Irisity

Irisity AB (”Irisity” or ”the Company”) is a leading provider of AI-driven video analytics solutions, transforming traditional security cameras into intelligent detection systems. Operating in over 90 countries, the Company pursues a partner-driven go-to-market strategy underpinned by an ARR base equivalent to 60% of LTM sales. Following a two-year transformation into a leaner business with a sharper focus on cash conversion, Irisity has reset the cost base while returning to growth, bringing adj. EBITDA within reach of break-even in Q2-26. With a gross margin above 80%, a largely fixed OPEX-base and solid growth momentum ahead, we expect Irisity to reach break-even in FY2027, followed by a gradual improvement in profitability to an adj. EBITDA of SEK 13.5m in 2028. Applying an EV/S-multiple of 1.8x on our estimated net sales of SEK 100m for FY2026, we derive a potential present value of SEK 0.38 (0.31) per share in a Base scenario.

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• A Strong Quarter Across the Board…

Reported net sales in Q2-26 amounted to SEK 27.3m (17.9), up 52% Y-Y and a clear beat of our SEK 21.9m estimate, with growth led by the US, Canada and South America in the partner-driven model. The gross margin reached 86.3% (78.8), 4.8 p.p. above our estimate, while OPEX of SEK 25.3m (33.7), down 25% Y-Y, came in slightly above our estimate (23.7) . Together this lifted adj. EBITDA to SEK -1.7m (-19.5), ahead of our SEK -5.9m estimate and within reach of break-even. Invoicing rose 36% Y-Y to SEK 28.7m (21.2) and collections 67% to SEK 33.0m (19.8), signaling higher commercial throughput and a healthy cash conversion. MRR reached SEK 4.5m (3.7), up 30% at constant currency (4.8), taking ARR to approx. SEK 54m, representing roughly 60% of LTM sales.

• …But We Don’t Extrapolate the Growth Into Q3

While encouraged by the strong growth, we note that the beat was primarily driven by one-off revenue, partly fueled by the major U.S. airport contract won in the quarter. This is evident in MRR rising only marginally Q-Q, from SEK 4.4m to SEK 4.5m, implying that the bulk of the growth stemmed from one-offs. Accordingly, we expect a somewhat softer Q3-26 against tough one-off comparables in Q3-25, followed by a clear rebound in Q4-26. Crucially, the softer Q3 reflects comparison effects rather than fading momentum, with LTM invoicing of approx. SEK 114m running at about 1.3x LTM net sales, an embedded tailwind that, alongside the rising recurring base, provides a solid foundation for the growth ahead.

• Solid Execution Warrants a Re-Rating

Given the above, we raise FY2026 net sales marginally, from SEK 99.4m to SEK 100.2m. More notably, reflecting the stronger-than-expected gross margin, good delivery on cost reductions and the solid growth, we lift our sales and profitability estimates slightly for 2027-2028E, and now expect adj. EBITDA of SEK 2.3m in FY2027 and SEK 13.5m in FY2028. As this de-risks the path to break-even, the operational progress warrants a modest re-rating of the EV/S multiple to 1.8x (1.5x), while the still-tight liquidity, likely requiring further bridge financing until cash flow turns positive, keeps it measured. Together, this lifts our motivated value to SEK 0.38 (0.31) per share in a Base scenario.