Irisity AB (”Irisity” or ”the Company”) published its Q3 report for 2025 on the 3rd of November 2025.
The following are key events that we have chosen to highlight in the report:
- Net sales amounted to SEK 24.6m (30.3) – clear improvement vs. H1-25
- Invoicing of SEK 34.9m bodes well for growth ahead
- FX-adjusted MRR declined slightly Y-Y
- Streamlining initiatives support the ongoing SEK 40m cost-saving program
- Fully guaranteed rights issue to reinforce the balance sheet
Strong Sequential Rebound Signals Recovery Ahead
Reported net sales for Q3-25 amounted to SEK 24.6m (30.3), corresponding to a decline of approx. 19 % Y-Y. The decrease primarily stems from the reassessment of revenue recognition for large-scale projects introduced in Q4-24, which rendered the comparison base particularly challenging. Sequentially, sales improved by 38% Q-Q, and with invoicing of SEK 34.9m during the quarter, we see clear signs of a recovery trajectory gaining momentum ahead of 2026.
During the quarter, Irisity secured several strategically important contracts, including an expansion with a U.S. federal government agency, a major transportation project in New York, and a competitive project takeover for a C5i 911 center in Mexico. These wins reinforce the Company’s strong positioning in public-sector and enterprise security, while supporting growth in recurring revenues.
Given the soft comparison base in Q4-24 (SEK 4.7 m in sales), following delayed projects and postponed customer payments that affected revenue timing, we expect a pronounced rebound in Q4-25 and a normalization of revenue trends into 2026.
Solid Invoicing Momentum Supports Growth Outlook
Invoicing amounted to SEK 34.9 m (35.4) in Q3-25, corresponding to a marginal Y-Y decline of 1.2%, but a strong sequential increase of 65% Q-Q. Adjusted for FX-effects, invoicing increased by 3% Y-Y and 66% Q-Q, providing a solid foundation for renewed sales growth in the coming quarters. Collections totaled SEK 19.9m (26.2) during the quarter, a decrease of 24% Y-Y but broadly in line with the previous quarter (SEK 19.8m in Q2-25). The Y-Y decline mainly reflects lower invoicing in Q2-25 compared to Q2-24 (SEK 39.3m), as cash collections naturally lag invoicing in the quote-to-cash cycle.
The Company notes a seasonal pattern in both invoicing and collections, with activity typically weighted toward the second half of the year, reflecting customer procurement cycles and partner project timing. On an LTM-basis, invoicing and collections amounted to SEK 111.4m and SEK 89.7m, respectively, indicating a solid platform for improved cash conversion going forward.
Monthly Recurring Revenue (MRR)
MRR amounted to SEK 4.0m (4.3) in Q3-25, down Y-Y but up from SEK 3.7m in Q2-25. Adjusted for currency effects, MRR reached SEK 4.2m, making the Y-Y decline modest. The past quarters have been affected by delayed renewals among certain existing customers, primarily related to Software Upgrade Plans (SUP).
Looking ahead, Irisity intends to place greater strategic focus on recurring revenues. Combined with the conversion of previously delayed renewals and a gradual build-out of the Security-as-a-Service offering, supported by regulatory tailwinds following the revised camera permit requirements introduced in Sweden in April 2025, we expect a solid trajectory for ARR growth going forward.
Streamlined Cost Base Supports Ongoing Transformation
During the quarter, Gustav Zaar assumed the role of Interim CEO, bringing renewed operational focus while maintaining continuity in the Company’s strategic transformation. The leadership change underscores Irisity’s emphasis on execution, cost discipline, and progress toward sustainable profitability.
Personnel costs amounted to SEK 22.3m (30.1) in Q3-25, down approx. 26% Y-Y and 11% Q-Q (vs. SEK 25.1m in Q2-25). At quarter-end, the Company employed 73 (87) full-time equivalents and engaged 16 (11) consultants, corresponding to a total workforce of 89 (98). Other external costs showed a similar trend, declining 22% Y-Y to SEK 7.7m (9.9), and 10% Q-Q. Total OPEX (excl. COGS and D&A) amounted to SEK 34.4m (45.4), reflecting an improvement of 24% Y-Y and 2% Q-Q. Despite the Y-Y decline in sales of SEK 5.7m, the streamlined cost base contributed to a notable EBITDA improvement to SEK -7.5m (-14.3). Adjusted for work performed for own account and other operating income and costs, EBITDA totaled SEK -10.0m (-14.2).
During the quarter, Irisity initiated the Company’s simplification program, targeting a 30% OPEX reduction from Q2-25 levels (SEK 33.7m), corresponding to estimated savings of approx. SEK 10m per quarter, or SEK 40m annually. The program is progressing according to plan, driven by initiatives such as R&D consolidation and organizational streamlining. The full effects are expected to materialize gradually during the coming quarters, becoming fully visible from Q2-26 onward. If executed successfully, the OPEX base would be reduced to around SEK 94m annually, aligning more closely with the Company’s current revenue run-rate.
In our view, the reduced OPEX base, coupled with the ongoing efficiency initiatives and the solid invoicing and sales momentum, indicates that Irisity is taking vital steps toward reaching break-even.
Rights Issue Key to Reinforcing Balance Sheet
During Q3-25, Irisity reported operating cash flow (OCF) of SEK -18.4m (-17.5), with changes in working capital weighing on cash generation. Including investments of SEK 5.0m (3.4), free cash flow (FCF) was negative at SEK -23.5m (-21.0). Working capital typically fluctuates between quarters, while continued investment remains essential given Irisity’s position in a fast-moving, high-tech niche where product development strengthens competitiveness.
The ongoing, fully guaranteed rights issue with preferential rights for all shareholders, running from November 5–19 at a subscription price of SEK 0.12 per share, will yield gross proceeds of approx. SEK 26 m before transaction costs (approx. SEK 0.5m) and set-offs. The issue is fully guaranteed by the main shareholder, Stockhorn Capital AB, which will subscribe for its 36.6% pro rata share and act as bottom guarantor for the remaining portion. In addition, members of the board and management, along with other existing shareholders, have entered into subscription commitments corresponding to approx. 13% of the total issue. Depending on the subscription outcome, the net cash proceeds may range between approx. SEK 3–16 m, as up to SEK 23 m of the SEK 26 m issue could be settled through set-off against shareholder loans. The remaining portion of the short-term loan from Stockhorn, including accrued amounts not set-off in connection with the rights issue, will be repaid in December 2026. Regardless of outcome, the transaction will strengthen the balance sheet by reducing interest-bearing debt. Net proceeds will be used to strengthen working capital, advance the simplification program, and accelerate the shift toward recurring revenues. As the share currently trades above the subscription price, prospects for a high subscription rate appear favorable.
At quarter-end, cash amounted to SEK 1.6m. To address short-term liquidity needs, Irisity secured SEK 20m in loans from Stockhorn Capital during Q3-25. The full amount was likely not disbursed by the balance sheet date, as cash flow from financing activities totaled SEK 18.3m for the quarter, indicating that the entire facility had not yet been drawn.
Net debt totaled SEK 37.4m (29.8), making the rights issue a key step toward reinforcing the balance sheet. While a portion of proceeds will be allocated to debt refinancing and near-term cash outflows are expected, additional capital cannot be ruled out before reaching cash flow break-even. However, with a lower OPEX base, growing sales momentum, and reduced leverage, any future capital raise would likely take place on more favorable terms.
Concluding Remarks About the Report
Overall, we view Irisity’s Q3-25 report as a meaningful step in the right direction across several key areas. The reported net sales of SEK 24.6m represent a clear improvement versus H1-25, and with invoicing of SEK 34.9m at the end of the quarter, this reflects solid underlying demand and indicates that the recovery trend is gaining momentum.
On the cost side, the reduced headcount and ongoing streamlining initiatives, such as the consolidation of R&D operations, a leaner go-to-market organization, and a shift away from high-cost one-time projects, are enhancing operational scalability and contributing to a lower customer acquisition cost (CAC). Together, these measures mark tangible progress toward the targeted SEK 40m in annual savings and are gradually aligning OPEX with the current revenue run-rate.
Looking ahead, we anticipate improving momentum, driven by renewed sales growth and continued operational execution, with the efficiency measures gradually materializing in the P&L toward break-even. In our view, the combination of a leaner cost structure, lower CAC, and improving sales activity should foster renewed investor confidence as Irisity advances on the Company’s path towards profitability.
We will return with an updated equity research report of Irisity.
