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Introduction & Market Context
Finnish technology company Bittium Oyj (HEL:BITTI) presented its half-year financial report on August 8, 2025, revealing solid revenue growth across all business segments despite ongoing challenges in certain markets. The company’s stock responded positively, rising 11.56% to €11.10 following the presentation.
CEO Petri Toljamo highlighted the company’s progress toward profitable growth, particularly in the Defense & Security segment, which continues to benefit from increased defense spending amid ongoing geopolitical tensions. The presentation revealed both achievements and challenges as Bittium navigates varying market conditions across its three business segments.
Quarterly Performance Highlights
Bittium reported Q2 2025 net sales of €22.9 million, representing a 15.6% year-on-year increase, while operating result reached €1.1 million or 4.9% of net sales. For the first half of 2025, net sales grew by 11.3% to €42.2 million with operating result at €1.5 million (3.6% of net sales).
The company’s order book showed significant strength, increasing by 27.5% year-on-year to €43.1 million, indicating healthy future revenue potential. However, profitability was impacted by continued investments in growth initiatives and non-recurring costs of €0.9 million resulting from restructuring in the Medical (TASE:BLWV) Business Segment.
As shown in the following quarterly financial development chart:
The quarterly progression shows consistent improvement in net sales compared to 2024, though operating results remain below the exceptional performance seen in Q4 2024, when the company achieved an operating result of €6.0 million (18% of net sales).
Looking at half-yearly performance trends:
The chart demonstrates Bittium’s continued revenue growth trajectory, with first-half 2025 results showing the strongest first-half performance in recent years. Operating results have remained positive for three consecutive half-year periods, though profitability in 1H 2025 was affected by the previously mentioned non-recurring costs.
Segment Performance Analysis
The Defense & Security segment emerged as Bittium’s strongest performer, with Q2 net sales growing 19.4% year-on-year and order intake increasing significantly to €20.0 million. The segment benefited from continued partnership with the Finnish Defence Forces, including new orders for Bittium TAC WIN and Tough Comnode products, as well as ongoing deliveries of Tough SDR tactical radios.
The segment’s international expansion continued with new orders from Croatia, Estonia, and Austria, along with new European customers for Tough SDR radios. Additionally, Bittium initiated negotiations with Indra regarding potential cooperation on SDR radio technology.
The Defense & Security segment’s performance is illustrated here:
The Medical Business Segment presented a more challenging picture. While Q2 net sales increased by 4.5% year-on-year, the segment’s operating result was negative due to the €0.9 million in non-recurring costs from change negotiations and other restructuring measures. First-half sales actually decreased by 2.6% compared to the same period in 2024.
A significant positive development was a new three-year agreement with Boston Scientific (NYSE:BSX) for ECG devices, continuing a relationship highlighted in previous earnings reports. However, ECG device sales outside the US remained moderate due to market fragmentation, and Respiro sales were slower than anticipated, prompting the company to seek a strategic partner for sales.
The Engineering Services segment showed moderate growth with Q2 sales increasing 8.5% year-on-year and first-half sales up 6.3%. Order intake doubled compared to Q2 2024, with new customers from the manufacturing industry and the segment’s first defense sector service projects. However, the company noted that challenging market conditions persist, with customers maintaining tight budget constraints for new R&D projects.
Financial Position & Cash Flow
Bittium maintained a strong financial position with an equity ratio of 70.7% and negative net gearing of -0.9%. The company’s R&D investments decreased slightly to €7.7 million (18.2% of net sales) compared to €7.9 million (20.9% of net sales) in the same period last year.
The cash flow statement reveals significant improvement in operating cash flow:
Net cash from operating activities reached €9.2 million in the first half of 2025, a substantial increase from €3.0 million in the first half of 2024. This improvement was primarily driven by better working capital management, which contributed €5.1 million compared to a negative €3.9 million in the same period last year.
The company’s balance sheet structure remains healthy:
With total assets of €160.4 million, Bittium maintains a strong equity position of €110.7 million (69% of total assets) and manageable liabilities of €49.7 million (31%). Cash and liquid assets stood at €21.7 million, while interest-bearing debt was €20.8 million.
Outlook & Forward Guidance
Bittium maintained its positive outlook for 2025, forecasting net sales between €95-105 million, representing a significant increase from €85.2 million in 2024. The company expects operating result to reach €10-13 million, up from €8.6 million in 2024.
The company’s guidance is summarized in the following slide:
Management cited several megatrends supporting growth, particularly in the Defense & Security segment. The company also noted ongoing investments in production scalability and organizational strengthening. A strategy update is planned for fall 2025, with a Capital Markets Day scheduled for September 23, 2025.
Despite challenges in the Medical segment and a competitive Engineering Services market, Bittium appears positioned to continue its growth trajectory through the remainder of 2025, with the Defense & Security segment expected to remain the primary growth driver amid favorable geopolitical trends for defense technology providers.
Full presentation:
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