Welcome to the Q2 2026 results. My name is Rósa Stensen , and later on, Abhi Banik will be joining me. We report revenue of NOK 15 million in the quarter, a decline of 11% year-on-year. However, adjusted for the stocking due to U.S. tariffs last year and effects, we see a strong underlying growth of 13%. In addition, we report an increased gross margin of 49%. When it comes to our strategic partners, we have further strengthened the partnerships and collaboration. However, we are seeing delays in ramp-up and scaling. We are going to give you a sneak peek of our products later in the presentation, where we are going to be telling you about our Microsoft collaboration, but in addition to our Huddly Crew+ system that is going to be launching early next year.
We've adjusted the revenue targets, and we will also in detail go through these. When it comes to our key priorities, they are still the same. We are going to market through our strong partnerships, as well as monetizing on our products and AI developments. At the same time, we keep strict cost control and disciplined investments. But first, I would like to bring you into a context of the market we are operating in. The current market size, according to Frost & Sullivan, is estimated to be around $5 billion. The partners we have are estimated to be addressing approximately 15%-20% of that market. Further, this market is estimated to grow with strong 16% in the years to come. I know many of you were excited about our Lenovo partnership, and so are we.
In January, we signed the partnership with Lenovo to go to market with our products in Huddly, the entire product portfolio, together with their compute and control. We have since then been working relentlessly on both sides to bring these products to the market, and we look forward to ramping that up further with Lenovo. When it comes to our friends in Denmark, they are going to market with Room for More, which means they are bringing solutions to all meeting rooms from two to 22 people, where Huddly brings the video to the medium and large rooms. To bring you back to what I said about the delayed ramp-up of our strategic partners, we would like to bring you into a bit more details of that context.
To enable a partnership such as we have takes a lot of work and a lot of activities that need to happen in order for that to start to ramp up and scale. It is not only signing the contract and ship off, it is actually a lot of work that needs to come in place. We need to align supply chains, product access, market access, etc . That work has been ongoing now in this quarter, and we look forward that into the coming quarters now to see those focusing further into ramp-up and scale. To our second part of our business priorities. Our product format is on track. From being a company that delivers a video solution to meeting rooms and multi-camera systems to meeting rooms, we are now bringing AI-native collaboration system into the meeting rooms as of early 2027.
In addition to the video and audio, we have also something called AI data channel, which allows us to exchange data and contextual understanding from the rooms with platforms. To give you an example of that, Microsoft believes all future meeting rooms are going to be intelligent. But what does that mean? In Huddly, we believe our equipment is intelligent because the AI on the edge allows us to have contextual understanding of what's happening in the room. That contextual understanding, we through the AI data channel, bring to Microsoft Teams platform. As of September, Microsoft will be rolling out their intelligent people labels, who will then allow people using the Microsoft Teams platform to have correct attribution to who said what and what actions is whose.
Our Huddly Crew+ platform adopts the architecture and technology of distributing the AI on the edge, similarly as we have done with our Huddly Crew. But in addition to the video, it also brings the audio and the AI understanding to the mix. It allows us to scale to every size of meeting rooms, from small and medium rooms to large, by just adding more devices. But it doesn't really stop there. The system is fully modular and allows us to bring our solutions in every type of space. Huddly Crew+ is well positioned when it comes to the market. The market, the multi-camera market, expected to grow from 1% to 8% in the video-enabled rooms. We're not only doing that.
With the disruptive technology, we are also be able to do that at a price point that fits the budget, in a price point the market hasn't seen before. From small and medium and large and extra-large rooms, you can have a full AI-native collaboration system with multi-camera at a very competitive price. We have talked now about our strategic partners and our product. I would like to bring the attention to our channel. Previously, we have informed that we were increasing our focus in the Asia Pacific region, and we have been adding more distribution partners in that region. We are now starting to see strong growth coming from the region, still small, but starting to have an impact on our P&L. We are going to be continuing our efforts in that region going forward.
When it comes to Europe, we see there is a differentiation between the U.K. and Europe at rest. Whilst in the U.K. we have seen strong growth in the quarter, we have had our market in Europe under pressure. Last but not least, to our U.S. market. The U.S. market has in general been volatile in the last few quarters. However, we are now seeing some signs of stabilization. In addition, that we have been strengthening our organization in that region as of this quarter. With that, I will give the word over to Abhi, who will summarize but also go through the financials with you. Thank you.
Thank you very much for that introduction there, Rósa. So far in this presentation, we have been discussing about the business priorities of the company. I will now summarize and provide the key takeaways from the presentation on how that drives revenue and cash flow positivity. In June this year, we launched the AI data channel, which integrates together with Microsoft Teams and IntelliFrame. This provides AI-enriched video meeting experience and thereby further differentiating our products. From H2 2026, we expect strategic partner volumes to ramp up as they start to scale their offerings through their global distribution network. Third, in Q1 2027, we will launch the full Crew+ modular platform, which will then tap into a larger share of the market with large room offerings with both video and audio, and also at the same time capture a larger budget of the meeting rooms.
All this leads into cash flow positivity from H2 2027. This is also supported by very strong market fundamentals. The market is huge, approximately $5 billion in this year, and expected to grow by approximately 16% on an annual basis towards 2029. Finally, in addition to that, the multi-camera market is expected to grow by eightfold towards 2029. All this translates into our business case. Although we have revised our numbers, we do still see promising growth prospects in our business. The revised number for 2026 is NOK 230 million-NOK 300 million for the year, with a gross margin between 45%-50%. In 2027, between NOK 500 million and NOK 600 million , and in 2028 between NOK 650 million and NOK 800 million with a gross margin approximately at the same level as in 2026. This then translates into cash flow positive from H2 2027.
That wraps up the part on the business review of this presentation, and I will now move into the financial section and provide more deep dives into the numbers. Revenue in Q2 2026 was NOK 50 million . That is a reported decline of 11% on a year-on-year basis. However, it is important to acknowledge that there were several one-off effects in Q2 2025. So if you adjust for tariff stocking in Q2 2025 as well as currency adjustments, it was actually a 13% organic growth year-on-year. This can be shown on this breakdown in this slide here. So if you adjust for NOK 8 million in tariff stocking, NOK 4 million in currency adjustments, the residual is now representing a 13% organic growth in Q2 2026. Gross margin in Q2 was very strong at 49%, up from 43% the same quarter last year.
We are very proud of this achievement because in a market with increasing component prices, we are still maintaining our gross margin. One of the reasons behind that is because we are increasing the prices to our customers, in addition to showing the operational resilience that we have in this company. In addition to that, Q2 2026 also provided a favorable mix in terms of products and customers, and we expect that the gross margin will fall between 45% and 50% in 2026 full year. Looking at the summarized P&L, the gross profit was actually at the same level in Q2 2026 as in the same quarter last year. Even though the revenue has somewhat declined, it has been offset by the increase in gross margin. Looking at the cost base, it is quite stable.
If you look at on a pure cash cost basis and take out non-cash effects such as depreciation, amortization, and then pre stock option program, year-over-year, it was a quite stable development in Q2. We continue to invest in the future, and we invest in our R&D organization to develop the products that will provide us with a competitive edge. Capitalized R&D in Q2 2026 was somewhat lower than the same quarter last year. However, this is mainly related to a relatively lower share of projects being capitalizable. We do still have a very strong organization of 57 engineers, in addition to designers and product managers supporting the product roadmap that we have, which will enable us to grow the revenue as we have illustrated in the business case. Finally, on the cash flow statement.
Cash end of the quarter was NOK 62 million , down from NOK 110 million at the start of the quarter. The change is mainly explained by working capital changes, which is then again mostly attributed to increase in inventory as we have built up products in anticipation of strategic partner demands. These are mostly finished goods which are ready to be shipped to our customers. On the financing side, financing includes a loan from Innovation Norway of NOK 40 million . Proceeds from a repair offering in the same period of NOK 11 million . Finally, we also did a repayment of a shareholder loan facility of NOK 30.8 million in Q2 2026. That wraps up the presentation for Q2 2026, and I would like to thank you for your attendance. I will now take questions from the audience.
Yes. Now we are on the Q&A part of this presentation, and Jon Øyvind has joined us for that. The first question is related to the private placement announcement sent out yesterday, and if we can elaborate a bit more on that. Abhi, maybe that's a good one for you.
Yes, absolutely. So yesterday we launched a comprehensive private placement between NOK 50 million and NOK 70 million , and we are very happy and proud that we have closed that round and raised a total of approximately NOK 70 million , so in the upper range of that private placement. So strong support from primary insiders, shareholders, and we also have new shareholders. So thanks a lot for supporting us in our journey going ahead.
Thank you. The next question comes related to our strategic partners. You say that the collaboration has been strengthened during the quarter. Could you give us more flavor on how it works in practice? With our strategic partners, we work with them quite closely on all levels. If it is from design, engineering, product, but also from finance, supply chain, compliance, sales, and marketing. There is a large investment and quite a large operation both on our side and their side to enable us to go together to the market and to address that big market potential as was mentioned in the presentation. There is another question. What tangible evidence do you have today that gives you confidence that Lenovo and Jabra are going to materially accelerate in the second half and full 2027, despite the rollout being taking longer than originally expected?
Well, as I mentioned in our Q&A in the first quarter presentation, the largest risk that we see is delays in that ramp up. As said, it is a large operation and a huge investment from both sides to get these rollouts up and running. Again, I would just reiterate that answer. There is obviously still a risk of that. However, we are working quite closely with our partners to enable that. Here come a question on inventory, Abhi.
Yes.
Inventory and consignment inventory total approximately NOK 160 million at Q2, more than 3x quarterly revenue and materially above cash at hand. Given the recent reduction in revenue guidance and the need for additional funding, can management explain the inventory build-up, expected inventory turnover, and whether there is any increased risk of obsolete or write-downs?
Yeah. I guess there are three questions in this question here. Yes, there is a build-up in working capital in terms of inventory. What is important to understand here is that that is mostly finished goods. That is readily able to be shipped to end customers. We have been in strong collaboration with our strategic partners. We have started to ramp up production in order to satisfy that demand. As we expect to have a ramp up in volumes from the second half of this year, that will then gradually be consumed over time. With regards to inventory turnover, that tied into the revenue question. We would expect that to increase as sales is expected to increase according to our business case.
The final part of the question with regards to obsolescence, that is of course something we have very strong discussions and collaborations with our auditor. Currently, we do not see any significant amount of that because it is inventory of products that is readily sellable and in demand out in the markets. Currently, that is not a risk impact that we are currently seeing, but we are obviously continuously monitoring that as we do evaluate the demand of our different products out in the markets.
It kind of ties back to how our product strategy and our product roadmap looks like. As we do have modular solutions, we can mix and match them. The Huddly L1 hardware is the same as the Huddly Crew hardware that can also be mixed in with the Huddly C1. So it allows us to be quite flexible in the use of the actual finish goods.
Yes, correct.
Which is a big benefit of that.
Absolutely.
Let's see if there are any more questions. Let me see. There is one more. "What differentiates the AI data channel that Huddly now delivers to the next generation IntelliFrame from other Teams-certified solutions?" That's actually a very good question. Historically, we have been talking about video and audio in meeting rooms, not only Huddly, but in general, Microsoft as a platform. What we're seeing with the AI development happening in every workplace, that AI is becoming way bigger part of that workplace. What Microsoft is saying that every meeting room needs to be part of that journey. So every meeting room needs to be intelligent.
Instead of only delivering video and audio to the platform, we now also deliver a contextual understanding with our AI understanding on the cameras and our devices to the platform, so they can utilize that to bring that into the whole AI ecosphere. The first feature that is released now is the Microsoft Teams IntelliFrame people labels that allows correct attribution and actioning of items, for example. We'll see. Give it a quick minute. I think there are no more questions here today, but in case you want to reach us, you can always contact us at ir@huddly.com. Thank you for today.