Welcome to INVISIO's presentation of the interim reports January to June 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. I will hand the conference over to the CEO, Lars Højgård Hansen. Please go ahead. Thank you. Good morning, everyone. Welcome to our Q2 and half-year update. We will run through a number of important topics today. We have chosen a highlight or a headline for the report, which is strong revenues and significant strategic progress. We saw a good year-on-year revenue growth in the first quarter of about 20%. Our orders intake was a little lower than expected, and it was mainly because of timing and also some impact from temporary U.S. procurement delays. We don't think that any of these orders have been lost, but they have merely been postponed until later in the year. We have also delivered the final part of the radio order that we received back in 2024, and as previously communicated, that had a little lower gross margin, which also impacted us in this quarter. We have, during the quarter, been approved by the U.K. MoD for a broader framework contract. That for us is important as we consider the U.K. to be one of our home markets. Last but not least, we have our new products in the market, creating a lot of attention, and at the recent Eurosatory trade show in France, we also launched a new feature called INVISIO Drone Aware that created a lot of interest and attention. Turning to our sales numbers, as I said, our revenues grew by 20% compared to the same quarter last year, and in comparable currencies it was 23%. A lot of it was related to Europe and of course, based on the order book that we had when entering Q2. A little bit delays also here on the revenues in the U.S. because of the previous shutdown of the government administration and especially also in Homeland Security, but we expect to regain that gradually during the second half of the year. The underlying demand and interest for our products is definitely intact, despite some of these delays stemming from the U.S. Our order intake was a little lower than last year and also lower than our own internal expectations, but I would characterize that as the normal business environment with volatility and timing that we cannot always influence. Some of it has been related to the temporary U.S. shutdown of certain government parts, but also a reorganization of the U.S. Department of Defense that has been implemented with the new administration, and where it takes a little time before everyone is settled in their new roles and responsibilities. It should be all in place now. We still estimate that the demand remains intact. We have not lost anything. In fact, I would say that the budgets are still in place and the last quarter of the financial year in the U.S. is Q3, the upcoming quarter. We already now see good activity in the U.S. and we expect to be able to see good order intake for the rest of the year. In fact, we have seen quite a good start to the third quarter in July, good order intake both from Europe and U.S. Had some of these orders arrived just a little earlier, like in June, our order intake for the second quarter would have been somewhat higher. That's the nature of our business. It's been like that for the many years that I have been here. Our order book was about SEK 500 million at the end of the quarter, where majority will be delivered in the second half. We still see that the ability to deliver fast or with reasonable lead times is a competitive advantage that we have and something that our customers value highly. We try to deliver as much as we can within six to eight months. The radio order that impacted this quarter, the radio order back from 2024, was now finally delivered in Q2. There is nothing left pertaining to this order in our order book, so that is all done. Gross margin, a little lower than last year. There was an approximately five percentage point impact from this final delivery of the 2024 radio order. We see that our newer products in the portfolio is going to impact our gross margin positively over time. We have a very healthy gross margin on our own products. It is also, I think, important to mention that INVISIO is now considered to some extent also as a system integrator, even at a maybe lower level than larger companies, but we are delivering systems. Sometimes it's entirely systems consisting of our own products, but sometimes we are also being asked to add other elements to an order to deliver a full system. The radio order was maybe an extreme that we will not see often. There are examples, for instance, when we have been delivering Racal headsets for vehicles, where the customers have also asked us whether we could procure a helmet and deliver together with the headsets so that they fit together and the customer don't have to do several tenders themselves. They can do it as one package. In these situations, we are, of course, trying to accommodate and help our customers. That could potentially, for certain deals, influence the gross margin somewhat, but it doesn't influence the gross margin of the INVISIO products. It's merely a consequence of the fact that INVISIO is becoming a larger and a more important company in the communications industry in general. In terms of our operating expenses, they increased about 6% from last year, and also continued and were in line with the first quarter of this quarter. As we have said many times, we have a belief that we can continue to grow the company over many quarters. Therefore, we will also continue to invest in both new product solutions and in our organization to be able to capture and meet the market activity and the demands for solutions that we see from our customers. Regarding margins, in the second quarter, our operating margin was 15.3%. It actually improved despite the lower gross margin. For the last four quarters, we are at 17.7% EBIT margin. We have, as you might recall, increased our target for the EBIT margin from 15% to 20% last year. We are well above the previous target of 15%, and we are now marching against or towards the target of 20%. As always, it is important to evaluate our development over an extended time frame as quarters will fluctuate, and sometimes fluctuate quite a lot, as we have seen in the past. Our inventory levels are still strong. We have a significant inventory to enable us to make prompt deliveries of larger volumes. Our inventory is not only finished goods, it is also key components and cables and other things that is needed to support a full system delivery. In addition to our own inventory, we also keep inventory with our suppliers. It is standard products and components that we have. I have previously received questions about component shortage. It is not something that is affecting us at this point in time. We are working closely with our suppliers and partners to make sure we have sufficient inventory of the key components that we need for a certain period of time. Cash flow, n ot much to say. The decrease is mainly due to the fact that we have had dividend payout in 2026. In previous years, we have sometimes had an exercise of employee stock options that brought cash back into the company. This didn't happen this year. The cash flow was mainly affected by the payout of dividends. Our cash position is still good. Cash and cash equivalents at the close of the period are close to SEK 300 million. On the operational side of things, of course, I know many of you were present and visited us at the Eurosatory in Paris, and thank you for that. You saw yourself the high interest for our new INVISIO Drone Aware capability in the INVISIO T30. It is a feature that will be included in the product when we ship from the third quarter. It is basically an ability for the user to detect drones earlier through acoustic signals. If you are a soldier at the front and somebody is sending a drone towards you are given extra seconds to hear that there are incoming drones and you have a possibility to take countermeasures or to hide. This is something that has really sparked high interest, not only in actual war zones, but also for homeland security in many areas. We expect this to be a key feature for our already market-leading headset, the T30. This is again an example of how closely we work with end users in many countries. The feature has been tested and proven in combat environments and has been praised a lot. We expect this to be a key feature, as I said. We also see that the interest for the T30 is very high. We are now manufacturing the product in one factory, we are preparing a second factory to start manufacturing the T30 from already now in Q3. Therefore, we will have two factories up and running from the fourth quarter and onwards. Then we will be able to expand our volume ability in these two factories as we go forward. This is an anticipation of significant orders for this new market-leading headset. In the U.K., we have been approved as a direct supplier to the U.K. MoD under something called the Tactical Communications Systems framework. This is quite a broad communications framework agreement. It covers other categories than our types of products. It is a broad system, and the total potential value of this framework is GBP 8 billion. For us, the importance is that we are now able to go directly to the U.K. MoD. Whenever they put up new tenders, we can respond directly through our local company, INVISIO Limited, in the U.K. As usual, when it comes to framework agreements, there are no guaranteed order volumes or contract values in this agreement. It is a license to operate. We can also see that there is very few in our category that are actually approved for direct deliveries to the U.K. MoD. For us, this is another statement that we are well-established in the U.K. with our company in Croxley outside London, and we are considering the U.K. one of our home markets. Eurosatory, as I have mentioned, was a huge success for INVISIO. I think it was the largest Eurosatory ever, both in terms of number of exhibitors and number of visitors, and I know a lot of you attended and also came to visit us. I think the defense sector has undergone a lot of transformation and development over the last three or four years for understandable reasons. This area where we are has definitely developed a lot. There is now a very strong focus on tactical communications, strong focus on digitalization, interoperability, networking capabilities that will integrate soldiers, vehicles, sensors, and unmanned systems in shared information and communication networks. There are also trends towards demands for solutions that can manage voice data and also power while enabling effective system integration in complex operational environments. This is where we are very well positioned with our system thinking from the hearing protection systems to the advanced control units with aided audio data and power to our new hubs, to our vehicle systems and intercom systems. We are really able to provide very broad and integrated systems. The growing use of drones that we saw, of course, a lot at Eurosatory also continues to accelerate the need for better situational awareness and rapid access to relevant information on the battlefield. I think also that what is very clear is that while the drones are now dominating the battlefield, there is a full focus on the fact that they cannot be operated without people. The foot soldiers, so to speak, are still very important. As we see in most European countries, the number of foot soldiers are increasing, and we think that the interaction between drones and soldiers is a trend that we will see even more going forward. This is also where we can contribute in some parts. As said, there is a very strong interest in our new products and solutions. The T30 especially, which addresses larger user groups of soldiers, both in special forces and in the armies, but also for our segments in public safety like police, firefighting, and coast guard. We expect this to be a main contributor to our growth in the coming years. INVISIO Link is also creating a lot of interest where we have demonstrated this now to a number of new potential customers that are interested in seeing what we have done with the U.S. Coast Guard, but are also interested in seeing how it can be used in land-based environments. Our INVISIO H-Series, our data hubs, is now fully integrated and up and running in the INVISIO system. We are receiving the first orders. We have quite a few units out for testing in different countries. The system thinking, again, is a very important part of our offering and something that sets us apart from the competition. We think that we are in a very good spot. We are the market-leading company in our industry, as we see it, with a lot of good prospects for the coming quarters. We are definitely going into the second half with confidence. Market conditions are still favorable, and there will be structural drivers to support our continued growth for years to come. We think we are very well positioned for continued growth. While there will be volatility, as we have seen for the last 15 years, there will be volatility from quarter to quarter, but I think we are, over time, again, continuing the path that we have seen with good growth and good profitability. Just wanting to repeat that the order delays we have seen in the first half is something we should be able to recover in the second half of the year. With that, I conclude the short presentation of the second quarter, and now we are now open for questions, please. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Adrian Elmlund from Nordea. Please go ahead. Hi, Lars, good morning. Morning. I have three questions from my side. Firstly, here on the U.K. framework agreement, did you say GBP 8 billion in potential sales to INVISIO, or did I mishear you? You misheard me. It is the total value of the frame order is GBP 8 billion, that covers quite a lot of communication categories. Even though I would like to say that we can get GBP 8 billion, that is not the scope of it. The total contract, it is in different parts. I have no number on what the value potentially could be for us because it is not specified. It is just from the U.K. MoD said that the total value of this contract could go up to GBP 8 billion. It covers many different categories of communication. That makes sense. Fair enough. Could you perhaps give any sort of historical rate on how much sales you could get from this, from previous framework agreements? I don't know, not at this point in time. I really don't know because this is a new thing they have done, just a pre-qualifying. What they're doing is they're pre-qualifying several companies, and that makes it a lot easier when they then go down to actual procurement and start sending out tenders for different things. We know that we are already pre-qualified. We don't have to go through all the paperwork again. We can just focus on the technical requirements for the product solutions. All right. That makes sense. Thanks. The second question is kind of on the major deviation in the quarter obviously is North America, right? If we look at the remainder of the group, could you give us any kind of figure on how the order intake performed versus last year? I'm trying to figure out how well the performance was here, if we exclude the kind of U.S. effect here. Yeah. It is again difficult because it is a snapshot. We closed the books on the 30th of June, so it is actually a snapshot. On the 1st of July, orders arrived, had we received those on the 30th of June, the picture would look different. That's again why I say we have to look at it at several quarters to see the full picture. There is a number of things that are in the pipeline that is just about timing, where we never know which month or which quarter it will end up. Okay, good. Last question from my side. I also noted a very strong performance here in Sweden, some sales of SEK 90 million. Could you give us any details on what you have been delivering, and is this anything that we should extrapolate, or is this sort of a one-time effect? I can unfortunately not give you any more details for several different reasons. I can only say that we, of course, are very pleased that we have a very strong performance in Sweden. Sweden now being a member of NATO and investing heavily in its capabilities, it's of course, very pleasing that they are choosing INVISIO as a key partner. I'm sure we will see a lot more business in Sweden, but I cannot go into any more details. Sweden is our home market, so of course, it's very important for us to have a strong foothold here. Okay. Very good. Thank you, Lars. Thank you. The next question comes from Yiwei Zhou from SEB. Please go ahead Hi, Lars, thank you for taking my questions. Hi. I have three questions also. Firstly, you mentioned this U.K. MoD named you as a direct supplier. Does it mean that your partnership with your key distributor, MCL, now terminates? Yes and no. In certain areas, we still have a relationship because of existing contracts, but it has always been our ambition, of course, that for as much business as possible, we would like to go direct because we do have 70 or 80 people in the U.K. We have our own company. We have all the capabilities now in the U.K. after acquiring Racal Acoustics and after integrating Racal Acoustics. It makes sense that we, to some extent, do business directly with the MoD. In certain areas, we will still work with different partners in the U.K. going forward also. Our main path is to do as much as we can ourselves. Okay. I recall that you had a large contract a few years back with the U.K. Army. Can you remind me if that contract was through MCL or it was directly a contract on your product? Back in those days, it was through MCL. Yes, correct. They still have the contract with the U.K. Army? On that one, yes and no. I can't go into more details on that. I think this one was back in 2015, the one you refer to. Yeah. I don't think that one is active at this point in time. Okay. Good. Thanks. Second question is on the U.S., you also won three large contracts back in 2019 with the DoD. If I recall correctly, this contract is generally for five years and with two years extension. I asked the same question also last year, and I do it again here. Can you confirm if any of these contracts have been expired, and if any re-tendering ongoing? I'm asking because the DoD has this organization change. Would this change impact your contracts? No, it would not impact existing contracts. There might be new contracts coming into place over time, as we have also seen in other countries, and which is a normal procedure. As usual, I cannot comment on actual tenders or programs ongoing in specific countries, but I can only say that the U.S. market, of course, is extremely important to us as we traditionally have 30%, 40% of our revenues coming from the U.S., and we have a strong position. We still have contracts in place in the U.S., yes, and we also expect to get new ones going forward. Yeah. Can you confirm the three contracts you won in 2019 are still active? Yes. Okay, great. Thanks. Last question, on the gross margin. You mentioned that the impact was five percentage points from the delivery of the third-party radios. If I remember correctly, the remaining part of the radio order was SEK 30 million after Q2 last year, and the service margin is 7%- 8%. I'm just curious that the impact is such big here in this quarter. Can you elaborate a bit? I can only say that the deliveries under such contracts to support a country that really needs it is difficult. There have been many elements to this contract, including service, support, training, and many other elements, and all of those have had different gross margins. It has also, to some extent, been a little unclear up until the last point what should actually be delivered under the last part of the contract. I don't want to go into more details, more than saying that we have now delivered all aspects of this order, and there was an impact here at the last part. Yeah, I don't want to give you more details than that. Okay, fair enough. Thank you. I will jump back to the queue. Thanks, Wei. Thank you. The next question comes from Daniel Lindkvist from Danske Bank. Please go ahead. Hi, guys. Just a few questions. Hello. From my side. Hi. I guess the U.S. recovery is in focus in INVISIO at this time, and I'm just trying to understand what we dare to expect for the second half of this year. Starting off with the U.S. budget year, how important is that to get things going over there? Is there a stress in the system to get the functioning organization from their side as well? Yeah, I think so. I think the reorganization of the U.S. Department of Defense or Department of War, as some is calling it, has been a huge task. The purpose has, of course, been to make it more efficient going forward. When you do these type of larger reorganization, it takes a little time before everyone finds their place and new people are put in certain areas as responsible for things, also things that impact us. I think that we are well-positioned because of the size of our team and the experience we have in the U.S. market. We are working around the clock to try to make sure we understand the new setup and understand where the responsibilities are and who we should talk to. On top of that, you can say that the budgets are not lost, the budgets have not disappeared. The budgets are very large in the U.S. also for our area and will increase also next year. It's just a matter of trying to help the customers, also the end users in the U.S., utilize their budgets and make sure they get as much as possible before the end of the financial year. We have very good hopes that we will see good business in the U.S. for the rest of the year. As usual, timing is crucial, and things can easily move a month or two. Now, also with, of course, the activities that the U.S. is involved in in the Middle East will require attention from a large part of the Army organization. We are still a very small part of the U.S. defense budget, so we don't think we are that much impacted by that. It could also be leading to opportunities for us. Again, our U.S. team and we here are very positive about the rest of the year in the U.S. Right. Have you continued to produce so the lead times can be shorter in the U.S.? Could you get an order in Q3 that will be delivered within the quarter even? Yeah. We have inventory. Great. Do you now at this point, it's hard to tell naturally, but do you think that we could be in a situation where we have a normalized situation in the U.S. in Q4 and going ahead, or should we expect things to take even longer? No, I don't think so. Again, I'm used to fluctuations, so I'm not really sure I fully know myself what normal is, because it does fluctuate, and it has done for a long time. I think we are well-positioned for good business in the U.S. We are also in the U.S. seeing a lot of interest for our new products, especially also the INVISIO T30 headset. I believe that will drive business for us in 2026, but definitely also in 2027. Yeah. Cool. What can you say about T30? You started your deliveries now in Q2, is that right? Yeah. Yes. It's on the ramp-up, yeah. How has the ramp-up proceeded? Are you all ready at the capacity to take on large orders? We are producing now everyd ay. As usual, when we have a new product, it's a little slower in the beginning until everyone is fully trained and up to speed and so on. It's a little slower, but it gradually improves week for week. In, as I said, in addition, we are now starting up a second manufacturing site so that we can have a higher capacity. Should we receive larger orders, we have a possibility of adding several shifts or more people. We are now able to scale this product to significant volumes within a reasonable time period. Great. The drone awareness, that's developed in cooperation with your customers or on demand from them. Yep. Could there be some potential organizations waiting for that to just hit the market in Q3 and give orders more or less instantly? Maybe not in Q3, it's definitely something that is out for testing and something that has created a lot of interest. As anything else, it requires a bit of testing before somebody would actually put in at least a larger order. I think the fact that we have been testing it with, I think, six or eight customers in different countries and geographies is testimony to the fact that it actually does provide value, and we can be quite sure that anyone testing it will see that this is yet another benefit to this fantastic product. My final question, then on the OpEx. The OpEx is sequentially down since Q1, and I wasn't expecting that. Is there anything that we should bring with us? Are there any one-offs in this number, or is this a fair number to bring with us for the future? No, I would say the OpEx development has predominantly been around the hirings and so on, and that goes a little bit. There's a volatility in that as well, of course. Yeah. Again, we should look at it over a longer period of time to get the average trend. We've been a little slow on the hirings in the first half. Okay. What you're saying is basically that you have one-off costs on when hiring for the HR side? Yeah, we've been a little slower. We haven't added that many people in the first half of the year. Okay, perfect. That's all from me. Thank you so much. Thank you. The next question comes from Hjalmar Ahlberg from Redeye. Please go ahead. Thank you. Maybe just one more on the U.S. there. I guess it's not difficult to understand, but you mentioned that the reorganization and that you have a strong position historically, but do your salespeople have any discussions? Do you have any insight on that this actually things happening right now, or is it still quite uncertain if projects will come in the next couple of months or quarters? I don't want to make it sound more complicated than it is, because we know how to get by, and one of the things that we are always doing is, of course, also to work directly with customers at the military bases and the unit levels and so on. That's why it's a huge advantage to have a large sales team, so we can, instead of addressing the headquarter functionalities, we can also work with the actual units and the different bases and get orders that way. We will get by, and we will see good business in the U.S. going forward. I'm not so concerned about this. Again, our business has never been fast. Any project with a customer does take time, and it is very hard to time it within a certain quarter. That's just the volatility we have seen for so many years. Okay, great. Understood. Also maybe a quick one on the T30 Drone Aware. Is that something you see any competitors have or any competitors trying to catch up with you on that feature? I'm sure they will try to see if they can copy or catch up. The quality of this feature is also related to all the different components we use in the product and the software and so forth. If you just take an ordinary, cheaper headset solution, you will not be able to achieve the same results. There's no possibility. It is a combination of software and very good and expensive microphones and speakers and so on. It is a system thing in the headset. Understood. A few quarters back, I think you mentioned that the Coast Guard order in U.S. had attracted some interest for other Coast Guard or marine customers. Do you see any progress there? Is this something that you could potentially see orders from? Yeah, definitely. There's absolutely customers that are looking at it. We also have received a smaller order from another country as a test order, so there's definitely interest. We will continue to follow up on this and address this. There's a number of countries, of course, with large coast guards that are relevant for this, that our sales team is now addressing. Great. The final one, I don't know if you can comment anymore, but you said the order book deliveries are majority scheduled for H2. Can you give any flavor on Q3 versus Q4 as of now? No. Okay. That is a quick answer. All right. Perfect. That's all from me. Thank you very much. Thanks, Hjalmar. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Daniel Thorsson from ABG Sundal Collier. Please go ahead. Yes. Hi. Thank you very much. I have a question on the gross margin first. Given the launch of T30 here, which I guess has slightly lower initial gross margin, and also the underlying gross margin of 58% in Q2, is it reasonable to expect the gross margin to be back above 60% again anytime soon? I don't know that. Again, our own products, when we sell them direct, has a very healthy gross margin. We are affected by, as I was trying to explain, sometimes we are asked to deliver other things together with our headsets. Sometimes we deliver through a partner like Thales or a radio manufacturer or system integrator, and then we have a lower gross margin. Sometimes we are also selling to the public safety that goes through national resellers. The gross margin is sort of a mix of everything that happens in a quarter. The only thing I can say is that when we ship something ourselves directly to a customer, we have a very good gross margin. The sales model and the route to market is in different directions, and that will affect. That's also why, again, we don't have an official target for gross margin. We only have an official target for the EBIT margin. I see. Okay, that's clear. Another one on the radio delivery here in the quarter. I didn't really understand if you confirmed that it was around SEK 30 million, the delivery in Q2, or was it higher or lower? No, we are not confirming that. We are not informing about that in detail. Yeah. I see. Okay. The only thing we say now is everything is done, it's out, it's over. Yeah. I understand. Looking at the order book, it's down around 30% year-over-year, and you mentioned the snapshot picture here at the end of June, but if we were to see some U.S. order recovery here during Q3, will that be able to be shipped within the quarter? You said yes to a previous question here, but will it be enough to save the revenues for the second half of the year, or should we be a little bit cautious given the lower year-over-year order book? Again, I don't know. It will be down to timings. I would say we have a significant inventory. We also have a very significant manufacturing capability, so it will all be down to timing. If we receive orders in December, it will be hard to ship them before the end of the year. If they arrive in October, we have a fair chance. It will be back to timings. I think at least the pipeline is sufficient to support a good second half of the year. Again, back to timings of when we receive the orders. Yeah, that's clear. Final one on hirings here in the second half of the year. Do you have any certain plans on R&D or sales efforts you would like to add to the organization, more or less than usual? No, not more than usual. I think this is, again, looking at what is happening in the market, activity levels. As an example, is there a lot going on in a certain area where we can see we need a little more sales support? Is there requirements regarding additions to our existing portfolio where we need a few extra hands in R&D? We will not be shy, we will hire those people. If there are significant attempts to do something more, we'll let you know. Perfect. That's all. Thank you very much. Thanks, Daniel. There are no more questions at this time, so I hand the conference back to the CEO, Lars Højgård Hansen, for any closing comments. Thank you very much. Thank you all for your questions and interest and participation today. Have a great summer and talk to you again after our Q3 a little later in the year. Thank you all. Bye for now.