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Bittium Oyj reported a strong second quarter of 2025, with net sales increasing by 15.6% year-on-year to €22.9 million, building on its impressive 13% revenue growth over the last twelve months. The company demonstrated solid growth in its defense and medical technology segments. Following the earnings announcement, Bittium’s stock price surged by 11.56%, reflecting investor confidence in the company’s strategic direction and financial health. According to InvestingPro data, the company maintains a perfect Piotroski Score of 9, indicating exceptional financial strength.
Key Takeaways
- Net sales increased by 15.6% year-on-year in Q2.
- The stock price rose 11.56% following the earnings report.
- Strong growth in defense and medical technology segments.
- Operating result was €1.1 million, representing 4.9% of net sales.
- The company remains net debt-free with a robust equity ratio of 70.7%.
Company Performance
Bittium’s performance in Q2 2025 was marked by a significant increase in net sales, driven largely by its focus on tactical communications and medical technology innovations. The company has been expanding its international customer base, securing partnerships across Europe, and investing in product development, particularly in software-defined radio technology. This expansion aligns with broader industry trends in defense modernization and medical technology advancements.
Financial Highlights
- Revenue: €22.9 million, up 15.6% year-on-year.
- Operating result: €1.1 million, 4.9% of net sales.
- Order book growth: 25% year-on-year.
- Equity ratio: 70.7%.
- Net debt-free status maintained.
Market Reaction
Bittium’s stock price increased by 11.56% following the earnings release, closing at €11.10, up from the previous close of €9.95. This movement positions the stock closer to its 52-week high of €11.48, with the stock showing remarkable momentum through a 54% gain over the past six months. The positive market reaction reflects investor optimism about the company’s strategic initiatives and financial performance. Based on InvestingPro Fair Value analysis, the stock appears to be trading above its intrinsic value, suggesting investors should monitor valuation metrics closely.
Outlook & Guidance
Looking ahead, Bittium has projected net sales for 2025 to be between €95 million and €105 million, with operating results expected to range from €10 million to €13 million. With a market capitalization of $462.6 million and analysts forecasting continued profitability, the company anticipates a stronger second half of the year, driven by continued growth in the defense and medical segments. A Capital Markets Day is planned for September 23rd to further outline strategic priorities. Get deeper insights into Bittium’s growth potential and comprehensive financial analysis through the detailed Pro Research Report, available exclusively on InvestingPro.
Executive Commentary
CEO Petri Tolemo highlighted the company’s strategic positioning, stating, "We are in an excellent position now to capture the wave of modernization and digitalization of radio and tactical communication systems." He also emphasized the importance of profitable growth, saying, "We don’t want to just grow the top line. We have to be able to grow profitably."
Risks and Challenges
- Supply chain disruptions could impact production timelines.
- Market saturation in certain segments may limit growth.
- Macroeconomic pressures could affect defense budgets.
- Competition in the medical technology sector remains intense.
- Currency fluctuations could impact financial performance.
Q&A
During the earnings call, analysts inquired about potential cooperation with Indra in Spain and the status of the BAE Systems partnership. Bittium addressed concerns regarding profitability and investment strategies, emphasizing its commitment to innovation and strategic partnerships.
Full transcript - Bittium Oyj (BITTI) Q2 2025:
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Good morning, everyone, and welcome to this webcast on half year financial results. My name is Karolina Malmi, and I’m the Head of Communications and Sustainability at Bittyom. And with me here today is our CEO, Petri Tolema, who has started to leading this company in the April. But before I hand over to you, Petri, I’d like to remind you all, we have reserved some time at the end of the presentation for Q and A. So please use the Q and A box on your screen to write us questions, and we will answer them at the end.
Pat, now over to you, Petri.
Petri Tolemo, CEO, Bittyom: Thank you, Carolina. Good morning, and thank you for joining us today. So my name is Petri Tolomo. I started this April 1 as the CEO of I’m excited about my new role as the CEO. I was six years with the Board of Directors of BitTim.
And I see a lot of opportunities, especially on the defense side for BitTim to grow. And based on my background, I believe I’m in a good position to help BitTim to take ourselves to the next level. So first few forward looking statements. So some statements made in this material are relating to the future circumstances and by their nature. Those forward looking statements involve risk and uncertainty and therefore, BitTeam Corporation disclaims all obligations to update such forward looking statements.
Then we will go over the financial results for the first half year. So our net sales and order book grew significantly. So the second quarter net sales grew by 15.6% year on year and we were at €22,900,000 So then looking for the business segments, what we have, so the Defense and Security, net sales grew by 19.4% and order intake grew significantly to €20,000,000 Medical business segment net sales grew by 4.5% and order intake grew to €4,600,000 Engineering service net sales grew by 6.3% and order intake grew significantly to €6,000,000 which basically doubled the order intake number. To summarize the first half, so net sales grew by 11.3% year on year and was €42,200,000 Our order book increased by 25% year on year and is now at 43.1%, which has put us in a very good position to have the strong order book situation. Second quarter operating result was €1,100,000 representing 4.9% of the net sales.
And which impacted then the profitability level was that we have continued to make certain investments for the growth, which made an impact on the profitability level. And also, we announced earlier that we had a onetime cost related to the restructuring of the Medical business segments, which lead to €2,000,000 annual cost savings, 2,000,000 annual cost savings and that impacted by €900,000 our second quarter operating results. To summarize, the first half of the operating results was €1,500,000 representing 3.6% of the net sales. Then going to financial review, starting with this quarterly financial development. So we are presenting here that two years sorry, four, three years quarterly development.
And so the second quarter total was €22,900,000 services €7,800,000 while the products were €15,100,000 And which is notable to here, if we look to last year, the second quarter twenty twenty four, so the product business side has been growing significantly here. On the right, there’s operating results. And as we see, the trend is a positive, the 23%, 24%. We spent time on the turnaround on the profitability side, and that was made well. And now it’s the time for the growth.
And so the second quarter, so €1,100,000 representing 4.9% of the revenue. The same comparison, but now on the half year, so 11.3% year on year. In total, 42,200,000 services, 16,300,000 under products, 25,900,000. And again, if we compare that to the first half, what we had the situation last year, a notable year is the growth of especially on the product side. And on the right, you are able to see then on the operating results curve as well.
R and D investments decreased year on year, so €7,700,000 representing 18.2% of the net sales, while we had last year in the comparable time €7,900,000 €2,200,000 was capitalized, which is less than we had in the last year €3,900,000 Also the depreciations decreased to €1,800,000 while we had €2,800,000 last year. So the total R and D cost and the impact on the P and L was €7,300,000 while last year it was €6,900,000 And the investments, main focus on that is especially on the tactical communications and the radius for the defense market, but we are also making significant investments also on the medical technologies and the products and the software. Looking for the cash flow, I think the trend has been positive on the cash flow. So first, the net profit with adjustment on the first half, 4,200,000 change in the net working capital, 5,200,000.0 interest and taxes, €100,000 net cash from operating activities €9,200,000 which is significantly higher than last year then net cash from investing activities minus €5,200,000 and net cash from financing activities minus €4,000,000 which included the dividend payment of €3,500,000 and which changed the net change in cash and cash equivalents to be zero for the 2025.
Assets and liabilities. So first looking at the assets, the non current assets, 85,000,000, which is included the property plant and equipment, 19,000,000 capitalized development cost €15,800,000 and other assets €15,100,000 On the current asset side, the inventory was €24,700,000 trade and other receivables €28,900,000 and cash and liquid assets €21,700,000 Then on the equity and the liability side, equity €107,000,000 liabilities €49,700,000 which included the trade and other payables €24,000,000 interest bearing debt €20,800,000 other liabilities €4,900,000 So our equity ratio remained at excellent level being the 70.7%. Basically, we are net debt free company at the moment and our capability to finance the operations is at excellent level. Then we are going to look to business segments, starting first on the Defense and Security business segment. So last year, Defense and Security business had an excellent year.
We did grow. Now even if we have tough comparison points from the last year, on the second quarter, we grew 22.2% year on year and on the half 19.4% year on year. And also the backlog, like mentioned, did grow significantly. So looking at the market development on the defense and security business side, the first, our important customer, the Finnish defense forces. So we ended with the partnership agreement over the last year.
With them, we have been ramping up that one. We received new TACWIN and TAFCOM node orders on the second quarter. That was more than €7,000,000 That was a big deal for us. Also, we did continue the deliveries for the SDR tactical radius. Also, we did demonstrate the hybrid network where the tactical network is communicating with the commercial five gs network, creating the five gs bubble together with the Finnish Defense Forces and Nokia.
On the international customer side, we did continue to receive orders from multiple countries, being Croatia, Estonia and Austria. Also, we have received new customers or been able to acquire new customers for the tough SDA radius in Europe. And also, it was announced that there’s negotiation ongoing now with Intra, which is one of the largest technology company in Spain, which is operating in the more than 100 countries. So we are negotiating them with regarding the SDR radio as well as the production technology deal with them. Also, we have received new orders for Securcall, SafeMove and Tafmopal too.
Then on the Medical business segment, so second quarter 4.5% year on year and first half minus 2.6% year on year. Net sales increased, but the operating result, it would have been positive, but due to this onetime cost, 900,000.0, the results went to negative side. Which was significant on the Medical business segment on the second quarter is that we were able to close the deal with our long term partner and the customer Boston Scientific for ECG devices for the next three years and that also included joint development, a new product for The U. S. Market.
So ECG device sales outside of The U. S. Remained moderate due to the more fragmented markets, which is typically in Europe. Rispero sales was lower than estimated and we have activities ongoing and we will update more that on our CMD, which has happened in September. And Nina Hoykuru started as the Head of the Medical Business segment, bringing a lot of background understanding and knowledge for this EGT market.
Engineering Services business segment, it has a pretty challenging market situation, but we managed to grow 8.5% on the second quarter and 6.3% on the first half. The ongoing customer projects are proceeding well and we have one new extensions for the projects. Also, the order intake increased significantly year on year in the second quarter, like mentioned earlier. There were several defense sector service projects we have won. This was a new thing we defined for the growth strategy that we want to also focus on the defense sector in our engineering service side and that has started well.
Also, we have won new customers from the manufacturing industry as well. And we announced also the cooperation with the Terrestar regarding integration of this new five gs NG and non terrestrial networks. Supporting Wario’s defense and security business segment project continued through the first half and challenging market situation continues. There are some past budget constraints for the new R and D project, but I would say, it’s an excellent start still for the year and which helps a lot that we are dealing with a lot of international clients, not just with the Finnish customers only. Then as we see how we summarize the trends, so we believe that the MEKA trends are supporting the growth, in the defense and security side and there are some budgets being increased for the defense at the moment.
We are seeing more and more activities with respect to kind of the new opportunities in the defense market, the size and the amount of new opportunities has increased. And this is something we are working very intensively at the moment to capture the growth for the big team. Also this EGT and home slip apnea testing device market is growing and we are now focusing on the win to new customers, building the new market channels and optimizing the go to market at the moment. Also, like mentioned in this engineering services, despite of the challenging market situation, we believe it’s in the good track this year, which is important for us, especially on the defense side, have to make continue to make investments for the production scalability, which is important to be able to deliver higher volumes in the future to meet the kind of the demands in the defense segment. We have also strengthened the organization, bringing new leaders.
And we have excellent and committed highly skilled people, which is making supporting our growth strategy. We will have the CMD twenty third of September, when we will provide the strategy updates for during this fall. In the outlook, we are going to repeat the same outlook, keeping the outlook. So we expect the net sales this year to be 95,000,000 to €105,000,000 operating results to be in range of 10,000,000 to €13,000,000 And finally, we have the investor comment to welcome all of you to join the CMD. We look forward to providing more updates on our long term targets and also the strategies for the corporation and the business segments.
And third quarter results will be published on the 10/24/2025. And I believe that’s now time for the Q and A.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Yes. Thank you, Petri, very much. I have quite a bunch of questions here.
Petri Tolemo, CEO, Bittyom: So
Karolina Malmi, Head of Communications and Sustainability, Bittyom: let’s start with defense and security and our latest news about cooperation, possible cooperation with Indra Group. So what’s behind this cooperation and this licensing programs? What exactly do they need from Bettion?
Petri Tolemo, CEO, Bittyom: So in overall, I think this Indra and this Spain opportunity is very interesting for us. It looks like this Spain ones that there’s a lot of domestic kind of content the while they are building this national radio. BitTim is in excellent position, because one of those rare companies, which actually have the kind of software defined radio both commercially and technically ready and available. So we are in the discussion with them to provide both our technology of our product as well as the manufacturing technology, which would help them to manufacture then the radius in Spanish market. And the negotiations are in a very early phase.
We our discussions are continuing in a very good manner. And I believe that’s excellent and a very sizable opportunity for big team in the future.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Thank you. That sounds good. Is there any how you can comment on the Spains trying to get rid of Israeli radios or cooperation with them. Can you comment on that?
Petri Tolemo, CEO, Bittyom: This is interesting, and this is something we have also tried to figure out what is exactly the official statement at the moment. Looks like that there’s discussions in the media and the media statements that Spain is not going to use the Israeli and our competitors at all, but this is something we have not been able to confirm. But how I see is that because bidding with Intra is in excellent position in Spain to negotiate about this future Spanish radio opportunity, I believe there might be some truth behind this market news. But like I said, we have not been able to confirm it.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Okay. Good. Is there anything you can comment on the size of the potential that lies behind this cooperation?
Petri Tolemo, CEO, Bittyom: Like I said, we are in the very early phase of the discussions, and we don’t have yet any numbers. But if we compare the opportunity for BitTeam and both intra, it’s very sizable for BitTeam, especially so.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Okay. Thank you. So let’s move a bit north and go to our cooperation with BAE, which we signed in summer last summer twenty twenty four. So is there anything you can tell about the status of the cooperation at the moment? Have you been have we been able to participate in tenders together with BIA?
Petri Tolemo, CEO, Bittyom: So this we were expecting to join this industry, this RFP round in the tender in The U. K. But this has been postponed, not because of us or because of our product. It’s more the political reasons and this is something that we’ll work with together with the BA. And we are ready to tend to kind of a product provides the updates and participate the tender when it comes becomes reality.
But as you have seen today, we announced that we are launching the new kind of office and there is a new leader in The U. K. So we are taking this U. K. Seriously.
We are believing there’s significant opportunities and that’s why we are investing to have a stronger presence in The U. K.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Yes. How about Austria? We have provided our core backbone network there, related products. How about the radios? Is there any tender ongoing or upcoming?
Petri Tolemo, CEO, Bittyom: So in overall, if I look to Austria and the customer, the customer the relationship with the customer has been excellent for the long time. We have been able to deliver the core network for a long time and deliveries are ongoing. And at this stage, I’m not able to comment about the radius, but what we and I personally expect that our business with the Austrian customer is going to grow.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Okay. Good. How many countries has Bitumen made pilot deliveries? And how big opportunities these are? Pilot deliveries, meaning that the first very initial first phase before tendering
Petri Tolemo, CEO, Bittyom: and So we have not published the exact amount of the countries, and this is not because of us. Many of our customers, are kind of government and this military sites and they are not letting us to announce the kind of the discussions or the deals with them. Therefore, we have said that, of course, we have this Spain discussion ongoing. We have also announced that we have delivered to one European country for the special forces. This is something then we have announced our public references.
But beyond that, there are several countries in Europe and Asia that we have been able to deliver the pilots. And we look forward to grow the business. And like I said earlier, Pitim radios are both commercially and technical ready, and we are in excellent position now to capture the wave of this modernization and the digitalization of this radio and tactical communication systems.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Yes. That’s great. But then about the outlook. Are you able to open the drivers behind four different business segments? So what needs to happen in order to be able to deliver set So
Petri Tolemo, CEO, Bittyom: typically, the second half is stronger for BitTim than the first half. And I think we have a pretty solid plan for the second half. Of course, the defense being the most important there and the largest one, but I was referring earlier that we have excellent order book situation now. I would say that we have almost all needed orders in place to deliver the results for the defense and security business for this year. So I think that there’s a solid possibility to deliver the expected outlook.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Good. Thank you. Then about profitability. After significant progress of profitability during the last two years, it appears that the profitability is yet again taking a step or two backwards due to growth investments and recalibration of Medical. Can Bitmium still grow fast and scale profitable up at the same time?
Or is this eating every
Petri Tolemo, CEO, Bittyom: Yes. All So we don’t want to just grow the top line. So it’s also we have to be able to grow profitably. And that’s true that we have made certain investments after this turnaround. So when we made these reductions ’23 and ’24, so we reduced a lot of the cost, but we knew that once we are going forward for the growth path, there are certain investments we need to add and do for the especially going for the international market and that’s typically what happens in the product business that you have to invest first.
But of course, we are very carefully making all the investment decisions And of course, we want to grow profitability. And this Medical segment, we actually reduced to €2,000,000 of the annual cost. And this is an example that we are not doesn’t just want to grow the top line.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Okay. Thank you. That’s actually there is one more question about the BIA and the cooperation, but you answered this already. I think this question came at the same time or something. But yes, that’s all for the questions today.
But thank you
Petri Tolemo, CEO, Bittyom: Thank you, very everyone.
Karolina Malmi, Head of Communications and Sustainability, Bittyom: Thank you.
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