Q2 2026 Bittium Oyj Earnings Call

August 7, 2026

Karoliina Malmi: Good morning, everyone, and welcome to this webcast. My name is Karoliina Malmi, and I'm the Head of Communications and Sustainability at Bittium. With me here are our CEO, Petri Toljamo, and CFO, Petri Hiljanen. Today we are going to talk about our financial development of the Q2 of this year and the H1 of this year, of course, the main events resulting to the results. At the end of the presentation, we have reserved some time for the Q&A. Any time, if you have questions, you can place them through that Q&A button on your screen, and at the end, we will go through your questions. Before we start today about forward-looking statements, they may have risks and uncertainties, and may occur differently. Bear that in mind. Without further ado, I will let Petri you to start.

Speaker #1: Good morning, everyone, and welcome to this webcast. My name is Karoliina Malmi, and I'm the Head of Communications and Sustainability at Bittium. With me here are our CEO, Petri Toljamo, and CFO, Petri Hiljanen.

Speaker #1: Today we are going to talk about our financial development in the second quarter of this year and the first half of this year, and of course, the main events resulting in the results.

Speaker #1: At the end of the presentation, we have reserved some time for Q&A. So, anytime you have questions, you can send them through the Q&A button on your screen, and at the end we will go through your questions.

Speaker #1: And before we start today, a reminder about forward-looking statements: they may involve risks and uncertainties, and actual results may differ. So please bear that in mind. Without further ado, I will let Petri start.

Speaker #2: All right, thank you, Karoliina. I'll start with the highlights for the second quarter, Q2 2026. First, our net sales grew 60%. EBITDA was 27.5%, and operating profit was 22.2% of net sales.

Petri Toljamo: All right. Thank you, Karoliina. I'll start with the highlights for the Q2 2026. First, our net sales grew 60%, EBITDA was 27.5%, and operating profit was 22.2% of the net sales, while operating cash flow was EUR 8.8 million. Our new orders, order intake was EUR 46.3 million, and we have personnel at the end of the Q2, 575 employees. Let's look the H1. Net sales growth was 37.2%, EBITDA 22.3% of the net sales, operating profit 16.6% of the net sales. Operating cash flow EUR 36.9 million, new orders EUR 81 million, and our order book EUR 102.2 million. I'll summarize this briefly, the H1. I think that our financial performance was excellent, both on the net sales and operational results. We were within company's strategic long-term financial goals.

Speaker #2: Our operating cash flow was €8.8 million. Our new orders, order intake, was €46.3 million, and we had personnel at the end of Q2 totaling 575 employees.

Speaker #2: Let's then look at the first half. Net sales growth was 37.2%. EBITDA was 22.3% of net sales, and operating profit was 16.6% of net sales.

Speaker #2: Operating cash flow was €36.9 million, new orders were €81 million, and our order book was €102.2 million. I'll summarize this briefly. In the first half, I think that our financial performance was excellent.

Speaker #2: Both on the net sales and operational results, we were within the company’s strategic long-term financial goals. Also, with technology leadership and future investment through new product launches and strategic partnerships, I think that we were progressing pretty well.

Petri Toljamo: The technology leadership and future investments through the new product launches and strategic partnerships, I think that we are progressing pretty well. Our H2 was very active, announcing new different investments and announcement on the product side. We have put emphasis on the scaling the operations to ensure fast deliveries, investing in process development and data-driven systems continued as well. The main driver for the good results at Bittium was the Defense and Security business segments. They're driving the growth 67.8% on the H1, and also very strong order intake. Medical turns profitable and restructuring start to pay off. Engineering Services side is a still challenge. There's a market that's not very positive at the moment, and we are doing a turnaround there. Our ICB sector reclassified to Defense, which is enabling us to access to international Defense ETFs as well.

Speaker #2: Our second half was very active, announcing new and different investments and the announcement on the product size. Also, we have put emphasis on scaling the operations to ensure fast deliveries, also investing in process development and data-driven systems continues as well.

Speaker #2: The main driver for the good results at Bittium was the Defense and Security business segments, driving the growth—67.8% in the first half—and also very strong order intake.

Speaker #2: Medical turns profitable and restructuring starts to pay off. Engineering service side is still a challenge. The market is not very positive at the moment, and we are doing a turnaround there.

Speaker #2: Our ICP sector was reclassified to defense, which is enabling us to access international defense ETFs as well. Strong cash flow, significantly strengthened financial position, and record order backlog.

Petri Toljamo: Strong cash flow significantly strengthened its financial position and record order backlog. We believe it provide a strong platform for the strategy implementation and future growth. I'll now hand over our CFO, Petri Hiljanen, to cover the financial parts.

Speaker #2: We believe it provides a strong platform for strategy implementation and future growth. I will now hand over to our CFO, Petri Hiljanen, to cover the financial parts.

Speaker #3: Thank you, Petri. Good morning, everybody. My name is Petri Hiljanen. I'm the CFO for Bittium. Let's review some key financials for the last quarter, and then the first half.

Petri Hiljanen: Thank you, Petri. Good morning, everybody. My name is Petri Hiljanen, and I'm the CFO for Bittium. Let's review some key financials for the Last quarter and H1. Our sales reached EUR 36.6 million, which were heavily leaning towards the defense and security deliveries. Product deliveries especially went up. The service sales was flat comparing to previous quarters. Most of the growth was contributed by product sales and deliveries. Quarterly operating result for Q2 was EUR 8.1 million, and it was an increase to EBIT of 22.2%. There was especially good performance at the defense and security, which then, of course, offset the other segments a little bit less, a little bit poor performance. Especially Engineering Services was negative during Q2. As mentioned earlier, for Q2 and also for H1, the sales growth was contributed mostly by defense and security product deliveries.

Speaker #3: Our sales reached €36.6 million, which were heavily leaning towards defense and security deliveries. Product deliveries especially went up. The service sales were flat compared to previous quarters, so most of the growth was contributed by product sales and deliveries.

Speaker #3: Quarterly operating results was for second quarter was 8.1 million. And then it was an increase to EBIT of 22.2%. There was especially good performance at the defense and security which then of course offset the other segments a little bit less a little bit poor performance especially engineering services was negative during the second quarter.

Speaker #3: As mentioned earlier, for the second quarter and also for the first half, the sales growth was contributed mostly by defense and security product deliveries.

Speaker #3: Medical grew a bit, some 6.3%, but then again, as mentioned earlier, the performance with engineering services was not at the level that we are happy with.

Petri Hiljanen: Medical grew a bit, some 6.3%. As mentioned earlier, the performance with Engineering Services was not at the level that we are happy with. The top line went down there. As we can see that momentarily, we have been exceeding even the long-term target range for sales, but that's heavily related to the cyclicality of the deliveries and the quarterly sales has been fluctuating during the past years and past quarters. That, of course, is explaining that part. The margins for H1. It gives us a solid base to go forward and to develop further our strategy, especially in the defense and security area.

Speaker #3: So the top line went down there, and now, as we can see, that momentarily we have been exceeding even the long-term target range for sales. But that's, again, heavily related to the cyclicality of the deliveries, and you know the quarterly sales have been fluctuating during the past years and then past quarters, so that, of course, is explaining that part.

Speaker #3: And now, the margins for the first half give us a solid base to go forward and to further develop our strategy, especially in the defense and security area.

Petri Hiljanen: Fluctuations, as you can see here, are quite high between the quarters and H1 especially has been lower than H2, but that's again, something that we are not going to be considering as a change here from the previous years. Investments for future growth. We invested more than EUR 10 million to R&D. Of course, percentage-wise, it was a little bit less than earlier, but then again, our sales went up so much that it's explaining the little bit lower percentage. Our investments and capitalizations were something like EUR 3 million during H1, and that's especially supporting our growth going forward. Our long-term financial goals here, as we can see, we are confirming them that the annual growth target is between 20% to 30%, and an operating result target is between 10% to 20% of sales.

Speaker #3: The fluctuations, as you can see here, are quite high. Between the quarters, the first half especially has been lower than the second half, but that's again something that we are not going to be considering as a change here.

Speaker #3: From the previous years. Investments for future growth we invested 10 more than 10 million to R&D of course it percentage wise it was a little bit less than earlier but then again our sales went up so much that it's explaining the little bit less little bit lower percentage.

Speaker #3: Our investments and capitalizations were something like €3 million during the first half, and that's especially supporting our growth going forward. Our long-term financial goals here, as we can see, we are confirming them. The annual growth target is between 20% to 30%.

Speaker #3: And then the operating result target is between 10% to 20% of sales. The order book also reached a historically high number, and it was more than €100 million. The order book has been contributed mostly by defense and security, and it's concentrated there. Our customer base has also been mostly there.

Petri Hiljanen: Order book reached also a historically high number, and it was more than EUR 100 million. The order book has been contributed mostly by the defense and security, and it's concentrated there. Our customer base also has been mostly there. Our confidence, of course, is that Confidence for the outlook is still there. We keep our outlook for this year, sales EUR 140 to 155 million, and estimate that the operating profit will be in the bracket of EUR 26 to 32 million. That's about the outlook. Cash flow was extremely good, and now we can see and confirm that we are net debt-free company. Operating cash flow was EUR 36.9. We were able to convert a huge amount of net working capital to cash during H1.

Speaker #3: Our confidence, of course, is that we still have confidence for the outlook, so we keep our outlook for this year’s sales at €140 million to €155 million.

Speaker #3: And estimate that the operating profit will be in the bracket of €26 to €32 million. So that's about the outlook. Cash flow was extremely good, and now we can see and confirm that we are a net debt-free company.

Speaker #3: So, operating cash flow was €36.9 million. We were able to convert a huge amount of net working capital to cash during the first half. Operating cash, as mentioned, was close to €37 million, and it leaves us with a good base to continue with our development path forward.

Petri Hiljanen: Operating cash, as mentioned, it was close to 37 million. It leaves us a good base to continue with our development path forward. We informed this morning also that in addition to earlier paid dividend, we're paying an additional dividend of EUR 0.15. It will be paid shortly. There was a stock exchange release this morning. You can refer to that. Balance sheet here as a final note. We're in a good position to go forward and continue our growth, even look for additional items that will help us grow. Key items, of course, are the capacity investments in production and development also. Of course, as mentioned earlier in the strategy communication, of course, we're looking and we're interested in other companies. I'm working closely with certain partners on those kind of things.

Speaker #3: We informed this morning also that, in addition to the earlier paid dividend, we're paying an additional dividend of €0.15—15 cents—and that will be paid shortly.

Speaker #3: So there was a stock exchange release this morning. You can refer to that. And the balance sheet here, as a final note, so we're in a good position to go forward and continue our growth, and then even look for additional items that will help us grow. Key items, of course, are the capacity investments in production and development also. And then, of course, as mentioned earlier in the strategy communication, we are looking and we are interested in other companies and working closely with certain partners and those kinds of things.

Speaker #3: So, healthy cash flow, healthy cash position, and that's a good basis for our future growth. And now, Petr, please.

Petri Hiljanen: Healthy cash flow, healthy cash position. That's a good basis for our future growth. Now, Petri, please.

Speaker #2: Thank you. Petr, so that's covered the final sell part. I'll now focus on our business segments, starting with Defense and Security. So let's look at the numbers first.

Petri Toljamo: Thank you, Petri. That's covered the financial part. I'll now focus on our business segments, starting with the Defense and Security. If we look at the numbers first, net sales on the Defense and Security grew as 100%. Our operating margin was 30.6%, which shows excellent profitability. On the H1 level, the net sales was 67.8% growth, operating margin 24.5%. If we then look for some highlights, what happened on the H1 on the Defense and Security, the R&D investments was EUR 6.6 million, new orders EUR 64.4 million, order book EUR 94.2 million. Order book remains at a very high level. We managed to secure a lot of the orders during the H1. Also, we managed to win deals from the key customers on the H1: Finland, Austria, Croatia, and Estonia. We are also progressing well with the new customer acquisitions.

Speaker #2: So, net sales in Defense & Security grew by 100%, and our operating margin was 30.6%, which shows excellent profitability. At the half-year level, net sales grew by 67.8%, and operating margin was 24.5%.

Speaker #2: If we then look at some highlights of what happened in the first half on the Defense and Security side: First, the R&D investments were €6.6 million, new orders were €64.4 million, and the order book was €94.2 million.

Speaker #2: So, the order book remains at a very high level. We managed to secure a lot of the orders during the first half. Also, we managed to win deals from key customers in the first half: Finland, Austria, Croatia, and Estonia. We are also progressing well with new customer acquisitions. We also announced several strategic partnerships in the first half, namely Himera, for example. Also, we were active on new product and solution launches in new verticals: Fusor, which is the software-based roading product; TUF SDSR unmanned for the drones; and Mission Net for the battlefield in the interconnect.

Petri Toljamo: We also announced several strategic partnerships on the H1, namely HIMERA, for example. Also, we were active on the new product and solution launches to new verticals. FUSOR, which is the software-based routing product, Tough SDR Unmanned for the drones, MissionNet for the battlefield in the interconnect. Bittium SafeMove product portfolio was unified more towards the complete overall software offering. We are also investing aggressively on the AI integration. We launched two partnerships, NestAI and MarshallAI, which was announced earlier. We are also increasing our own efforts on the AI to make sure that the AI will be actively involved with our products going forward. Also, we have done hybrid network solution demonstration for the Finnish Defence Forces with the Telia, our production capacity was scaled up to meet the growing customer demand.

Speaker #2: Then Bittium safe move product portfolio was unified more towards the complete overall software offering we are also investing aggressively on the AI integration we launched two partnerships Nest AI and Marshall AI which was announced earlier we are also increasing our own efforts on the AI to make sure that we are the AI will be actively involved with our products going forward.

Speaker #2: Also, we have done a hybrid network solution demonstration for the Finnish Defense Forces with Telia, and our production capacity was scaled up to meet the growing customer demands.

Speaker #2: That was something we started already last year, and I think we have—I believe we have succeeded pretty well with this one. Also, we signed NATO framework agreements regarding the secure communication products.

Petri Toljamo: We started already last year, and I believe we have succeeded pretty well with this one. Also, we signed NATO framework agreement regarding the secure communication products. Geopolitical uncertainties continues increase the defense budget allocations for defense. We are satisfied with the Defense and Security progress on the H1. Let's look the medical. We had moderate growth and this profitability turnaround is proceeding. The net sales on the Q2 was 3.2% year-on-year, operating margin 2.1% of net sales. Looking on the H1 development numbers, net sales was 6.3% growth year-on-year and operating margin 5.5% of net sales. Looking then the medical highlights. We are seeing positive signs of this turnaround. We are not yet satisfied with the level where the operability and growth is.

Speaker #2: Geopolitical uncertainties continue, increasing defense budget allocations for defense. So we are satisfied with the defense and security progress in the first half. Let's then look at medical.

Speaker #2: So we had moderate growth and this profitability turnaround is proceeding. The net sales in the second quarter were up 3.2% year on year. Operating margin was 2.1% of net sales. Then, looking at the half-year development numbers, net sales showed 6.3% growth year on year and operating margin was 5.5% of net sales.

Speaker #2: Then, looking at the medical highlights, we are seeing positive signs of this turnaround. We are not yet satisfied with the level where the operability and the growth are. We are seeing a lot of long-term potential for this business, and we can say that the strategic focus on the cardiac and sleep areas is now delivering results.

Petri Toljamo: We are seeing a lot of long-term potential for this business. We can say that the strategic focus on the cardiac and sleep are delivering now results. 25 restructuring costs benefits are now fully materialized, and we are saying that this profitability turnaround has been made. Cardiac business outside of the US in the H1, it grew 33% year-on-year. The collaboration with Boston Scientific is progressing as planned and which is also there's year-on-year growth. Sleep business side is still developing. We are awaiting results from the pilots by the end of this year, and we have signed several new distribution agreements in Europe and new growth markets. We are planning to launch new long-term EKG monitoring device on the H2 2026, expecting to accelerate the cardiac sales.

Speaker #2: '25 restructuring cost benefits are now fully materialized, and we are saying that this profitability turnaround has been made. Cardiac business outside of the US in the first half did grow 33% year-on-year.

Speaker #2: Also, the collaboration with Boston Scientific is progressing as planned, and there is year-on-year growth. The sleep business side is still developing.

Speaker #2: We are waiting for results from the pilots by the end of this year. We have also signed several new distribution agreements in Europe and in new growth markets.

Speaker #2: Also, we are planning to launch a new long-term AKG monitoring device in the second half of 2026, expecting this to accelerate cardiac sales. We are also continuing R&D investments for future product innovation.

Petri Toljamo: We are continuing R&D investments for future product innovation as well, and like I said, the positive outlook for the future growth. To summarize the numbers, the R&D investments on the H1, EUR 2.9 million, new orders EUR 9.8 million, and order book EUR 5.3 million. Sorry, EUR 5.4 million. We continue to look at the Engineering Services. First, the numbers on the quarterly. Net sales decreased 14.5% and operating margin was negative. On the H1 side, the net sales decreased 20.9% and operating margin was negative. Let's look the highlights. Of course, we are not satisfied with the numbers on these Engineering Services. We are seeing a little bit difficult market on this Engineering Services side.

Speaker #2: As well, and like I said, the positive outlook for future growth. And to summarize the numbers: so, the R&D investments in the first half were €2.9 million, new orders were €9.8 million, and the order book €5.3 million.

Speaker #2: Sorry, €5.4 million. Then we continue to look at the Engineering Services, first the numbers on the quarterly. Net sales decreased 14.5%, and operating margin was negative. Also, on the half-year side, the net sales decreased 20.9%, and operating margin was negative. And then, let's look at the highlights.

Speaker #2: So, of course, we are not satisfied with the numbers on this engineering services. We are seeing a little bit difficult market on this engineering services side.

Speaker #2: We have also decided to make sure that we are utilizing the engineering services resources to help the Defense and Security business segments, as there are many programs and opportunities in our hands.

Petri Toljamo: We have also decided to make sure that we are utilizing the Engineering Services resources to help the Defense and Security business segments as there are many programs and opportunities in our hands. The H1 was weak, mainly because of the market situation. We communicated last year that we are making clear strategic focus towards the defense sector and embedded AI. This is now progressing. We have made the first defense industry client wins, which is validating the new strategic direction. We launched a partnership with VTT as a defense R&D partner. We changed the leadership. Hanna Hulkko started as a Senior Vice President for the segment earlier on the H1, and she's now focusing to make sure that we are able to make this turnaround and reposition ourself for this new service areas.

Speaker #2: So, the first half was weak mainly because of the market situation. We communicated last year that we are making a clear strategic focus towards the defense sector and embedded AI, and this is now progressing.

Speaker #2: We have made the first defense industry client wins, which is validating the new strategic direction. We launched the partnership with VTT as a defense R&D partner.

Speaker #2: Also, we changed the leadership. Hanna Hulkko started as Senior Vice President for the segment earlier in the first half, and she is now focusing on making sure that we are able to achieve this turnaround and reposition ourselves for these new service areas.

Speaker #2: Staff utilization was maintained through the defense and security project contribution, and we expect this weak market to continue also through this '26. However, there are growing European defense budgets and Europe's push for technological sovereignty, and the increase in adaptation of edge and embedded AI, creating new opportunities for this segment.

Petri Toljamo: Staff utilization maintained through the defense and security project contribution, we expect this weak market to continue also through this 2026. However, there are growing European defense budgets and Europe's push for the technological sovereignty and the increase in adoption of the edge and embedded AI, creating new opportunities for these segments. We believe that the long-term competitive advantage comes from the deep embedded software and hardware expertise combined with the practical AI application capabilities. We are believing that will position ourself as strong partners for companies seeking to integrate AI into product development, particularly in the defense industry. Summarizing the H1, we are delivering on our strategy. The main focus is acceleration of international growth. We are making clear progress there. Our growth is solid, and our market outlook remains good.

Speaker #2: And we believe that the long-term competitive advantage comes from the deep, embedded software and hardware expertise combined with practical AI application capabilities. And we believe that will position ourselves as strong partners for companies seeking to integrate AI into product development, particularly in the defense industry.

Speaker #2: And then, summarizing the first half, we are delivering on our strategy. The main focus is the acceleration of international growth. We are making clear progress there.

Speaker #2: Our growth is solid, and our market outlook remains good. We are also now turning the growth into profits, which means converting it to cash.

Petri Toljamo: We are also now turning the growth to profits, which means converting to the cash. Defense mega trends is structural tailwind for both defense and security, and also increasingly for the engineering services segment as well. We are believing that our long-term competitiveness will remain because there's a strong innovation pipeline, what we have. Clear strategy, strong execution, and favorable mega trends are the cornerstones for the future growth. Thank you from my behalf.

Speaker #2: Defense megatrend is a structural tailwind for the Defense and Security segment, and also increasingly for the Engineering Services segment as well. We believe that our long-term competitiveness will remain because there's a strong innovation pipeline, we have a clear strategy, strong execution, and favorable megatrends are the cornerstones for future growth.

Speaker #2: So thank you on my behalf, yes, thank you, Petri. Now I think it's time for Q&A, and I have received a lot of questions here.

Karoliina Malmi: Yes, thank you, Petri. Now I think it's time for Q&A. I have received a lot of questions here, and you can still place questions if you want, and we go through as many as possible now here. Let's start, both of you. The first questions, can you comment on the expected revenue facing this year? Are you progressing in line with your expectations, or were things moving faster than you anticipated in the start of the year?

Speaker #2: And you can still place questions if you want, and we will go through as many as possible now here. But let's start—both of you.

Speaker #2: The first question: Can you comment on the expected revenue for this year? Are you progressing in line with your expectations, or have things been moving faster than you anticipated at the start of the year?

Speaker #1: So, I think we have said that there will be fluctuation between the quarters. Our first quarter was moderate, second quarter was excellent, and I think that after the first half we are proceeding according to the plan. We are still expecting the second half to be stronger than the first half, and our confidence remains high to meet our guidance for this year.

Petri Toljamo: I think we have said that there will be fluctuation between the quarters. Our Q1 was moderate, Q2 was excellent, and I think that after the H1, we are proceeding according to the plan. We are still expecting H2 to be stronger than the H1, and our confidence remains high to meet our guidance for this year.

Speaker #2: Good, thank you. So, Bittium has said that it has negotiations or discussions ongoing regarding tactical communications in at least 10 countries in Europe.

Karoliina Malmi: Good. Thank you. Cambium has told that it has negotiations ongoing or discussions ongoing regarding tactical communications, at least in 10 countries in Europe. Are these discussions still ongoing, and how they are going, and when are you expecting some deals resulting from these discussions?

Speaker #2: Are these discussions still ongoing, and how are they going? When are you expecting some deals to result from these discussions?

Speaker #1: So we have been very actively discussing and advancing these customer cases. These are kind of national cases, which are quite high and big cases, and there's a tendency that these will take time.

Petri Toljamo: We have been very actively discussing and advancing these customer cases. These are kind of national cases which are quite high and big cases, and there's a tendency that these two will take time. The positive thing why our order intake went high on Q2, also on H1, in addition to these national deals, we have been able to win new customer from the weapon system providers. Some of these are smaller, some of these are one-timers, some of these will be repetitive orders. The amounts, of course, we would like to announce that, but many of our customers are not letting us, unfortunately, to announce this. We are expanding our focus, not just from the national countries or country-based deals, also to weapon system providers. That doesn't mean that we are less interested about the national deals.

Speaker #1: The positive thing why our order intake went high on the second quarter also on the first half we have been in addition to this national deals we have been able to win new customer from the weapon system providers some of these are smaller some of these are one timers some of these will be repetitive orders but the amounts of course we would like to announce that but many of our customers are not letting us unfortunately to announce these but so we have expanding our focus not just from the national countries or country based deals also to weapon system providers and that doesn't mean that we are less interested about the national deals of course this is our main focus but it's very difficult to predict or forecast that when we will land those deals we will of course announce those separately.

Petri Toljamo: Of course, this is our main focus, it's very difficult to predict or forecast when we will land those deals. We will, of course, announce those separately.

Speaker #2: Yes, thank you. I think you already answered this next question about the defense margins in Q2 compared to Q1. What resulted in these margins?

Karoliina Malmi: Yes. Thank you. I think you answered with this answer already, this next question about the defense margins in Q2 compared to Q1. What resulted to these margins? Can you comment on that?

Speaker #2: Can you, and can you comment?

Speaker #1: So I think that, of course, we managed—the order intake was high. We managed to deliver. Our service business in general was pretty flat.

Petri Toljamo: I think that, of course, we managed the order intake was high. We managed to deliver our service business in general was pretty flat. The growth came mainly from the scaling and increasing the volume for our defense and security product business. That we will see the impact on the profitability right away.

Speaker #1: So the growth came mainly from scaling and increasing the volume for our Defense and Security product business. And we will see the impact on the profitability right away.

Speaker #2: Okay. And related question to that—can you comment on the status of current intra deliveries and any potential licensing income for Q2? Was there?

Karoliina Malmi: Okay. Related question to that, can you comment on the status of current Indra deliveries and any potential licensing income for Q2 was there?

Speaker #1: So we are not opening individual customer kind of revenue recognitions, but we can say that we have delivered everything to Intra according to the plan, and things are progressing as planned. We are very satisfied with the collaboration and the partnership with Intra.

Petri Toljamo: We are not opening individual customer kind of revenue recognitions, but we can say that we have delivered everything to Indra according to the plan, and things are progressing as planned, and we are very satisfied to the collaboration and the partnerships with Indra.

Speaker #2: Yes. What capabilities have you increased to strengthen your tender capabilities, as you mentioned?

Karoliina Malmi: What capabilities have you increased to strengthen your tender capabilities as you mentioned?

Speaker #1: So of course, this is one area. We have actually increased quite a few resources over the year, and we have said that we are going to emphasize and increase capabilities for sales, marketing, and customer-facing operations.

Petri Toljamo: Of course, this is one area. We have actually increased quite many resources over in a year, and we have said that we are going to emphasize and increase capabilities for sales, marketing, and customer-facing operation, and the bidding and the tender process capabilities is one element where of course, we have to also make sure that we are strengthening while we go forward.

Speaker #1: And bidding and the tender process capabilities is one element we, of course, have to also make sure that we are strengthening while we go forward.

Speaker #2: Yes. And you also highlighted the client pilots that have been progressing within defense and security. Has the number of potential clients you are discussing with increased?

Karoliina Malmi: Yes. You also highlighted the client pilots that have been progressed within the defense and security. Has the number of potential clients you are discussing with increased?

Speaker #1: I would say that, on the national side, we are still working with roughly 10 different ones. But of course, I can maybe say that—that is, weapon system providers. I think the number of discussions, I think it has increased.

Petri Toljamo: I would say that this national side, we are still working with roughly 10 different ones. Of course, I can maybe say that these weapons system providers, I think the number of the discussion, I think this has increased.

Speaker #2: Yes, thank you. Talking about geography, where are the most lucrative markets for Bittium? Are you considering Asia or even Latin America?

Karoliina Malmi: Yes. Thank you. Talking about geographically, so where are the most lucrative markets for Bittium? Are you considering Asia or even Latin America?

Speaker #1: So, on the defense and security side, I think the main focus is Europe and, of course, to some extent Asia. So, we have some customer wins there.

Petri Toljamo: On the defense and security side, I think the main focus is Europe and, of course, with some extent Asia. We have some customer wins there. We will increasingly add focus also on the Asia-Pacific as well, selective markets. Of course, the medical is then the global focus.

Speaker #1: We will increasingly add focus also on the Asia-Pacific, as well as selective markets. Of course, medical is then the global focus.

Karoliina Malmi: Yes. Thank you. Yes, congratulations on the strong results. Is there any prepayments or other one-off triggering strong figures?

Speaker #2: Yes, thank you. Congratulations on the strong results. Is there any prepayment or other one-offs triggering these strong figures?

Speaker #1: I don't think there is one timer. So, there are multiple customers that contributed both to the orders and the revenue-wise. Of course, we have said that we have announced the most significant orders, and also mentioned in the announcement whether we will deliver it in '26 or '27. And we have said also that Intra is a big portion, of course, of our business now.

Petri Toljamo: I don't think there is one-timers. There are multiple customers that contributed both the orders and revenue-wise. Of course, we have said that we have announced the most significant orders and also mentioned on the announcement whether we will deliver it in 2026 or 2027, and we have said also that Indra is a big portion of course, our business now. Beyond those, no single individual ones.

Speaker #1: But beyond those, no single individual ones.

Speaker #2: Yes, thank you. Going forward to Engineering Services, what are your plans for engineering?

Karoliina Malmi: Yes. Thank you. Going forward to engineering services, what are your plans for engineering?

Speaker #1: So, our plans—I think it’s pretty clear. We changed the leadership; under new leadership, we are going to execute the new strategy, which means that we will continue to increase the focus more on the embedded AI and the defense markets. As well, we have been helping to make sure that we are able to staff the programs that we have on the defense and security side.

Petri Toljamo: Our plans, I think it's pretty clear. We changed the leadership. Under new leadership, we are going to execute the new strategy, which means that we will continue to increase the focus more on the embedded AI and the defense markets, as well as we have been helping to make sure that we are able to staff the programs what we have on the defense and security side. It's a turnaround, and it's a kind of a change how we are going to position ourselves in the markets going forward regarding the offering and the required skills and competencies.

Speaker #1: So it's a turnaround, and it's a kind of a change in how we are going to position ourselves in the markets going forward regarding the offering and the required skills and competencies.

Speaker #2: Thank you. And about the medical business— is there already a plan, or are there negotiations to sell it?

Karoliina Malmi: Thank you. About medical business, is there already a plan or are there negotiations to sell it?

Speaker #1: There are no plans and no ongoing discussions to sell the company. Like said, we are not satisfied with profitability and growth, but we are satisfied with how this turnaround is progressing.

Petri Toljamo: There are no plans and no ongoing discussions to sell the company. Like I said, that we are not satisfied with the profitability and the growth, but we are satisfied how this turnaround is progressing. Team is doing good job. There are a lot of long-term possibilities, and we have kept also the R&D investments on the high level, and currently, we want to make sure that we are able to support the medical business segments to capture the growth and profitability going forward.

Speaker #1: The team is doing a good job. There are a lot of long-term possibilities, and that's why we have also kept the R&D investments at a high level. Currently, we want to make sure to support the medical business segments to capture growth and profitability going forward.

Speaker #2: Good, thank you. Going back to defense and security, how do you see the potential sales of the new product areas, like unmanned or anti-drone systems, in the coming years?

Karoliina Malmi: Good. Thank you. Going back to defense and security, how do you see the potential sales of the new product areas like the unmanned or anti-drone systems in the coming years? What kind of expectations could be realistic for the sales outside of the current core, which are the radios and the-

Speaker #2: What kind of expectations could be realistic for the sales outside of the current core, which are the radios, and?

Speaker #1: Yeah, I think those new initiatives—maybe I would say that some revenue is expected from '27 and onwards.

Petri Toljamo: Yeah, I think those new initiatives are maybe I would say that some revenue are expected from 2027 and onwards.

Speaker #2: Could you comment on the Himera cooperation? Do you believe that this will lead to significant sales in addition to technological support?

Karoliina Malmi: Could you comment on HIMERA cooperation? Do you believe that this will lead into significant sales in addition to technological support?

Speaker #1: I think that we have commercial targets, or that's partnerships—we are helping them and they are helping us. So, of course, we want to make sure that our product sales will be increased also in Ukraine with the help of the Himera.

Petri Toljamo: I think that we have commercial targets for that partnerships. We are helping them, and they are helping us. Of course, we want to make sure that our product sales will be increased also in Ukraine with the help of the HIMERA.

Speaker #2: Thank you. And could we expect decisions from the UK, and when? And what other large opportunities do you see within the next 6 or 12 months?

Karoliina Malmi: Thank you. Could we expect decisions from UK, and when, and what other large opportunities do you see within the next six or 12 months?

Speaker #1: So I would say that this UK is normal business in the sense that we are participating. We have the framework agreement with BA Systems in the UK, and this is of course a high priority. We have not received any major significant news regarding who would have won these cases.

Petri Toljamo: I would say that this UK is a normal business in that sense that we are participating. We have the frame agreement with BAE Systems in the UK, and this is, of course, the high priority. We have not received any major significant news regarding that who would have won these cases, so this remains a high priority for us, but it's just one of our many potential opportunities. We are not naming these opportunities what we have. There are many sizable European countries what be in our hands, and we want to go forward with the full portfolio what we have.

Speaker #1: So this remains a high priority for us, but it's just one of our many potential opportunities, and we are not naming these opportunities that we have.

Speaker #1: There are many sizable European countries that we have in our hands, and we want to go forward with the full portfolio that we have.

Speaker #2: Thank you. So, you mentioned important customer wins—Finland, Austria, Croatia, Estonia. Can you elaborate a little bit on what kinds of projects these are, and are they all military customers?

Karoliina Malmi: Thank you. You mentioned important customer wins, Finland, Austria, Croatia, and Estonia. Can you elaborate a little bit what kinds of projects these are, and are they all military customers?

Speaker #1: Yeah, these four are military customers, and we are expanding our sales towards these customers. These have been multi-year customers for us, so when we get a new customer, it's rarely a single delivery.

Petri Toljamo: Yeah. These four are military customers. We are expanding our sales towards these customers. These have been multi-year customers for us. When we get a new customer, it's rarely a single delivery. It's typically that it's the start of a long-term relationship, like all these four mentioned customer has been many years as our customers, and they are repetitive orders. They keep buying. We have been mostly selling Tough SDR radios, and also some other products what we have.

Speaker #1: It's typical that it's the start of a long-term relationship. Like all these four mentioned customers, they have been with us for many years as our customers, and they have repetitive orders.

Speaker #1: They keep buying, so we have been mostly selling TACWIN SDR radios and also some other products that we have.

Speaker #2: Yes, and thank you. More than 92% of Bittium's order backlog now comes from the Defense and Security business. Has Bittium effectively become a defense company?

Karoliina Malmi: Yes, thank you. More than 92% of Bittium's order backlog now comes from the defense and security business. Has Bittium effectively become a defense company?

Speaker #1: So, I think that we are gradually putting more emphasis on there. Our classification on the ICP was changed to defense, but we are still committed on all of our business segments.

Petri Toljamo: I think that we are gradually putting more emphasis, and there our classification on the ICB was changed to defense. We are still committed on all of our business segments, and that means that we are continuing to support the medical, we are making sure we are funding the R&D investments and making sure that it can grow. On the other hand, we have said that we want to make sure that we are capturing all the opportunities that we have in the defense and security. For example, in M&A, our main focus is on the M&A is to look the opportunities for the defense side.

Speaker #1: And that means that we are continuing to support the medical. We are making sure we are funding the R&D investments and making sure that it can grow, but on the other hand, we have said that we want to make sure that we are capturing all the opportunities that we have in defense and security.

Speaker #1: For example, in M&A, our main focus is on the M&A opportunities we have looked at for the defense side.

Speaker #2: Thank you. You mentioned that geopolitical uncertainty continues to drive higher defense budgets. Do you believe this represents a structural, long-term shift in defense spending, or are you planning for a normalization later in the decade?

Karoliina Malmi: Thank you. You mentioned that geopolitical uncertainty continues to drive higher defense budgets. Do you believe this represents a structural long-term shift in defense spending, or are you planning for a normalization later in the decade?

Petri Toljamo: I think this is something that we are closely monitoring. It's very hard to forecast and predict what will happen, we are making assumptions that this is a multi-year trend, and we are betting on that the modernization of the communication systems on the military side will continue strong, even if there would be a peace in the Ukraine. This is a long-term wave that has started, and I think we are making good progress there.

Speaker #1: So I think this is something that we are closely monitoring and it's a very hard to forecast and predict what will happen but we are making assumptions that this is a multi-year trend and we are betting on that that the modernization of the communication systems on the military side will continue strong even if there would be a peace in the Ukraine.

Speaker #1: So, this is a long, long-term wave that has started, and I think we are making good progress there.

Speaker #2: Sounds good, thank you. So, further, did the pilots for the new potential defense clients you mentioned in the report contribute to your Q2 sales or order intake?

Karoliina Malmi: Sounds good. Thank you. Further, did the pilots that for the new potential defense clients you mentioned in the report contribute to your Q2 sales or order intake?

Speaker #1: Yeah, some of these are, yes. So, if we are selling pilots, smaller deliveries for the new weapon system kind of customers, also the new countries.

Petri Toljamo: Yeah, some of these are, yes. If we are selling pilots, smaller deliveries for the new weapon system kind of customers, also the new countries, so yes, those have contributed the order book.

Speaker #1: So yes, yes, those have contributed to the order book.

Speaker #2: Yes, thank you. So, what is the outlook regarding new customers? Are all the cases still open, or have you lost any tenders?

Karoliina Malmi: Yes. Thank you. What is the outlook regarding new customers? Are all the cases still open, or have you lost any tenders? Is there new cases open and?

Speaker #2: Is there new cases open?

Speaker #1: I think that is mostly the same. Maybe some are progressing slower than expected, some are progressing faster than expected. There are also some new opportunities that have arrived as well.

Petri Toljamo: I think that it's mostly the same. Maybe some are progressing slower than expected, some are progressing faster than expected. There are also some new opportunities that has arrived as well.

Speaker #2: So thank you. Okay. A lot of the same questions regarding the UK. Then about Sweden—when could we hear something from Sweden?

Karoliina Malmi: Thank you. Okay, a lot of same questions regarding the UK. About the Sweden. When could we hear something from Sweden?

Speaker #1: So, Sweden is of course one of these ten customers which is in our high priority and focus, and we have announced the framework agreement with Sweden last year.

Petri Toljamo: Sweden is of course one of these 10 customers which is now a high priority and focus, we have announced the frame agreement with Sweden last year. Of course, we are in a good discussion with Sweden, but it's very difficult to predict when the actual orders would come.

Speaker #1: And of course, we are in good discussions with Sweden, but it's very difficult to predict when the actual orders would come.

Speaker #2: Thank you. For now, the final question: What is the outlook with the secure government devices, meaning Tough Mobile and that service market, and what's going on with Tough Mobile 3?

Karoliina Malmi: Thank you. For now, the final question, what is the outlook with the secure government devices, meaning Tough Mobile and that service market, and what's going on with Tough Mobile 3?

Speaker #1: So, Tough Mobile 2 4G version is still there. There are opportunities with Tough Mobile 2. At the same time, we are progressing with HMD Secure Oy regarding the development of this Tough Mobile 3.

Petri Toljamo: Tough Mobile 2 4G version is still there. There are opportunities with Tough Mobile 2. At the same time, we are progressing with the HMD Secure Oy regarding the development of this Tough Mobile 3, and this is something that we will later provide the details about the availability, but this is what we are developing. We are making sure that our software portfolio on top of the Tough Mobile 3 is also progressing, and we are advancing those software versions as well.

Speaker #1: And this is something that we will later provide the details about the availability, but this is what we are developing. We are making sure that our software portfolio on top of the Tough Mobile 3 is also progressing, and we are advancing those software versions as well.

Speaker #2: Thank you. I'm trying to check if I missed any questions here, but I think so far I have captured all questions. Oh, there is one regarding any potential customers in Asia.

Karoliina Malmi: Thank you. Trying to look if I missed any question here, but I think so far I have captured all questions. One is regarding any potential customers in Asia.

Speaker #1: So like I mentioned, we already have some design wins from Asia, and as I also said, it will increasingly be more in our focus going forward.

Petri Toljamo: Like mentioned, we have already some design wins from Asia, also said that it increasingly will be more in our focus going forward. The main emphasis is on Europe.

Speaker #1: But the main emphasis is on Europe.

Speaker #2: Yes. Well, I think that's it for today. So, thank you all on my behalf and...

Karoliina Malmi: Yes. Well, I think that's it for today. Thank you all on my behalf.

Speaker #1: Thank you also on my behalf.

Petri Toljamo: Thank you also from my behalf.

Speaker #3: Thank you.

[Company Representative] (Bittium): Thank you.

Karoliina Malmi: Thank you.

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