Sensys Gatso Group AB (LTS:0H0U) (Q2 2026) Earnings Call Highlights: EBITDA Margin Surges to 19. …

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Revenue: SEK204 million in Q2 2026, in line with Q2 2025.

Gross Profit: SEK77 million, with a gross margin of approximately 38%.

EBITDA: SEK39.8 million, up from SEK31.4 million in Q2 2025, with margin expanding from 15.4% to 19.5%.

EBIT: SEK25.1 million, up from SEK18 million in Q2 2025.

Profit for the Period: SEK14.5 million, compared to a loss of SEK8.9 million in Q2 2025.

North America Revenue: SEK43 million, down from SEK46 million in Q2 2025, but up 15.5% quarter-over-quarter.

North America EBITDA: SEK5 million, impacted by lower violation volumes; Q2 2025 included a one-off insurance recovery of SEK8 million.

International Revenue: SEK164 million, stable year-over-year.

International EBITDA: Approximately SEK34 million, representing a 21% EBITDA margin.

New Business Intake (North America): SEK16.5 million in annually recurring revenue from new customer signings in Colorado, New York, and Pennsylvania.

Order Backlog (North America): SEK35.3 million in annually recurring revenue.

International Order Intake: Approximately SEK63 million, mainly from repeat orders and renewal of Saudi maintenance contract.

Cash Flow from Operations: SEK25 million in Q2, with net working capital increasing by SEK13 million in the quarter.

Investments: SEK25 million in Q2, mainly in fixed assets, hardware, and software development.

Available Cash: SEK192 million, up from SEK137 million in Q2 2025.

Net Interest-Bearing Debt: Approximately SEK243 million, with a leverage ratio of 1.89.

Full-Year Revenue Guidance: Reaffirmed at SEK750 million to SEK800 million.

Full-Year EBITDA Guidance: Increased from 14%-16% to 15%-17%.

Release Date: August 20, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

EBITDA margin expanded significantly from 11.9% to 17% in the first half, leading to an increased full-year guidance to 15%-17%.

Q2 EBITDA rose to SEK39.8 million, up from SEK31.4 million year-over-year, with margin improving to 19.5%.

North American restructuring is yielding results with new customer signings in Colorado, New York, and Pennsylvania, adding SEK16.5 million in annual recurring revenue and boosting backlog to SEK35.3 million.

International segment saw strong service revenue growth, particularly from maintenance contracts in the Netherlands, Australia, and the Middle East, offsetting delayed product revenue.

Cash position strengthened to SEK192 million, up from SEK137 million in Q2 2025, and the company achieved a profit of SEK14.5 million versus a loss of SEK8.9 million in the prior year.

Negative Points

North American revenue continues to be impacted by lower year-over-year violation volumes in the Albany, New York program.

Q2 revenue was flat year-over-year at SEK204 million, with some planned revenue delayed due to changes in customer order and delivery schedules.

Gross margin was impacted by the compliance effect in the North American business, coming in at approximately 38%.

Net interest-bearing debt increased to approximately SEK243 million, driven by translation impacts on the euro-denominated bond and higher asset finance.

The company faces ongoing risks from global political developments, particularly in the Middle East, which may continue to affect order and delivery timelines.

Q & A Highlights

Q: What drove the increase in full-year EBITDA guidance, and what are the updated expectations?A: CEO Lewis Miller stated that the company is increasing its full-year EBITDA guidance from 14%-16% to 15%-17% due to a “material increase in profitability” in the first half of 2026. The EBITDA margin expanded from 11.9% to 17% year-over-year, driven by economies of scale in project delivery and effective expense management. Revenue guidance for the year remains reaffirmed at SEK750 million to SEK800 million.

Q: Can you provide details on the progress and results of the North American restructuring?A: CEO Lewis Miller highlighted that the strategic restructuring of the North American business, which began in Q1, is showing tangible results. In Q2, the company signed new customers in Colorado, New York, and Pennsylvania, adding SEK16.5 million in annually recurring revenue (ARR). The order backlog increased to SEK35.3 million in ARR. Post-quarter, the company also entered Minnesota for a new Work Zone safety pilot, positioning the segment for top-line growth at improved margins.

Q: What were the key drivers behind the strong Q2 EBITDA performance, and how did it flow down to the bottom line?A: CFO Simon Mulder explained that Q2 EBITDA reached SEK39.2 million, up from SEK31.4 million in Q2 2025, with the margin improving from 15.4% to 19.5%. This was driven by effective expense management in both business segments and increased global maintenance revenue. The strong EBITDA performance, combined with lower currency impact on financial items, resulted in a profit for the period of SEK14.5 million, compared to a loss of SEK8.9 million in Q2 2025.

Q: How did the International segment perform, and what is the outlook for delayed revenue?A: CFO Simon Mulder noted that the International segment saw increased order intake of approximately SEK63 million, mainly from repeat orders and the renewal of the Saudi maintenance contract. Revenue remained stable at SEK164 million, with strong service performance from maintenance projects in the Netherlands, Australia, and the Middle East offsetting delayed product revenue. CEO Lewis Miller added that changes in customer order and delivery schedules impacted Q2 revenue timing, but the majority of the delayed revenue is anticipated to be realized in the second half of 2026.

Q: What is the current cash position and financial leverage of the company?A: CFO Simon Mulder reported that available cash rose to SEK192 million, up from SEK137 million in Q2 2025. Net interest-bearing debt increased to approximately SEK243 million, driven by translation impacts on the euro-denominated bond (SEK9 million) and an increase in asset finance (SEK7 million). The company maintains a healthy leverage ratio of 1.89, with cash and bank closing at SEK137 million.

Q: Can you elaborate on the new Chief Technology Officer appointment and its strategic importance?A: CEO Lewis Miller announced the appointment of Johan Norrman as the new Chief Technology Officer in Q2. Johan brings over 20 years of leadership experience in global technology organizations, with a proven track record in integrating hardware and software platforms, deploying advanced AI-driven video solutions, and leading significant technology transformations. His expertise will be instrumental in ensuring the company’s technology roadmap directly supports its commercial strategy and market competitiveness.

Q: What is the status of the North American revenue, and how is the Albany, New York program impacting results?A: CFO Simon Mulder stated that North American revenue for Q2 amounted to SEK43 million, down from SEK46 million in Q2 2025, due to lower violation volumes in the Albany, New York program. However, revenue improved by 15.5% quarter-over-quarter. EBITDA for the segment was SEK5 million, impacted by the lower volumes. The Q2 2025 results were positively impacted by a one-off insurance recovery of SEK8 million; after adjusting for this, the underlying operational profit improved by SEK1 million.

Q: What were the main drivers of the cash flow and working capital changes in the quarter?A: CFO Simon Mulder explained that cash flow from operations amounted to SEK25 million in Q2, with net working capital increasing by SEK13 million in the quarter and SEK37 million at mid-year. This increase is mainly due to project milestones to be invoiced on completion of parts of the Dutch EG 39 project. During the quarter, the company invested SEK25 million in fixed assets and operations, as well as hardware and software development, with mid-year investments totaling SEK42 million.

Q: Are there any new contract wins or expansions after the quarter end?A: CEO Lewis Miller confirmed that after the quarter, the company signed a contract to expand its business in Queensland, Australia, valued at SEK38 million. Additionally, the company entered Minnesota, a new state for Sensys Gatso, to support a Work Zone safety pilot. These developments, along with the go-live of the new Xilium Traffic Events Service, are expected to support future growth.

Q: What are the key risks or factors that could impact the company’s financial outlook for the remainder of 2026?A: CEO Lewis Miller noted that the company is closely monitoring project schedules and global political developments, particularly in the Middle East, which may continue to impact order and delivery timelines. Despite these potential headwinds, the company is reaffirming its revenue guidance of SEK750 million to SEK800 million and increasing its EBITDA margin guidance to 15%-17%, reflecting confidence in its disciplined execution strategy.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.