• Orders and sales below consensus in Q1, costs above
• Optimistic H2'25 guidance reiterated, we cut EBIT 8-10%
• Tough sales comp in Q2e, share at 41x EV/EBIT 2025e

Q1 miss on most lines

Even though underlying order intake (ex. announced orders in comparable figures) grew 27% y-o-y, the SEK 264m came in 28% below Modular Finance consensus. Combined with a 13% sales miss, slightly lower gross margins, and higher costs, EBIT at 60% below consensus surprised negatively. However, sales still grew 9% organically, although Q4 turned out to be a strong quarter favoured by timing deliveries around year-end that affected Q1 negatively. Invisio has always been volatile on quarters, and we are therefore careful about extrapolating too much from the weaker Q1. We also emphasise the forward-looking comments about higher military budgets, to be seen in order intake and sales in H2'25e.

We reduce our estimates

As a result of the Q1 sales miss, we cut '25e-'27e sales by 2%. Due to the gross margin miss and somewhat higher opex, we also raise costs, resulting in adj. EBIT coming down 8-10%.

Long-term growth outlook, but some near-term headwinds

We remain positive on the long-term outlook, but emphasise two near-term risks: 1) Q2e faces a tough comparable on sales due to large deliveries of the third-party radio system in Q2'24: we estimate -20% organic growth, and 2) pre-Q1 Modular Finance consensus EBIT margin assumptions of 26-28% in '26e-'27e are clearly above the company's target of ">15%", and above how we think Invisio will be managed; optimised for growth when above the margin target. We therefore model a more neutral EBIT margin ahead (and Q1 was one sign showing that the margin does not scale upwards forever). On our updated estimates, the share trades at 41x 2025e EV/EBIT and 34x 2026e. We expect to see improved order intake momentum during 2025e.