Welcome to today's event where we have the pleasure to present GomSpace . The occasion is, of course, the financial Q2 and H1 report fresh from the press this morning. Looks like the markets are liking what they are seeing, at least at the share price level. To help us take you through the results and answer questions, we are joined by Carsten Drachmann, CEO of GomSpace . As always, ask questions in the box down below. There's already a lot of questions, and maybe if it's asked, you don't need to ask it. Try and read some of the questions, but do feel free to do it. Also, do feel free to ask in Danish. I will try and translate that to the best of my ability. For now, I think I will let you, Carsten, take the stage.
Thank you, Michael, and welcome to, I'm actually standing right now in the North Sea Oceanarium up in northern Jutland. It's a bit of a special background you can see right here. We're here on an executive team meeting. We're talking about strategy. We're talking about the future. As you can see, there's a lot to do in the future. Just to give you an idea of where we are, it's a pretty big tank behind me here. There's about 54 million liters of water. I just checked that the glass is this thick behind me. You can't see my face now. It's very interesting being here. We thought the link here is also, while w e're talking to our customers that are usually human beings. We're actually also here to help the environment. We're here to help the fishes. We thought it was a good place to be.
We're enjoying ourselves up here. I know those of you say, oh, it's just kind of a digital background. It's not. Just watch the shark and the stingray that's passing once in a while. You see it's actually live. Anyway, let's get started. We make space yours. I start, I'm going to talk a bit about investor communication as I usually do, some key messages and highlights. Where are we on our business units? This is GomSpace. Quick overview. We're growing with confidence. You'll hear me say that a couple of times in a quick summary. Okay, clarity and communication. My two key mottoes internally, externally, we need to be clear. We need to communicate. Let me try and help you as investors the best I can here. Key messages for Q2. Let's take the revenue.
Basically, our second quarter, we are up 45% compared to the second quarter last year in 2024. That's a pretty significant increase. Our EBITDA is positive, about SEK 9 million. That's also an increase. We were just below breakeven the same period last year. Very, very happy with that. Our cash flow this year was, t his quarter was negative, minus SEK 45 million. We've had a long stream of positive free cash flow. This has been really good. We've managed tightly the cash. This is what we needed to do. We knew now that we have cash coming in, we have capital coming in, we have good credit facilities. We've been much more forward leaning to capture the growth that we've seen in the market. This is then the outcome here that we are negative on the free cash flow. We're keeping momentum for the year.
You can see that we are about SEK 96 million in revenue for the second quarter. We were SEK 88 million in the first one. Quarter on quarter growth, this is good. We have the positive EBITDA that we are chasing for the year. As promised, we are looking to generate a positive EBITDA, so tracking fine there. Significant events, big contracts, 18 satellites, SEK 215 million. Pretty good. We closed it just at the end of the quarter, a few days before closing. To be delivered over about 12 months, plus minus. Really, really strong deal for us. Also, why we're speaking with confidence about what we think we'll deliver for 2025. Also gives us some confidence into next year. We have the capital, access to the capital now. Money has come in from Peter Hargreaves, SEK 196 million.
We also have the credit facility that actually Hargreaves has taken over from the European Investment Bank. Some of the portfolio is that we have a lot of cash now. If you look at it, combining that, good results. We are actually on a good track for the P&L and our balance sheet is really strong. This is a very good position. I'm very, very pleased that we are here now. As I said, the free cash flow is impacted. This is a little bit the price of winning. I would claim that we have probably, i t would have been really difficult for us to win. It was difficult, but we won anyway. The large contract had we not had the confidence we had by having cash and cash coming in.
That basically led us to make some decisions saying, hey, in order to win this, we need to start investing in, we call it long lead items. We are ramping up early. That was also part of the sales process, convincing the customer, come at us, it's safe. We know what we're doing. We can stomach this now in a startup phase. That's actually why they chose us in the end as well. It takes some cash in order to do the bigger deals. I'm really, really pleased with this. This is a consequence of having more capital now. If you're looking a little bit beyond, first just summarizing. For the first half year, we are up 59% on the revenue. Pretty, pretty good as well, I would say. The first half year EBITDA in total is slightly above SEK 20 million.
This is against minus SEK 16 million last year. Again, we're trending in the right direction for EBITDA, an operational profit if you like. Obviously, the free cash flow is negative, as I've discussed as a consequence here. Looking forward, we maintain our outlook with confidence, with confidence for sure. The big contract that came in, of course, gives us that confidence. We don't need more than that. Let's see what's happening in the coming months here. There's still a few months to go, but that contract gives us a lot of confidence in delivering on our outlook. We are increasing spending in some areas more than I had originally budgeted. This is to capture the momentum that we'll talk about later, the momentum in the market. If you want to set ourselves up for continuous growth, we simply need to be more in the market.
We need to have more salespeople, business development people all over the world. We are basically saying we have to start investing in that now. We're also investing in more people with solution experience so we can go out to the customers and help them build the solutions that they require in order to solve a business case, illegal fishing right behind me here, or monitoring what's going on in the oceans around their country, et cetera. When I say with confidence for the outlook, we have actually increased our costs in certain areas, but we maintain our confidence here. Looking beyond Q2, just to say we actually had a negative equity in the first half of the year or at the end of the quarter. This has been restored. We knew that would happen. Our equity ratio right now is about 40%.
We have more than SEK 200 million equity and cash in bank. Middle of August was SEK 260 million. Go in and read, it says SEK 29 million in the bank end of the quarter, not so good, but we knew money was coming. We have SEK 260 million. It's the most money I've seen in a very long time. Everything is fine and we can continue to execute here. Cautious optimism for 2026. I don't normally make forward-looking statements and I should be careful what I say, but I would say we have a certain optimism that the momentum that we are picking up on in 2025, it's a good chance that we will go into the first part of 2026 with our confidence and some optimism.
Okay, just a reminder, we run our business through three business units: programs, doing contracts with customers for building satellites; products, where we are selling bits and pieces of the satellites to competitors, universities; and then North America, a little bit outside of this, but simply a big geographic region. We want to capture business in North America. It's the biggest market in the world. Some mood pictures. This is what an example of a satellite looks like. We're putting it together in a clean room. I know we have a lot of new investors. I hope you enjoy the pictures here. It's really cool. Here we have some examples of the products, so the insides of the satellites. Like I usually say, it's a flying laptop, a satellite. We do hard disk, we do power, power supplies, et cetera, which is sitting inside the satellite.
This is what it looks like. Battery packs as well. Pretty cool stuff. Go look at our website also if you want to see more. Now let's dive into the revenue. How was it distributed? As I said, it has increased very well year on year, about 49%. It's SEK 96 million, SEK 97 million in total. If you look at the breakdown, and now we're sharing with you, we're running our business based on the business units also to help you to see the dynamic here. 40% improvements for programs, pretty good. It's about SEK 60 million out of the total, so about two thirds. Products increased 71%. This is also a consequence of, you remember, we had a very good order intake in the first quarter of the year. Now we see that because, of course, we start delivering, so we start seeing the revenue coming in. A great performance there.
A little bit less on North America in the quarter. Looking at the half year, programs up 73%. That is pretty damn good, if I can put it that way. Slight increase in products. Also North America, ever so slightly, small steps are moving forward, and we see some motion and traction there. That's the distribution. Take a look at the EBITDA. We are around SEK 9 million, a little bit less than the first quarter. This is related to the mix of products and programs and margins, so it will always vary a little bit. Break down into programs to deliver the very good EBITDA this quarter. Products a bit less. We had some more costs coming in there, and the product and the margin mix was a bit different. North America, just around break even. The story in North America, I've said it's okay.
We don't need to make a lot of money there right now. We just want to start building business, and every time we make money, we reinvest it in North America so we can grow the platform. On a half-year basis, programs to about SEK 13 million out of the S EK 20 million, products SEK 7 million, and North America, as I said, just about break even. I'm fairly content with the EBITDA results here. Doesn't say we don't want to do more. Of course, we will do more, but it's a pretty good development if you compare to previous years. Operating profits, we are actually a bit positive. SEK 100,000 is also positive, but let's be fair, we are around break even on the EBIT. That's good. The net profits, I haven't put in the numbers, but it was a negative quite a lot. This is a bit odd.
It's just a very brief explanation on that. We have, with the European Investment Bank, a loan that's now transferred to Hargreaves. There are also warrants associated with that. This is a technicality, and it's because we have a lot of investors. You like us, share price has gone up a lot. There's a technical valuation and liability on those warrants that is basically impacting the net profit. If you ask me, and I'm pretty blunt about it, it's a pretty stupid way of accounting for it, but whatever, that's what we have to do. Actually, this will fluctuate with our share prices, but there's no cash involved. It's got nothing to do with our financial performance, nothing, but it is purely accounting and technicality.
If the share price in the next quarter is somewhat less than what it was in average in the second quarter, actually, it will be positive again. Now you know. No cash impact, no impact on business, no consequence for anything, but hey, that's accounting. I already, I restate here, the equity ratio and equity is restored in August. We knew this was coming, but just to be clear, because if you read the report, you have a negative equity, not anymore. We are fine. We have a strong balance. No problems doing government business, et cetera. Free cash flow, negative in the Q2. I explained that. This is about leaning into winning a deal, a large deal that we then won. It was the right decision. You can say, so why did you get some of the money? We signed a contract at the end of Q2.
I decided to very early on to ramp up. We started to work internally. We had paid suppliers to make sure that they could deliver in time because it's a very short timeframe for our delivery. It's really, really tight, so there's no room for mistakes. Everything is on track there, but it's cost money in Q2. Since we signed a contract at the end of the quarter, and typically there are some payment terms that basically say the contract payment terms are coming into the third quarter. I'm expecting to rebalance that in Q3. We should see a positive free cash flow again, and we're also guiding on the full year to say we maintain our guidance on positive free cash flow. Bank balance, SEK 260 million. Not worried about the cash. Don't misinterpret what I say. It is really, really good that we have that money.
We will strive that from our operations, from the business we do, the products we sell, the programs, we will make money. That money gives us some cushion to be a bit more bold in taking larger deals. The other thing is it allows us to start investing more. We're not jeopardizing it. We're not having the money to say, okay, now we can go to sleep and we have money for years. No, no. That money is going to be put to work, but not to cover losses, but actually to increase the top line and thereby also the profit over time. This is very good. I estimate we'll have a positive free cash flow again in Q3. Order intake went up.
Programs improved a lot, obviously with the big contract, and we'll keep chasing those types of contracts and more where we can. SEK 145 million moving upwards, including delivering actually the highest revenue from programs this year, or if ever, actually. I'm very satisfied with the increase. You see a slight decrease in products. They had a very strong first quarter, significant, really, really strong first quarter. It's dipping a little bit now. We see the revenue. You can see the revenue here is about SEK 30 million, SEK 31 million we've taken out. We have less coming in, so the backlog is growing. This is okay. Of course, we're expecting this to go up again. At the same time, we're also driving on fast delivery, which means, I've said before, our visibility here should not be much more than three, four months tops.
We want to get the order and we've got to get it out the door, get the cash and get the revenue. We will never have hundreds of millions in order backlog here. We shouldn't. Then we are failing. We actually need to constantly rotate it and keep it at a steady pace, roughly where it is now. North America, we've built up a bit of backlog. Trending in the right direction. Okay, quick overview of the markets. Remember, a lot of things are happening in the market. I get questions from many of you all the time. What are you going to do in the future? Look at what's happening in the market. We talk about marine domain awareness, illegal fishing, surveillance of who is sailing in and out of your territory, your sovereign territory. What about the shadow fleets from Russia?
There's a lot of things that are driving this. We have a desire and a need to know more about what's happening in our oceans and our seas around the different countries. Denmark, not to forget, absolutely. I think more is happening there. Indonesia is on everybody's mind. We have Thailand, we have Philippines, we have Singapore. There's a lot going on. Secure communication in general is important and also alternative communication, not just via ground, but also via space. The whole in-earth monitoring environments. On top of all of this, since everything we do is dual use, dual use means we could take pictures of fishes, but we can also take pictures for defense purposes. Our technology can be used either. It's a question of what's on the picture. There's no difference to what the satellite is. The whole defense industry is booming. You know that already.
Our share price has done well in this context. Of course, we are working hard to jump on that wave. If you ask me, what are you going to do about the future? I'm going to catch the wave. That's what I'm going to do. Now I have the money to do it even better. Marine domain awareness, one of my favorite presentations. I think many of you investors have seen it before, others maybe not, but this is a great picture. This is for our good friends, Unseenlabs. The white dots are these, it's called AIS transponders. It's all about their by-law, they have to say, here I am, this is me, this is my ID, you know, I'm all friendly, I'm all good. They can turn that off. They can, you know, forgot to charge the batteries, whatever the excuses usually are, and then they go dark.
The red dots are representing dark ships, basically ships that if they don't have their transponders on, they probably shouldn't be there or doing something they shouldn't be doing. That's already a tell. Look here with our friends from Unseenlabs, and it's all our technology, all our satellites are, all their satellites are coming from GomSpace. We can monitor the Baltic Sea here. You see the red dots, you see a couple of guys at the timer is taken up just outside of Limfjorden. Something is happening there. I wonder what that is. I would send the Coast Guard out to check out what's going on there. Not a surprise if you look up at the bottom of the Baltic Sea, there are a lot of red dots where there's probably Putin's fleet sitting up there, not wanting to tell who they are or what their intentions are.
The orange cable is the fiber cable or gas lines, if you like, coming from the Nordics and down through Europe. It was caught. I had the story before. I love the story. It was caught by a Chinese trawler not so long ago. Sort of a big problem. 35% of the data traffic was caught for a period of time. We saw that. We could monitor that. Unseenlabs could monitor that. This is down from the Strait of Gibraltar between Africa and Spain and Europe. Lots of cables going across there. You see the white line is representing the same boat, the same Chinese trawler, and how it was sailing. No, no, no boat is sailing like that. That trawler was trying to drag an anchor, very likely to see you caught a cable. With the technology we have with our partners, you can avoid that for sure.
Some of you have been sailing down there. You will also know that there's a pretty strong current. Even if you say, oh, I was just floating, that's good. You're not going to float like that. That's not how it works. Good technology. I'm going to jump on that ship as well. We have that technology. We have several customers looking to buy this. Megatrends, market changes. You've seen this slide before, but I want to repeat it. Heightened threat level environments. This has led to increased defense budgets in Europe. Denmark has increased the spending, I believe, up to 4%-5% of GDP. Many countries have done that. It is unique. It is very different. I know that Danish defense has now allocated about SEK 3.5 billion in the coming years for investing more in space technology of different kinds. That's good news. Things are moving forward there.
In general, there's a sense of urgency. We do see more requests. We are engaging in many more deals. The common denominator when we talk about government business is wanting to control assets. You can buy as a service. You can buy from Elon Musk or from others. As a state, you don't necessarily control it. People see, yeah, maybe I could rent it, but I would actually like to control it myself. I can decide what I want to do with it. I can make sure it's always available. I can make sure the data that is coming is unfiltered, unedited, nothing. I know exactly I control a whole stream of data. That's really important. That's a trend we see as well. We have many governments, customers asking us for advice. How do we do that? How do we deal with that?
Obviously, one area which is on everybody's mind right now, many areas, but Ukraine in particular and also Denmark is, and thank you, Denmark, is actually investing a lot and giving a lot of financing towards Ukraine, also to help Ukraine and to promote Danish technology. These are, of course, some of the trends that are happening now. We have our nose in that trail, and we'll definitely follow it. Addressing market opportunities, some of the things we need to do, reduce time to market is important. Things are moving fast. We can't come out and say, oh, yeah, sure, we'll take your order and we'll deliver in two or three years from now, or it'll take us nine months to deliver a part to a satellite. It doesn't work. We have to be faster. We are building on that and investing in that.
We have to have more defense and government-oriented solutions. We are going in that direction. Cybersecurity, more signal intelligence, general intelligence, and surveillance is important. Excuse me. There's simply more coming. That's a ship we are trying to jump on. To capture the new market opportunities, we need to do a couple of things. We, of course, need to advance the technology that we have, the capabilities of our satellites. We also need to be in front of the customer and be on everybody's mind. That requires sales and business development people, and it requires technical people that have time to talk to the customer. We want to be the trusted advisor. We want to be the company that everybody comes to and says, these guys know what they're doing. In order to do that, I need more than three people. I need a lot more.
This is what we're investing in. It will obviously cost some money initially, but we are on the right track now to do that and still have a positive EBITDA and cash flow. That's good news, I think, also here. Following the trends, you ask me, Carsten, what are you going to do? I'm going to follow those trends. I'm going to gear up and be ready with my organization. I'm going to have the right skill sets. I'm going to make sure I'm present in the right parts of the world. Very clear. In summary, we're growing with confidence. First half year showed a strong growth on 2024. We also have a positive EBITDA. Check in the box for that one. Free cash flow. Yep. It went negative, but for a good reason. Look at the deal we got in. Happy with that.
It will recover in Q3 and Q4. I'm not worried about it. Order backlog increased. That's great. Increased order backlog gives more visibility. It will always mainly be from programs, as you just talked about. It gives us more confidence and visibility. You can do the math with that size of backlog and what we're delivering. The backlog is extending into next year also for execution. That's good. We have restored our balance sheet. I'm very, very, very pleased. Thank you, Mr. Hargreaves, for the investment. I think I hope everybody is giving a big thanks to Hargreaves for supporting here. He has no interest in taking over the company. We said that many times, but he really believes in the story. He provided this capital without blinking. It was less than 24 hours. This has really restored us to a level where we have a strong equity ratio.
We need that to do government business. We have cash in bank. We can really start focusing on developing the business from here. Guidance, our outlook, we keep that SEK 320 million-SEK 380 million on the revenue side. Somewhere between, yeah, probably positive, we can say that. Up to 11% for the adjusted margin. EBITDA margin 11% and a positive free cash flow. Again, I want to repeat, we stayed with confidence. There are more things to be done. Even this, if you allow me, we stick with the confidence in this delivery of the top line. It's still a 30%- 50% growth in 2024. That's pretty damn good. If you can do more, we'll do more. Don't worry about it. I'm not holding back. We are pushing forward. We want to do it with be profitable as we go along.
I now also say with some confidence running into 2026, I think we can keep our momentum going. Thank you.
I think, Carsten, should we jump into the question? As always, a lot of questions. I think we will get very well around all the edges of your investment case. Let's start with the one we usually get. Indonesia, have you had any contact with the government down there explaining some of the delays? Any thoughts you have on the Indonesia potential contract?
Yeah, yeah, yeah. Contact every week. Always, we talk to them. Remember, we have a very good French partner, Ellipse Projects. They're actually present in Jakarta every day. We are in contact all the time. I think it's not about them needing to explain a delay. It's just a process that we're going through. I'll repeat my statement from earlier. I will tell you if something significant is changing for the better or for the worse. Right now, it's status quo, and we are working on this every day, and we are in regular contact with the customer. Nothing has really changed. Remember, we signed a commercial contract at the end of 2023. That hasn't changed. That contract is still valid. The financing is required for Indonesia to execute it.
Technically, I could execute it now and then hope that they would pay me, but I'm not going to do that. I think they need some financial backing. This is ready, but the financing is a political process that is dragging out. Hey, it's fine. We have a lot to do, and one day this one is going to show up in one shape or another.
Perfect. To Mr. Hargreaves and his offer, he's needed to make to the shareholder. I should allude that the people asking this question state that this is actually between the investors and Mr. Hargreaves. You are kind to be the mediator here. Any news, and exactly this, the 20-day where, from which date, was it the 1st of August, or was it when the shares were submitted? There's still this question about, is it these 20-days average price that will set the price? I know, Carsten, you're actually not obligated to talk about it, but if you can kind of allude to your knowledge about this process.
Yeah, I think what I would like to focus on, on repeating, why is Peter Hargreaves doing this? He's doing it because he's very pleased with the development of the company. He came in early and basically saved the company. Let's be honest, that's what he did. He came in, he saved the company with the cash, and he really sees now we're on the right track. I said to Peter, you know, if you want me to accelerate, we need more cash. He was ready to do that immediately. The reason Peter Hargreaves is doing this, he wants to help us boost the company and take it further. Guys, do the analysis. If he wanted to buy the company, he probably bought it at SEK 3 or SEK 4 . He could have done that. I mean, he could have done it, written a check, and it was done.
That's not what he did. He invested, and the share price is going up. He's helping everybody. We can really grow the company now. That's why he's doing it. There will be an offer from Hargreaves coming soon. I don't want to comment or speculate on that. You know that the FDI process or the foreign direct investment has been approved. I don't even want to say any dates, but once that's approved, the clock is ticking, which means Hargreaves has to come up with an offer in the very near future. Once you see that offer, you will see what his final decision is on what he wants to offer in the market. I don't want to comment anything on that, just saying, so there's no misunderstandings. Peter doesn't do this because he wants to buy the company. He wants to help the company.
Everybody in on the right, thanks God for Peter Hargreaves because we are going in a good direction here.
I know. As you said, soon we will get this out of.
Yeah.
What are your expectations of revenue recognition for the eight satellite deal you signed June, the big order there, given that your guidance now remains unchanged? Can you give some kind of a feel on when this revenue will get recognized in your books?
Yeah, it's as stated in a press release, and we are required to do that also. We state the contract value, and we have to indicate the delivery time. It's within, give or take, 12 months, plus minus. You can do a little bit of the math because there are different revenue recognition patterns. How I would state it is that when I say with confidence, obviously that has given me confidence. There are many parameters that need to move, but you can read on my body language. It has not put it in a worse situation than we were before. It has helped. We say that with confidence. I'm not going to comment on revenue recognition as such. That would be wrong. You can see that it's trending in the right direction.
The share of admin strength employees has increased from 16%- 20% over the last half year. What's the explanation for that?
That's a very good question. Just to be precise, it's the percentage. It's not a percentage increase. It's a percentage of the full staff. There's some technicalities on that, but actually the main reason is what I said before, sales and business development people and solution architects and engineers that we need. We're investing in a lot of that right now. I'm taking in and deliberately increasing my overhead costs there towards the sales. It's actually SG&A. I think there's an estimate in the report, sales general administration. The G&A hasn't moved so much, but the sales has moved up a lot with good intention and good purpose.
Perfect. A little bit about, and I think you touched upon it, your confidence in this cash flow. The deferred customer payments primarily drove the weak cash flow. Are you worried about the customer's ability to pay or what had driven the deferral? I think you mentioned that it was a contract that came in late Q2. Remember, it's the balance sheet for that.
I'd say, you know, I am always vigilant about our customers paying, and I am on their back. First of all, I'm on the back of our own people to deliver in time, so we per contract can invoice and we can collect cash. Of course, we're following up strongly on our customers to deliver. Like you said, yes, the payment turns if the contracts were sort of leading into Q3. We will see payments during Q3. In order for me to close the contract and win the confidence of the customer, I basically decided to spend money ahead of time. It was a calculated risk, and hey, it paid off.
Could you add some explanation to the SEK 20 million program order that was canceled during the quarter?
Yeah, this is a good catch also. I'm very pleased that we were actually reading the details of the report. This is a program, this is a customer order we actually got quite some time back, I think maybe even before my time. We have a lot of startup customers, people looking for capital, et cetera. They placed an early order to get some commitment from us that technology-wise we could do it. They never managed to raise the capital. We've been working with them over the years. We had accepted to say, okay, you know, let us know when you're ready. We've decided, okay, we'll take it out of the backlog now. The customer is still there, but they need to raise the capital. Basically, that's why. It's not the cancel order hasn't really taken anything away from our outlook or cash. We haven't spent much time on it.
We're just waiting for the customer. I want to say what's very interesting, and that's also why some customers come to us. Almost everything in this business is startup. It can be a small startup or a big startup. It's all new ideas unless it's government business. I worked in a startup. I understand what it means to raise capital. I understand the dynamics. We have a very good dialogue, and we don't take any stupid risks on this. We are deliberately understanding who they are, which phases are they going through, and how can we best help them. I strongly believe that one or the other of these startups are going to go in the right direction if you help them. We have a long-term customer. One example, Unseenlabs. When they started, they were really small. They had nothing.
GomSpace was helping them getting started, helping them with the technology, and look at where they are today. Fantastic company, growing a lot, and our best customer ever. That is why. The long explanation of why did we cancel that? Technically we say, okay, it's been now more than two years, so we'll take it off the list, but if you when you're ready to move, come back.
I don't know whether you want to answer this, Carsten, but now looking at your order book in the systems, how many are a lot of this type or very small? I guess if I put the $250 million in, I can actually calculate that can't be a lot of this.
No, okay, Carsten is at heart. No, it's not. There's not a lot of that, but this is a leftover from the past. I don't want to, I can't disclose what it is, but just say that it was, it still is a new technology that if it flies, I saw a great opportunity in that. I let it slide a bit longer, but now we're moving on and leaving it there. No, there's not an overinflated order backlog. Don't worry about it.
Perfect. Do you have any comments on Space Inventor claiming that Bifrost is the first satellite to survey the Arctic?
I offer you facts. Here's a fact. In 2018, GomSpace launched two satellites. It's been flying over the Arctic for almost six years. Those two satellites were launched. One was paid by the Danish Defense, and the other one was paid by the European Space Agency. They're called GomX-4A and GomX-4B. They've been flying, taking pictures, doing signal intelligence, doing communication for more than six years. We, as we do, because all the satellites are our small babies, we shed a tear. We celebrated. We have a tear in the canteen after six years of loyal service to us and providing data to the European Space Agency and also to our Danish Defense to the extent they wanted it. They were end of life. This is really good. The average end of life is actually five years in this context.
They flew for six years, so that was really, really good. In the end, they retired and we said, okay, time to go to sleep. They have been deorbited. I have no comments to what they're saying, but I can just offer you a fact. In 2018, we launched two satellites over the Arctic.
Do we have any pending projects or orders that might have awaited the finalization of the stock emission? I think also there's one asking about the equity. You know, when you need to go out and take in big projects, of course, the clients look at your balance sheet and on the equity. Has something been postponed that might now happen, or have you been able to convince customers, look, I have everything coming in, feel comfortable with us?
Yeah, let's start backwards on that. There's nothing that has been waiting for this. We've actually got all the deals. When I was confident we got it, I repeat the story. I went out, I pushed all in on waiting those 18 satellites, which is really, really good for us. I want to repeat it in many senses. You understand the top line, but beyond that, it's really proving our capability to produce a lot of satellites, 18 satellites, in a very, very short period of time and manage the whole supply chain. You've seen the announcement that we've outsourced part of our production of our subsystems to a local partner, Necas. They're doing really well. It's capacity scaling that we're doing. Not only does it generate a top line and, of course, profit, it's also helping us gearing up our organization.
This is a really strong reference case for the future. I could do that because I knew the capital was coming in. It wasn't waiting for that. It enabled me to do that. Outside of that, I'm not going to comment on if anything is just around the corner, but there's nothing, there's been no blocking points for us not having that capital, but it has enabled me to do more.
There is a question, and I think you already answered it. Are you convinced you secure enough orders in H2 to be able to continue strong revenue growth in 2026? I'm not asking you as a guide, and I think you can maybe just move to the slide where you commented that.
Right. I say with confidence, speak about confidence, with confidence on our outlook. You deduct from that what you want.
That's a long question, but I think I can sum it up to, can you talk a little bit about the changes that have happened since you arrived at the company? Secondly, where do you see the company moving in the future?
Yeah, yeah. You know, now we are out here in the North Sea Oceanarium for just a little bit of fun in that because there are fish in the background. It's also about fish, what we're doing. We have an executive team here where we talk about strategy into the future, very intense discussions because of all the things already listed on the slide. Looking forward, it's simply a market opportunity thing that we need to capture. We are starting to learn and understand what we need to do. We also have a larger team. A lot of our project managers and middle managers are here for a day where we are talking about the next steps. That's leading me to say very good motivation, really good engagement from everybody. We are on a good track.
That brings me back to what have we done over the past two, two and a half years. A couple of key things. First of all, to me, it's all about people. If I can make people function together, if you have the same value set, if you understand what we want to do, then we can solve a lot of problems. If you fail to focus on your people, if you fail to appreciate and respect people, you will fail, no matter how smart you are. You simply will fail. We fixed that a lot. We're really on a completely different level than we were two and a half years ago. It was a turnaround from a pure cash point. It was a turnaround. Money just came in. How can we save us? We've had a lot of focus on cash. Cash, cash, cash, cash, cash all the time.
Then profitable orders. We've cleaned up our order backlog earlier. We have let programs go. We have stopped programs where we couldn't make money, simply to say, but it doesn't make any sense. We can't have hundreds of people and not make money on programs. It won't fly. We did that. We've had to focus on cash. We have invested more in sales. We've built a pipeline. We are much more present around the world. We have a North America strategy, which slowly will come. We've closed good business in Singapore with several customers in Singapore. That's really strong. We continue business with Unseenlabs. We start seeing a couple of other customers lining up that hopefully we can develop into long-term customers. In summary, people, focus on cash, clean up the order backlog, build the pipeline. Here we are. You see the result. I don't have to explain that.
You see the results for the first half year. It's good. It's a good result. There's money in the bank. Now I can start turning my attention towards how do I grow it even more. My focus in the past has been how do we make sure that we keep having money in the bank and we slowly grow to basically continue as a business to make sure that our investors are happy. Now we can do even more. Quick overview there.
Perfect, perfect. After a solid EBITDA result in the first half, why are you not narrowing your guidance, and where do you expect to invest if that's the explanation of your not narrowing your guidance?
I say with confidence about our guidance, we're still a little bit left in the year. We'll see what's going to change. I don't feel any special need to just keep changing this. I think the guidance is really good here and it speaks for itself. We have a positive EBITDA in the first half and you see a pretty solid revenue as well and we keep our guidance on the top line as well. We'll see. Remember, it's an EBITDA percentage that can change. The better my top line is, you know, the % will be changing. I didn't see any reason to do that. Listen to my voice, listen to what I'm saying, analyze the words, confidence, optimism about 2026. I think that's more than sufficient.
A little bit about where you're to invest? I think I also alluded to that. Now you want to also build efficiency and use a little bit of money to be more efficient to produce and so on. Is that the same as you said, or are you expecting maybe to push a little bit harder on such investments also to be able to really deliver faster and faster and faster?
Yeah, the efficiency or scaling is perhaps a better, would be a more appropriate word. We are learning to scale. Scale means how do we ramp up faster? How do we have a bigger operation? Everything gets more complex when you have more products, more customers, more things to do. This is what we're investing in. There is a certain level of ability to procure perhaps a little bit more buffer, but it's not so much about that. It's the ability to scale. When we go out and outsource to this company, Necas, we have to invest in some pilot runs with them. We have to do some initial investments to get them up to par. Once that started working, we will see our ability to scale increasing. This is really what we mean.
Perfect. There are a lot of questions about whether the money helps you to actually start securing orders. I think you explained it very well. No, not securing orders, but scaling. You are able to deliver on the orders there. I think we have covered all those questions on that one sentence.
No, Michael, I can comment further. I can just repeat. I don't think we would have taken that big contract if I did not know that the cash was coming. Because of that, I could also give the confidence to the customer that we are a rock solid partner to do this. That's why we win. Really, really important.
Perfect. You recently applied approximately 30 employees between this Q2 and Q1. What is the short-term goal numbers for employees if you want to give that? I'm not sure. Are you scaling based on increased orders or a little bit? Is there other parameters you are scaling up your organization?
Yeah, two key areas. We are scaling with the pipeline and order backlog we take in. Some of the people coming in is to execute. So a higher person, that person generates revenue because we have an order. We have grown our engineering organization that are delivering. That's one area of growth. The other thing is that this is in our programs. If you look at our products, product business unit, we have invested a few more people into logistics and supply chain because the complexity is increasing as well. I didn't want to have issues there. That has gone up a bit. As I said before, sales and business development and Solution Managers, Solution Architects, we need that. We have really, really good people. We need more. Good news, a little investor hint, the GomSpace brand is actually doing really well.
We are getting a lot of requests from customers. Employees start calling us. We're known in really many places. We have no issues finding more staff now. They're coming from all over the world, moving to Aalborg. Go figure to work for GomSpace because we have such a strong brand and we have a very good culture that is spreading in the town. Those of you who live in Aalborg and start talking, you will hear people talking about it. It's also really positive that we have turned this around. We can hire people and we can grow that way. In North America, and we are here, we have Slava, who is our new heading up our CEO in North America, also telling me he comes to the market. Everybody's heard about GomSpace.
We haven't been that present, but they know about GomSpace and they start to understand what we can do. It's also very strong. I'm very happy and very proud about our brand with customers and with employees and also with competitors because they know they have to watch out because we're here and we're not going to go away.
What is the probability that you can close like a type of Indonesia order in the second half? I think you already alluded to it. You are not going to speculate on orders and big size and when they get closed. Maybe I can ask it in a little bit different way. Do you have the capabilities to do it? Do you feel your organization is ready and you could actually, you could deliver on such a one? Not that whether you will do it or the probability, but actually that you are able to, if it comes, you would, you put your signature under it.
Yes, the answer is yes. We are in a much better place now than we've been in the past. You also see that we are increasing the headcount a lot. I do that mindfully. I do that carefully. We need to be able to support the business we have, but we are also cautious about not going overboard. That doesn't work. Yes, we are quite confident. The interesting part, again, leading back to the 18 satellites, this is really our reference case. There are not that many of them around, which means other customers coming are not going to ask questions whether we can do that. I'm very, very confident that we can deliver this. Yes, we have a big confidence in being able to take in bigger programs as well as we see them coming.
Perfect. Let me just look. There's a little bit about the North American market and the tariffs. Will that be impacted being a non-American company?
I don't know. I discussed that with Slava, our guy in North America, and he says that it's not really a topic that's being discussed. I mean, they can barely understand themselves right now what tariffs are there. It's not really a topic. It's not a focus from my side because it only makes sense if you have a very, very large revenue and maybe your profitability is impacted and you're worried about that. I'm not worried about that. I'm worried about getting the traction we need and we'll figure out if there are tariffs into the future, what we do with them. It's not a focus area for me.
Indra, the test phase was positive and worked. What is the next step?
Some of you are probably following Indra. I hope you do go to their LinkedIn or actually it's article. It's a place to look for that. We have launched. The satellite is up and flying. There is a communication. You'll find that there's some communication from the satellite to ground, which is really good. That was the first in the world. They are now testing and we are talking with them, of course, on a regular basis. They have to decide what they want to do next. I believe they have said they have probably one and a half, two years of tests in front of them trying to figure out how to do this. They also need to raise the capital to build out the network. We are in there. We've delivered the first satellite. There's an antenna. Communication is going on. So far, so good.
Perfect. There is a question where you are asked to comment on a competitor. I don't know whether you like to do that, but your thoughts about the in-orbit demonstration. One project has taken years for GomSpace. Kongsberg is now in IOD- 2 phase in one year. How do you see the development, the future for the development, the work together with Darticle? Is there a chance that GomSpace will land a bigger order on a bigger constellation?
I think look at GomSpace where we are. We're growing the top line. We're starting to have a positive EBITDA. We have money in the bank. We have very skilled people. We have a very long heritage in the market. Do you think we're going to be competitive? Absolutely. Bet your ass we will be. Of course we're going to go in and compete. Nothing is given. Nobody wins. Nobody's going to give us anything. We have to go fight for it. That's what we're doing. I have all the parameters ready now that I need to do this. I didn't have that two years ago, but now everything's falling into place. Of course we're not going to go out and compete for Indonesia, where we are competing for other countries, other opportunities that are coming up. We fought for the 18 satellites and we won.
It was a real team effort and we won. We will fight, of course. We have the technology, we have the means, we have the heritage, we have what the customers are looking for. Of course we'll do more.
There is a little bit about the Arctic. I think the question is surrounding that you can deliver surveillance, but could you also find a partner that delivers internet and security services and such? Besides surveillance, you talked about this dual purpose that maybe your satellites could actually do. I guess in such an area, it could also be interesting to deliver some kind of internet capabilities.
Of course. This is, remember, it's not for me to build satellite constellations. Customers have to do that. If Denmark wants to build a communication network, we are ready to be part of delivering that. We're certainly ready on Friday with our French partner. We can deliver surveillance of the whole Arctic. No problem. We already have the technology in place. The contract will be beyond Unseenlabs. We'll deliver the satellites. We can do all of that today. Just to be precise, it's not a dual purpose. It's a dual use. Dual use means you can use it both for commercial and for government purposes. Two different things. There are absolutely possibilities to expand in many technology directions. If you speak about security, the observation part is actually about sovereign nations and national security. That surveillance is good.
I know Denmark is, of course, looking at this now, understanding that maybe we need to do a bit more ourselves.
Perfect. Maybe to round off, there's a question here. Could you actually do a constellation, sell it to the Baltic Sea, sell it to the Danish government, run it? The reason, could you do that yourself as GomSpace or do you need a partner? There's also one asking, do you actually compete sometimes with your partners about projects if you could, you know, make the constellation yourself and run it? A little bit of talk about your role and the partners not seeing you as a competitor.
Yeah, okay. Let's start backwards for who we are as GomSpace. We are a very skilled and experienced provider of technology and solutions for satellites and satellite solutions. We have all the core technology. We understand how to do special solutions like the signal intelligence, observation, imaging, et cetera. This is what we do. No, basic principle of business, don't step into your customers' areas. I don't want to compete with Unseenlabs. Why would I do that? I'm going to lose all my technology business. I'm not doing that. As to the question, could we build a constellation? Of course we could. I could build the same as Elon Musk has done, but I need $30 billion minimum plus government support for another $30 billion. I don't have that.
It's not really about whether I can do it or not, but our swim lane is to deliver the best technology in the world with heritage, fast, in a competitive price, and add a solution component on top where we're really solving real problems for our customers. For example, monitoring illegal fishing or monitoring coral reefs, which might be polluted, and we need to do something about it. These things we can do today. We need to have a customer who has a business case that they want to implement. We are becoming one of the strongest partners for that.
Perfect. There just came one in. Which impact on margins would you expect from the outsourced production, or is that more about speed than the margins?
I'm not going to comment on margins as such, but I would say the speed, the capacity, the scaling, the ability to go up and down. We have to expect that we don't have a linear demand on our products. It's going to go up and down and up and down. It's not anything bad, that's just a reality. It gives us flexibility. Now there's a peak, so we have a partner. We can put it out. We keep our staff the same. Now there's less, we stop the production with the partner, do it ourselves, another peak. It's really an ability to scale. The big satellite oil projects, 18 satellites, really, really pushed that because in order for us to deliver on all the good product sales we have to individual customers, and then we have to do this on top.
That was a stret ceterah, but we have now solved that with outsourcing. It's really about having more capacity and ability to deliver more in the same time without adding a lot more resources because that also takes time.
Perfect. It has come in some questions about this 20-day. When should it be accounted for? I do fully understand it's not you who should comment on this. I'm just asking because a lot of people are a lot of interest in whether you want to comment not on the price, not the average price, but on when the 20 days should be accounted for. I do fully understand, Carsten, if you don't want to get into this legal mess as you are not actually a part of this.
No, I don't. Let me give you my focus. My focus is to deliver the best possible result for the investors who believe in GomSpace and who see the future, who understand that space is only just starting and we are really well positioned. That's my focus. Any kind of speculation on what the share price is now and can I cash in, I leave that with you. It's totally not interesting because I know we're going to do a lot more.
Perfect. Thank you, Carsten. That was the last question. Thank you for taking us through your result and answering a lot of questions that I think are very well around in the corners of your business.
Did you count the shark? How many times did he pass?
I was actually concentrated on you, and that's a good sign.
Very good. Okay. Thank you, everybody. By the way, advertising, we're in a millionaire club tomorrow morning if you haven't seen that. If you want to hear more and have a listen to hopefully a fun interview tomorrow morning at 8:30 A.M., The Millionaire Club.
Perfect. See you, Carsten.
See you. Bye-bye. Thank you.