Betolar Q3'25: Large order paves the way for growth next year

Translation: Original published in Finnish on 10/29/2025 at 7:32 am EET.

Betolar's Q3 report turned out to be a pleasant surprise when the company announced the largest order in its history, which was received after the review period. Thus, the modest growth figures for the review period played a secondary role in the earnings report. We did not adjust our revenue estimates for the coming years because our projections for rapid growth required successful new sales. Following the rise in the share price on the day of the earnings announcement, we believe the share is fully priced, and the risk/reward ratio does not reach an attractive level. We reiterate our Reduce recommendation and EUR 1.30 target price for Betolar.

Post-review-period order took center stage

Betolar’s Q3 revenue decreased by approximately 20% to 0.2 MEUR, which was below our estimate of expected growth. The level achieved is modest, considering the company's growth ambitions and the early stage of the business. Betolar's EBITDA settled at -1 MEUR in Q3, which was in line with our expectations when adjusted for the timing of grant payments. The company thus managed to compensate for the low revenue through strict cost control. The liquidity situation also developed as expected, with the company's cash reserves totaling 7.4 MEUR at the end of Q3. In addition, the company has approximately 2 MEUR in undrawn grants, which it plans to use during the 2025 and 2026 financial years. While we estimate that financing will suffice to cover needs for the 2026 financial year, we anticipate that the company will seek to arrange its financing in the very near future. Although new orders for Q3 fell short of our expectations at 0.3 MEUR, the company reported that it had secured its largest order ever (1.4 MEUR) for an infrastructure project after the review period.

Order seems to have come from an unexpected direction

Betolar reiterated its guidance for the financial year 2025, pointing to growing revenue. This was to be expected, given the company's stage of commercialization and the low comparison figures. After a weak Q3, however, growth in absolute euros will remain sluggish in the current financial year. With the large order recorded after the review period, attention is already turning to the 2026 financial year. Due to contractual reasons, the company was very reticent about the details of the announced order, but we interpret it as coming from the (infra) construction customer segment. This came as a surprise to us, as Betolar's commercialization efforts during the current financial year have focused on customers in the mining and metal industries. While the announced order appears to offer at least moderate additional sales opportunities, our growth forecast for the coming years is primarily driven by progress in commercializing customers in the mining industry. Metal extraction technology will only significantly contribute to revenue in our forecasts in 2027 because the method still seems to require a pilot phase and development work before moving on to the commercial phase. The announced order mitigates the risk associated with the robust growth estimate for 2026, though the forecast hinges on achieving new sales successes in H1’26 comparable to the current one.

A high risk level warrants caution regarding the stock

Due to Betolar's early development phase, the predictability of the business is low and the risks associated with estimates are high. Based on our estimates expecting fast growth, Betolar's EV/S multiples (29x-7x) are higher than for the peers as a whole.  Our DCF model, which focuses on long-term potential, reaches EUR 1.30. However, options and financing needs put upward pressure on the number of shares in the model, which we believe limits the expected return. Stretched valuation combined with high business, financial, and estimate keeps the risk/reward ratio subdued in our books.