IR Blog – January–June 2026
Key messages
Strong financial performance: Net sales grew 37.2% year-on-year to EUR 57.9 million and operating profit increased to EUR 9.6 million, with the second quarter showing particularly strong growth and profitability.
Defence & Security driving growth: Growth and improved profitability were mainly driven by higher product deliveries in the Defence & Security business segment.
Record order backlog: Order intake reached EUR 81.0 million, increasing the order backlog to a record EUR 102.2 million, of which 92.2% relates to Defence & Security.
Strong foundation for future growth: Bittium’s financial position is strong, while continued investments in production and delivery capabilities support our ability to meet growing demand.
Strategy focused on international growth: We continue to accelerate international growth and see further opportunities driven by rising defence investments, healthcare technology markets and the growing adoption of AI across our businesses.
Additional dividend: The Board of Directors decided to distribute the extraordinary dividend of EUR 0.15 per share with the authorizations granted it by the Annual General Meeting. The Board of Directors evaluated that this discretionary extraordinary dividend can be paid, since there have been no significant changes in the business environment during the first half of 2026 and the outlook for the second half of the year is good.
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Q&A Summary
The following is a summary of the key question and answers from the discussions following the publication of the January–June 2026 results.
2026 outlook
Q: Are you progressing in line with the expectations, or are things moving faster than anticipated at the start of the year?
A: As we have communicated, there will be some quarter-to-quarter fluctuation, although we aim for a more balanced quarterly performance. The first quarter was moderate, while the second quarter was excellent. After the first half of the year, we are progressing according to plan. We continue to expect the second half to be stronger than the first, and we remain highly confident that we will meet our guidance for the full year.
Financial performance
Q: What drove the strong revenue and higher margins in Defence & Security business segment in Q2?
A: Growth came mainly from scaling up and increasing volumes in international Defence & Security product business, which had a direct positive impact on profitability as well.
We have put a lot of effort into ensuring sufficient production capacity. We have successfully secured orders and, importantly, been able to deliver them, which demonstrates our ability to execute our strategy.
Q: How do margins in Defence & Security services compare with product margins?
A: We are achieving good margins in our international services business, although they are not at the same level as the product margins.
Q: Can you comment on your net working capital levels?
A: The cash flow in 1H was strong. Some increase in the levels should be expected as large orders are being delivered, and the receivables will go up. Although the level is quite healthy, inventories might get hit onetime when we reserve materials for components. We are continuously monitoring the levels and continue to develop and improve. Our inventory is in shape so that we can deliver orders and we have, for instance, bought memories into stock.
Q: Are there any pre-payments or other one-offs behind the strong figures?
A: There are no one-timers, and multiple customers contributed to the received orders and revenue. We announce our biggest orders and their delivery times and have communicated that Indra is among the biggest orders. We do not communicate on every deal individually.
New customer prospects
Q: How are the ongoing negotiations with the approx. 10 European countries regarding tactical communication progressing? When do you expect these discussions to result in customer orders?
A: We have been actively advancing these customer cases. Some of them are large, national-level projects, so naturally, the discussions and decision-making take some time. Some of them are smaller. But it is still difficult to estimate exactly when these discussions will turn into actual customer orders.
One of the reasons behind the strong order intake in the second quarter and the first half was the new orders from weapon system providers. We cannot disclose the names nor the values of all these orders. Our focus is also expanding our business towards weapon system providers.
Q: How are the weapon manufacturer deals structured? How was the order intake on the second quarter of 2026, and what is the potential on short or mid-term?
A: These deals typically involve the integration of our radios into weapons/larger systems. There is no major difference in margins, but GBAD customers tend to move faster, and the individual order sizes are smaller. They are a good addition to our business with the continuous order flow. In the second quarter, order intake from weapon system providers was good, and our delivery capabilities remained at a good level.
Q: What role do new orders from the Finnish, Estonian, Croatian and Austrian defence forces play?
A: With these orders, we are expanding our sales for the long-term military customers with products such as TAC WIN, Tough SDR radios, and other products.
Q: Have client pilots within Defence & Security increased the number of your potential customers?
A: Regarding national deals, our focus remains on roughly 10 potential national customers. At the same time, the number of potential new customers among weapon system providers has increased.
Q: Did the customer pilots contribute to sales or order intake on Q2?
Some of the pilots also contribute to our order book.
Q: When can we expect decisions from Sweden and UK, and what other large opportunities do you expect within the next 6 or 12 months?
A: In Sweden, we have the framework agreement that was announced last year, and this remains one of our main priorities. The discussions are progressing well, but it is still difficult to predict when we will see actual orders. The framework agreement also provides an opportunity for Norway and Denmark to join the partnership.
In the UK, we have an existing agreement with BAE, and it remains a high priority as well. Going forward, we will continue to pursue these opportunities with our full portfolio.
Q: What capabilities have you strengthened to enhance your tendering capabilities?
A: We have developed quite a lot of resources and capabilities in this area. Going forward, we also need to make sure that we continue to develop these capabilities further.
Q: Do you need a major customer win this year?
A: We are not assuming that we will get one this year, but securing major customers is important for our long-term growth.
Q: How would you describe Bittium’s long-term outlook regarding new customers? Have you lost any tenders?
A: We have been actively submitting tenders and advancing new potential customer cases through discussions with national large customers, so new opportunities do exist. Some discussions are progressing more slowly, some more quicky. Overall, the negotiations require a lot of time and are impacted by multiple angles, like political and governmental issues.
Strategic partnerships
Q: What is the status of the Indra Group deal?
A: We have delivered everything according to the plan and are satisfied with the collaboration with Indra Group. In accordance with the agreement, certain revenue will materialize throughout the year from the partnership.
Q: Do you see that HIMERA cooperation could lead into significant sales, in addition to technological support?
A: The cooperation with HIMERA is built on mutual support, but we have commercial targets for the partnership and expect our product sales in Ukraine to increase with the help of HIMERA. It is an important partnership for us, as it allows us to test our products in a real-world environment.
Business segments and products
Q: What are your plans for Engineering Services business segment going forward?
A: The plan is quite clear. We have changed the leadership, and now we are focused on executing our new strategy. This means putting more emphasis on embedded AI as part of our offering in the defence market and making sure we have the right resources and capabilities to support the programmes underway in Defence & Security. Overall, we are making a significant turnaround in how we position ourselves in the market, both in terms of our offering and the skills and competencies we have.
Q: Are you planning or negotiating to sell Medical business?
A: No plans or discussions are ongoing. We are not yet satisfied with the level of Medical business growth and profitability, but we are pleased with the progress of the turnaround. We see significant long-term opportunities, and our R&D investments remain at a high level. We can support the business segment in capturing growth and improving profitability going forward.
Q: As more than 92% of the order backlog now comes from Defence & Security business, has Bittium effectively become a defence company?
A: We are gradually turning our focus into Defence & Security, which is also reflected in the change in our ICB industry classification, but we stay committed to all our business segments. We continue to support growth and R&D opportunities in the Medical business, while making sure we capture the opportunities emerging in Defence & Security. In M&A, our focus is on opportunities in the Defence & Security sector.
Q: How do you see the sales potential of new Defence & Security product areas, such as unmanned systems and drones, developing over the coming years? What could be the potential revenue contribution from these new areas compared with your current product portfolio, such as radios?
A: We expect some revenue from these product areas from 2027 and onwards.
Q: What is the outlook with the secure government devices like Tough Mobile, and the service market?
A: Tough Mobile 2 exists, while we are at the same time developing Tough Mobile 3, on which we will provide details later. It is important to ensure that the software portfolio built on top of the TM3 is progressing as well, with continued development of the software versions.
Market
Q: Which are the most potential geographical markets (Asia, Latin America) for Bittium?
A: In Defence & Security, Europe is the main area, but we have some customer wins in Asia Pacific area as well. In the Medical business, we have a global focus.
Q: How do you see the market potential, and what are Bittium’s key strengths and competitive advantages as international competition increases?
A: The tactical communications market is large and growing, with a market size of more than EUR 10 billion, offering significant growth potential. Old analogue systems are being replaced by new technologies on the battlefield, which is a transition we have been preparing for well before the war in Ukraine. Bittium has strong technology, a proven track record, and an established international sales and marketing network, which gives us a strong competitive position.
Q: Do you see geopolitical uncertainty as a long-term shift that will support higher defence spending, or do you expect some level of normalisation towards the end of the decade?
A: It is difficult to forecast, but we are monitoring the development closely. Our assumption is that this is a multi-year trend, and we expect the modernisation of military communication systems to remain strong even after the war in Ukraine ends. So, we see this as a long-term trend, and we are making good progress in this market.