How are energy investors positioned?
Huddly AS reported a robust performance in Q2 2025, with significant revenue growth and strategic product launches. The company’s stock saw a 4% increase, closing at 13.50 NOK, reflecting investor confidence in its transition to a complete solution provider. Despite adjusting revenue guidance for the year, Huddly continues to expand its market presence. According to InvestingPro analysis, the company currently shows signs of undervaluation, though it faces challenges with a Weak Financial Health score and accelerated cash burn.
Key Takeaways
- Revenue increased by NOK 45 million compared to Q2 2024.
- Gross margin improved to 45% excluding one-off items.
- Launched innovative products, including Huddly Crew and Huddly C1.
- Announced a private placement of NOK 50-75 million.
- U.S. market now accounts for 60% of revenue in the first half of 2025.
Company Performance
Huddly demonstrated mixed financial performance in Q2 2025, marking a NOK 45 million increase in revenue over the same period last year, though InvestingPro data shows a 16.36% revenue decline over the last twelve months. This transition period reflects the company’s strategic shift towards becoming a complete solution provider, as well as its expansion into larger room solutions and AI-driven products. The U.S. market remains a key revenue driver, contributing 60% of the company’s earnings in the first half of 2025. For deeper insights into Huddly’s financial health and growth prospects, investors can access comprehensive Pro Research Reports available on InvestingPro.
Financial Highlights
- Revenue: Increased by NOK 45 million YoY in Q2 2025.
- Gross Margin: 43%, improving to 45% when excluding one-off items.
- Operational Cash Flow: Enhanced from -33 in Q4 2024 to -18 in Q2 2025.
Outlook & Guidance
Huddly has adjusted its revenue guidance for 2025 to NOK 240-280 million, reflecting a more conservative outlook. The company targets a gross margin of 45-50% for 2026-2027 and aims to achieve cash flow positivity by 2026. Continued investments in research and development, alongside strategic partnerships, are expected to drive future growth.
Executive Commentary
- "We are changing our position from being a video provider to being a complete solution provider," stated Avi Panik, CFO, emphasizing the company’s strategic shift.
- Rosa Stemsen, Executive, expressed optimism, saying, "We believe that the trend is turned," indicating confidence in the company’s growth trajectory.
- Juna van derision, Chairman of the Board, highlighted shareholder commitment: "The fact that we already see the offering pre-committed signals long-term commitment."
Risks and Challenges
- Tariffs: Navigating 15% EU/Norway/U.S. and 30% China/U.S. tariffs could impact profitability.
- Market Competition: Increasing competition from Asian competitors may pressure market share.
- Economic Conditions: Global economic uncertainties could affect demand for video conferencing solutions.
Huddly’s strategic initiatives and product innovations position it well for future growth, despite the challenges posed by tariffs and competition. The company’s focus on expanding its market presence and enhancing its product offerings faces headwinds, with the stock declining 72.59% over the past year. Subscribers to InvestingPro can access additional insights through 8 more ProTips and comprehensive financial metrics to make informed investment decisions.
Full transcript - Huddly AS (HDLY) Q2 2025:
Rosa Stemsen, Presenter/Executive, Huddly: We report gross margin of 43%, 45% if you exclude one offs. The key highlights on the go to market side is that we continue the momentum with Shore, and in the quarter, we signed a memorandum of understanding with Barco, as well as we continue to pursue more strategic partnerships. When it comes to Huddly C1, our audio video AI driven video bar, we are on track towards first customer shipment in September. When it comes to the outlook, we are adjusting the outlook to $2.40 to $280,000,000 for 2025. And as of this morning, we have announced a private placement of 50,000,000 to 75,000,000, whereas 50,000,000 is fully guaranteed.
And to iterate on our business plan, we start and have continued to deliver our business plan, which is built up of three main pillars: increasing the revenue, monetizing on our products, whilst we keep strict cost control and investment. On the revenue side, as we said, we continue the momentum with Shore, which had their first end customer shipments in the quarter. We do see that the momentum will continue to grow in the coming quarters. We are, of course, very pleased with the partnership with Shore and in our humble opinion believe this is one of the best bundles you can have in the market. When it comes to Barco, Barco and Hudley have had a long standing relationship.
However, as of June, we announced that we are strengthening that partnership and relationship even further. First of all, with our go to market efforts, we have as of June, an entire Hudly portfolio certified on Barco ClickShare. This includes now Hudly Crew and C1. And we also agreed that we are going to continue the cooperation when it comes to the Barco Hub and Hub Pro, which are Microsoft Mdap devices that will allow Huddly customers now to enjoy the Huddly product on Android as well. And as stated, part of our strategy is to attract more strategic partner revenue and we are in dialogue with several partners.
And as of today, we are in final negotiation with a global player in that space. When we look further at the channel revenue, we see a very good growth in the three consecutive quarters in a row. This is mainly driven by three main things. In addition to have a very strong and broad partnership throughout the channel, we do have strengthened and worked more strategically with some key partners such as AVA SPL. In addition, we have gone through the ways of working and have been working more efficiently with regards to systems, processes, routines and so on.
And part of the growth is also driven by increased adoption and momentum for products such as Huddly Crew. And to iterate on the product roadmap, in 2024, we announced and came to the market with Huddly Crew, a state of the art, one of a kind multi camera system that is easy to deploy and install. In 2025, we are working towards bringing the Huddly C1A audio, video, AI driven video bar to the market. And looking into the future, we will be working further with the audio and video to expand into even larger rooms. As stated, much of the channel growth, but also the strategic partner growth is due to Huddly Crew is getting better momentum and adoption in the market, and now starts to be a significant part of the total balance for Huddly.
Huddly. We are of course very pleased to see the market endorsing that product so well. And when it comes to the Huddly C1, our AI driven video bar, with 20 times the AI capabilities of our previous products, this product was launched at Infocom globally, together both with Barco and Lenovo. And it has got a great reception so far, both by end customers, distributor resellers and industry analysts. And most importantly, we are on track for first customer shipment in September.
Looking forward to what Huddly C1 is and is gonna be is that we are gonna be enabling the Huddly C1 hardware towards the Huddly Crew software platform. Huddly Crew is not only a camera system and hardware system, it is actually a software platform. Now we are going to be enabling both video and audio from the C1 on as of next year. And how are we bringing the HEDLIC one to the market? We had introduction of the product at IEC in February, with good reception.
As well, we continued that motion in Europe with our partners in Lenovo and Microsoft with a European roadshow in multiple cities. This just before we had a global launch at Infocom in June. In the second half of the year, we are gonna be continuing the roadshow with Lenovo and Microsoft, expanding to more cities in Europe, but also added some key locations in The US. And we look forward to bring the product to our customers in September. And with that, Avi, I’ll give the word over to you.
Avi Panik, CFO, Huddly: Thank you very much, Srulsa. So far in this presentation, we have been discussing details around sales, marketing and products. And I will now shift gear a bit and focus on financials and operations. In our previous quarterly announcement, we shared our insights on the newly imposed used tariffs, and since then, quite a bit has changed. What we’re now seeing is presented on this slide here, where we do see a 15% tariffs between EU, Norway and The U.
S. And 30% between China and The U. S. The latter is based on a trade truce, which is announced to end on November 10. So what will happen after that is still unknown.
This obviously has an impact for us as a company. And to recap a bit, we ship our products from Poland and Norway to The U. S. And generally speaking, it is The U. S.
Distributors who carry the cost for duty payments and shipments. As a consequence of this, we have increased the prices to the end customers, thereby protecting our own margins and preserving the margins of the distributors. Before the hike in the tariffs from 10% to 15% from August 1, we stocked up goods worth 8,000,000 in The U. S, and this number is reflected also in the Q2 revenue. Huddles seem to currently benefit from a favorable relative cost position.
And the reason for that is that many of our competitors, they have their production based in Asia, in China, Malaysia, Vietnam, which generally have a higher tariff level than Europe. I will now summarize a bit our business plan, what we have done and what we are looking forward. So as mentioned by Roussa, we have three strategic pillars. So the first one, growing strategic partner and channel revenue. We’re seeing a quite strong momentum and growth here.
In channel, very strong three consecutive quarters of growth. And with strategic partners, we have momentum with Schar. We added Barco as partner through MOU in June and we are in negotiations with another partner. In addition to that, we have strong alignment with Microsoft, which is very important for technology validation. Second, maintaining healthy gross margins.
With the new C1 product, the VidyoBar, we are changing our position from being a video provider to being a complete solution provider with both video and audio. That is a very important move for us, which will help us to preserve our margins and grow the business case going forward. Third and finally, strict cost control and disciplined investments. We implemented a cost saving program in spring this year with annual savings of 12,000,000. And with the tariff situation easing a bit, we do see reduced risk in comparison to what we saw just one or two quarters ago.
What has changed since last time is that we do see our deferment in strategic partner revenue. So hence, we have adjusted the expected revenue for 2025. We communicated previously NOK $270,000,000 to NOK $320,000,000 for 2025, that is now been adjusted to NOK $240,000,000 to NOK $280,000,000. Gross margin changed to 45%. However, if we look at 2026 and 2027, we keep the revenue estimates and have changed the gross margin expectation to 45% to 50%.
Translating this into profitability, we have an ambition to get to cash flow positive in 2026 with a healthy cash generation from 2027. As a consequence of these changes, the company has a finance needs to bridge the company to cash flow positive in 2026. And as a consequence of that, we this morning announced a contemplated private placement of between 50,000,000 to NOK 75,000,000. Of this NOK 50,000,000 is guaranteed. The uses from these proceeds is going to be used on continued investments in R and D, on boarding new strategic partners, expanding channel sales and of course for general working capital requirements to support growth.
On the final note on this slide, the company currently has NOK55.5 million in shareholder loan and that is due on June year. And lenders representing million of the total, they have committed to extend their portions of the loan for twelve months into 2027. Let’s now go towards the financials and discuss a bit more details here. Revenue as communicated was very strong in Q2. We do see a continued growth driven by both strong momentum in channel and strategic partners.
Revenue was billion in Q2, representing a NOK45 million increase over Q2 twenty twenty four and NOK25 million increase in comparison to Q1 twenty twenty five. Sales to channels was very strong, that is driven by solid performance across all products and the number also includes NOK8 million in U. S. Stocking in anticipation of higher tariffs. Sales to Strategic Partners also seeing quite a strong growth here, gradual growth of sales to Sure in addition to revenue from Microsoft and Lenovo.
And we do expect to see increasing sales to strategic partners in the next coming quarters as we are adding additional partners to our mix. Moving towards the gross margin, we had 43% gross margin in Q2 twenty twenty five. The change is mainly due to change in product mix as well as certain one off items. The one off items is, number one, related to concluding sales of a maturing product with relatively lower margins and number two, scrapping of certain components. So if you exclude these two effects, the gross margin for Q2 was 45%.
It is important to note that the change in gross margin is not driven by market specific or supply chain related issues, such as rising component prices or supply shortages. Looking at that first half year basis, gross margin was 47%, which is in line with what we expect towards ’27 and also an improvement versus 43% in same half year last year. Looking at the summarized P and L statement, we have already discussed the revenue and the gross margin. So I’d like to focus now on the OpEx here. The OpEx has reduced significantly, and that is due to two changes.
Number one, reduction in costs related to a cost saving program, which was fully implemented in spring this year. And number two, reduced costs related to employee share incentive program. So hence, both on a quarterly basis, Q2 and half year basis, we do see a significant year over year reduction in losses. We talked about the C1 and the product being launched and shipped to end customers from September year. So all of our investments into the company in R and D goes into product development such as C1, Crew and other software enabling enhancements.
So capitalized R and D for Q2 twenty twenty five was million, that is an increase versus same quarter last year. However, it should be noted that in Q2 last year, it was a relatively high degree of maintenance. So Q2 this year has returned to a more of a normalized level. Our organization consists of, amongst others, 57 engineers with approximately 45 with extensive experience in AI, machine learning and software development. So we’re going to continue to invest into the talent, the product development capabilities to ensure that we will defend our leading technological position and to enable future revenue growth.
Finally, I’ll now go through the cash flow statement. Cash June was million. However, we did see a significant improvement in operational cash flow. This category was minus 33 in Q4 twenty twenty four, it was minus 21 in Q1 twenty twenty five and was reduced down to minus 18 in Q2 this year. As already communicated, due to the changes in the business plans and the need for additional financing, the company has just announced a contemplated private placement of NOK50 million to NOK75 million.
And with that, I would like to conclude the presentation for this quarter announcement and we will now move on to the Q and A session where we will open up for questions from the audience.
Rosa Stemsen, Presenter/Executive, Huddly: Hello, and welcome to the q and a session. Together with us here, we have Juna van derision, our chairman of the board, Abi Panik, CFO and me, Rosa Stemsen. First of all, I would just like to point out, if you have any questions, so please type them into the chat, and we will then respond to them as we go. We have the first question. Which shareholders have pre committed to the private placement?
And, Jonavint, I think that’s a good one for you.
Juna van derision, Chairman of the Board, Huddly: Yes. I’m very glad to see that the shareholders that have agreed to pre commit in the private placement are found among Huddl’s largest shareholders, Board members and the management. And of course, the complete list will be made public into a later date. I’d like to say that the fact that we already, before the launch of the private placement, see that offering is pre committed, that signals a long term commitment and confidence in the company and the report that we are presenting today.
Rosa Stemsen, Presenter/Executive, Huddly: Thank you, Jonahren. So how confident is Huddly in mitigating tariff impacts when assuming end customers will absorb the price rises. How material is The US exposure in 2025 given that 56% of the revenue in ’24 was in The US and 60% already in first half twenty five? Abid, this is a great one for you.
Avi Panik, CFO, Huddly: Yeah. So I think there are many factors playing into into this question here. So we have chosen to increase the prices to the end customers And how they will respond to this, this is a bit too early to say. However, we do know that our customers, they are generally quite big B2B customers, which typically have a different behavior from more price sensitive consumers. But whether that means that will translate into a relatively small change in demand due to change in price, that remains to be seen.
So we will, of course, monitor this continuously, and we might also do other changes to the price or other mechanisms depending on how the situation develops. With regards to the question exposure, we do have a slightly higher sales to The U. S. So far in this year in comparison to last year. And it’s a quite good proxy, the sales, the revenue that we have to The U.
S, which is presented in the interim report that shows you a quite good number of our exposure to potential U. S. Tariffs.
Rosa Stemsen, Presenter/Executive, Huddly: Yes. Thank you, Abi. The third question, will there be a repair offering, Jumeleven?
Juna van derision, Chairman of the Board, Huddly: Yes. The company may carry out the repair offering of new shares at the same price as the price in this offering, And that would be directed towards the small shareholders who are qualified to participate in this offering. Whether we will carry out the repair offering will be decided by the Board later. But in order to be a qualified shareholder, you would need to then, firstly, hold less than 1% of the current shares in the company. And secondly, not have been allocated shares in the private placement that is taking place now.
And thirdly, not be a foreign resident in the jurisdiction where taking part in the offering would require hardly to release a prospectus of filing or registration or similar or otherwise be in conflict with the law of that country.
Rosa Stemsen, Presenter/Executive, Huddly: Thank you, Jornalin. There’s a question with regards to the shareholder loan. There is still an internal loan of million on the balance sheet, with further material drawdowns soon expected. With the business now targeting cash flow positive in ’26, are there any concrete plans to convert, restructure, reduce this loan in the near term to strengthen the capital structure? So this was actually one part of the announcement we came out with this morning, Jeuneven, so you can maybe a
Juna van derision, Chairman of the Board, Huddly: little bit. Yes. Actually, yes, there are several parts to that question. Further drawdowns are not planned. And when it comes to the actual loan, we have communicated that 24,750,000.00 of that NOK loans have already been committed in writing to be extended for twelve new months until June 2027.
And we have not still not completed all the discussions. So the final result will be announced at later date.
Rosa Stemsen, Presenter/Executive, Huddly: Thank you. You’re contemplating NOK 50,000,000 to NOK 75,000,000 private placement to fund operations through a cash flow positivity? If the upper range isn’t reached or cash burn exceeds expectation, is there a backup plan, such as another round or internal financing or new capital raise already considered? Okay. Or this is actually a Yeah.
Yeah. One. So
Juna van derision, Chairman of the Board, Huddly: Yeah. I think that when when it comes to cash flow, of course, our CFO would have the last word here, but we are planning for actually that in the lower end of the range that should be sufficient to to fund the company. So we haven’t planned any alternative b here. We are we have already got a commitment in the lower range, and the transaction is launched today. So we don’t know the final result, but we already know that we have succeeded in meeting the minimum targets that we have set.
Rosa Stemsen, Presenter/Executive, Huddly: Yes. Anything to add, Abhi?
Avi Panik, CFO, Huddly: Yes. So our current business plan is to get to cash flow positive in 2026. That’s what we are working on, and that is our plan. However, the future is uncertain. And of course, if there are changes to that, we will take operational implications for that.
Rosa Stemsen, Presenter/Executive, Huddly: Thank you. How this is I will rephrase the question a bit. How is the upfront stocking in q two regarding tariff effect revenue in q three and going forward? This is where it relates to the upfront stocking The
Avi Panik, CFO, Huddly: So if I understood that question correctly, so we can’t say anything about Q3 at the moment. So that’s also a bit too early to say. Plus, we are having a quarter announcement on the Q2 numbers. So we can get back to that when we get into the Q3 announcements.
Rosa Stemsen, Presenter/Executive, Huddly: Thank you. At which price will the private offering be set?
Juna van derision, Chairman of the Board, Huddly: The private offering has a fixed price of 11. And the share price is linked to a volume weighted share price of the share in thirty days with a discount around 11%. And this approach is quite normal for offerings in the present capital market. And I’d like to say also that you should note that the share price of NOK 11, it represented 10% increase compared to the share price in the last investment drone. And the value creation for the shareholders who invested in the last drone, it reflects positive achievements of Huddle in 2025, which we report today.
Rosa Stemsen, Presenter/Executive, Huddly: Thank you. Let me see. And then there is a question about compared to the large number of quarters with large losses and negative growth, three consecutive quarters with revenue growth can be seen as a cold comfort. Why should we believe that the positive trend will continue? Oh, I can take that question.
What we see throughout 2025 with the numbers we are reporting today is that we are starting to deliver on our business plan. And the two revenue pillars, both on the channel and strategic partner side, we see the growth and the momentum starting to build up. This is also, as we pointed out in the presentation, Huddly Crew, the adoption of Huddly Crew is definitely supporting that growth. And now with coming with the Hadley C1 out on planned schedule in September will even further impact the revenue in a positive way. And obviously, as well as we pointed out, we are continuing in dialogues and attracting more strategic partners and revenue going forward.
So we believe that the trend is turned. Thank you. I think that’s the all questions we have received. So with that, I if you have any additional questions, please do not hesitate to reach us at reach to us on IR@huddl.com. We will answer your questions as they come in there.
And with that, I thank you for the time today, and see you next time. Thank
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