Ovzon Q1 2025 slides: Revenue jumps 46% YoY, EBITDA margin hits 20%

Introduction & Market Context

Swedish satellite communications provider Ovzon AB (STO:OVZON) presented its Q1 2025 results on April 24, highlighting strong revenue growth and continued improvement in profitability. The company, which specializes in high-reliability satellite communications for defense and security applications, is benefiting from increasing geopolitical tensions and growing demand for secure communications solutions.

Founded in 2006 and listed on Nasdaq Stockholm, Ovzon focuses on delivering integrated satellite communications solutions to critical sectors including defense, national security, and public safety. The company’s strategic positioning comes at a time when geopolitical tensions, cyber security concerns, digitalization needs, and climate change are accelerating the urgency for reliable satellite communications.

Quarterly Performance Highlights

Ovzon reported Q1 2025 revenue of 95 MSEK, representing a 46% increase from 65 MSEK in Q1 2024. This marks the company’s fourth consecutive quarter of revenue growth, with a particularly strong performance in recurring SATCOM service revenues.

As shown in the following revenue breakdown chart, Ovzon has been steadily increasing its base of recurring SATCOM service revenues, which now represent the majority of the company’s income:

The company achieved a significant improvement in profitability, with EBITDA reaching 18 MSEK in Q1 2025, compared to -18 MSEK in the same period last year. This translates to an EBITDA margin of 20%, a substantial improvement from the -28% margin in Q1 2024. The positive EBITDA trend is clearly visible in the company’s financial charts:

One of the most impressive aspects of Ovzon’s Q1 performance was its operating cash flow, which reached 66 MSEK, compared to -3 MSEK in Q1 2024. This strong cash generation was attributed to customer pre-payments and investments related to the Ovzon 3 satellite program.

Strategic Initiatives and Key Achievements

During Q1 2025, Ovzon completed the delivery of its largest order to date – a 12-month contract worth 185 MSEK (17 MUSD) with the Swedish Space Corporation (SSC). This milestone contract includes an integrated SATCOM solution based on Ovzon 3, with mobile satellite terminals and satellite services. The SATCOM services started on March 1, 2025, with full payment received in January 2025.

The company also successfully validated its satellite communications technology in extreme Arctic conditions, demonstrating the resilience and reliability of its solutions more than 480km inside the Arctic Circle. This achievement is particularly significant as the Arctic region becomes increasingly strategic from a geopolitical perspective, with growing interest from Nordic countries, the U.S., and Canada due to its resources and military significance.

Other notable Q1 achievements included:

• Participation in a strategic 6GSAT research initiative
• Renewal of SATCOM-as-a-Service delivery to the Italian Fire and Rescue Services
• Appointment of André Löfgren as new CFO effective May 1, 2025
• Extended and amended loan facility agreement with P Capital Partners (WA:CPAP)
• New order from a European NATO customer worth 1.7 MUSD (17 MSEK)

Financial Analysis

Ovzon’s order book remained strong at 25.0 MUSD (250 MSEK) at the end of Q1 2025, up from 19.1 MUSD in Q1 2024. However, order intake in the quarter was lower at 2.2 MUSD compared to 11.1 MUSD in the same period last year. The company’s rolling 12-month order intake amounts to 39.9 MUSD (420 MSEK), up from 34.6 MUSD a year ago.

The following chart illustrates Ovzon’s order intake and order book trends:

While EBITDA has turned positive, EBIT remains negative due to the Ovzon 3 satellite not yet being fully utilized. The company’s net debt stands at 629 MSEK, up from 520 MSEK in the comparable period.

Looking at the company’s overall financial momentum, Ovzon has shown consistent improvement across key metrics in recent quarters:

Forward-Looking Statements

Ovzon’s remaining investment in the Ovzon 3 program is estimated at 50 MSEK for 2025, with contractual investments of 60 MSEK spread over the period 2025-2033. The following chart shows the expected investment timeline:

Going forward, Ovzon is focused on three strategic pillars:

1. Delivering financial performance through increased order intake, revenue growth, improved EBITDA, and positive cash flow

2. Ensuring commercial success by making every customer a reference, fully utilizing Ovzon 3, and focusing on core market segments and relevant geographies

3. Actively scaling up with a focus on customers, people, and delivering value with technology

The company’s stock closed at 27.15 SEK on April 24, 2025, up 1.66% for the day. The shares have traded between 9.56 SEK and 31.15 SEK over the past 52 weeks, reflecting the market’s positive response to Ovzon’s improving financial performance and strategic positioning in the high-reliability satellite communications market.

Full presentation:

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