Earnings call transcript: Ovzon’s Q1 2025 revenue surges 38% YoY

Ovzon AB reported a strong financial performance for the first quarter of 2025, marked by significant revenue growth and positive operating cash flow. The company’s revenue reached 90 million SEK, representing a 38% year-over-year increase, while its EBITDA remained positive for the third consecutive quarter. These results come as Ovzon continues to expand its satellite communication services and technological innovations. The company’s stock has reflected this strong performance, delivering a remarkable 92.8% return over the past year. According to InvestingPro analysis, the stock is currently trading slightly above its Fair Value.

Key Takeaways

• Ovzon’s Q1 2025 revenue increased by 38% year-over-year.
• The company achieved a record operating cash flow of 66 million SEK.
• Recurring Satcom Services revenue more than doubled from the previous year.
• Ovzon launched the Opson Three satellite, advancing its technological capabilities.
• The company is exploring the development of a second satellite.

Company Performance

Ovzon’s performance in Q1 2025 highlights its robust growth trajectory, driven by increased demand for its satellite communications services. The company’s strategic focus on innovation and market expansion has resulted in a diversified revenue base, with significant contributions from both European and U.S. markets. This growth aligns with broader industry trends, as geopolitical tensions boost demand for secure communication solutions.

Financial Highlights

• Revenue: 90 million SEK, up 38% year-over-year.
• EBITDA: 18 million SEK, marking the third consecutive quarter of positive results.
• Recurring Satcom Services Revenue: 76 million SEK, a 112% increase from the previous year.
• Operating Cash Flow: 66 million SEK, an all-time quarterly high.
• Order Book: 25 million USD, primarily from network services.

Outlook & Guidance

Ovzon is focusing on securing long-term contracts and investing in technology to sustain its growth momentum. The company is considering the development of a second satellite and aims to expand its presence in the European and U.S. markets. The estimated investment for the Opson Three satellite in 2025 is between 50 and 60 million SEK. With a strong analyst consensus recommendation and operating with a moderate debt level of 70.3 million USD, the company appears well-positioned for its expansion plans. Discover more detailed analysis and projections with InvestingPro’s comprehensive research reports, available for over 1,400 stocks.

Executive Commentary

Per, Ovzon’s CEO, emphasized the strategic importance of satellite communications, stating, "Satellite communications has become an essential part of the architecture of how you actually both protect and connect countries and regions of the world." He also highlighted the company’s growth strategy, noting, "We cannot save ourselves to prosperity, so we have to have profitable growth."

Risks and Challenges

• Geopolitical risks could impact market stability and demand for satellite services.
• Technological advancements by competitors may intensify market competition.
• Economic downturns could affect client budgets for communication services.
• Regulatory changes in key markets could pose operational challenges.

Q&A

During the earnings call, analysts inquired about Ovzon’s growth potential in the European market and the company’s plans for developing a second satellite. The management expressed confidence in the European market’s growth prospects and confirmed active exploration of additional satellite development to complement existing services.

Full transcript - Ovzon AB (OVZON) Q1 2025:

Ludwig, Webcast Moderator: Hello, and welcome to today’s webcast with Obson, where CEO of Panorian and CFO, Victor Bremer, will present the report for the first quarter of twenty twenty five. After the presentation, there will be a Q and A. So if you’re calling in and want to ask a question, please press 9 to raise your hand and then star six to unmute yourself when handed over. You can also send in questions via the form to the right. And with that said, I hand over the word to you, Pare.

Per, CEO, Opson: Thank you, Ludwig, and good afternoon and good morning, and warmly welcome everyone to our q one report for, 2025. I’m here with our interim CFO, Victor Brimmer.

Victor Bremer, Interim CFO, Opson: Hello, everyone.

Per, CEO, Opson: Okay. So before we start the presentation, I would like to comment on three things specifically. First of all, the geopolitical, pressure and turmoil has has further increased, of course, in the past few months, which probably no one has, escaped. This brings a lot of uncertainty to the world, obviously, but one thing is for sure, the need for, resilient and high performing mobile satellite communication continues to increase. Secondly, Opsalon’s financial performance has continued to improve during the quarter because of a very strong finish to 2024.

We have the third consecutive quarter, Q3, Q4 ’20 ’20 ’4 and Q1 twenty twenty five with positive EBITDA. The EBITDA was SEK 18,000,000 this quarter versus minus SEK 18,000,000 in the first quarter of twenty twenty four, and we had positive operating cash flow of SEK 66,000,000. The revenue growth year over year from Q1 twenty twenty four to Q1 twenty twenty five is 38%. So we think we have a very, very strong quarter behind us. But the third thing I think is important to understand before we dwell into the numbers, and the reporting is that timing of deals, dealing with government procurement and decision processes can take time.

And also the decision by the customers to decide when they want delivery of the service and the terminals in our case can also vary, which means that it can have an effect on a quarter to quarterly basis. It’s just a general thing when you work in this industry. So what we do with that is we invest, and we have invested. We’ll continue to invest in both relationships, building business cases and education of the customers, current customers and the new customers we’re working with. And the last thing I’ll I’ll I’ll I’ll just say is that, three years ago, the company had 90 plus percent of its revenue base from, from the from The United States Of America, from customers there.

We have today, a very well balanced revenue base, about 60% from Sweden and and Europe and about 40% from The United States Of America. And some of those contracts are also in Swedish krona and not US dollars, which you’ll see has a has a positive effect given that the krona has strengthened its, position versus the US dollar. So overall, I think, before we go in deeper into the presentation, a solid quarter, the third consecutive quarter with positive EBITDA and growth in the quarter with a positive operating cash flow. We’ll go into more details now. First of all, again, an introduction to Osson.

Most of you probably know the company fairly well by now. We are a leading provider of integrated satellite communication solutions with the most advanced capability to drive performance, meaning bandwidth and data throughput mobility, meaning you can bring it with you anywhere, any place, anytime, and resiliency meaning you we can guarantee uptime and and connectivity for the customers that use it. That’s our mantra, performance, mobility, resiliency. We call it the OBSON coefficient because there are actually things you need to do in order to have both performance mobility resiliency. And that goes into choices of technology and choices of how we design networks and how we deliver the service to customers.

We are in a niche market. We are not, the, consumer market satellite connectivity provider. We are really here for those organizations and customers that need guaranteed connectivity for their critical missions, whether there is no infrastructure or destroyed infrastructure or they need the backup to where the infrastructure might be vulnerable. So we’re very, very targeted. We’re very almost like snipers in that approach.

We work very closely with customers, partners, and end users across Sweden, United States, Europe, and we also see opportunities in Asia Pacific and other places. Our core markets are defense, both military and civil defense, national security, and public safety. The defense customers we have are the majority of our revenues today. We have invested over two, around 2,400,000,000.0 Swedish kronor in our new technology programs that would be our first own proprietary owned satellite, Ozone three, our Ozone onboard processor, and our Ozone mobile satellite terminals. You can also see that the trend, as I spoke about in the introduction, is that quarter by quarter, we are improving, the revenue base.

And since we are a services business and the majority of the revenues are in services, they are repeatable and they span, over years, at this point, and we’re now on a much higher level than we have been before. Next slide, please. You know, satellite communications has been, a nice to have. It’s been used by specialized organizations. But the more we see the trend in geopolitical pressures and and and situations, such as, Russia’s full, invasion of Ukraine or in the Gaza Strip or in other places, the more communication has become an essential part of the architecture of how you actually both protect and connect, countries and and regions of the world.

Cyber, and secure communication is essential. For those of you in Sweden, when when you when we talk about this, you know that the Swedish version, the bank ID was down yesterday. We don’t know the full effect of that, but we all see it around us. So the the drive towards security and resiliency is very, very high. Digitization is, of course, another thing.

With digitizations comes the need for communication and secure communication, where satellite communication actually provides the most advanced ability to do that. Most of our defense customers are talking about the digitization of defense. Digitization then requires communication again, so you cannot kind of turn around and say, oh, I don’t need communication. I’m just gonna digitize or automate or use AI. You absolutely need the last mile of being able to utilize digitization and AI and and cloud is that you have a communication pipe that is strong enough and guaranteed enough.

So we see that that that the trend there continues. And last but not least, we see more and more of, you know, environmental impact on on our society and societies around the world. And at at such occasions, it’s very, very important that you have communications. You can have a fast and efficient and effective way of doing rescue missions. And most often when things happen like wildfires or landslides or whatever, or or earthquakes, you have no, fundamental infrastructure.

You have to use, the space infrastructure, meaning satellite communications for it. So I think all of those four things drive a a continued drive a need for satellite communications. Now as I said, it takes time. You have to educate. You have to show.

You have to tell, and you have to, build business cases and use cases for your customers. But I can tell you that the world and specifically in Europe, the focus is very, very hard high and hard, drive towards these kind of, capabilities and solutions that we provide. Again, we are a niche provider. We are not it all be all for everyone. We are very, very, very, very advanced in what we do for those that needs that advancement, And therefore, we provide premium value, we provide, premium solutions, and we do it at a premium price, and it’s worth worth taking the time to win the right customers and the right deals in the right regions for the right purpose.

Victor Bremer, Interim CFO, Opson: Next, please.

Per, CEO, Opson: This is our value proposition. And, I I don’t have the slide this time around for what the difference is between low Earth orbit satellite, mid Earth orbit satellites, and geostationary satellites. But in essence, if you have a geostationary satellite, which often operates in that in that part of space, you have you and and you do it in a certain band that we do in the Ku band. We have a very, very advanced way of building and designing networks, if you look at 12:00. And therefore, we can get and we have steerable antennas and beams on our satellites, which means we can concentrate the energy of the satellite and the beam to smaller areas, which means you have higher throughput and higher bandwidth.

We’re very, very good at that, very strong at that, and geostationary satellites, provides that, advantage, I would say, versus lower orbit satellites that circles closer to the surface of Earth, but, you cannot guarantee it’s it’s it’s when the satellite is is over you, in orbit that you can actually get connectivity. For our customers, guaranteed performance, mobility, and resilience is the thing. So geostationary is the perfect choice for us. The only way to get connectivity is for you to have a satellite terminal that can connect within seconds. We provide that.

We provide the smallest, most advanced with several, with dual modems in in in most of our terminals, which means that we can switch on and off, we can connect in different ways that others can’t. Our competitors do not have this. They, they they choose other third party providers of terminals, while we develop, design, and and secure that we have the smallest and most high performance and resilient mobile satellite terminals that connect to our networks within a maximum of minutes. And, of course, we don’t own any teleports if you look at 03:00, but we partner with a few selected partners that actually are the ones that provide that capability, and we embed ourselves there, and we connect then the signal to fiber and ensure that we have the highest resiliency and performance for that as well. And then last but not least, both out in the field as well as virtually and as well as in our network operations infrastructure, we have dedicated twenty four seven customer support and service that have both been part of designing the networks, understand our terminals, understand where signals come, come in, and can continue to drive, uptime of of we we hold ourselves accountable to a %, but things can happen, and that’s what we do, better than anyone else.

So we have an integrated solution that no one else has. Next slide, please. This is just a way of of trying to describe where satellite communications is going and where OFSON is going that with that. Now with the OFSON three satellite in space, we have the ability to do multi domain operation. We can connect stationary on the move, equipment, personnel, and headquarters for total mission, control, basically, whether it’s on the ground, in the air, or on the water, whether it’s manned or unmanned.

We have both the terminal capability, the design of the network capability, and our solution capability to actually connect all aspects of this. This has been one of the dream scenarios for defense, national security, and public safety organizations for years, and it’s first now that, Opson and and we’re in the leading leading edge of this can offer this. So this is called multi domain operations, or you connect all aspects of your operations at the same time. Very, very unique and advanced. Next slide, please.

Competitively, I would say that this is then gonna try to it’s a summary really of what I’ve said in initially here. You can see that from the bottom, it’s traditional, you know, network infrastructure of communications all the way up to low Earth orbit satellite, which is, you know, best effort to have connectivity when the satellite is is near you and and above you in space. But we operate in the upper, upper, upper part of that pyramid of competitiveness and niche, and we provide exactly what I said on the previous slide, the integrated solution for, guaranteed connectivity. The top top sliver of it is what I would call sovereign capability, meaning that a country or an alliance, but foremost a country, have their own capabilities. And we border into that.

We work closely with customers on that side so that they have their own resilient and sovereign capability that we can provide for them exclusively. So we’re very well positioned at the higher end of the competitive landscape. Next slide, please. Now over to q one. Q ’1 has been very, very strong for us.

I would say that, you know, we we ended q four, in 2024, obviously, a large deal with the Swedish based corporation that was prepaid in, in January, 2025. So we filled up the cash bank. That contract started March 1. We’ll come back to that and what effects it has on the financials. But we also delivered the majority of the mobile satellite terminals during q four as well.

And, we are engaged. We have we got one new customer during the quarter. That customer was on the last day of the quarter, actually, a new country that chose to go with Avsun, and it’s a new country in Europe and a NATO country, in Europe as well. That was the the we also did, refinancing and re, with our current financing partner, Key Capital Partners, with somewhat better terms and conditions and extended that financing for us so we would have time to build up for the next generation of solutions and capabilities we have. Next slide, please.

Let me look at this. Which number is this slide? Eight. Thank you. I’m just gonna move on so I don’t miss anything on this.

And as I said, we, you know, we received a large order, which was a hundred and 85,000,000 for a twelve month contract with Swedish Space Corporation, and it includes, of course, OpsOn three, which is now in use, there. And we have delivered, most of the terminals, some in q one and some in in q two of those terminals to that deal as well. Very strategic milestone for us in the partnership, and and a strong financial position for us as well. Next slide, please. Now this is very interesting.

So when you’re in the top of the competitive landscape with a unique value proposition and integrated solution, We, we continue to, charge, charge forward in finding ways to be more effective and efficient for our customers. And one of the areas in the world that is, that is a very, very of of very high interest to most native countries, but I would say foremost, The Nordics, The US, and Canada is, potentially others as well, but those are foremost, is the Arctic. And Arctic is difficult and complicated when it comes to satellite communications. So we, we did invest in an in an expedition to the High North for the Arctic, and we had a very successful expedition with four different NATO countries participating in that where we could validate that our OXON three satellite and our terminals, OXON t six and t seven, their performance, reliability, and ability work all the way up to Nordkopf flawlessly. And I think this provides a new unique opportunity for our customers to actually build use cases for both manned, unmanned, and and personal use of satellite communication in an area that is of great interest from a geopolitical perspective today.

So we’ve gotten a lot of interest, from a lot of countries, after this, and we will potentially continue further up North North with another expedition when the time is right to to make sure that we can cover as much up in the High North as we possibly can. Thank you. Next slide, please. Now let’s turn to the financial section of our presentation. The order intake continues to be a bit irregular as I spoke about.

So sometimes it’s almost like, you know, the the finish line is at a certain date, March 31, and it might not be so that the actual, things we work on come in on on that exact day. But also customers want or does not want to take delivery until a certain time when they have the right setup and manning for, such an important strategic project like implementing satellite communication for them. So it’s very natural that there has some sort of fluctuation in in the order intake. But what we can see is that we have actually improved because about almost three years ago, we would have, most of our order intake in one quarter, q four, and that irregularity has actually disappeared, and we have a more even flow even though it can fluctuate between, between quarter as well. The order intake for q one twenty twenty five amounted to $2,200,000 corresponding to 22,000,000 Swedish kronor, and it was the new European NATO country that was, the order intake for this quarter mostly.

In a twelve month rolling perspective, the order intake continues to increase, and it’s now at 413,000,000 sik compared to 368,000,000 sig in the first quarter of twenty twenty four. Order book amounts to 25,000,000 US dollars, corresponding to 250,000,000 Swedish kronor, and it’s a it’s a solid figure as it contains network service, mostly network services. This is a good foundation for 2025. We focus on developing current customer base, renewals, and expansion upsell opportunities with current customers and expanding with new customers in in in a lot of concentration is in Europe. We also do continue our our drive and strive in in The United States Of America even though their focus has shifted more towards the West, I would say, meaning West of the versus, what they previously had towards the, Europe and East East as well.

I think that’s what I had, and I’ll hand it over to you, Victor, for some, deeper analysis of our numbers. Thank you, Per.

Victor Bremer, Interim CFO, Opson: The recurring revenues from Satcom services of 76,000,000 sikh is an improvement in the first quarter compared with the last four quarters and compared with the first quarter previous year. And this compared with the first quarter previous year, this represent an increase of 112%. Total revenues of SEK 90,000,000 is an improvement of 38% compared with the first quarter previous year. And the revenues from terminals in the quarter amounts to SEK 30,000,000. Run rate for Alps and Cellcom Services is increasing and followed the positive trend the last year and is also on time high the last two years.

Next slide, please. For the fifth quarter in a row, we are improving EBITDA. EBITDA for the quarter amounted to SEK 18,000,000, which is an improvement of SEK 36,000,000 from the first quarter previous year. The increase of EBITDA and EBITDA margin is an effect of increased utilization of OZON three, with the latest OPSON three order from SNC in December, of which Saturn services started on March 1. EBIT and EBIT margin were slightly improved in the first quarter, thanks to improved EBITDA, but still negative due to depreciation related to the activating of Opsom three starting in in the third quarter twenty twenty four.

And the depreciations represent Opsom three represent approximately SEK 25,000,000 per quarter. Next slide, please. Cash flow from operating activities of SEK 66,000,000 is an all time high for a single quarter, and this is due to the annual customer prepayments that we had in January. Cash flow from investments of SEK 12,000,000 is related to the finalization of OPSON three program and the onboard processor. Net debt increase decreases from the fourth quarter with SEK 20,000,000 down to SEK $629,000,000, which is mainly an effect of variances in US dollar.

Next slide, please. The total estimated investment in OSAN three for 2025 remains in the span of SEK 50,000,000 to SEK 60,000,000 and is attributable to the finalization of our onboard processor. In summary, we show that we have a strong business momentum with improved recurring SATCOM revenues, improving EBITDA quarter by quarter, and also financial position is today stronger than six months ago. Back to you, Per.

Per, CEO, Opson: Thank you so much, Victor, for that summary. Well, these graphs, of course, summarizes the key financial performance indicators as we’re looking at them. And as you can see, we have a solid order book. Our twelve month order intake continues to increase. Victor mentioned the recurring Satcom, services revenue stream that we have, which is actually a fundamental piece of what we do.

The terminal side, just to mention that, can fluctuate. It depends on the size of the order and when we can deliver, things, obviously. Our EBITA is the most promising, I think, that I feel very, very strongly about. Third consecutive quarter, as profitable, continues to improve both in absolute numbers and in margin as well. It’s very important to our business.

And cash flow is very strong. I think that’s also quite important for our business. It’s a very it’s a cash and and and, flow intense business that requires a lot of hard work. We are very good in managing our, operating expenditures and, cash management, and we have a solid cash position. I will mention that we benefited greatly from having customers that want delivery very fast and are prepared to do prepayments for those deliveries, and they were quite, large, of course, coming out of 2024 into 2025.

So very, very solid for us. Next slide, please. I think concluding what’s important to the company going forward. We’ll go we’ll go into questions and answer just after this, but I will say financial performance obviously is very important. And we we measure it, and we look at it very thoroughly both in increased order intake, as I mentioned before.

The revenue growth is important. You can’t save yourself to prosperity, so you have to have profitable growth, improved EBITDA, which I think we we are in a very good momentum and and and path on, and positive cash flow. And I think we hit we hit it, well in in in this quarter as well. Now could we have had a little bit better, revenue growth? Yes.

We could have if the customers would have wanted, for example, the SSC contract started on March 1. It would have made a huge difference had it started January 1 or February 1. But if the customer is not ready, the customer is not ready, and we start when the customer wants to start. So that’s what I mean. It it then extends that contract into, first part of twenty twenty six as well.

Secondly, ensure commercial success. What I feel very strong about is that we’ve made some phenomenally good technology choices with Opson three, with the Opson processor onboard processor and with our terminals. We have a phenomenal portfolio of technology and capabilities. We have a great team that can make, magic with those technology and even the capacity we buy from, satellite capacity we buy from others. So I think the commercial success comes from utilizing external capacity to 100%, fully utilize Opsom three, which drives both growth and margin, really be concentrating on core market segments.

I would say foremost that would be, Europe, and and The US right now, and focus on on, or focus on relevant geographies in the core market segments will continue to be defense, military and civil defense, national security, and public safety. That’s where we have our strengths. And then, obviously, actively scale up the company. So we are today 38, by March 31, we’re 38 employees. Right?

You would think that that would be a very small group to handle such large countries and customers as we have. We’ve been smart about how we manage our assets. Our own assets, we own and control our own IP and design, but we also outsource to highly specialized companies that have done really well in delivering on time, at quality, and at cost as well. So overall, I think, you know, these objectives and these drives are fundamental to the performance in 2025. And lastly, before we go over to q and a, you know, this is kind of a quick reminder what fills our news daily, but I wanted to comment on it somewhat.

So we don’t react to things in our business. We concentrate on our core business. We are not currently affected by we’re not currently affected by the tariffs at all. We are a services business, basically. So for for our hardware, for our terminals, there might be tariffs potentially.

We haven’t seen an effect of it yet. If there is, we will, do a price adjustment, to cover for that. So I don’t see that any of those things are actually fundamentally disturbing our commercial success or progress. I think, unfortunately, with the geopolitical instability, what we deliver, what we do is fundamentally becoming a strategic aspect of every country and the country and alliances. So therefore, it’s worthwhile for us to invest in those countries and in those regions and in those alliances that requires advanced satellite communications for their well-being.

It’s not an easy world to operate in, but I think we have a good position. We stand true to our value proposition and our core business, and we will continue to do so. And I believe that’s going to serve us well for the remainder of this year and for the future. And with that, we’ll hand it over to questions and answers.

Ludwig, Webcast Moderator: Thank you so much for the presentation here. And as you mentioned, we will now carry on with the Q and A. And the first question here, are potential customers hesitating to use OBSON services because there is just one OBSON satellite and therefore no redundancy, except for higher capacity on other satellites?

Per, CEO, Opson: Except for yes. Well, I will answer that question. I’ll let there were there were several questions in one there. I would say, no. We do not see a hesitation to use Ops on services and Satcom solutions because we only have one satellite.

We have the most powerful, geostationary satellite in space. We have proven it. We have customers as anchor tenants on that satellite. Others are hugely interested in, in that satellite. It takes them sometimes to sometime to evaluate their business case and decision process.

We do have a backup capability through, leased capacity from others. Those are similar in style, those geostationary satellites, but they are available, and we have good relationships with those that manage those. So I would say no to that question. We do not see hesitation, rather the opposite, but I do believe that governments that, buy this kind of strategic capability are thorough, which they should be, are clear that they want to understand the business cases and how they can use this, but there is no nothing hindering, Ozone from continuing its markets expansion due to that we only have one satellite.

Ludwig, Webcast Moderator: Thank you so much. How are you affected by the new tariffs and the possible effects on supply chain for components or terminals, etcetera?

Per, CEO, Opson: Okay. Thank you for that question. Very good. We do not see any effects of that for the moment. Of course, it that might change.

That might vary. But we have our, supply chain in Europe. So we have we have very few, if any. I don’t think we have any components from other parts of the world. They’re either Swedish or they’re European, and most of it at least.

And therefore, we we do not see any effects of the tariffs. We have not seen any logistical issues either so far that I know under other industries and other customers have. So for the time being and for the moment, I would say there is no disturbance in our, supply chain and logistics for what we do today. That could, of course, change, but for the moment, no.

Ludwig, Webcast Moderator: Thank you. Can you elaborate on Opsal’s strategy for improving profitability and converting top line revenue into sustainable bottom line growth?

Per, CEO, Opson: Bottom line growth, yes, yes, you mean net profit. For sure, For sure. As I said in in my statement before, on one of the previous slides, we definitely, need to grow, and the growth is is the way to get to increased EBITDA and sustainable EBITDA, but also to get to EBIT and net profit levels. So what we have to do is to sign our strive is to sign longer term contracts for the value we deliver with, customers, governments, and customers in our in our markets, defense, national security, and public safety. So it comes from trying to be not short term contracts, but longer term contracts with sustainable revenue streams, preferably coming with prepayments that will then in turn drive, investments in how we scale the business going forward and in our supply chains.

And then we can make choices how we invest those money with whether it is in new capabilities like satellites and terminals or other things, or if we do it by partnering with others. But I think the key is to drive growth, long term contracts, keeping a very close finger and eye on our operating expenditures and our capital expenditures, but but also investing in the future. And that’s gonna drive positive cash flow, reinvestment in the business, reinvestment in the customers. They’re then turn go to renew and expand with our services. I think that’s how we get to, net profit, and that’s how we get to, consecutive quarters of EBITDA growth going forward.

Ludwig, Webcast Moderator: Thank you. Looking at your current order book, how much is terminals and how will the network part of the order book play out through 2025?

Per, CEO, Opson: Well, I think answering that is since we deliver an integrated service, an integrated solution rather, I think there’s there’s more of dependency of having enough terminals available so we can ship those quickly to customers and then thereby turn on the services. So they are they are actually integrated together. Now since we deliver best best best the best service in the industry, we make sure that we can guarantee performance, mobility, and resiliency, what we call the ops on coefficient. So in the order book, it is most of it is actually today services, not terminals. As in most the absolute majority of the order book is services, which means repeatable monthly, quarterly kind of services that we deliver.

So not that many terminals. For new deals, or new contracts that come in into the order book, there will be, front loaded delivery of terminals most often to deliver those and then added on the services when the customers have the terminals in hand. But right now, services.

Ludwig, Webcast Moderator: Thank you. Do you see more potential in Europe or in The US for the rest of 2025?

Per, CEO, Opson: I see more potential in Europe for the rest of 2025, to be quite honest. I think the investments that are going in to satellite strategic satellite communications in Europe are very, very, very advanced in Europe right now given the situation in Ukraine, Gaza, and other places. So the geopolitical pressure drives investments in, in defense spendings. Defense looks at satellite communication as a strategic asset. Therefore, the interest and the investment profile is very, very high.

Now that doesn’t mean that the interest and investments in The US go down, but I think the concentration of the efforts is actually for the European governments, European Union, NATO, and, friendly neighbors, the Nordics, the Baltics, the and part of Europe is is very high now in investing in in defense and satellite communications. So I I see that that we have a great possibility to do something there.

Ludwig, Webcast Moderator: Thank you so much. It has been discussions regarding Starlink’s presence in Europe and Ukraine. Would also be a possible replacement for Starlink in those markets?

Per, CEO, Opson: Very good question. Something we get quite often. I would say, if I answer simply, I would say yes, but I will be more granular than that. POVSON cannot replace the thousands and thousands of of satellites and, that that starting operates today. So we will be part of a solution, an essential part of a solution, but it cannot only be off zone.

But, obviously, we replace, for mission critical stuff and for defense, national security, and public safety, we we should be the preferred choice of capability there, but it needs to be complemented with other types of capabilities, that are European based. And many of you have seen articles and so on about some other solution providers that have those capabilities, but also it’s definitely one part of that architecture and solution for sure.

Ludwig, Webcast Moderator: Thank you. Looking at current development, when will it be defendable with another satellite?

Per, CEO, Opson: It is always defendable with another satellite, as we say in the space industry. But joking aside, listen. The lead times for new satellites are fairly long. So, I would say this without, opening up to too many more questions around it. We are investigating we know that the the platform we have created in Ozone three m with the onboard processor is state of the art, works fantastic with an enormous performance, mobility, and resiliency for our customers.

So we believe that we have a technology platform that actually should be repeatable. So we’re looking into what that would mean if they’re how fast something could be built, but it’s not only about the capability because we see the need in the market. Right? But it’s not only the capability of the technology, the platform, and the service we provide. You also have to make sure that you can, have a financing solution that is effective for the company and for its shareholders.

So there are and then there’s regulatory aspects of this as well. Do we have orbital slots? Can we get a launch that is affordable, etcetera? But we are working actively with these things, for the moment here since we see the the the prospect of of of a son three being very successful. But there are many aspects of this that needs to get into consideration that that myself and the management team and the board needs to, evaluate.

But we do not rest on our laurels. We’re actually actively, kind of looking at what we do next to drive growth for the company and value to our customers.

Ludwig, Webcast Moderator: Thank you so much. Moving on to the last question here. How much of the capacity of Olufsen 3 is utilized as of right now, preferably answered in percentage?

Per, CEO, Opson: Yes. I think this is a question that we very, very often get, and we’ll probably have to get to a point where we where we talk about it more in detail. But right now, we need to protect both pricing. We need to protect, kind of ourselves from from being too scrutinized with that. But you know, the market knows, and the the one that asks the question knows that we have a number of, anchor customers on the satellite.

We have some smaller, use cases that we have used it for. So we are steadily improving the anchor tenants on this on the satellite. And, hopefully, we will be able to, shed some more light on this during the remainder of this year. But right now, I I I I’m not gonna reveal or guide anything on on the capacity utilization of the satellite. But it’s it’s looking very strong, and it’s looking very positive.

Ludwig, Webcast Moderator: Thank you so much, Per and Victor, for presenting here today and answering all our questions, and I wish you all a pleasant day.

Per, CEO, Opson: Thank you so much, Ludwig.

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