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Introduction & Market Context
Sensys Gatso Group AB (NASDAQ STOCKHOLM:SGG) presented its Q2 2025 interim report on August 21, 2025, revealing strong revenue growth and improved profitability despite global economic uncertainties. The traffic enforcement solutions provider reported significant contributions from Swedish and Dutch projects, increased TRaaS (Traffic as a Service) revenues from Saudi Arabia, and a recovery in its US managed service business.
The presentation, led by newly appointed CEO Lewis (JO:LEWJ) Miller and CFO Simon Mulder, highlighted the company’s diversified revenue streams across multiple geographies, providing resilience in a challenging global market environment. The stock closed at 46 SEK on the day of the presentation.
Quarterly Performance Highlights
Sensys Gatso reported Q2 2025 revenue of MSEK 204, representing a 22% increase compared to MSEK 167 in Q2 2024. The company’s EBITDA reached MSEK 31.4, up 29% year-over-year, with EBITDA margin expanding significantly from 7.3% in Q1 2025 to 15.4% in Q2 2025.
As shown in the following chart of quarterly revenue and EBITDA performance, the company has maintained a positive growth trajectory over the past six quarters, with Q2 2025 representing the highest revenue quarter in this period:
The gross margin for Q2 stood at 43%, positively impacted by final invoicing from Saudi Arabia. System sales increased by 39%, while TRaaS revenue grew by 7%. The company also reported positive cash flow from operations of MSEK 22 for the quarter.
Segment Performance Analysis
The company’s financial results were presented across two main segments: Managed Services and System Sales. The System Sales segment showed particularly strong performance with a 33% revenue increase to MSEK 158, driven by deliveries on Swedish and Dutch projects and final invoicing from Saudi Arabia. EBITDA for this segment increased by 29% to MSEK 23, representing a 14% margin.
The segment’s performance over recent quarters is illustrated in the following chart:
The Managed Services segment stabilized with Q2 revenue of MSEK 46, slightly down from MSEK 48 in the same period last year. However, EBITDA for this segment increased by 28% to MSEK 9, benefiting from a one-time insurance recovery of MSEK 8. The segment faced currency fluctuations (MSEK -5) and impact from Iowa legislative changes (approximately MSEK -6), but these were offset by underlying growth of MSEK +9 from new customers and program expansions.
The following chart shows the Managed Services segment’s performance:
A key strength of Sensys Gatso’s business model is its stable recurring revenue from TRaaS, which has consistently generated around MSEK 100 per quarter. The US market accounts for approximately 50% of this recurring revenue, demonstrating the company’s strong foothold in this key region.
Cash Position and Financial Outlook
Sensys Gatso reported available cash of MSEK 137 at the end of Q2 2025. The company made significant investments during the period, allocating MSEK 40 to fixed assets and MSEK 40 to working capital for ongoing large projects, which are expected to convert to cash in the second half of the year.
The cash position movements and debt structure are illustrated in the following chart:
Interest-bearing debt stood at MSEK 291, with increased lease liabilities due to prolongation of the lease for headquarters in Jönköping (MSEK +22), translation effect on bond (MSEK -10), and increased credit facility usage (MSEK +20).
Despite uncertainties in the global political environment, Sensys Gatso reaffirmed its financial guidance for 2025, tracking to the lower end of its revenue guidance (SEK 700-800 million) and the mid-range of its EBITDA guidance (12-14%).
Strategic Initiatives and CEO Transition
The presentation introduced Lewis Miller as the new CEO, bringing over 20 years of experience in the automated traffic enforcement industry. Miller holds a JD and Master’s Degree in Public Policy, along with a Bachelor of Arts in Economics and Political Science.
As shown in the following slide detailing the new CEO’s background and objectives:
Miller outlined his key objectives: engaging with global teams and stakeholders, assessing markets and customer value propositions, evaluating technology and go-to-market strategies, and driving profitable growth with efficient operations.
The company highlighted strong global demand with multiple opportunities in process, particularly noting significant revenue contributions from major projects:
The presentation emphasized geographic diversification as a key strength, with projects spanning Sweden (Trafikverket, 850 MSEK), the Netherlands (Dutch Speed Project, 400 MSEK), Saudi Arabia (27 MSEK annually), and various states across the US.
Forward-Looking Statements
Looking ahead, Sensys Gatso identified several key factors that will influence its performance in the remainder of 2025. The company expects investments in working capital for ongoing large projects to convert to cash in the second half of the year, potentially strengthening its financial position.
While acknowledging uncertainty in the global political environment as a challenge for predicting full-year performance, management expressed confidence in meeting the adjusted financial guidance. The company continues to monitor market developments closely while pursuing growth opportunities across its global markets.
The presentation concluded with these key takeaways:
Sensys Gatso’s Q2 2025 results demonstrate the company’s ability to deliver strong performance despite market challenges, with improved profitability and continued revenue growth providing a solid foundation for the remainder of the fiscal year.
Full presentation:
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