Open Infra US Assets AB (publ) hereby publishes the interim financial report for Q1, 2026

Q1 financials show modest deterioration: network EBITDA run-rate fell 2% to $6.5m, net debt rose to $49.7m from $49.0m, and ARPU declined to $70 from $71 quarter-on-quarter. Net debt/EBITDA increased to 7.65x, while active headcount was essentially flat at 9,569 and remains above the amended covenant floor of 9,500. The update points to mild balance-sheet pressure but no immediate covenant breach.

Analysis

This reads like a classic late-cycle leverage squeeze: cash generation is flattening while the balance sheet is not, which means the equity is increasingly hostage to covenant optics rather than operating momentum. The key second-order issue is that a small deterioration in ARPU is now disproportionately painful because leverage is already high; at this point, even modest revenue slippage can compress financing flexibility faster than management can offset through headcount or cost actions.

The fact that active headcount still sits above the covenant floor is not reassuring so much as it is a warning that the company has little room to shrink its way to safety. If management leans further into headcount reduction to protect cash, that may stabilize near-term liquidity but risks accelerating revenue leakage via lower service capacity, weaker customer retention, and a more fragile sales funnel over the next 1-2 quarters.

From a credit perspective, the market should focus on refinance timing, not just leverage ratios. A net debt/EBITDA move toward the mid-to-high 7x area usually means lenders start pricing in either tighter terms or an amendment fee stack, which can become self-reinforcing if quarterly EBITDA drifts lower. The base case is not immediate distress, but a slow conversion from an earnings problem into a financing problem, with the next catalyst likely being either a covenant reset or a surprise capital raise within 3-6 months.

Contrarian take: the headline decline is small enough that a relief rally is possible if management credibly frames this as a seasonal dip and proves headcount discipline can hold covenant compliance. But that rally should be faded unless ARPU stabilizes, because the underlying operating leverage is working in the wrong direction and the equity has very little buffer left to absorb another quarter of similar deterioration.

Key Decisions for Investors

• Avoid new long exposure to the equity until at least one quarter of ARPU stabilization is visible; risk/reward is poor while leverage remains above 7x and financing optionality is tightening.
• If the name is publicly traded, consider a tactical short on any relief rally into results or covenant-related headlines; target a 1-3 month horizon with defined cover if EBITDA inflects up or refinancing terms come in cleaner than expected.
• For credit investors, prefer avoiding unsecured paper and only consider short-dated secured exposure if it trades wide enough to compensate for amendment/refinance risk; otherwise the spread does not justify the balance-sheet fragility.
• If accessible via options, use puts or put spreads on the equity into the next reporting window; the asymmetry favors downside if ARPU rolls over again, while upside is capped by persistent covenant overhang.
• Monitor for a liability-management event over the next 3-6 months; any exchange offer, covenant reset, or fee-heavy amendment would be a signal to reduce risk rather than add, as it likely marks the transition from operating softness to capital structure stress.