InCoax Networks (INCOAX) Q2 2025 earnings summary

Executive summary

• Net sales for April–June 2025 declined 58% year-over-year to 8,072 KSEK, mainly due to delayed orders from Google Fiber and a slower ramp-up with Nokia.

• Gross margin improved to 70% from 53% in the same quarter last year, driven by a favorable product mix and higher service revenues.

• Operating loss (EBITA) widened to -11,357 KSEK from -6,735 KSEK year-over-year, reflecting lower sales and increased costs tied to Nokia collaboration.

• Strategic partnerships with Nokia and Google Fiber progressed, with new orders and technology integration, positioning for future growth.

• A cost savings program targeting SEK 11–12 million in annual reductions is being implemented, with a SEK 20 million loan guarantee secured for financial flexibility.

Financial highlights

• Net sales for the quarter: 8,072 KSEK (19,432 KSEK in Q2 2024); for Jan–Jun: 33,697 KSEK (50,225 KSEK in 2024).

• Gross margin: 70% (53% in Q2 2024); Jan–Jun: 65% (55% in 2024).

• Operating profit (EBITA): -11,357 KSEK (-6,735 KSEK in Q2 2024); Jan–Jun: -13,816 KSEK (-2,155 KSEK in 2024).

• Profit after tax: -11,503 KSEK (-6,995 KSEK in Q2 2024); EPS: -0.09 SEK (-0.06 SEK in Q2 2024).

• Cash flow from operating activities: -4,380 KSEK (-5,962 KSEK in Q2 2024); total cash flow: -11,069 KSEK (-11,980 KSEK in Q2 2024).

Outlook and guidance

• Major growth is delayed, with significant sales increases now expected from 2026 as operator adoption and market conditions improve.

• The cost base will be reduced by SEK 11–12 million annually by end of 2025, supporting a return to profitability.

• Long-term goals remain: at least 50% average annual organic revenue growth over 3–5 years and positive operating cash flow with EBIT margin of at least 10% from 2025.

• Demand for high-speed broadband remains strong, and the company is positioned for future growth with its technology platform.