Following INVISIO's Q2 2026 interim report, we have updated our investment case on the company. Our updated investment case covers the key investment reasons, risks, and valuation perspective relative to peers across Nordic/EU defense equipment, international defense communications, and audio/hearing protection.

INVISIO delivered strong Q2 2026 revenue of SEK 513m (+20% y/y, +23% in constant currency), extending H1 growth to +24% y/y, while EBIT margin expanded to 15.3% (14.1%) and net profit reached SEK 58m (+84%). However, order intake of SEK 279m (-31% y/y) reflected temporary US delays from a partial US government shutdown affecting DHS/Coast Guard and an ongoing DoD reorganization, with the order book closing at SEK 498m. Management assesses that no orders were lost, only postponed to H2. The gross margin of 53.0% (56.7%) still carried a ~5pp headwind from the final deliveries of the 2024 third-party radio order, which has now been fully executed with no remaining exposure.

There are clear indications that the US-related softness is timing-driven rather than structural. Management expects the delayed US business to be recouped gradually during H2 as DHS funding has been restored and DoD roles resettle. Alongside the temporary headwind, Q2 delivered two strategic milestones: approval as a direct supplier under the UK MoD Tactical Communications Systems Framework – a strategic entry into one of Europe's most important defense markets – and the Eurosatory 2026 launch of INVISIO Drone Aware™ for the T30 headset, enabling early drone detection through acoustic signals. Deliveries of the T30 headset, INVISIO Link™ wireless and H Series smart hubs continue to ramp, with additional T30 production capacity being added from late Q3 to meet strong market interest.

The quarter reinforces a central point in the investment case: order intake and revenue remain lumpy from one quarter to the next, but the underlying direction is clear. Q2 book-to-bill of 0.54x and R12 of ~0.91x reflect the US shutdown and DoD reorganization rather than underlying demand weakness. Revenue grew at a 5-year CAGR of 27% to 2025, and on consensus estimates is set to compound at ~20% to 2028E, with EBIT compounding at ~36% over the same period, a profile that is hard to find in the European listed defense universe outside of the largest primes.

The key investment reasons continue to center on structural NATO rearmament tailwinds, with European defense spending of EUR 380bn in 2025 already +60% above 2020 levels and the NATO 2% GDP target now being accelerated towards 5% by 2035, providing a multi-year procurement backdrop into which INVISIO's NATO-qualified products fit directly. High operational gearing in an asset-light model with subcontracted production enables continued margin expansion as the topline scales, with the 2025 EBIT margin of 17.8% already well above the Nordic/EU peer median of ~10.4%. A market-leading position underpinned by regulatory hurdles, co-development with armed forces and 3-5 year procurement cycles supports high switching costs and recurring upgrade orders, and the shift from headset supplier to integrated soldier and vehicle system provider, via the T30, Link™, H Series and the UltraLYNX bolt-on, raises revenue per customer. Strong cash generation also supports a continued dividend, with a 5-year average payout ratio of 48%.

The key risks remain centered on valuation expectations and revenue lumpiness. The share continues to trade at a premium to Nordic/EU defense peers, leaving limited room for execution slippage in the new product ramp or further US-related delays. Lumpy revenue and order intake creates q/q volatility, as Q2 2026 illustrated through the partial US government shutdown affecting DHS/Coast Guard and the DoD reorganization delaying orders, and larger framework orders may exacerbate this going forward. Defense supply chains may struggle to keep pace with industry growth, partly mitigated by INVISIO's strong inventory position and third-party scale options. Modern warfare is also evolving rapidly, and equipment priorities may shift over time – though INVISIO's Drone Aware™ launch demonstrates agility in responding to emerging threats.

From a valuation perspective, on 2026E multiples, INVISIO trades at 24.6x EV/EBIT and 33.4x P/E, a moderate premium to Nordic/EU peers (22.5x and 31.9x) that has compressed YTD following share price weakness (-18.6%). On 2027E estimates, multiples fall to 15.7x EV/EBIT and 21.2x P/E, broadly in line with peer medians at 18.7x and 24.5x. The valuation is supported by a superior growth profile (revenue CAGR 20% and EBIT CAGR 36% over 2025-28E versus peer medians of 12% and 11%) and a higher margin profile (2026E EBIT margin of 19.1% versus the peer median of 14.6%). Risk/reward has become more binary, with near-term performance hinging on whether the delayed US orders materialize in H2.

For further insights into the Q2 results and management's focus areas for the rest of 2026, you can watch the event we hosted with INVISIO: https://www.inderes.dk/videos/invisio-praesentation-af-regnskabet-for-2-kvartal-2026

Disclaimer: HC Andersen Capital receives payment from INVISIO for a Digital IR subscription agreement. /Rasmus Køjborg and Jacob Frehr 15:30 06/08-2026