Welcome to today's event, where we have the pleasure to present GomSpace. To help us through today's presentation and answer questions in the end of the presentation, we are joined by CEO Carsten Drachmann. Today's topic: Financial Report Q3, and I guess also a little bit of insight into the market development. As always, there is a box down below. Do ask questions. We have already gotten a lot in. See if something is asked, and maybe you can avoid it. Of course, you are also free to do it in Danish. I will try and translate to the best of my ability. For now, Carsten, I think I will take off my picture and leave you to the center stage.
Thank you, Michael. Yeah, welcome to our third quarter 2025 presentation. Do put in as many questions as you like. I know there's a lot already. I'm looking forward to answering them. I think I cover a lot of it during the presentation, but there will be time at the end. We make space yours. This is the slogan we are using right now. This is what we're telling the world, and this is actually what we're doing. We are really enabling commercial use cases, governments, nations to realize their business cases in space or perhaps protect a country, maybe Denmark. We'll talk about that. We'll talk about investor communication, key highlights, business unit summary, a market talk. I will share a bit more what I see in the market. I know from your chat forums you're paying attention, so there's a lot happening in Europe.
We'll talk about that. I'll open up a little bit for where do I think GomSpace should head compared to where we are now. We'll talk about that and a summary. Clarity and communication. Always, always, always try to communicate as much as possible internally and externally. Remember, we are doing now a—this is a trading statement, so it's quite short. We do that in the first quarter and the third quarter. We will give guidance on 2025 in addition to cash flow. Also, press releases. Remember, they come out. If there's any significant things on impacting the share price. I have to communicate quickly. If I don't communicate quickly on something, it is not a major event. Anything that I need to say that might influence the share price, I will communicate quickly. You can count on that.
There will be other press releases that I think are useful for you that I send out. Other than that, please, please follow us on, if you do not already do it, LinkedIn, social media. We have now a very capable marketing manager, so our social media presence is actually gone up a lot. You will find a lot of useful information in there. Now, key messages for Q3. Let's take it. Revenue, year on year, we are up 94%. I think that's pretty good. Actually, the third quarter is also higher than Q1 and Q2 this year. Trending very well there. We delivered an EBITDA of SEK 15 million, so we are keeping the trend of delivering a positive operational result. Cash flow, minus SEK 38 million. It is related to some late payments. I did not anticipate that.
I had expected that we would be at break-even for Q3. I'll get a little bit more into that in a second. Strong delivery of order backlog. Really, we are executing. We have a strong backlog from the previous quarters, and we are now executing on that. Hence the higher revenue, hence the EBITDA. Also, the EBITDA is driven by healthy margins. Those of you who have been with GomSpace longer remember in the beginning, two and a half years ago, I was talking about the profitability of the order backlog that we had was not good. It's really difficult to make money when the projects are close to zero negative. We cleaned all of that up now. The result also in an increased volume and then together with a healthy order backlog in terms of margin is helping us deliver these results.
That is where we need to be. That is how you do a business. Free cash flow. Shifting customer payment shifted out. There were two customers actually that had not paid as anticipated. One has paid in full. Other has paid in part. I saw there was a question, can we get some reassurance that they will be paid in Q4? I am absolutely sure that they will pay in Q4. That is the arrangement we have. It did shift from Q3. Actually, one of the reasons why we wanted to bolster our balance sheet with more cash, which we have done in Q3, we got a significant amount of cash in from a capital increase, is exactly to be able to handle these situations. If you look at it going two years back, this would have been very difficult for us to handle.
It's not a problem at all. We have SEK 250 million in a bank today. It's totally fine, and it's part of doing business. It's also part of the programs that we are running are getting bigger and bigger, which also means the impact when you see a shift between quarters is growing. Let's take a look at the year to date. We are up 71% compared to the same the first nine months last year. EBITDA at SEK 35.4 million. I think that is very decent, up from a negative minus SEK 17 million last year. Again, we're trending. As a total for the year also towards delivering profitability. The accumulated cash flow, minus SEK 78 million.
This is partly related to the deferred payment, as I mentioned, and also that we are increasing our investment level, especially into go-to-market resources, but also scaling up internally in terms of being able to test more and do more in a solution space. Accumulated revenue well ahead of 2024. That trend continues. We are reaching a more steady level of delivering profitability. That is good, at least on the EBITDA level. We are now at 9% EBITDA. This is good. Adjusted, if you take out some of the warrant adjustments, it is actually at 12%. What is 9%? Let me try and give you a feeling for that. If you look into the industry, somewhere between 10%-15% is average for the industry. Some run with a lot less, some with a little bit more. I would say 10%-15% is quite decent.
We are looking at we are growing. Growth typically means you have higher cost in anticipation of capturing more business into the future. 9% is actually quite decent. As you have seen also, it is in the upper range of what we have been guiding on previously. EBITDA is also year to date. Very happy with that, SEK 3.4 million. It is not a lot positive, but it is positive. That is good. We will take it. As I said before, the cash balance is SEK 255 million end of Q3. No, I am not happy that there was a delay in payment. Am I worried about it? No, I am not worried about it. I do believe that will be settled in Q4. That is a clear agreement. I am not worried because we have plenty of money to continue to execute. It is not really an issue for us.
It doesn't mean we're throwing away money. It just means we have exactly the right level of maturity, stability, solidity that we need to have. Some of you will also remember I've said we need to have a strong balance sheet to do business with nations, a government business. We cannot have a weak balance sheet. We cannot have a weak cash balance. We don't. This is exactly the situation that the market also wants to see. We can put business with GomSpace. They're fine, they're solid, and they can execute without any problem. That's basically where we are today. Okay, let's dive into our three-year business units that we are operating in. Remember, satellite projects, programs running over a longer period of time. We have our products. We have some new cool pictures here. I thought you would enjoy those. Latest shots.
The products where we are building the parts, the inside of the satellites. There's a battery pack here. Could be a power module. This is a very strong business and healthy business for us. Now, platform kits. I mentioned it previously, but let me dwell with that for a second. What are we doing here? In very, very simple terms, in order to build your satellite, you need a broad range of components inside. Like when you have your laptop, you need a hard disk, you need a keyboard, you need a screen, you need to have a processing board. You need a lot of things. The same thing in a satellite. We have now done it so that because we have all the bits and pieces that you need to build a satellite, we have that in-house. We have tested everything together. We're selling it as a kit.
Call it an IKEA kit to keep it in Scandinavia. Basically, it's a plastic bag. You put all the stuff you need for a satellite in that bag. We have tested everything. We have tested that all bits and pieces are working. We give them, put it together manually, make sure that all the screws are there, like IKEA is getting good at or not. We are delivering that, making sure that the customer has everything they need so they do not have to worry about buying from 10 different vendors and trying to make everything work together. They do not have to do that. It works from us. This is an example. I think it's a pretty cool picture that's floating out and showing that the bits and pieces inside we are delivering as a kit.
It gives a number of advantages, much higher reliability for the customer to do that. We aim at being able to deliver this within a few months. From the customer's side, they actually have this, it's quite fast. It is also enabling us, ourselves, GomSpace internally, that when we do on contract, we build satellites for customers. We need to build in volume. We can start from this. It is very fast and much easier for us. Big competitive advantage for product customers, big advantage for ourselves as well when we need to build, and especially when we need to scale. North America, I hope you all saw there was an order announced yesterday about SEK 15 million. It was a product order for a fairly well-known, we could not disclose the name, but a larger satellite builder and operator. This was great.
Some of you also noticed it's actually a doubling up on the order intake in North America for some time. That's very good. We'll see also, we're a little bit behind in Q3, but now here in Q4, we will definitely catch up on that front. Revenue overall for the third quarter, about SEK 118 million in total, majority in programs, not a surprise. Year to date, about just shy of SEK 300 million. That is, I don't know if you remember, we closed around SEK 248 million last year for 2024. In the first three quarters, we are well ahead of that. We have an adjusted EBITDA running up at around SEK 15 million here. Sorry, I can't even read it myself. For the year, it is SEK 33 million or SEK 35 million, I think it says. Nice growth. You will also see on the graph.
That we are now steady. Q1, Q2, Q3 with a nice EBITDA performance. This is great. I've had a lot of focus on that with the organization. I hope that we will stay at this level. That is my expectation. Operating profit. EBIT is actually positive year to date. That is good. Net profit is still negative. These are some technicalities on the loans that we had with EIB and now with Hargreaves. There are some warrants attached to that. Those of you who are financial techies can look into it. It is basically because the better a share price does, it actually has a negative impact on the net profit. It has no impact on cash. It has no impact on our operational performance. It is purely a financial rule that you have to do it like that.
I don't like it, but some people tell me I have to do it. Okay. No cash impact on this one. Free cash flow. We talked about that. It was negative in Q3. I don't like it, but I am okay with it. It is what it is. It's part of the operation. You've got plenty of money in a bank. I do expect that in Q4, this is remedied. For the full year, we're going back to a positive or at least break-even free cash flow. This is fine, not something I am worried about. Order intake. We had a lower order intake in programs as compared to the previous quarters. It's okay. There's SEK 215 million in one order coming in the second quarter. We don't necessarily see that every quarter. There will be more of those deals coming in a quarter.
If you look at the revenue delivered, it was about SEK 85 million from the programs for the quarter. Then you take that out. Of course, you need to have at least SEK 89 million or SEK 85 million again to replace that. We did not in this quarter. It is fine. There will be more orders coming next time. If you say also in relation, let's say programs need to be around SEK 90 million, SEK 90 million, or if you get an order for SEK 200 million every quarter, then yes, that is a really, really good backlog. We are fine here. Product BU, order intake at a good level is about SEK 27 million. That is good. I would like it to go higher. That is of course the ambition. The revenue conversion was SEK 21 million in a quarter, which means we have a net positive impact on the order backlog.
This will go up and down a bit, but should preferably trend like this all the time. As mentioned before, North America somewhat behind plan. Still building momentum over there, but the SEK 15 million that came in yesterday was great. Obviously, you'll see that in the fourth quarter reporting that North America is doing quite a lot better. Other than that, they did drop on the order backlog because we converted a lot of that to revenue. Overall, I am satisfied with the order backlog. It was solid from the previous quarter. It dropped some SEK 40-50 million this quarter. It's okay. It will come up again in the fourth quarter and running into next year. Now, guidance. We updated on October 15. So what are we saying?
Right now, with everything, all the orders we have come in, the way things are going in execution, we are now guiding at between SEK 420 million-SEK 450 million for the year. This is up with more than SEK 100 million from the previous guidance, from the previous lowest guidance, which was SEK 320 million. This is good. You can do the math yourself right now. We are a little bit below SEK 300 million for the first three quarters. You can do the math and see what you think fourth quarter is going to be. We are also increasing our guidance on EBITDA %. We had said from the beginning of the year, minus 2%, maybe we'll have a small negative EBITDA, but on a good year, on a good day, we'll have 10%. We are now increasing that to between 7%-13%.
We are very confident that we'll deliver a positive EBITDA, which would be quite an achievement for this year and considering where we're coming from. I maintain my guidance on positive free cash flow, expecting that we will resolve the negative cash flow from the first couple of quarters. For the first, from Q2 and Q3, it will be resolved in Q4. Overall, well done on revenue, I think. Thank you, team at GomSpace. Thank you, sales team. Thank you, program management team. Thank you, product team. Thank you, production. Everybody's working very hard to make this flow. As our orders are going up and the revenue is going up, there's a lot more that has to go through. We start all the way out at supply chain with our vendors who have to do more for us. We need to put more together.
We need to build things faster. It is a big teamwork and it is quite an end-to-end event when this is going up. We are doing well here. EBITDA is now, as I said, expected positive for the year. Double-digit growth in all business units, though America and North America is a little bit behind, but the latest order is actually making up for that. Free cash flow, we talked about that unchanged. Overall, I will talk a bit more about it. I think it is fair to say that I feel we are turning a page now in the GomSpace storytelling. We are coming from a challenging time, slowly, slowly building it up, executing a strategy to now we are in a situation that the results are very decent. Actually, they are really good. It is okay.
We have a growing market and we are now in a position with a strong balance sheet and strong cash balance that we can execute well into next year. We can really go out and try and capture the market. For me, this is a turning page in the book of GomSpace. Let's look at a couple of other things. Look at that beauty there. This is a picture of a microsatellite, one of the microsatellites that we are building right now. For sure, we are world leader. We are winning business around the world. Here you see what the slightly bigger satellites look like compared to the CubeSats we have looked at before. Remember, we do business in many areas. It is a modern word. It is dual use. It means our satellites for Earth observation, signal intelligence, can be used for civil purposes.
Observing the changes of foresting. Looking for efficient ship traffic, looking for illegal fishing around the world. Those same technologies can be used for defense purposes as well. Looking for warships that we do not want in our waters or observing the front line in Ukraine with a camera from space. The advantage of this technology is it is really dual use. With all the defense spending coming in now, obviously, we are really well positioned to capture that growing market as well. Now, let's talk a bit about what is happening in the market right now. Again, thank you online. Please keep posting. I think you are very impressed with the amount of information you are able to pick up. I hope everybody reading there is appreciating the investors who are contributing well on the chat forum. I picked a couple of things from Europe in particular.
Did you see the four EU flagship programs announced recently? European Drone Defense Initiative. Okay. We were taking. We were not out of bed when drones came in over Denmark recently. You all know the impact. You all saw it. Something needs to happen. Clearly, the EU is waking up and saying, oops, that's not good. Big question is, of course, can we monitor this from space, from satellites? The answer is, we can monitor a lot of things, but it has not been a focus before. If we go in and work together with the defense and try to understand what kind of drones we are talking about here, we can see so many other things. Why not see this as well? This is probably in combination with other things. I know it is on people's mind. Can we do this from space?
Yeah, probably we can do something from space that will help detect this. Eastern Flank Watch. This is really about Ukraine and towards Russia and Belarus. This is on the agenda. Look at the next one, European Air Shield. It is a defense system and defense detection system. The last one here, European Space Shield. I read in all of this, I read space. Space is part of this. Space can enable those ambitions that the EU is having. There is no doubt that space will grow. Obviously, GomSpace is part of that. What kind of business we'll get, from where it's coming, we'll see. What is for sure is that there are lots of budgets coming. If you take a look at that, public investments in the space, Germany just recently announced EUR 35 billion investment into space only.
It was not even for defense. This is space only over the next four-five years. This is significant. This is actually more than the German space industry is able to deliver by themselves. There is no doubt that money is not going to just stay in Germany. It will go outside as well. This is great. Obviously, opportunity there. The EU allocates EUR 800 million towards defense and space. Here is the duality in that. Part of that EUR 800 million also goes to the four flagship programs. Is there an opportunity for GomSpace and also for any space company in Denmark? Absolutely, yes. Denmark triples the contribution to the European Space Agency. How it works with the European Space Agency is that each member state puts in money to ESA, and then they choose which programs they want to support. Then it is so-called a dual return.
When they support a certain program, when Denmark supports a certain program in ESA, the money comes back to Danish space industry in terms in the shape of projects. The fact that, and thank you, Christina Eilund, well done, has actually managed to triple this, will also impact. It's not just about GomSpace. It will impact positively the Danish space industry. That's really well done. There should be more opportunities coming our way. You can say, but Carsten, what's different from before? The difference is obvious to the amount going up. The biggest contributors to this are typically France, Italy, Spain, Germany to some extent. It also means when they put in a billion, that billion goes back to the country where it's coming from. It's difficult for us to grab that. Here we can.
It's another reason why we have been in Luxembourg over the years is that Luxembourg Space Agency and Luxembourg are actually contributing a lot more than Denmark to space. That's why we are there, because that has been benefiting us as well to get programs. I know you are interested in hearing about what's happening in Denmark. You can follow the news as I can, and we are going to build warships, and we're going to build jet fighters, and we're going to buy anti-tank missile systems and long-range missiles. Great. We absolutely need all of that. I am sure that within not too long, Denmark will also start buying space assets for surveillance of the Danish waters, including Greenland and Arctic, where we actually don't have as much information as we should have. The Danish space industry and GomSpace can absolutely deliver into this.
There's no doubt about that. I think it would be suitable and very likely that we'll have a Nordic joint solution with contribution from all the Nordic countries, including Denmark. Let's see how it plays out. Somebody wrote, but are you active in this? And the answer is absolutely yes. Are you busy? Absolutely, yes. Do you have a lot of meetings? Yes, we do. How it's going to play out, we'll see. Looking ahead with considering the financial results we have delivered and considering everything that's happening in the market, what should GomSpace do now? Looking ahead a little bit. Five key focus areas that I see, and you will see them repeated going into 2026. We need to align with the market. First of all, we need to continue to increase our product business. That will not change. It is good business.
Every time a satellite is set up, it's an opportunity for us to sell. Right now, we are probably, if you discount China and Elon Musk and Russia and all other launches, which are very proprietary, GomSpace is in about 30-50% of all missions launched, all satellites launched. There's some kind of GomSpace component in there. Big or small, expensive, not expensive, doesn't matter. We're already a big part of that. As this market overall is growing, we have a chance with our product business, and we should pursue that. Two, prepare to deliver satellites in high volume. This is really important. The 18-satellite program we got earlier in the year has been super important for us because it has really helped us scale up our production.
All the way out from our suppliers of components in through our product production into our AIV assembly room, which is in here where we are putting together the satellites. This is important. Now having a real time, having to put together 18 satellites in a very small period of time has really, really helped us. It's very important. We need to do more of that. To grow GomSpace, we need volume as well. That volume comes with an ability. You have to have an ability to deliver. We can't close 100 satellite programs unless we have the capacity and the processes, and we can document that we can do it. This is the road we are on right now. Focus area number two, prepare to build satellites in high volume. Number three. Continue to focus in North America. It is the biggest market.
We will get traction. I have absolutely no doubt. Will it be very fast? Will it be a bit slower? I do not know. We will see. We will see. It is definitely growing, and there is a demand no matter what. We really need to focus, and we are focusing more on end-to-end solutions. For nations, it can be defense or it can be for civil use. What do I mean? Our opportunity, and I know you will ask me about that in Indonesia, is an example of an end-to-end solution. The customer, the nations are not interested in buying a piece of technology. A satellite in itself is a piece of technology. Many of them want to have an end-to-end solution. I have a problem with illegal fishing. Give me a solution. We were able to do that in Indonesia. We need to replicate that.
We need across all aspects, also Earth observation, signal intelligence to have more end-to-end solutions. We have to prepare for that. We cannot win without having prepared. A lot of our focus going into 2026 is preparing for that, potentially including launching some of our own satellites to simply test and verify and to show customers what we can do and also do use cases together with them. Number four, create end-to-end solutions primarily for nations, for defense and civil work. Five, very much tapping into the European market. We need to capture part of the EU and national space budgets in Europe, either through grants or funding, which is what Denmark is doing, and Christina Eilund has helped getting more money in there, but certainly by capturing contracts as well in this space, coming out of all the money flowing through Europe.
It's not going to be an easy process. It's a very political process. Who gets what, geo-return, all kind of stuff. It's all fine. We will play a part in that. This would also include certain scientific projects. We have our Uranus flying in deep space. I think there will be lunar programs coming up soon, orbiting around the moon. We'll take a piece of that. Focus on product business. Deliver satellites in high volume. We need to get better, even better at that. Continue to build North America, create end-to-end solutions, and gear ourselves towards tapping into the big budgets that are in Europe right now. All of these are also market-oriented. It's not an internal structure based on who we want to sit next to at GomSpace. It is very much oriented towards the market.
It is very important for me to say that these are all things that are related to very specific go-to markets. Then in behind that, we have to align ourselves to capture that. Okay, next chapter, let's summarize it. Guidance going up for 20-450. Great. I think very, very decent EBITDA here. Market probably somewhere between 10-15% when it is performing at its best. We will recover on EBITDA. I would say our strategy is working. The transformation we have been through the past 24 months or more is paying off. We will execute the final stretch of 2025 with confidence. You do the math. I am not going to do it for you again. We should be able to execute based on backlog. There are not a lot of outstanding orders that we need to take in. It is very minimal. Everything is backlog.
It is up to us to execute. We have precision to scale with confidence. With confidence, I do not need to. I can get more cash if I want to, but we have plenty. We can really start focusing on scaling. The market is moving in GomSpace's favor. We just looked at that. There is a tremendous movement. EU is one thing, but the whole notion of nations wanting to own assets. Nations do not want to buy from Elon Musk and Starlink. Nations want to control their own assets in space, meaning they want to control their satellite networks. They want to decide what to do with them, when to do with them, when they are on, when they are off. This is a trend we see globally. Very much. In Southeast Asia, we see a lot of trends for that.
We see it in Africa, and we see it in Latin America as well. This is really a key thing. I said that last time. Cautious optimism from my side. The trend we see now should also continue into 2026. I do not see any particular reason why not. If I may, I dock back to first quarter 2023. That was my first reporting here. I talked earlier about setting the sails. You have to set the sails correctly in terms of getting to where you want to. We set our sails forward. I would say now, we reset our sails. Back in Q1 2023, I was very clear. Focus on cash flow. Focus on profitability. Already at that time, we said we are going to do North America products and customer contracts and programs.
We have focused relentlessly on that for now two and a half years. I hope you acknowledge and see that the results are here now. It's paid off. It was the right thing to do. Now going forward. From Q3 and onwards, it's really changing. Towards scaling and capturing market. The market is there. We're ready to capture it. It'll be a little bit different for us. We are also internally working on what is that mindset? How do we scale? I know the GomSpaces are sitting out there. GomSpaces, remember, we have to think a bit differently now that we need to scale. We have to embrace it and say, yes. Yesterday was this. Tomorrow is something else. Tomorrow is more complex, likely. Tomorrow is a lot more. Tomorrow is a lot new cases coming in, more customers coming in.
We need to prepare for that. The market is there. We are ready. We have delivered the results, I think, very well over the last two and a half years. Let's assume it is go GomSpace also in 2026. Thank you.
Let's jump into some questions, Carsten. First, there are a lot of questions coming in, of course, about this delayed payments. I think you actually touched upon it. You are confident that money will come in. Sitting from the outside, I think maybe the last thing we need to get confirmed is there is nothing you need to deliver. It is a delayed payment, not a dispute or something like that. Can you confirm that? I think you covered that subject very well.
Let me answer it even more precisely to that market. No, it is not about a delayed delivery from our side.
We have delivered what we should. Two customers, like I said, are paying, should have paid money in Q3. They did not. One has paid in full. The other one has paid partly now. It will be resulting in Q4. I know they are, oh my God, this happened in the past. Yeah, I know it happened in the past, but that was in the past. I think we have a fairly good control of what is going on here. Also, we are in a solid position. We can manage it. I expect we will see more of this shifting between quarters as the business is going up. It is okay. That is why we need a strong balance sheet and a strong bank account, which we have.
Perfect. Of course, there is a little bit, there are a couple of questions I will also group about Indonesia.
I know you have told me many, many times that you will announce when there is something new to announce, but there is a question here also, this SEPA, which is a deal with the European Union and Indonesia about free trade. Do you think that helps or has that given you anything new? That is a specific question. Any comments about Indonesia?
Yeah, SEPA, for those of you who do not know, is a trade agreement and free trade, focusing on a free trade agreement between Indonesia and Denmark. I am not sure it is signed yet, though, but of course, it will help facilitating business in Indonesia. For our specific programs with the Ministry of Fishery, we are already well positioned there. We have done all the work. It does not really change anything there, but going forward, it is not a bad thing at all.
Let me answer the Indonesia question. I will tell you if something is changing, good or bad. If I tell you nothing, nothing has really changed there. I remain, as before, optimistic that this is going to happen sooner or later. If I know for sure it will not happen or something bad has happened, I will tell you. I have to tell you. If something good is happening and I can see there is clear progress, I will tell you. Until I tell you anything, everything is as before.
There is a specific question about Unseen Labs and Singapore. Is there any launch date set? Can these satellites function as a mother satellite for other nanosatellites? Launch date and as a mother satellite.
Let's start with the launch. Actually, three microsatellites we are working on right now, three different types of microsatellites.
They are all set to launch in 2027-ish, not later than that. It will be 2027, maybe late 2026, but right now, I believe 2027 is the plan for those satellites. Can it work as a mothership or a mother of satellites? It is a good question, actually, because what we want to build now going into the future is a constellation of satellites with different capabilities. Let me give you an example. You have an Earth observation, so a satellite with a camera that can take pictures, very high resolution. It is a lot of data if you have to take a picture of a lot of ocean and you do not know where there is anything to look for. The result is you have a vast ocean and a lot of pictures of blue. Then sometimes there is a ship or sometimes there is something interesting.
That can be problematic because you have so much data, you don't know what to do with it. The data processing takes time, so you don't have any real-time information. However, if you combine this with a so-called SIGINT, where we can see radar signals, the little SIGINTs can fly in front and say, "Hey, there's something interesting here, here, and here." Earth observation camera satellite comes after and look there, there, and there, and there. You actually, by combining different technologies, you get much faster, more precise information.
Do you need a mother satellite for that?
Not really, but there could be some intelligence built in, but it's not depending on the size. It doesn't actually matter whether it's a CubeSat or a Microsat or something bigger. The notion that satellites are.
Via something called inter-satellite links, that they communicate directly between satellites instead of through Earth. That is something that is definitely coming. We are actually good at it at GomSpace. We have that technology. In that constellation, yes, there could be some intelligence built into a satellite telling one satellite to do something else on its behalf. It is a long answer to a short question, but yes, there is a level of motherhood in certain satellites.
Check. There are a lot of questions on the European gaining of these investments that you yourself alluded to. I think the ESA will make the budget this month and approve it, and everybody expects it to go up. I think you covered that part. Also, maybe I do not need to ask you what gain do we have of doing all the conferences?
I guess kicking in doors is not a bad thing. I think you also alluded to that. About the potential, there is a question here. Can you put some words on what you are gaining being part of Space Connect North? There is a question on one of your competitors. I do not think you want to answer that, but can you tell me what you gain from being a part of this Space Connect North?
Space Connect North is really about promoting Northern Jutland and Jutland and the space industry we have here, primarily in Denmark. Focusing on making sure that the politicians and different government organizations understand that we are here, especially the defense as well. We are here. Denmark is a leading space nation.
We have leading companies in really, really many areas of the space industry. Denmark has bought absolutely nothing. It is very, very limited. A few demo satellites, including 2018, they bought two satellites from us at GomSpace flying up over Greenland. Denmark has not done anything. I say it with a warm heart, but also with a chill that, come on, Denmark, we can do better than this. I know it is coming. Space Connect North is also this purpose is to make sure that it is understood how much actually skills we have in Denmark that we need to facilitate to build the industry, but we also need to leverage as a nation. Let's go back and look at all the different conferences. We had a space conference up here in Aalborg, the European Space Conference, because we have the EU chairmanship. That was really well.
Why do we participate in that? A number of reasons. We want to have GomSpace as a brand. We're hammering in everywhere. You see some of it we do here, but we go internationally. Thomas Læssøe, our Chief Commercial Officer, was in Thailand not so long ago, speaking with generals, was on the stage talking about what we can do with space and how we can help them. I'm going to Singapore in the beginning of next year. I've been invited to speak at the Singapore Space Summit to talk about what space looks like in Southeast Asia. This is all about hammering in the brand. Last week, I was in Brussels, speaking about European resilience from space. I was invited to speak there. There are a lot of EU commissioners and senior people, and they're asking us for our input.
There we go and influence and say, but what should Europe think when it comes to resilience in space and defense in space? We're contributing with that. That's important. If you're a contributor, we can become a thought leader. If you're a thought leader, people will come and listen to us and buy from us. The last thing, number three, why we are very active is that we want to make damn sure that the Danish politicians and the Danish defense understands we have solutions to the problems that Denmark is facing right now, which is surveilling, in particular, Greenland and the Arctic, but also the waters around Denmark and Bornholm and the Baltic Sea. We have solutions to monitor that. I'm hammering that in there to make sure that before anybody's making any decisions about what to do, they understand you can buy it in Denmark.
We've done it for a long time. It serves a lot of purpose being so present. It takes a lot of time, but I believe it's worth it.
Check. That was actually whether you expected something from the Danish government signed soon. I think you actually gave us, alluded to that at the end of your presentation. I think people can just listen to that comment there. Hey, then there's what challenges and opportunities do you see in scaling up production to meet the growing demand for defense-related products and solutions? What are your challenges and, of course, opportunities by scaling up? What gives you that opportunities that you are able to fast scale up? What challenges do you actually see in scaling up in that specific business segment?
The scaling is required to capture a market.
If you want to grow, if let's say our program business right now is 90-100 million quarterly, if you want to double that, we have to produce double as much. We need to simply be able to scale. It is going to be a much bigger volume. That means the way that you procure components all the way out from the very beginning to how it's flowing into our assembly factory, to how it's going out to the customer, to how we test it. The scaling is really, really critical. The challenging part is, of course, to say, how do you do that efficiently? We can't make too many errors along the way. That is why we are practicing ourselves. I don't know how much you can see, but those of you following that, actually, we have several productions.
I'm going to move a little bit so you can see it here. It can wave. We actually have several production lines here. Now, this is a bit different from what we had before because we are now building a lot of satellites in parallel. That is a requirement to win. You cannot win. Nobody's going to give you a contract for 100 satellites if you can't show how you can build it. We understand how to build it, and we keep practicing so we can do higher and higher volumes. In terms of defense, there are obviously some security things that we are paying attention to. We are increasing our different certification in terms of cybersecurity and also how we do things. We probably have to look at more access control, et cetera. These are all things that are coming as part of being a defense contractor.
We are very well on the way, and I will see more. It's not a challenge. It's something we need to do and need to learn.
I guess by scaling also means being able to use subcontractors or sub-suppliers. Is that also challenging, or do you feel comfortable about that? There's actually a question here whether you could use some Ukrainian sub-suppliers, but I don't know whether you want to be that specific. A little bit about your confidence in using sub-suppliers and the quality control going into that. I guess that's a big part of scaling also.
It is a big part of scaling, absolutely. If you take the outsourcing or using partners and not necessarily outsourcing, what we're doing with NanoRacks right now is not direct outsourcing. It's expanding of capacity.
We're still doing the same thing in-house, but they do something externally as well. Then we can double or triple the amount of the same product. We're not outsourcing, but we are increasing capacity. That's important. There's no doubt that growing more, we can't do everything ourselves. We will look for partners. Yeah, Ukraine is a possibility. There are lots of countries around in Europe and Eastern Europe that are actually quite lucrative from a cost perspective. If you really need to scale the production, we will always have a production here in Aalborg, but perhaps to have even bigger physical capacity, it should be somewhere else. These are the things that we are preparing for. I'm not saying, please don't speculate. Our cousin said this or that. No, but of course, we need to prepare. What is the smartest way of doing this?
This is what we're working on right now.
There's a very specific question on what would the profitability for products in the quarter have been when removing the inventory effects? I don't know whether you want to be that specific on your—
no, I probably don't want to answer that specifically, but perhaps better to comment on the inventory adjustment is actually we have been a bit conservative in the first two quarters of the year. This is sort of a reversal that we're doing into the second half of the year. In average, you should see—I can't remember the exact numbers—but if you look at the year to date, it's better to look at that. You can look at the percentage and then assuming some level of continuation of that, then you have the answer of what it should be.
There was deliver border control from space was a question. I think you put that into your slide as a bullet. Yes, I guess that. Let's end up, Carsten. I know you have a deadline you also need to catch here. When does guidance for 2026 need to be communicated to the market? I think I know when it is, but any comments on when we could expect maybe you give further insight into 2026?
No, I won't give guidance on that because I have to tell everybody at the same time. We will do a press release when there's something specific. Normally by the rules, typically it's by the fourth quarter report. There's going to be some time in February.
I will aim to do it as soon as we have an overview, we'll come up with a guidance to help you for next year.
Perfect. We didn't get into all the specific questions, but I think we got a very good overview of all the questions by grouping them up. Thank you, Carsten, for taking us through your results and where GomSpace is going. Thank you for the audience listening in and asking a lot of very, very interesting questions.
Thank you. My pleasure, as always. Looking forward to next time. Bye.
Welcome to today's event where we have the pleasure to present GomSpace. To help us through today's presentation and answer questions in the end of the presentation, we are joined by CEO Carsten Drachmann. Today's topic, financial report Q3, and I guess also a little bit of insight into the market development.
As always, there is a box down below. Do ask questions. We have already gotten a lot in. See if something is asked, and maybe you can avoid it. You are also free to do it in Danish. I will try and translate to the best of my ability. For now, Carsten, I think I will take off my picture and leave you to the sensor stage.
Thank you, Michael. Yeah, welcome to our third quarter 2025 presentation. Do put in as many questions as you like. I know there is a lot already. I am looking forward to answering them. I think I cover a lot of it during the presentation, but there will be time at the end. We make space yours. This is the slogan we are using right now. This is what we are telling the world, and this is actually what we are doing.
We are really enabling commercial use cases, governments, nations to realize their business cases in space or perhaps protect a country, maybe Denmark. We'll talk about that. We'll talk about investor communication, key highlights, business unit summary, a market talk. I will share a bit more what I see in the market. I know from your chat forms you're paying attention, so there's a lot happening in Europe. We'll talk about that. I'll open up a little bit for where I think GomSpace should head compared to where we are now. We'll talk about that and a summary. Clarity and communication. Always, always, always try to communicate as much as possible internally and externally. Remember, we are doing now, this is a trading statement, so it's quite short. We do that in the first quarter and the third quarter. We will give guidance on.
2025 in addition to cash flow. Also, press releases, remember, they come out. If there are any significant things impacting the share price, I have to communicate quickly. If I do not communicate quickly on something, it is not a major event. Anything that I need to say that might influence the share price, I will communicate quickly. You can count on that. There will be other press releases that I think are useful for you that I send out. Other than that, please, please follow us on, if you do not already do it, LinkedIn, social media. We have now a very capable marketing manager, so our social media presence has actually gone up a lot. You will find a lot of useful information in there. Now, key messages for Q3. Let us take it. Revenue, year on year, we are up 94%.
I think that's pretty good. Actually, the third quarter is also higher than Q1 and Q2 this year. Trending very well there. We delivered an EBITDA of SEK 15 million, so we're keeping the trend of delivering a positive operational result. Cash flow, minus SEK 38 million. It is related to some late payments. I did not anticipate that. I had expected that we would be at break-even for Q3. I'll get a little bit more into that in a second. Strong delivery of order backlog. Really, we are executing. We have a strong backlog from the previous quarters, and we are now executing on that. Hence the higher revenue, hence the EBITDA. Also, the EBITDA is driven by healthy margins. Those of you who have been with GomSpace longer remember in the beginning, two and a half years ago, I was talking about the profitability of the.
Order backlog that we had was not good. It's really difficult to make money when the projects are close to zero or negative. We cleaned all of that up now. The result also in an increased volume and then together with a healthy order backlog in terms of margin is helping us delivering these results. That's where we need to be. That's how you do a business. Free cash flow, shifting customer payment shifted out. There were two customers actually that had not paid as anticipated. One has paid in full. Other has paid in part. I saw there was a question, can we get some reassurance that they will be paid in Q4? I am absolutely sure that they will pay in Q4. That is the arrangement we have. It did shift from Q3.
Hey, actually, one of the reasons why we wanted to bolster our balance sheet with more cash, which we have done in Q3, we got a significant amount of cash in from a capital increase, is exactly to be able to handle these situations. If you look at it going two years back, this would have been very difficult for us to handle. It's not a problem at all. We have SEK 250 million in a bank today. It's totally fine, and it's part of doing business. It's also part of the programs that we are running are getting bigger and bigger, which also means the impact when you see a shift between quarters is growing. Let's take a look at the year to date. We are up 71% compared to the same the first nine months last year. EBITDA at SEK 35.4 million.
I think that is very decent, up from a negative minus 17 million last year. Again, we're trending as a total for the year also towards delivering profitability. The accumulated cash flow, minus 78 million. This is partly related to the deferred payment, as I mentioned, and also that we are increasing our investment level, especially into go-to-market resources, but also scaling up internally in terms of being able to test more and do more in a solution space. Accumulated revenue well ahead of 2024. That trend continues. We are reaching a more steady level of delivering profitability. That's good, at least on the EBITDA level. We are now at 9% EBITDA. This is good. Adjusted, if you take out some of the warrant adjustments, it's actually at 12%. What is 9%? Let me try and give you a feeling for that. If you look into the industry.
Somewhere between 10%-15% is average for the industry. Some run with a lot less, some with a little bit more. I would say 10%-15% is quite decent. We are looking at we are growing. Growth typically means you have higher cost in anticipation of capturing more business into the future. 9% is actually quite decent. As you have seen, also well in the upper range of what we have been guiding on previously. EBITDA is also year to date. Very happy with that, SEK 3.4 million. It is not a lot positive, but it is positive. That is good. We will take it. As I said before, the cash balance is SEK 255 million end of Q3. No, I am not happy that there was a delay in payment. Am I worried about it? No, I am not worried about it.
I do believe that will be settled in Q4. That is a clear agreement. I'm not worried because we have plenty of money to continue to execute. It is not really an issue for us. That does not mean we are throwing away money. It just means we have exactly the right level of maturity, stability, solidity that we need to have. Some of you will also remember I have said we need to have a strong balance sheet to do business with nations, a government business. We cannot have a weak balance sheet. We cannot have a weak cash balance. We do not. This is exactly the situation that the market also wants to see. We can put business with GomSpace. They are fine, they are solid, and they can execute without any problems. That is basically where we are today.
Okay, let's dive into our three-year business units that we are operating in. Remember, satellite projects, programs running over a longer period of time. We have our products. We have some new cool pictures here. I thought you'd enjoy those, the latest shots. The products where we're building the parts, the inside of the satellites. There's a battery pack here. Could be a power module. This is a very strong business and healthy business for us. Now, platform kits. I mentioned it previously, but let me dwell with that for a second. What are we doing here? In very, very simple terms, in order to build your satellite, you need a broad range of components inside. Like when you have your laptop, you need a hard disk, you need a keyboard, you need a screen, you need to have a processing board. You need a lot of things.
The same thing in a satellite. We have now done it so that because we have all the bits and pieces that you need to build a satellite, we have that in-house. We have tested everything together. We're selling it as a kit. Call it an IKEA kit to keep it in Scandinavia. Basically, it's a plastic bag. You put all the stuff you need for a satellite in that bag. We have tested everything. We've tested that all bits and pieces are working. We give them put it together manual, make sure that all the screws are there, like IKEA is getting good at or not. We're delivering that, making sure that the customer has everything they need so they don't have to worry about buying from 10 different vendors and trying to make everything work together. They don't have to do that.
It works from us. This is an example. I think it's a pretty cool picture that's floating out and showing that the bits and pieces inside we are delivering as a kit. It gives a number of advantages, much higher reliability for the customer to do that. We aim at being able to deliver this within a few months. From the customer's side, they actually have this, it's quite fast. It is also enabling us, ourselves, GomSpace internally, that when we do on contract, we build satellites for customers. We need to build in volume. We can start from this. It's very fast and much easier for us. Big competitive advantage for product customers, big advantage for ourselves as well when we need to build, and especially when we need to scale.
North America, I hope you all saw there was an order announced yesterday about SEK 15 million for it was a product order for a fairly well-known. We could not disclose the name, but a larger satellite builder and operator. This was great. Some of you also noticed it is actually a doubling up on the order intake in North America for some time. That is very good. We will see also, we are a little bit behind in Q3, but now here in Q4, we will definitely catch up on that front. Revenue overall for the third quarter, about SEK 118 million in total, majority in programs, not a surprise. Year to date, about just shy of SEK 300 million. That is, I do not know if you remember, we closed around SEK 248 million last year for 2024. In the first three quarters, we are well ahead of that.
We have an adjusted EBITDA running up at around SEK 15 million here. Sorry, I can't even read it myself. For the year, it is SEK 33 million or SEK 35 million, I think it says. Nice growth. You will also see on the graph that we are now steady. Q1, Q2, Q3, with a nice EBITDA performance. This is great. I've had a lot of focus on that with the organization. I hope that we will stay at this level. That is my expectation. Operating profit. EBIT is actually positive year to date. That is good. Net profit is still negative. These are some technicalities on the loans that we had with EIB and now with Hungary. There are some warrants attached to that. Those of you who are financial techies can look into it.
It is basically because when the better share price does, it actually has a negative impact on the net profit. It has no impact on cash. It has no impact on our operational performance. It is purely a financial rule that we have to do it like that. I do not like it, but some people tell me we have to do it. Okay. No cash impact on this one. Free cash flow, we talked about that. It was negative in Q3. I do not like it, but I am okay with it. It is what it is. It is part of the operation. We have got plenty of money in the bank, and I do expect that in Q4 this is remedied. For the full year, we are going back to a positive or at least break-even free cash flow. This is fine, not something I am worried about. Order intake.
We had a lower order intake in programs as compared to the previous quarters. It's okay. There's SEK 215 million in one order coming in the second quarter. We don't necessarily see that every quarter. There will be more of those deals coming in a quarter. If you look at the revenue delivered, it was about SEK 85 million from the programs for the quarter. Then you take that out. Of course, you need to have at least SEK 89 million or SEK 85 million again to replace that. We didn't in this quarter. It's fine. There will be more orders coming next time. If you say also in relation, let's say programs need to be around SEK 90 million, SEK 90 million, or if you get an order for SEK 200 million every quarter, then yes, that's a really, really good backlog. We're fine here.
Product BU, order intake at a good level is about SEK 27 million. That is good. I like it to go higher. That is, of course, the ambition. The revenue conversion was SEK 21 million in a quarter, which means we have a net positive impact on the order backlog. This will go up and down a bit, but should preferably trend like this all the time. As mentioned before, North America somewhat behind plan. Still building momentum over there, but the SEK 15 million that came in yesterday was great. Obviously, you will see that in the fourth quarter reporting that North America is doing quite a lot better. Other than that, they did drop on the order backlog because we converted a lot of that to revenue. Overall, I am satisfied with the order backlog. It was solid from the previous quarter. It dropped some SEK 40-50 million this quarter.
It's okay. It will come up again in the fourth quarter and running into next year. Now, guidance. We updated on October 15. What are we saying? Right now, with everything, all the orders we have come in, the way things are going in execution, we are now guiding at between SEK 420 million-SEK 450 million for the year. This is up with more than SEK 100 million from the previous guidance, from the previous lowest guidance, which was SEK 320 million. This is good. You can do the math yourself right now. We are a little bit below SEK 300 million for the first three quarters. You can do the math and see what you think fourth quarter is going to be. We are also increasing our guidance on EBITDA %.
We had said from the beginning of the year, minus two, maybe we'll have a small negative EBITDA, but on a good year, on a good day, we'll have 10%. We are now increasing that to between 7%-13%. We are very confident that we'll deliver a positive EBITDA, which would be quite an achievement for this year and considering where we're coming from. I maintain my guidance on positive free cash flow, expecting that we will resolve the negative cash flow from the first couple of quarters. For the first, from Q2 and Q3, it will be resolved in Q4. Overall, well done on revenue, I think. Thank you, team at GomSpace. Thank you, sales team. Thank you, program management team. Thank you, product team. Thank you, production. Everybody's working very hard to make this flow.
As our orders are going up and the revenue is going up, there's a lot more that has to go through. We start all the way out at supply chain with our vendors who have to do more for us. We need to put more together. We need to build things faster. It is a big teamwork and it is quite an end-to-end event when this is going up. We are doing well here. EBITDA is now, as I said, expected positive for the year. Double-digit growth in all business units, though America and North America is a little bit behind, but the latest order is actually making up for that. Free cash flow, we talked about that unchanged. Overall, and I will talk a bit more about it, I think it is fair to say that I feel we are turning a page now in the GomSpace storytelling. We are coming from.
A challenging time, slowly, slowly building it up, executing a strategy to now we are in a situation that the results are very decent. Actually, they're really good. It's okay. We have a growing market and we are now in a position with a strong balance sheet and a strong cash balance that we can execute well into next year. We can really go out and try and capture the market. For me, this is a turning page in the book of GomSpace. Let's look at a couple of other things. Look at that beauty there. This is a picture of a microsatellite, one of the microsatellites that we are building right now. For sure, we are world leader. We are winning business around the world.
Here you see what the slightly bigger satellites look like compared to the CubeSats we have looked at before. Remember, we do business in many areas. It is a modern word. It is dual use. It means our satellites for Earth observation, signal intelligence, can be used for civil purposes. Observing the changes of foresting, looking for efficient ship traffic, looking for illegal fishing around the world. Those same technologies can be used for defense purposes as well, looking for warships that we do not want in our waters or observing the front line in Ukraine with a camera from space. The advantage of this technology is it is really dual use. With all the defense spending coming in now, obviously, we are really well positioned to capture that growing market as well. Now, let's talk a bit about what is happening in the market right now.
Again, thank you online. Please keep posting. I think you're very impressed with the amount of information you're able to pick up. I hope everybody reading there is appreciating the investors who are contributing well on the chat forum. I picked a couple of things from Europe in particular. Did you see the four EU flagship programs announced recently? European Drone Defense Initiative. Okay. We were not out of bed when drones came in over Denmark recently. You all know the impact. You all saw it. Something needs to happen, clearly. EU is waking up and saying, oops, that's not good. Big question is, of course, can we monitor this from space, from satellites? The answer is, we can monitor a lot of things, but it has not been a focus before.
If we go in and work together with the defense and try to understand what kind of drones we are talking about here, we can see so many other things. Why not see this as well? This is probably in combination with other things. I know it is on people's mind. Can we do this from space? Yeah, probably we can do something from space that will help detect this. Eastern Flank Watch. This is really about Ukraine and towards Russia and Belarus. This is on the agenda. Look at the next one, European Air Shield. It is a defense system and defense detection system. The last one here, European Space Shield. I read in all of this, I read space. Space is part of this. Space can enable those ambitions that EU is having.
There is no doubt that space will grow. Obviously, GomSpace is part of that. What kind of business we will get, from where it is coming, we will see. What is for sure is that there are lots of budgets coming. If you take a look at that, public investments in the space, Germany just recently announced EUR 35 billion investment into space only. It was not even for defense. This is space only over the next four or five years. This is significant. This is actually more than the German space industry is able to deliver by themselves. There is no doubt that money is not going to just stay in Germany. It will go outside as well. This is great. Obviously, opportunity there. EU allocates EUR 800 billion towards defense and space. Here is the duality in that.
Part of that EUR 800 billion also goes to the four flagship programs. Is there an opportunity for GomSpace and also for any space company in Denmark? Absolutely, yes. Denmark triples the contribution to the European Space Agency. How it works with the European Space Agency is that each member state puts in money to ESA, and then they choose which programs they want to support. Then it is so-called a geo-return. When they support a certain program, when Denmark supports a certain program in ESA, the money comes back to Danish space industry in the shape of projects. The fact that, and thank you, Christina Eilund, well done, has actually managed to triple this, will also impact. It is not just about GomSpace. It will impact positively the Danish space industry. That is really well done. There should be more opportunities coming our way.
You can say, but Carsten, what's different from before? The difference is obviously the amount going up. The biggest contributors to this is typically France, Italy, Spain, Germany to some extent. It also means when they put in a billion, that billion goes back to the country where it's coming from. It's difficult for us to grab that. Here we can. It's another reason why we have been in Luxembourg over the years is that Luxembourg Space Agency and Luxembourg are actually contributing a lot more than Denmark to space. That's why we are there, because that has been benefiting us as well to get programs. I know you are interested in hearing about what's happening in Denmark.
You can follow the news as I can, and we are going to build warships, and we're going to build jet fighters, and we're going to buy anti-tank missile systems and long-range missiles. Great. We absolutely need all of that. I am sure that within not too long, Denmark will also start buying space assets for surveillance of the Danish waters, including Greenland and Arctic, where we actually do not have as much information as we should have. The Danish space industry and GomSpace can absolutely deliver into this. There is no doubt about that. I think it would be suitable and very likely that we will have a Nordic joint solution with contribution from all the Nordic countries, including Denmark. Let's see how it plays out. Somebody wrote, but are you active in this? The answer is absolutely yes. Are you busy? Absolutely, yes.
Do you have a lot of meetings? Yes, we do. How it's going to play out, we'll see. Looking ahead with considering the financial results we have delivered and considering everything that's happening in the market, what should GomSpace do now? Looking ahead a little bit. Five key focus areas that I see, and you will see them repeated going into 2026. We need to align with the market. First of all, we need to continue to increase our product business. That will not change. It is good business. Every time a satellite is set up, it's an opportunity for us to sell. Right now, we are probably, if you discount China and Elon Musk and Russia and all other launches, which are very proprietary, GomSpace is in about 30-50% of all missions launched, all satellites launched. There's some kind of GomSpace component in there.
Big or small, expensive, not expensive, does not matter. We are already a big part of that. As this market overall is growing, we have a chance with our product business, and we should pursue that. Two, prepare to deliver satellites in high volume. This is really important. The 18-satellite program we got earlier in the year has been super important for us because it has really helped us scale up our production. All the way out from our suppliers of components in through our product production into our AIV assembly room, which is in here where we are putting together the satellites. This is important. Now having a real-time, having to put together 18 satellites in a very small period of time has really, really helped us. It is very important. We need to do more of that. To grow GomSpace, we need volume as well.
That volume comes with an ability. You have to have an ability to deliver. We can't close 100 satellite programs unless we have the capacity and the processes, and we can document that we can do it. This is the road we are on right now. Focus area number two, prepare to build satellites in high volume. Number three, continue to focus in North America. It is the biggest market. We will get traction. I have absolutely no doubt. Will it be very fast? Will it be a bit slower? I don't know. We'll see. We'll see. It is definitely growing, and there is a demand no matter what. We really need to focus, and we are focusing more on end-to-end solutions. For nations, it can be defense, or it can be for civil use. What do I mean?
Our opportunity, and I know you'll ask me about that in Indonesia, is an example of an end-to-end solution. The customer, the nations are not interested in buying a piece of technology. A satellite in itself is a piece of technology. Many of them want to have an end-to-end solution. I have a problem with illegal fishing. Give me a solution. We were able to do that in Indonesia. We need to replicate that. We need, across all aspects, also Earth observation, signal intelligence, to have more end-to-end solutions. We have to prepare for that. We cannot win without having prepared. A lot of our focus going into 2026 is preparing for that, potentially including launching some of our own satellites simply to test and verify and to show customers what we can do and also do use cases together with them.
Number four, create end-to-end solutions primarily for nations, for defense and civil work. Five, very much tapping into the European market. We need to capture part of the EU and national space budgets in Europe, either through grants or funding, which is what Denmark is doing, and Christina Eilund has helped getting more money in there. Certainly by capturing contracts as well in this space, coming out of all the money flowing through Europe. It's not going to be an easy process. It's a very political process. Who gets what, geo-return, all kind of stuff. It's all fine. We will play a part in that. This would also include certain scientific projects. We have our Uranus flying in deep space. I think there will be lunar programs coming up soon, orbiting around the moon. We'll take a piece of that. Focus on product business.
Deliver satellites in high volume. We need to get better, even better at that. Continue to build North America, create end-to-end solutions, and gear ourselves towards tapping into the big budgets that are in Europe right now. All of these are also market-oriented. It is not an internal structure based on who we want to sit next to at GomSpace. It is very much oriented towards the market. It is very important for me to say that these are all things that are related to very specific go-to markets. In behind that, we have to align ourselves to capture that. Okay, next chapter, let's summarize it. Guidance going up for SEK 20 million-SEK 450 million. Great. I think very, very decent EBITDA here. Market probably somewhere between 10%-15% when it is performing at its best. We will recover on EBITDA. I would say our strategy is working.
The transformation we've been through the past 24 months or more is paying off. We will execute the final stretch of 2025 with confidence. You do the math. I'm not going to do it for you again. We should be able to execute based on backlog. There are not a lot of outstanding orders that we need to take in. It's very minimal. Everything is backlog. It's up to us to execute. We have positioned to scale with confidence. With confidence, I don't need, I can get more cash if I want to, but we have plenty. We can really start focusing on scaling. Market is moving in GomSpace's favor. We just looked at that. There is a tremendous movement. EU is one thing, but the whole notion of nations want to own assets.
Nations do not want to buy from Elon Musk and Starlink. Nations want to control their own assets in space, meaning they want to control their satellite networks. They want to decide what to do with them, when to do with them, when they're on, when they're off. This is a trend we see globally. Very much. In Southeast Asia, we see a lot of trends for that. We see it in Africa, and we see it in Latin America as well. This is really a key thing. I said that last time. Cautious optimism from my side. The trend we see now should also continue into 2026. I do not see any particular reason why not. If I may, I dock back to first quarter 2023. That was my first reporting here. I talked earlier about setting the sales.
You have to set the sales correctly in terms of getting to where you want to. We set our sales forward. I would say now we reset our sales. Back in Q1 2023, I was very clear. Focus on cash flow. Focus on profitability. Already at that time, we said we are going to do North America products and customer contracts and programs. We have focused relentlessly on that for now two, two and a half years. I hope you acknowledge and see that the results are here now. It has paid off. It was the right thing to do. Now going forward. From Q3 and onwards, it is really changing. Towards scaling and capturing market. The market is there. We are ready to capture it. It will be a little bit different for us. We are also internally working on what is that mindset? How do we scale?
I know the GomSpaces are sitting out there. GomSpaces, remember, we have to think a bit differently now that we need to scale. We have to embrace it and say, yes. Yesterday was this. Tomorrow is something else. Tomorrow is more complex, likely. Tomorrow is a lot more. Tomorrow is a lot of new cases coming in, more customers coming in. We need to prepare for that. The market is there. We are ready. We have delivered the results, I think, very well over the last two and a half years. Let's assume it is go GomSpace also in 2026. Thank you.
Let's jump into some questions, Carsten. First, there are a lot of questions coming in, of course, about these delayed payments. I think you actually touched upon it. You are confident that money will come in. Sitting from the outside, I think maybe.
The last thing we need to get confirmed is there is nothing you need to deliver. It's a delayed payment, not a dispute or something like that. Can you confirm that? I also think you covered that subject very well.
Yeah, let me answer it even more precisely to that market. No, it is not about a delayed delivery from our side. We have delivered what we should. Two customers, like I said, should have paid money in Q3. They did not. One has paid in full. The other one has paid partly now. It will be resolved in Q4. I know they are, oh my God, this happened in the past. Yeah, I know it happened in the past, but that was in the past. I think we have a fairly good control of what's going on here. Also, we are in a solid position.
We can manage it. I expect we'll see more of this shifting between quarters as the business is going up. It's okay. That is why we need a strong balance sheet and a strong bank account, which we have.
Perfect. Then, of course, there is a little bit, there are a couple of questions I will also group about Indonesia. I know you have told me many, many times that you will announce when there is something new to announce, but there is a question here also, this CEPA, which is a deal with the European Union and Indonesia. About free trade. Do you think that helps or has that given you anything new? That is a specific question. Any comments about Indonesia?
Yeah, so CEPA, for those of you who do not know, yeah, it is a trade agreement and free trade, focusing on a free trade agreement between Indonesia and Denmark.
I'm not sure it's signed yet, though, but of course, it will help facilitating business in Indonesia. For our specific programs with the Ministry of Fishery, we are already well positioned there. We've done all the work, so it doesn't really change anything there. Going forward, it's not a bad thing at all. Let me answer the Indonesia question. I will tell you if something is changing, good or bad. If I tell you nothing, nothing has really changed there. I remain, as before, optimistic that this is going to happen sooner or later. If I know for sure it will not happen or something bad has happened, I will tell you. I have to tell you. If something good is happening and I can see there's a clear progress, I will tell you. Until I tell you anything, everything as before.
There is a specific question about Unseen Labs and Singapore. Is there any launch date set? And can these satellites function as a mother satellite for other nanosatellites? Launch date and as a mother satellite?
Yeah, let's start with the launch. Actually, three microsatellites we are working on right now, three different types of microsatellites. They are all set to launch in 2027-ish, not later than that. It will be 2027, maybe late 2026, but right now, I believe 2027 is the plan for those satellites. Can it work as a mothership or a mother of satellites? It is a good question, actually, because what we want to build now going into the future is a constellation of satellites with different capabilities. Let me give you an example. You have an Earth observation, so a satellite with a camera that can take pictures, very high resolution.
It's a lot of data if you have to take a picture of a lot of ocean, and you don't know where there's anything to look for. The result is you have a vast ocean and a lot of pictures of blue. Sometimes there's a ship, or sometimes there's something interesting. That could be problematic because you have so much data, you don't know what to do with it. The data processing takes time, so you don't have any real-time information. However, if you combine this with a so-called SIGINT, where we can see radar signals, the little SIGINTs can fly in front and say, "Hey, there's something interesting here, here, and here." Earth observation camera satellite comes after and look there, there, and there, and there. You actually, by combining different technologies, get much faster, more precise information.
Do you need a mother satellite for that?
Not really, but there could be some intelligence built in, but it's not depending on the size. It doesn't actually matter whether it's a CubeSat or a Microsat or something bigger. The notion that satellites are, via something called inter-satellite links, that they communicate directly between satellites instead of through Earth, that is something that is definitely coming. We are actually good at it at GomSpace. We have that technology. In that constellation, yes, there could be some intelligence built into a satellite telling one satellite to do something else on its behalf. It's a long answer to a short question, but yes, there is a level of motherhood in certain satellites.
Check. Of course, there's a lot of questions on the European gaining of these investments that you yourself alluded to.
I think the ESA will make the budget this month and approve it, and everybody expects it to go up. I think you covered that part. Also, maybe I do not need to ask you, what gain do we have of doing all the conferences? I guess kicking in doors is not a bad thing. I think you also alluded to that. About the potential, there is a question here. Can you put some words on what you are gaining being part of Space Connect North? There is a question on one of your competitors. I do not think you want to answer that, but can you tell me what you gain from being a part of this Space Connect North?
Let us do Space Connect North and then go back to why we are participating in a lot of different conferences.
Space Connect North is really about promoting Northern Jutland and Jutland and the space industry we have here, primarily in Denmark. Focusing on making sure that the politicians and different government organizations understand that we are here, especially the defense as well. We are here. Denmark is a leading space nation. We have leading companies in really, really many areas of the space industry. Denmark has bought absolutely nothing. It is very, very limited. A few demo satellites, including 2018, they bought two satellites from us at GomSpace flying up over Greenland. Denmark has not done anything. I say it with a warm heart, but also with a chill that, come on, Denmark, we can do better than this. I know it is coming.
Space Connect North is also, its purpose is to make sure that it is understood how much actually skills we have in Denmark that we need to facilitate, to build the industry, but we also need to leverage as a nation. Let's go back and look at all the different conferences. We had Space Conference up here in Aalborg, the European Space Conference, because we have the EU chairmanship. That was really well. Why do we participate in that? A number of reasons. We want to have GomSpace as a brand. We're hammering in everywhere. You see some of it we do here, but we go internationally. Thomas Læssøe, our Chief Commercial Officer, was in Thailand not so long ago, speaking with generalists, was on the stage talking about what we can do with space and how we can help them.
I'm going to Singapore in the beginning of next year, where I've been invited to speak at the Singapore Space Summit to talk about what space looks like in Southeast Asia. This is all about hammering in the brand. Last week, I was in Brussels, speaking about European resilience from space. I was invited to speak there. There are a lot of EU commissioners and senior people, and they're asking us for our input. We go there and influence and say, what should Europe think when it comes to resilience in space and defense in space? We're contributing with that. That's important. If you're a contributor, we can become a thought leader. If you're a thought leader, people will come and listen to us and buy from us.
The last thing, number three, why we are very active is that we want to make damn sure that the Danish politicians and the Danish defense understand we have solutions to the problems that Denmark is facing right now, which is surveilling, in particular, Greenland and the Arctic, but also the waters around Denmark and Bornholm and the Baltic Sea. We have solutions to monitor that. I am hammering that in there to make sure that before anybody is making any decisions about what to do, they understand you can buy it in Denmark. We have done it for a long time. It serves a lot of purpose being so present. It takes a lot of time, but I believe it is worth it.
Check. That was actually whether you expected something from the Danish government signed soon. I think you actually gave us.
Alluded to that at the end of your presentation. I think people can just listen to that comment there. Hey, then there's what challenges and opportunities do you see in scaling up production to meet the growing demand for defense-related products and solutions? What are your challenges. And, of course, opportunities by scaling up? What gives you that opportunities that you are able to fast scale up? What challenges do you actually see in scaling up in that specific business segment?
Now, the scaling is required to capture a market. If you want to grow, if, let's say, our program business right now is 90-100 million quarterly, if you want to double that, you have to produce double as much. We need to simply be able to scale. It's going to be a much bigger volume.
That means the way that you procure components all the way out from the very beginning to how it's flowing into our assembly factory, to how it's going out to the customer, to how we test it. The scaling is really, really critical. The challenging part is, of course, to say, how do you do that efficiently? We can't make too many errors along the way. That is why we are practicing ourselves. I don't know how much you can see, but those of you following that, actually, we have several productions. I'm going to move a little bit so you can see it here. It can wave. We actually have several production lines here. This is a bit different from what we had before because we are now building a lot of satellites in parallel. That is a requirement to win. You cannot win.
Nobody's going to give you a contract for 100 satellites if you can't show how you can build it. We understand how to build it and keep practicing so we can do higher and higher volumes. In terms of defense, there is obviously some security things that we are paying attention to. We are increasing our different certification in terms of cybersecurity and also how we do things. We probably have to look at more access control, et cetera. These are all things that are coming as part of being a defense contractor. We are very well on the way, and I would see more. It's not a challenge. It's something we need to do and need to learn.
I guess by scaling also means being able to use subcontractors or sub-suppliers. Is that also challenging, or do you feel comfortable about that?
There is actually a question here whether you could use some Ukrainian sub-suppliers, but I do not know if they want to be that specific. A little bit about your confidence in using sub-suppliers and the quality control going into that. I guess that is a big part of scaling also.
It is a big part of scaling, absolutely. If you take the outsourcing or using partners and not necessarily outsourcing, what we are doing with NanoRacks right now is not direct outsourcing. It is expanding of capacity. We are still doing the same thing in-house, but they do something externally as well. We can double or triple the amount of the same product. We are not outsourcing, but we are increasing capacity. That is important. There is no doubt that growing more, we cannot do everything ourselves. We will look for partners. Ukraine is a possibility.
There are lots of countries around in Europe and Eastern Europe that are actually quite lucrative from a cost perspective. If you really need to scale the production, we will always have a production here in Aalborg, but perhaps to have even bigger physical capacity, it would be somewhere else. These are the things that we are preparing for. I'm not saying, please don't speculate. Our cousin said this or that. No, but of course, we need to prepare what is the smartest way of doing this. This is what we're working on right now.
There's a very specific question on what would the profitability for products in the quarter have been when removing the inventory effects. I don't know whether you want to be that specific on your.
No, I probably don't want to answer that specifically, but perhaps better to comment on the inventory adjustment.
It's actually we have been a bit conservative in the first two quarters of the year. This is sort of a reversal that we're doing into the second half of the year. In average, you should see—I can't remember the exact numbers—but if you look at the year to date, it's better to look at that. You can look at the percentage and then assuming some level of continuation of that, you have the answer of what it should be.
There was deliver border control from space was a question. I think you put that into your slide as a bullet. Yes, I guess that. Let's end off, Carsten. I know you have a deadline you also need to catch here. When does guidance for 2026 need to be communicated to the market? I think I know when it is, but.
Any comments on when we could expect maybe you give further insight into 2026?
No, I won't give guidance on that because I have to tell everybody at the same time. We will do a press release when there's something specific. Normally by the rules, typically it's by the fourth quarter report. That is going to be sometime in February. I will aim to do it as soon as we have an overview, we'll come up with a guidance to help you for next year.
Perfect. We didn't get into all the specific questions, but I think we got a very good overview of all the questions by grouping them up. Thank you, Carsten, for taking us through your results and where GomSpace is going. Thank you for the audience listening in and asking a lot of very, very interesting questions.
Thank you.
My pleasure, as always. Looking forward to next time.