Invisio AB (publ)

Thank you. Hello everyone and welcome to our 2025 Q4 and full year presentation. We chose to start by showing you a small video on Invisio and who we are, because we think that the company has developed tremendously during 2025. We are entering 26 with a brand new product portfolio. We are entering with a number of new frame order contracts and new customers in our baggage. And we are ready to serve many of the countries that are looking for solutions rather than products in order to be able to ramp up the military capabilities over the coming years. Invisio is the clear market leader here and we are definitely ready to help our customer with what is next. So many of you have already seen the numbers released about an hour ago. It is of course a quarter. and even a year that we are very proud of. We had a tough Q3 with some delivery delays. And I think everyone in the Invisio network has come together tremendously in Q4 to show that this was a mistake, this was a one-off. and that we can do a lot better. So I think we have performed very, very well in Q4 on all parameters. It is our strongest quarter ever. despite the fact that there was a prolonged US government shutdown and that we continue to see Swedish kronor gaining momentum, especially towards the dollar. We saw a strong order intake across all key markets. Our gross margin is still stable and our OPEX is driven by continued but controlled investments to be able to take advantage of the opportunities we see in the markets. And our high sales, as we see in our scalable business model, transforms into high EBIT margins. We entered 2026 with a strong order book that promises good revenues for the first half of the year at least. Operationally, we saw several new developments. We had a new frame order agreement with the Dutch Defence Ministry that is for five with another two years optional. In addition to that, we had an agreement with the MOD in Ireland, the Irish Defence Forces, where there is a framework agreement through a radio manufacturer, but the first firm order was for around 120 million. We had an order for almost 200 million for Intercom and our dismounted soldier systems from an existing European customer. And in order to take advantage and really benefit from the many opportunities we see going forward, we have made a number of changes in our senior management team that I will come back to. So on the other order intake, very strong in Q4, 660 million, which is the highest ever if we... take the order last year with the radios and don't count the radios, then this is the highest we've seen. And for the full year, also almost a little more than 1.8 billion. Also the highest as we disregard the radio order last year. So what we see is also a clear trend again, that our customers really want us to deliver full systems, not only individual products, but to take care of a full category and therefore deliver more products as part of a system, which also increases the average order size for us. And apart from the larger orders, we continue to see a solid inflow of small and medium sized orders. So we enter 2026 with a very robust order book, 850 million. There's a little bit left of the third party radio order, but the majority of the order book is something that will positively impact our deliveries in the first half of 2026. Our revenues in Q4 were record high. It was the strongest quarter ever, despite the U.S. government shutdown and the corona. Our revenues were almost 100 million higher than the same quarter last year, and actually a bit higher if we look in comparable currencies. And for the full year, excluding the third-party radio systems, we actually grew by almost 10% in comparable currencies. So we are quite satisfied with 2025, also remembering that the growth between 2024 and 2025 was 46%. So the gross margin continues to be stable. The gross margin is still a little bit influenced by tariffs and the impact of currency conversion. But all in all, it's not been too bad. So I think the growing share of new products in our portfolio and especially also now where we go into 26 and the number of new products are on their way to hit the market, we will see a positive contribution from our new products to maintaining a healthy gross margin and gross profit. In our OPEX considerations, we have been following our investment plan based on market activities and opportunities for quite some time. And this is also the case in 2025, OPEX increased 13% in Q4 and for the full year about 16%. This is all in line with the plans we have and the investments we make in products and in sales teams to be able to address customer interests and the opportunities that we see. We have increased our team with about 40 people net in 25, so we are around 300 15 people in Envisio and then, of course, many more with the ones that work with us with our long-term partners and suppliers, both on the sales side and on the manufacturing side. Strong sales is because of the outsourced manufacturing model, something that automatically supports a strong operating margin, which was almost 33%, and for the full year, 18%. Again, this is related to some of the investments we have made throughout the year and that we will continue to do to make sure we can take advantage of all of the investments we see in defence capabilities in Europe over the next five to ten years. I think the first step for us has also been to update our operating margin target during 2025. So our new target is to achieve an average operating margin of at least 20% per year over time, which is in line with the ambitions we have for the coming years. Our inventory is still strong. We have inventories in the vicinity of 300 million Swedish kronor. It can vary up and down. We keep in significant inventory, not only Finnish goods, but also components. And this is a competitive advantage. We see that we are able to promptly deliver larger volumes and really work with our customers in these times where it is a bit volatile and sometimes we get information about available budgets at a very late stage and then we are able to act quite quickly on that. Our inventory is mainly standard products and components. And I would expect this to be a competitive advantage even further. And I think the inventory might grow somewhat in 26 when we have a lot of new products coming into the market and where we quite quickly need to establish a good inventory situation so we can deliver on the new products like the Invisio T30 headset and the new Invisio wireless link and the data hubs and everything we have coming out to the market now. Cash flow, not much to say about that. Strong cash flow both in Q4 and for the full year. The differences that we see here reflects the large increases in trade receivables that we had in December 24 and then that was paid in the beginning of 2025. And our cash and cash equivalents at the close of the period was about 400 million. So strong cash flow position. Our board of directors proposes a dividend of 3 Swedish kronor per share, up from 2.3 from last year. And the financial objective that we have is to pay between 25 and 50% of our profit after tax as a dividend. And this is in line with that proposal of 3 kronor per share. Now, operationally in the Q4, as I said, we received a framework agreement with the Minister of Defense in the Netherlands and the agreement is initiated for five years with an option for two one-year extensions and it could be worth up to 365 million Swedish kronor. It covers the majority of our product solution, headsets, control units and cables but also the possibility to serve them with other products and again we I think this is a way for us to position our entire system thinking with the Netherlands for many years to come. We expect this contract to generate significant collaboration and revenues with this customer for many years. And like same in Ireland with the IS Defence Forces, where the first order we received through a radio manufacturer was for 120 million in VCU headsets, multiple control units and cables. And then our deliveries started already now in the last quarter of 25 and continue into 26. And we expect also here that this is a long-term relationship with the Irish and that we will see further order from this customer over time. The 190 million order from a European customer is a customer we've had for some time. So this was a follow-up order with dismounted solar systems, intercom systems and so on for the user. And we have delivered most of this in 2025. A little bit left in the first quarter of 26. As we reported in the previous quarter, we achieved a large framework agreement with the US Coast Guard worth up to 930 million kroner. This is for the new Invisio Link with intercom systems and headsets, control units and cables. And we did receive the first small order that we are delivering on now. due to the government shutdown. There has not been further order activity yet, but we of course expect this contract to be a major revenue contributor for us in the years to come. But we also think that this is going to provide us with many new customers in maritime environments and coast guards. We already have a second country that has bought units for their coast guard as tests, and we have several more countries that are very interested in. in seeing the solution we are providing to the US Code Guard. And I'm sure this will be a very important category and revenue provider for Invisio in the years to come. Now with strong growth and many more employees, we also, of course, need to make sure that our management team and our organizational structure is up to speed. And therefore, I'm pleased to announce that we have done a couple of changes in Q4. We have a new position in management where Joachim Birgersson, former head of operations, is now taking on the role of looking into our strategy and what we call new growth initiatives. Joachim has been with us for a long time. And Roger Christiansen-Skåby, who has also been with us for even longer, will take over very seamlessly from Joachim and run operations from Now on, Mathias Rosval, also a long-termer with Invisio, is our new head of sales and marketing in the rest of the world. And he is now going to head the sales organization and marketing organization in this region. So we are all set for a strong 2026 with an updated management team. in summary for the full year there has been a lot of highlights where we have continued to invest in the organization in new product development in more sales team members we started out the year by acquiring ultra links we have during the year announced a number of new products like the market leading invisio t30 headset the invisio wireless link and many other smaller product solutions as well we have seen a number of new customers and major orders and framework agreements like with the with the dots with the iris with the us coast guard but more importantly we see continued high market activity going forward it has for quarters now of course been a little bit uncertain when are we going to see the effect of all the investments in in defense in NATO. And it is coming. I think some of these contracts are the first examples of that now it is starting to hit our area as well. And we believe that we are very well positioned to take advantage of these opportunities over time. We also during the year updated our estimate of the addressable market size, which you can find on our website. This market size does not take into account any of the forward-looking investments. It only looks at where the market is right now, where we believe right now the addressable market sizes are. Last but not least, Invisio has been moved to the large cap list on Nasdaq Stockholm, which is of course something we are proud of after 20 years of very diligent and hard work. Many of the employees here are those that have been here for this period of time and have taken us anywhere from a startup to now a company on Stockholm Nasdaq large cap. So in closing, market outlook, as we said many times, there is a very uncertain geopolitical landscape still that continues to keep defense and security issues very high on the agenda, which means there will be lots of investments into defence and security over the coming many years. And there is a fundamental need for modern communications equipment in very many countries. And all of these factors together lead us to expect continued high demand for NVishu in 2026 and for many years to come. So with this, I conclude the presentation. for Q4 and the full year. And operator, we are open for questions, please.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Jacob Marken from Danske Bank. Please go ahead.

Hello, Lars, and thank you for taking my questions. First of all, I need to congratulate you on a fantastic end to 2025 and a very solid report across all lines. If we start on the US shutdown that you mentioned a bit, I mean, can you give us a bit more color on that? You know, how much did that affect you? I mean, we can see, you know, of course, in the report quite a big drop in sales year on year here in Q4. But I also wonder how much of the effect did you have also on order intake? Did the orders come through as expected and it was just the top line affected or was it both top line and orders being affected here this quarter?