Q2: Positive EBITDA.

Irisity’s Q2 2026 turnaround delivered positive EBITDA of MSEK 1.6 versus MSEK -12.0 last year. Net sales rose 52% to MSEK 27.3 (from MSEK 17.9), while monthly recurring revenue increased to MSEK 4.5 (up 22%, or 30% at constant currency). Strong cash conversion is evident with collections up 67% to MSEK 33.0 and invoicing up 36% to MSEK 28.7, indicating improved payment timing and scalability.

Analysis

This is the kind of print that can trigger a rerating, but only if the market believes the margin inflection is structural rather than a one-quarter function of cost cuts and payment timing. At this revenue base, incremental sales should have outsized EBITDA leverage; the key question is whether the company can keep adding recurring revenue fast enough to absorb future SG&A re-inflation, sales headcount, and channel spend.

The stronger signal is the gap between invoicing and collections: that usually means prior-period backlog is being monetized, which improves near-term cash but is not the same as durable demand acceleration. If collections normalize while invoicing growth slows, the apparent operating momentum can fade quickly. For a small-cap software name like this, the equity re-rate tends to happen before the fundamentals are fully proven, then retrace hard if one quarter disappoints.

Second-order, a real turnaround here would pressure larger security/video incumbents to defend share with bundling or price concessions, which is margin-negative for the broader niche. The contrarian read is that consensus may be underestimating how fast the model can turn cash-generative once fixed costs are covered; but it may also be overestimating how much of this quarter is repeatable. The thesis breaks if next quarter constant-currency recurring growth slips below the low-20s or EBITDA turns negative again after working-capital effects fade.

Key Decisions for Investors

• If IRIS is liquid enough, buy only on a pullback after the initial reaction; target a 1-3 month hold with a tight stop if next-quarter EBITDA or constant-currency MRR growth weakens.
• If the stock gaps sharply higher on the print, fade part of the move rather than chase it; this is a classic setup for multiple expansion before proof of sustained operating leverage.
• Use MSI and HON as indirect beneficiaries of a healthier AI/video security spend cycle; if IRIS can repeat the growth profile next quarter, add a small 6-12 month long bias in those incumbents on any weakness.
• Set a hard falsifier alert: if invoicing growth falls below revenue growth for two consecutive quarters or collections revert toward invoicing, treat the cash conversion improvement as timing noise and reduce exposure.