We report a gross margin of 43%, 45% if you exclude one-offs. The key highlights on the go-to-market side is that we continue the momentum with Shure. In the quarter, we signed a memorandum of understanding with Barco, as well as we continue to pursue more strategic partnerships. When it comes to the Huddly C1, our audio-video AI-driven video bar, we are on track towards first customer shipment in September. When it comes to the outlook, we are adjusting the outlook to SOK 240- 280 million for 2025. As of this morning, we have announced a private placement of SOK 50- 75 million, whereas SOK 50 million is fully guaranteed. To iterate on our business plan, we start and have continued to deliver our business plan, which is built up of three main pillars: increasing the revenue, monetizing on our products, whilst we keep strict cost control and investment.
On the revenue side, as we said, we continue the momentum with Shure, which had their first end-customer shipments in the quarter. We do see that the momentum will continue to grow in the coming quarters. We are, of course, very pleased with the partnership with Shure, and in our humble opinion, believe this is one of the best bundles you can have in the market. When it comes to Barco, Barco and Huddly have had a long-standing relationship. However, as of June, we announced that we are strengthening that partnership and relationship even further. First of all, with our go-to-market efforts, we have, as of June, the entire Huddly portfolio certified on Barco ClickShare. This includes now Huddly Crew and C1.
We also agreed that we are going to continue the cooperation when it comes to the Barco Hub and Hub Pro, which are Microsoft and DAP devices that will allow Huddly customers now to enjoy the Huddly product on Android as well. As stated, part of our strategy is to attract more strategic partner revenue, and we are in dialogue with several partners. As of today, we are in final negotiation with a global player in that space. When we look further at the channel revenue, we see a very good growth in the three consecutive quarters in a row. This is mainly driven by three main things. In addition to having a very strong and broad partnership throughout the channel, we have strengthened and worked more strategically with some key partners such as AVI-SPL.
In addition, we have gone through the ways of working and have been working more efficiently with regards to systems, processes, routines, and so on. Part of the growth is also driven by increased adoption and momentum for products such as Huddly Crew. To iterate on the product roadmap, in 2024, we announced and came to the market with Huddly Crew, a state-of-the-art, one-of-a-kind Huddly multi-camera system that is easy to deploy and install. In 2025, we are working towards bringing the Huddly C1, an audio-video AI-driven video bar, to the market. Looking into the future, we will be working further with the audio and video to expand into even larger rooms.
As stated, much of the channel growth, but also the strategic partner growth, is due to Huddly Crew getting better momentum and adoption in the market and now starts to be a significant part of the total balance for Huddly. We are, of course, very pleased to see the market endorsing that product so well. When it comes to the Huddly C1, our AI-driven video bar with 20 times the AI capabilities of our previous products, this product was launched at Infocom globally together with both Barco and Lenovo. It has got a great reception so far, both by end customers, distributor resellers, and industry analysts. Most importantly, we are on track for first customer shipment in September. Looking forward to what Huddly C1 is and is going to be, we are going to be enabling the Huddly C1 hardware towards the Huddly Crew software platform.
Huddly Crew is not only a camera system and hardware system, it is actually a software platform. Now we are going to be enabling both video and audio from the C1 as of next year. How are we bringing the Huddly C1 to the market? We had an introduction of the product at ISE in February this year with good reception. We continued that motion in Europe with our partners in Lenovo and Microsoft with a European roadshow in multiple cities. This is just before we had a global launch at Infocom in June. In the second half of the year, we are going to be continuing the roadshow with Lenovo and Microsoft, expanding to more cities in Europe, but also added some key locations in the U.S. We look forward to bringing the product to our customers in September. With that, Abhi, I'll give the word over to you.
Thank you very much, Rosa. So far in this presentation, we have been discussing details around sales, marketing, and products. I will now shift gears a bit and focus on financials and operations. In our previous quarterly announcement, we shared our insights on the newly imposed U.S. tariffs. Since then, quite a bit has changed. What we're now seeing is presented on this slide here. We do see a 15% tariff between the EU, Norway, and the U.S., and 30% between China and the U.S. The latter is based on a trade truce, which is announced to end on November 10. What will happen after that is still an unknown. This obviously has an impact for us as a company. To recap a bit, we ship our products from Poland and Norway to the U.S., and generally speaking, it is the U.S.
distributors who carry the cost for duty payments and shipments. As a consequence of this, we have increased the prices to the end customers, thereby protecting our own margins and preserving the margins of the distributors. Before the hike in the tariffs from 10%- 15% from August 1, we stocked up goods worth NOK 8 billion in the U.S. This number is reflected also in the Q2 revenue. Huddly seems to currently benefit from a favorable relative cost position. The reason for that is that many of our competitors have their production based in Asia, in China, Malaysia, and Vietnam, which generally have a higher tariff level than Europe. I will now summarize a bit our business plan, what we have done, and what we are looking forward to. As mentioned by Rosa, we have three strategic pillars.
The first one, growing strategic partner and channel revenue, we're seeing a quite strong momentum and growth here. In channel, very strong three consecutive quarters of growth. With strategic partners, we have momentum with Shure. We added Barco as partner through a memorandum of understanding in June, and we are in negotiations with another partner. In addition to that, we have strong alignment with Microsoft, which is very important for technology validation. Second, maintaining healthy gross margins. With the new Huddly C1 product, the video bar, we are changing our position from being a video provider to being a complete solution provider with both video and audio. That is a very important move for us, which will help us to preserve our margins and grow the business case going forward. Third and finally, strict cost control and disciplined investments.
We implemented a cost-saving program in spring this year with annual savings of NOK 12 million. With the tariff situation easing a bit, we do see reduced risk in comparison to what we saw just one or two quarters ago. What has changed since last time is that we do see a deferment in strategic partner revenue. Hence, we have adjusted the expected revenue for 2025. We communicated previously NOK 270- 320 million for 2025. That has now been adjusted to NOK 240- 208 million. Gross margin changed to 45%. However, if we look at 2026 and 2027, we keep the revenue estimates and have changed the gross margin expectation to 45%- 50%. Translating this into profitability, we have an ambition to get to cash flow positive in 2026 with a healthy cash generation from 2027.
As a consequence of these changes, the company has a finance need to bridge the company to cash flow positive in 2026. As a consequence of that, we this morning announced a contemplated private placement of between NOK 50- 75 million. Of this, NOK 50 million is guaranteed. The uses from these proceeds are going to be used on continued investments in R&D, onboarding new strategic partners, expanding channel sales, and of course, for general working capital requirements to support growth. On the final note on this slide, the company currently has NOK 55.5 million in a shareholder loan. That is due on June next year. Lenders representing NOK 24.75 million of the total have committed to extend their portions of the loan for 12 months into 2027. Let's now go towards the financials and discuss a bit more details here. Revenue, as communicated, was very strong in Q2.
We do see a continued growth driven by both strong momentum in channel and strategic partners. Revenue was NOK 57 million in Q2, representing a 45% increase over Q2 2024 and 25% increase in comparison to Q1 2025. Sales to channels was very strong. That is driven by solid performance across all products. The number also includes NOK 8 million in U.S. stocking in anticipation of higher tariffs. Sales to strategic partners also seeing quite a strong growth here. Gradual growth of sales to Shure in addition to revenue from Microsoft and Lenovo. We do expect to see increasing sales to strategic partners in the next coming quarters as we are adding additional partners to our mix. Moving towards the gross margin, we had a 43% gross margin in Q2 2025. The change is mainly due to a change in product mix as well as certain one-off items.
The one-off items are, number one, related to concluding sales of a maturing product with relatively lower margins, and, number two, scrapping of certain components. If you exclude these two effects, the gross margin for Q2 was 45%. It is important to note that the change in gross margin is not driven by market-specific or supply chain-related issues, such as rising component prices or supply shortages. Looking at that first half-year basis, gross margin was 47%, which is in line with what we expect towards 2027, and also an improvement versus 43% in the same half-year last year. Looking at the summarized P&L statement, we have already discussed the revenue and the gross margin. I'd like to focus now on the OpEx here. The OpEx has reduced significantly, and that is due to two changes.
Number one, a reduction in costs related to a cost-saving program, which was fully implemented in spring this year, and, number two, reduced costs related to the employee share incentive program. Hence, both on a quarterly basis, Q2, and half-year basis, we do see a significant year-over-year reduction in losses. We talked about the Huddly C1 and the product being launched and shipped to end customers from September this year. All of our investments into the company in R&D go into product development, such as Huddly C1, Huddly Crew, and other software-enabling enhancements. Capitalized R&D for Q2 2025 was NOK 40 million. That is an increase versus the same quarter last year. However, it should be noted that in Q2 last year, it was a relatively high degree of maintenance. Q2 this year has returned to more of a normalized level.
Our organization consists of, amongst others, 57 engineers with approximately 45 with extensive experience in AI, machine learning, and software development. We're going to continue to invest into the talent, the product development capabilities to ensure that we will defend our leading technological position and to enable future revenue growth. Finally, I will now go through the cash flow statement. Cash end of June was NOK 52 million. However, we did see a significant improvement in operational cash flow. This category was minus NOK 33 million in Q4 2024. It was minus NOK 21 million in Q1 2025 and was reduced down to minus NOK 18 million in Q2 this year. As already communicated, due to the changes in the business plan and the need for additional financing, the company has just announced a contemplated private placement of NOK 50- 75 million.
I would like to conclude the presentation for this quarterly announcement. We will now move on to the Q&A session, where we will open up for questions from the audience.
Hello and welcome to the Q&A session. Together with us here, we have Jon Øyvind Eriksen, our Chairman of the Board, Abhijit Saha Banik, CFO, and me, Rosa Stensen. First of all, I would just like to point out if you have any questions, please type them into the chat, and we will then respond to them as we go. We have the first question. Which shareholders have pre-committed to the private placement? Jon Øyvind, I think that's a good one for you.
Yes. I'm very glad to see that the shareholders that have agreed to pre-commit in the private placement are found among Huddly's larger shareholders, Board members, and the management. Of course, the complete list will be made public at a later date. I'd like to say that the fact that we already, before the launch of the private placement, see that the offering is pre-committed signals a long-term commitment and confidence in the company and the report that we are presenting today.
Thank you, Jon Øyvind. How confident is Huddly in mitigating tariff impacts when assuming end customers will absorb the price rises? How material is the U.S. exposure in 2025, given that 56% of the revenue in 2024 was in the U.S. and 60% already in the first half of 2025? Abhijit, this is a great one for you.
I think there are many factors playing into this question here. We have chosen to increase the prices to the end customers and how they will respond to this is a bit too early to say. However, we do know that our customers are generally quite big B2B customers, which typically have a different behavior from more price-sensitive consumers. What that means is that will translate into a relatively small change in demand due to change of price. That remains to be seen. We will, of course, monitor this continuously. We might also do other changes to the price or other mechanisms depending on how the situation develops. With regards to the question to exposure, we do have a slightly higher sales to the U.S. so far in this year in comparison to last year.
It's a quite good proxy, the sales, the revenue that we have to the U.S., which is presented in the interim report that shows you a quite good number of our exposure to potential U.S. tariffs.
Thanks. Thank you, Abhijit. The third question, will there be a repair offering, Jon Øyvind?
Yes, the company may carry out a repair offering of new shares at the same price as the price in this offering. That would be directed towards the small shareholders who are qualified to participate in this offering. Whether we will carry out the repair offering will be decided by the board later. In order to be a qualified shareholder, you would need to then firstly hold less than 1% of the current shares in the company. Secondly, not have been allocated shares in the private placement that is taking place now. Thirdly, not be a foreign resident in a jurisdiction where taking part in the offering would require Huddly to release a prospectus of filing or registration or similar or otherwise be in conflict with the law of that country.
Thank you, Jon Øyvind. There's a question with regards to the shareholder loan. There is still an internal loan of NOK 55 million on the balance sheet, with further material drawdowns soon expected. With the business now targeting cash flow positive in 2026, are there any concrete plans to convert, restructure, or reduce this loan in the near term to strengthen the capital structure? This was actually one part of the announcement we came out with this morning, Jon Øyvind, so you can maybe elaborate.
Yes, actually, yes, there are several parts to that question. Further drawdowns are not planned. When it comes to the actual loan, we have communicated that NOK 24.75 million of that loan has already been committed in writing to be extended for 12 new months until June 2027. We have still not completed all the discussions. The final result will be announced at a later date.
Thank you. You're contemplating NOK 50- 75 million private placement to fund operations through a cash flow positivity. If the upper range isn't reached or cash burn exceeds expectation, is there a backup plan, such as another round or internal financing or new capital raise already considered? Abhijit, this is actually two options in one.
Yeah, yeah. When it comes to cash flow, of course, the CFO would have the last word here. We are planning for actually that in the lower end of the range, that should be sufficient to fund the company. We haven't planned any alternative B here. We have already got a commitment in the lower range, and the transaction is launched today. We don't know the final result, but we already know that we have succeeded in meeting the minimum targets that we have set.
Anything to add, Abhijit Saha Banik?
Our current business plan is to get to cash flow positive in 2026. That is what we are working on, and that is our plan. However, the future is uncertain. Of course, if there are changes to that, we will take operational implications for that.
Thank you. I will rephrase the question a bit. How is the upfront stocking in Q2 regarding tariff-affected revenue in Q3 and going forward? This is where it relates to the upfront stocking for the quarter.
Yeah, if I understood that question correctly, we can't say anything about Q3 at the moment. That's also a bit too early to say. Plus, we are having a quarterly announcement on the Q2 numbers, so we can get back to that when we get into the Q3 announcement.
Thank you. At which price will the private offering be set?
The private offering has a fixed price of NOK 11. The share price is linked to a volume-weighted share price of the share in 30 days with a discount around 11%. This approach is quite normal for offerings in the present capital market. You should note that the share price of NOK 11 represents a 10% increase compared to the share price in the last investment round. The value creation for the shareholders who invested in the last round reflects the positive achievements of Huddly in 2025, which we report today.
Thank you, Jon Øyvind. Let me see. There is a question about, compared to the large number of quarters with large losses and negative growth, three consecutive quarters with revenue growth can be seen as a cold comfort. Why should we believe that the positive trend will continue? Oh, I can take that question. What we see throughout 2025 with the numbers we are reporting today is that we are starting to deliver on our business plan. The two revenue pillars, both on the channel and strategic partner side, we see the growth and the momentum starting to build up. This is also, as we pointed out in the presentation, Huddly Crew, the adoption of Huddly Crew is definitely supporting that growth. Now, with coming with the Huddly C1 out on planned schedule in September, it will even further impact the revenue in a positive way.
Obviously, as well as we pointed out, we are continuing in dialogues and attracting more strategic partners and revenue going forward. We believe that the trend is turned. Thank you. I think that's all questions we have received. If you have any additional questions, please do not hesitate to reach us on ir@huddly.com. We will answer your questions as they come in there. I thank you for the time today and see you next time. Thanks.