris — Positive contract progress in Q2

Zalaris (OSE: ZAL)

Last close As at 02/07/2025

NOK76.20

−0.60 (−0.78%)

Market capitalisation

NOK1,700m

More on this equity

Research: TMT

Zalaris — Positive contract progress in Q2

Zalaris has recently signed a contract extension with a Nordic financial institution; the value of the extension makes up a significant proportion of the nearly NOK35m of annual contract value (ACV) signed in the quarter. In addition, letters of intent for two separate Managed Services contracts worth a combined NOK13m in ACV were signed in Q2. These contracts support our FY25 revenue forecast and underline the progress the company is making with existing and new customers. We maintain our forecasts.

Katherine Thompson

Written by

Katherine Thompson

Director

Software and comp services

Q2 trading update

2 July 2025

Price NOK76.80
Market cap NOK1,700m

Net cash/(debt) at end Q125

NOK(225.6)m

Shares in issue

22.1m
Free float 65.6%
Code ZAL
Primary exchange OSLO
Secondary exchange N/A
Price Performance

Business description

Zalaris is a leading provider of comprehensive human capital management and payroll solutions.

Analyst

Katherine Thompson
+44 (0)20 3077 5700

Zalaris is a research client of Edison Investment Research Limited

Note: PBT and EPS (diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Year end Revenue (NOKm) PBT (NOKm) EPS (NOK) DPS (NOK) P/E (x) Yield (%)
12/23 1,134.0 10.8 0.95 0.00 81.0 N/A
12/24 1,346.3 80.7 2.70 0.90 28.4 1.2
12/25e 1,494.5 145.2 5.06 0.96 15.2 1.3
12/26e 1,626.0 186.7 6.38 1.36 12.0 1.8

In Q2, Zalaris expanded its service agreement with a Nordic financial institution customer. The agreement extends Zalaris’s existing payroll services for the customer to now include its Finnish operations, adding more than 1,600 employees. The service includes end-to-end payroll, time and attendance, and travel expense management. The contract makes up a significant proportion of the almost NOK35m of ACV signed in Q2.

Also during Q2, two letters of intent were signed representing more than NOK13m in combined ACV. Project implementation is already underway for both.

Management commented that with the signed agreements and active implementations, the company is well on its way to achieving its 2025 sales targets. At the end of Q125, the company had Managed Services contracted annual recurring revenue of NOK1,065m; these new contracts increase this by 4.5% to NOK1,113m. With implementation of the new contracts likely to extend into FY26, we expect them to contribute to the company’s 10% revenue growth target for FY26.

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