Defence and justice customers are buying systems they can run themselves. Meanwhile, Pexip’s business connecting meeting rooms across platforms lost a little recurring revenue during the quarter. How much growth in secure video am I already paying for at NOK 68?

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US orders are recovering, and a US clinic is now treating patients with RayCare, RayStation and Varian TrueBeam. Yet much of the sales increase came from hardware, while license revenue and profit fell. At around SEK 167, does the lower share price offer enough room for the software opportunity to develop?

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Before the next round of results arrives in November, I want to bring together what I have learned from these four reviews and what I will be looking for next. The common question is how much of the progress in the business will reach each shareholder, and what we are paying for it.

Carasent is turning growth into cash

Carasent’s Q3 revenue grew 12% organically, while its EBITDAC margin, which deducts capitalised development, rose to 20% from 15%. That gives me more confidence in the underlying improvement than the lower reported EBITDA margin would suggest.

In my 15 October review, I kept my BUY view. The Nordic business is progressing, while Germany remains a drag. I will watch whether better cash generation continues as Carasent integrates InfoSolutions and develops its software.

Evolution is doing more for each remaining share

Evolution’s quarterly profit fell, while earnings per share rose to €1.31 from €1.25 a year earlier. Buybacks reduced the number of shares sharing in those earnings.

That is a useful contribution to returns. It also makes it important to follow total profit alongside earnings per share. Europe and Asia are still recovering slowly, and the temporary closure of the Brazilian studio adds uncertainty.

In my 26 October review, I kept my BUY view. The next improvement I want to see is stronger growth in the business itself. Buybacks can make each share more valuable. They still need a business that produces enough cash after normal tax payments and investment.

Vitec needs more growth from what it already owns

Vitec’s profitability remains strong, but organic subscription growth was 4.1% in Q3. Acquisitions supplied much of the increase in sales.

This matters because buying the next group of businesses requires funding. Cash spent on development, leases and dividends is no longer available to pay for acquisitions. A forecast that includes acquired growth needs to include the purchase prices and their financing too.

My 28 October review corrects a weakness in that part of my earlier model. The lower expected return is partly a correction to my analysis, alongside weaker growth evidence and a higher starting share price. Stronger organic growth would improve the case without requiring another acquisition to fund.

Hexatronic shows why a recovery can still lead to HOLD

Hexatronic delivered 17% organic growth in Q3. Fiber Solutions is contributing again, and Data Center has become a larger part of the group. The operating recovery has stronger evidence behind it.

The shares have recovered as well. My 30 October review moved to HOLD because the expected return at the article’s price was below my usual hurdle. I also corrected the acquisition funding in the model.

I can become more confident in a business while finding its shares less attractive to buy. With Data Center, I also want to see what demand looks like after a quarter helped by summer work and large projects.

What the reporting season has shown so far

For each company, I want to separate growth from existing operations, growth bought through acquisitions, and the effect of changes in the share count. Then I want to understand the cash required to keep that growth going.

What comes next in November

RaySearch reports on 3 November. After a weak first half, I want to see whether the delayed US orders are coming through in revenue. RayCare’s progress in clinical use and the cash left after development spending will matter alongside the headline growth.

Pexip reports on 5 November. The question is whether growth in Secure Communications can continue to outweigh pressure in Connected, while supporting profitability. Ørsted reports the same day, with project delivery and financing central to my assessment.

I am also watching Pandora on 4 November, and Ambu and ChemoMetec on 5 November. I will be looking for what has changed in demand, margins and cash generation.

Embracer follows on 11 November. I will focus on cash generation and the value of the businesses that remain after the separations.

New companies on the research list

I am also looking beyond the companies already covered. Thule and Medistim are among the names on my research list, adding consumer products and medical technology to the mix. I want to understand the quality of their growth, the capital they need and whether the valuation leaves enough room for an attractive return. The aim is to bring new investment ideas into the coverage alongside the report updates.

For paid subscribers, the coverage guide brings together the company analyses, investment cases and questions I am following.

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Fjord Alpha

Investment views and valuation scenarios reflect the prices and assumptions stated in each article.

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If you are new here, this page explains how I invest and gives you three free articles to start with.

How I invest

I start with the business. How does it make money? Why do customers stay? What could earnings and cash flow look like five years from now, and can management turn that potential into value for shareholders?

Some opportunities come from a strong business that investors have overlooked. Others emerge when temporary problems obscure a company’s earning power, or when a change in the business has yet to become clear in the reported numbers. I look across sectors and company sizes, with the same questions about business quality, valuation and risk.

For a new investment, I generally look for a credible path to around 20% annualised returns over five years in my base case. That is a hurdle for selecting investments, not a promise of returns. I also work through what could go wrong, what the downside could be and which assumptions would need to hold.

My research combines company reports and valuation work with my network, company visits and investor meetings organised by banks. These conversations help me ask better questions and challenge my assumptions. The conclusions are my own.

The work continues after the first article. I follow quarterly results, reassess the valuation and explain when the evidence changes my view. A better business does not automatically make a stock a better buy if the price has already moved.

Three examples from my research

These are selected positive outcomes from the companies I have analysed. Each example links to a free article so you can examine the reasoning yourself.

Hexatronic

Approximately +118% from the reference price in my first analysis.

I published the original analysis on 10 December 2025 at a reference price of around SEK 21.0. The case looked beyond the downturn in fibre demand to the potential in Data Center, Harsh Environment and the group’s US manufacturing footprint. It was an opportunity to examine whether the market had become too pessimistic about the business that remained.

Read the original Hexatronic analysis free

The share price has since more than doubled. That makes the current valuation a different question from the one in the original article. Read my latest Hexatronic assessment for paid subscribers.

Embracer

Approximately +30% including the value of the distributed Coffee Stain shares.

My first analysis, published on 16 September 2025, used a reference price of SEK 88. I saw a group emerging from a painful restructuring with a stronger balance sheet and valuable intellectual property. The question was whether a simpler business and better execution could unlock that value.

The comparison includes both the remaining Embracer share and the Coffee Stain share subsequently distributed to its owner. Following what shareholders actually retain is essential when assessing a breakup.

Read the original Embracer analysis free

Pexip

Approximately +23% from the reference price in my first analysis. Watchlist at initiation.

I began coverage in November 2025 at a reference price of NOK 57. The opportunity was the shift towards secure video communications, with a more attractive business mix and improving profitability. My base case fell short of the return hurdle, so I placed Pexip on the watchlist.

The free Q2 review shows how I followed that progress and weighed the improving business against a higher share price. It is a useful example of the valuation discipline behind the research.

Read the Pexip Q2 review free

Figures are measured from the reference prices stated in the first analyses to closing prices on 30 October 2026, in local currency. They exclude cash dividends, fees and taxes and are not annualised or portfolio returns. Embracer includes one distributed Coffee Stain share per original share. Starting prices may be approximate or predate publication. These are selected examples, and other covered companies have fallen. Past performance does not predict future results.

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Free subscribers receive the weekly overview, previews and selected full analyses. It is an easy way to get to know my approach and discover new companies.

Paid subscribers receive the full research, valuations and ongoing company coverage. Between reporting seasons, I aim for around two deep dives a month, alongside a monthly opportunity review. During earnings season, publication is substantially more frequent as the companies report. Paid access also includes the research archive.

The original articles show what I saw at the time. The ongoing coverage helps you assess what has changed and whether the opportunity still exists at today’s price.

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Since then, profits have continued to improve. Q2 showed that cost control was w…

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Q2 then showed some progress. Revenue increased 0.9% from Q1 to €517.8 million, although it was still down 1.2% from the previous year. Europe returned to sequential growth, but Asia took a step back. The EBITDA margin improved to 65.9%. The board also started the buyback programme, giving a clearer answer to the capital allocation question from Q1.

The Q3 report gives us some answers. Revenue is growing again, all regions improved compared with Q2, and more than a billion euros has gone into share buybacks. Several parts of the investment case are moving in the right direction.

But the recovery is taking time. Europe and Asia are still growing slowly, and part of the better reported growth comes from a much smaller currency headwind. The temporary closure of the Brazilian studio also puts pressure on a market I previously saw as an important source of growth.

I remain positive on the long-term case. Q3 gives me more confidence in the margins and capital allocation, but I still want to see stronger growth in the business itself.

That recovery raises the bar for the investment case. Further down, I revisit the valuation using the latest numbers and slower growth than in my earlier model.

Currency had much less impact this quarter

The weak dollar was an important part of the story in earlier quarters. In Q1, North American revenue grew 10.1% in euros, while growth in local currency was above 21%. Looking only at reported growth gave a rather weak picture of what was happening.

In Q3, this difference was much smaller. Group revenue grew 3.7% to €526.1 million, compared with an estimated 4.0% at constant currency.

Reported growth increased by 4.9 percentage points from Q2 to Q3. About 3.3 points of this came from the smaller currency headwind. In other words, roughly two-thirds of the improvement in the reported growth rate came from less FX pressure.

There was also an improvement in the business. Growth at constant currency increased from 2.4% to 4.0%. But it is still below the 6.8% seen in Q1. Positive reported growth is welcome, but it does not mean Evolution has returned to its earlier growth rates.

Currency movements also increased operating expenses by €1.2 million in Q3. The revenue growth rates do not show the full effect on earnings.

The Americas and RNG continue to grow

The regional shift I discussed in Q1 is continuing. North America grew 13.6% to €84.3 million, Latin America grew 23.1% to €49.0 million, and Africa and Other grew 23.7% to €27.1 million.

Together, these regions added around €24.5 million of revenue compared with last year. Europe’s decline reduced that benefit by €8.5 million. This shows why growth outside the two largest regions is becoming more important for the group.

My American fortress thesis remains an important part of the case. Evolution opened its second Michigan studio in Q2 and continues to add games. Ice Fishing is planned for North America in Q4, while the new Spinning Whale slots brand is aimed at the North American market.

This is broadly what I expected: continued investment in a market where Evolution already has a strong position. Still, the reported growth of 13.6% is below the 25% North American CAGR in my November 2025 base case. We cannot use the group’s currency adjustment to estimate the regional effect.

RNG is doing better than I expected. Revenue increased 10.1% to €83.1 million. It contributed roughly 40% of the group’s revenue increase, even though it represents only around 16% of sales. In my earlier model, I assumed low-single-digit growth for RNG. The current development is clearly better than that.

Live also returned to growth, increasing 2.6% to €443.0 million. Across all games, the rounds index grew 22.5%, far ahead of revenue. Faster games and smaller bets can explain part of this difference. For me, higher activity is positive, but the new games also need to produce higher revenue and earnings.

Europe and Asia are still slow

Europe and Asia together represent around 70% of revenue. Their combined sales increased by only €2.3 million compared with Q2. This is why strong growth in the smaller regions still produces quite modest growth for the group.

Europe generated €173.7 million, compared with €167.1 million in Q1. The direction is better, but the recovery slowed from 3.5% sequential growth in Q2 to just 0.4% in Q3. Europe has stopped declining for now. It is too early to count on it as a growth contributor.

Asia is also uneven. Revenue of €192.1 million was up 0.8% from Q2, but still below Q1’s €197.8 million. Work against the cybercrime problems I covered earlier continues. I see some stabilization, but no clear evidence of a stronger recovery yet.

Profitability is holding up better. Adjusted EBITDA grew 2.7% to €345.9 million, with a margin of 65.8%, almost unchanged from Q2. This supports the view that Evolution can maintain margins in the mid-60s while investing in expansion.

However, we are not seeing much margin improvement from higher revenue yet. Reported EBITDA fell 0.9% and net profit declined 3.6%. The difference between reported and adjusted EBITDA was €12.1 million, covering the UK Gambling Commission settlement and Galaxy Gaming termination and legal costs. It makes sense to separate these costs when looking at ongoing operations, but shareholders still pay for them.

Brazil is a setback

In Q1, I wrote that Brazilian regulation was paying off. Now the studio is temporarily closed following the regulatory changes in October. This is a setback for one of the markets expected to support future growth.

I have previously argued that regulation can strengthen Evolution’s position by making it harder for competitors to enter. Brazil is a reminder that regulation can also remove access to a market where the company has already invested.

Management says Brazil represents well below half of Latin American revenue by player IP. Latin America is about 9.3% of group sales, which puts the indicated Brazilian exposure well below 4.7% of the total. This helps put the risk in perspective, but we still do not know how long the closure will last or what it will cost. The revenue share is also not an estimate of how much revenue will be lost.

The UK review has at least concluded. The regulator found weaknesses in risk assessment and anti-money-laundering controls and required an independent audit. One uncertainty has been reduced, but work on compliance continues.

These events matter for valuation. Evolution’s margins are very high, but access to some markets is less predictable. I would allow for this risk in the assumptions rather than expect every setback to be temporary.

Buybacks lift earnings per share

Capital allocation is the clearest development since my Q1 article. Evolution spent €823.9 million on buybacks during Q3 alone. By the end of September, it had spent €1.127 billion under the €2 billion programme announced in May. It also cancelled 16.2 million shares during September.

The average basic share count was 7.8% lower than a year earlier. This helped basic EPS increase 4.6% to €1.31, despite the 3.6% decline in net profit.

This is the effect I discussed when the dividend was suspended. Each remaining share owns a larger part of the business. That is useful while growth is weak, although I still want to see the total profit increase as well.

Candle Lake’s SEK 695 offer was a required bid after its July purchase took the holding above 30%. Candle Lake also stated that it did not intend to buy all outstanding shares. I see little reason to make this a major part of the investment case or assume a takeover premium.

Cash generation remains strong. Operating cash flow after investment in tangible and intangible assets was €334.1 million. However, working capital added €32.5 million and cash tax paid was only €0.2 million, compared with a €45.1 million tax expense. Lease principal repayments are also outside operating cash flow. I would therefore be careful about using this quarter as a normal cash flow level or assuming the same buyback pace can continue indefinitely.

Valuation update

At SEK 841.40, Evolution trades at around 14 times reported LTM earnings and 9.7 times adjusted EBITDA. That uses the September share count and balance sheet, includes lease liabilities and excludes restricted jackpot cash.

I have rolled the five-year model forward to Q3 2031 and updated the actuals and share count. The model projects revenue and earnings, applies an exit multiple and adds the cash remaining after investment and capital returns.

Growth is the main change from my November 2025 model. I now use 9.5% annual revenue growth in the base case, down from 11%. The Americas and RNG should contribute more as they become larger parts of the group. But Europe and Asia also need to stabilise and return to growth. With constant-currency growth of 4% today, 9.5% still assumes a meaningful recovery.

I keep the 66% adjusted EBITDA margin and 12x exit multiple. The margin is close to the current level, while the multiple assumes some improvement in how the market values the business. The old exit exchange-rate assumption of SEK 11.5 per euro is also unchanged.

For cash generation, I use a 70% conversion of adjusted EBITDA into free cash flow after tax, capex and lease payments. Using the average of opening and exit EBITDA gives about €6.2 billion over five years. I then deduct the existing net current tax liability and the cost of future buybacks. This leaves estimated net cash of about €4.3 billion at the end of the period. It is a normalised estimate, rather than an extrapolation of the unusually strong Q3 cash flow.

The model assumes a further 10% reduction in the share count over five years, to around 164 million shares. At an average repurchase price of roughly SEK 1,262, this costs about €2 billion. It assumes buybacks continue beyond the current programme. The repurchase cost is deducted from the cash added to the exit value.

The base case gives revenue of about €3.3 billion and adjusted EBITDA of €2.2 billion in Q3 2031. Applying the exit multiple, adding the remaining net cash and dividing by the lower share count gives a target of about SEK 2,110. From SEK 841.40, that is 20.2% annual price appreciation over five years.

The bear case uses 2% growth, a 60% margin and a 6x exit multiple, giving about SEK 806 and a slightly negative annual return. The bull case uses 15% growth, a 69% margin and 17x, giving about SEK 3,804 and a 35% annual return. The range is wide because the regional recovery and market access can develop very differently.

The base case only just clears my 20% hurdle. At 9% growth, the estimated return is 19.6%. The difference is small, and the model remains sensitive to growth, currencies and the exit multiple. My conviction therefore depends on the recovery continuing and cash generation supporting the buybacks.

Final thoughts

Verdict unchanged: BUY.

Q3 gives me more confidence in capital allocation and profitability. The board is using the cash for shareholders, margins remain strong, and the smaller growth markets are becoming large enough to matter. Europe and Asia are still the missing pieces.

I remain a buyer and would continue building exposure gradually. The updated model supports a return around my 20% hurdle even with lower growth than in the old case. The higher target also reflects a later end date and a lower share count. It should not be read as a stronger view of current growth.

The share price has recovered faster than group revenue. The next step needs to come from the business. Buybacks help, but I want total earnings to grow as well.

What I will follow next

For the coming quarters, I will mainly look at five things:

• Europe and Asia: Both need to show more consistent sequential growth. Together they are too large for the smaller regions to carry the whole recovery.

• Brazil: When can the studio reopen, and what is the effect on revenue and costs while it remains closed?

• North America and RNG: Can North America increase its growth rate, and can RNG maintain its stronger performance?

• Live and margins: I want new games to produce faster revenue growth and, over time, higher earnings from the existing cost base.

• Cash flow and buybacks: How much cash remains after normal tax payments and investment, and how quickly is the share count falling?

The next reports need to show that the recovery is spreading to the two largest regions. If margins hold and growth improves, the current valuation leaves room for a good return. If the share count keeps falling while total earnings stand still, I will lower the growth assumptions further.

Q3-26, reported this morning, is more of the same, with one addition. The ARR engine keeps running across multiple growth vectors, EBITDAC is improving further, and now the cash is showing up on top of it.

The stock is up about 5% to SEK 28 on the day, back towards the top of the range it has traded in since the spring.

Further down I also take a detour via Tandem Health, the Stockholm AI-scribe scale-up valued at SEK 2.4bn and counting. It does roughly what Medsum does, at twice the price and without owning the patient record. I read it less as a threat and more as a public price tag on the AI functionality Carasent already has inside Webdoc, and which the market gives it no credit for.

Snapshot: Carasent AB (publ)

• Ticker: CARA.ST (Nasdaq Stockholm)

• Share price: ~SEK 28 (15 October 2026, intraday)

• Market cap: ~SEK 1.87 billion (66.9m shares outstanding)

• Enterprise value: ~SEK 1.8 billion

• ARR: SEK 416m (+29% reported, +14% organic)

• Verdict: High-conviction BUY, unchanged (more below)

Revenue update: 14% organic ARR growth, Nordics doing the work

Net sales of SEK 108.2m were up 32%, of which about 20 points came from InfoSolutions, consolidated for its first full quarter. If we take out M&A and currency, organic growth was 12%. Underneath, organic ARR growth was 14%.

14% is a touch below the 15% in Q2 and the 16% a year ago. But the reason matters. Daniel Öhman says it plainly in the CEO letter: the Nordics are growing well and Germany is diluting. German revenue fell from SEK 9.5m to 8.5m as the legacy Data-AL products wind down, and that drag is sitting inside the group number. The core is fine.

The sales pipeline agrees. Falck Norge has chosen Metodika, worth SEK 2–3m in ARR from January 2027. Frelsesarmeen extended its Ad Curis contract by another SEK 1m. Signed-but-not-yet-live ARR is now SEK 8m. Net revenue retention is 110%, which means the installed base grows by a tenth each year before anyone signs a new logo. Churn stays at 3%.

Margin update: EBITDA down and EBITDAC up

The number pessimists will quote is the EBITDA margin. It was 25%, down from 29%. The explanation is in the report and it is the opposite of a problem.

Carasent capitalised SEK 6.0m of development in Q3, down from SEK 11.3m a year ago. Capitalising development lifts EBITDA, because developer salaries go to the balance sheet instead of the P&L. Capitalising less does the reverse. So the EBITDA margin fell for an accounting reason, not a business one. Nothing to do with InfoSolutions either, as management says the acquired business is already running at group margin, before its price increases take effect in January.

That is why I keep banging on about EBITDAC, which takes capitalised development back out. It is the closest thing to cash operating profit in a quarterly report, and it does not care how much R&D you choose to put on the balance sheet.

On that measure Q3 was excellent. EBITDAC rose to SEK 21.4m from SEK 12.2m, a margin of 20% versus 15%. Over nine months the adjusted EBITDAC margin went from 8% to 14%.

Profit after tax fell from SEK 14.1m to 10.3m, but Q3-25 included a SEK 6m tax credit. Pre-tax profit actually rose 17%.

Cash flow update: SEK 73.7m in nine months

If I had to frame one number from this report it would be nine-month operating cash flow of SEK 73.7m, up from SEK 19.8m. It was driven by three thing, namely higher operating profit, receivables unwinding after last year’s invoicing clean-up, and less development being capitalised. Free cash flow before acquisitions was SEK 48m, against minus SEK 11m a year earlier.

Where did the cash go? SEK 92m net on InfoSolutions, SEK 40m on buying back 1.6m shares, and 2m shares were cancelled in May. Cash is down to SEK 47m from SEK 139m at year-end, with no bank debt at group level. The balance sheet is lighter than it was, and deliberately so.

Deep dives

InfoSolutions: already earning its keep

Carasent paid SEK 127m (SEK 115m cash plus SEK 12m in treasury shares) for a business with SEK 67m of 2025 revenue, SEK 41m of it recurring, and roughly zero EBITDAC. Three times recurring revenue for a break-even business made some investors nervous. I argued at the time that it was a moat purchase, not a margin purchase.

Four months in, it is both. After the 25% headcount cut at acquisition, InfoSolutions is already at group margin, and a 20% price increase on its ARR takes effect in January 2027. InfoSolutions handles the electronic lab orders and results between Swedish clinics and laboratories, regardless of which EHR the clinic runs. That gives Carasent two things. First, a transaction fee on lab traffic from competitors’ customers as well as its own. Second, higher switching costs, since a clinic leaving Webdoc would also need to replace its lab integration.

Medsum becoming a success story

Medsum, the AI assistant that listens to the consultation and drafts the journal note inside Webdoc, is now Carasent’s best-selling add-on. Paying users went from about 200 to just over 300 during Q3, with close to 400 including trials. That is 50% growth in a quarter when half the Nordics was on holiday.

At SEK 750 per user per month, 300 users is roughly SEK 2.7m of ARR, which is still a small number in a SEK 416m ARR base. What matters is the trajectory and what comes next: around the turn of the year Carasent rolls out a new Webdoc interface with AI through the whole workflow, where agents pick up every action agreed in the room (sick leave, prescription, follow-up) and draft it in the right place in the record with full patient context. That is a different product from a note-taker. It is the clinic’s admin layer.

The Tandem comparison

Here is the part that should make Carasent shareholders sit up.

Tandem Health, founded in Stockholm in 2023, sells an AI scribe for clinicians. It listens to the consultation, drafts the note, suggests codes, and pushes the result into one of 100+ medical record systems. It is, functionally, Medsum without the EHR. It is also very good at raising money. Kinnevik led a SEK 475m round in 2025 that valued the company at SEK 2.4bn according to Di. In September 2026 it raised a further $100m Series B led by EQT’s Scaleup Europe Fund, valuation undisclosed. Nobody raises a $100m B round at a lower price than the A.

Tandem’s 2025 revenue was about SEK 43m, growing fast from almost nothing. Carasent’s was SEK 344m. Yet on the 2025 round alone Tandem was worth more than Carasent’s entire market cap is today.

Two ways to read this, and I think both are right.

The optimistic reading. The market is paying a fortune for “AI that removes doctor admin”. Carasent already owns the workflow, the patient data and the distribution. Medsum does not need a sales team, they can just switch the functionality on with existing customers.

At today’s SEK 750 and assuming 50% penetration of 18,000 clinicians, that is SEK 80m of near-pure-margin ARR. At Tandem’s price point it is SEK 160m. On the current share price, the market is giving Carasent credit for none of it. That is hidden optionality sitting inside the EMR.

The sober reading. Tandem is a serious company. SEK 43m of revenue after two years, three MDR-certified devices, 100 in-house clinicians, and close to SEK 1bn of fresh capital. But it does not sit on the EHR, and therefore not on the patient data and context. For a clinic already on Webdoc, the choice should not even be debated. Medsum is half the price, fully integrated, needs no second login, and keeps the data where it already is. The user growth says clinicians agree, and more functions arrive with the new AI workflow at year-end.

Tandem’s real effect on Carasent is to open the market with a well-funded sales force teaching Nordic and European clinicians that AI documentation is worth paying four figures a month for. Carasent then collects on that education inside its own base, at a price that looks like a bargain by comparison.

In healthcare, the system of record wins the workflow. I will keep watching the Medsum user count each quarter, but I would not over-index on the competitive risk.

Germany is slower than planned

Germany remains the soft spot. Data-AL revenue is declining, Webcur has taken longer to launch than planned, and together they weigh on group results. A new German CEO has been in place since September, new salespeople are hired, and spend goes up in Q4.

What I care about is behaviour, not speed. Carasent has not bought growth with discounts to paper over the delay. I continue to model Germany at close to zero. Any real traction is upside.

Valuation update

At SEK 28 the market cap is about SEK 1.87bn and the EV about SEK 1.83bn, or roughly 4.7x trailing twelve-month sales. For a business growing ARR organically at 14%, a flat fixed cost base, and 84% gross margins that is not a demanding price.

I have rolled the five-year model forward to Q3 2031, using the same logic as before. I.e., grow revenue, let the cost base lag, take out capex, apply an exit multiple on cash operating profit, and add the cash that accumulates along the way.

Three notes on the model.

1. First, 15% from a SEK 390m base is now conservative, since the base only includes four months of InfoSolutions. Pro forma it is closer to SEK 435m.

2. Second, the base-case capex of 5% sits below management’s 6–9% guidance, but that guidance covers the 2026–28 build phase. Capitalised development is already falling (SEK 6.0m in Q3 versus 11.3m a year ago, and under 6% of Q3 sales), and about half of what remains is the Webcur build for Germany, which rolls off once the platform is launched. By 2031 a mature system of record should be at maintenance levels, and 5% is my estimate of that.

3. Third, the exit multiple of 6.5x sales versus 4.7x today contributes 7 points of the 25%. The rest is growth, margin and cash. Note that even the bear case returns a positive 9% a year.

Final thoughts and watchpoints

Verdict unchanged: High conviction BUY.

Q3 was another quarter of steady execution. Organic ARR grew 14% with the Nordics doing the work, the EBITDAC margin reached 20%, and InfoSolutions is already at group margin with a price increase still to come. Medsum went from 200 to 300 paying users over the summer and gets a full AI workflow at year-end. Germany is behind plan and needs watching, but it is modelled at close to zero.

A new angle this quarter is Tandem Health. A standalone AI scribe, without the patient record, is valued above the whole of Carasent. For a clinic already on Webdoc, Medsum is the obvious choice - it is half the price, fully integrated, and clinicians are adopting it. Tandem’s money is opening the market for AI documentation, and Carasent collects on it inside its own base. The market gives Carasent no credit for this today. That is hidden value.

✅ Organic ARR growth 14%, NRR 110%, churn 3%
✅ EBITDAC margin 20%, up 500 bps YoY
✅ 9M operating cash flow SEK 73.7m, up 272%
✅ InfoSolutions at group margin, 20% price hike from January 2027
✅ Medsum paying users +50% in a quarter, AI workflow launch at year-end
✅ Tandem Health’s SEK 2.4bn-plus valuation: a public marker for what Medsum could be worth

⚠️ Germany: Webcur launch delayed, Data-AL declining

🎯 5-year target (base case): SEK 86

📈 Implied 5-year compound return: ~25% CAGR from SEK 28

💡 Conviction level: HIGH (BUY)

Let’s look at where we stand after Q2 2026.

In short, the company delivered another very solid performance, confirming that the momentum built over recent quarters remains fully intact.

• Annual Recurring Revenue (ARR) expanded to $140.2 million, representing an 18% year-on-year increase and reaching the upper end of management’s guidance range of $137–$141 million. Blended Net Revenue Retention (NRR) rose to 102%, driven by strong net upsell across enterprise and government accounts.

• Top-line growth continues to convert efficiently into cash, with Last Twelve Months (LTM) Adjusted EBITDA reaching $40.4 million (a 31% margin) and pushing the company’s LTM Rule of 40 score to 49%.

Looking at the stock price chart, Pexip moved up strongly from its NOK 55 lows late last year, passing NOK 80 in May and peaking near NOK 85 in July. Since then, the stock has pulled back about 12% to around NOK 75, even though the company just reported its strongest operational quarter yet.

This means the stock is getting cheaper on a forward basis. While we are already getting close, any broader market pullback that pushes the price down into the high NOK 60s would offer a great setup. At those levels, as you will see, we should be clearing Fjord Alpha’s 20+% CAGR hurdle rate.

Segment Deconstruction: Twin Engines

Pexip’s commercial progress is best understood by looking at its two distinct product areas. Rather than analyzing product features and market catalysts separately, we can look at how specific industry trends feed directly into each segment.

1. Secure & Custom Spaces (The Growth Engine)

• Financial Performance: Segment ARR reached $64.2 million at the end of Q2 2026, up 27% year-on-year and adding $4.9 million sequentially from Q1. Secure & Custom now accounts for 46% of total group ARR, compared to 42% a year ago. Net Revenue Retention (NRR) reached 106% for the quarter, supported by $4.0 million in net upsell and $1.5 million in new client additions, offsetting $0.6 million in churn.

• Sovereign IT & Defense Demand: Public sector agencies across Europe are increasingly turning away from multi-tenant public cloud services for sensitive communications. Pexip’s self-hosted software runs on-premises, in sovereign cloud environments, or inside completely secure perimeters where public internet connectivity is prohibited. Defense and national security clients now represent 15% of group ARR, more than doubling from 7% in Q2 2025. Management also noted rising demand for tactical field deployments, where video hardware must operate reliably in environments with limited or unstable connectivity.

• Key commercial wins:

  • European Ministry of Defense: Public tender win covering 100,000 users for secure video meeting and integrated chat capabilities.

  • European Federal Police Force & Ministry of Finance: Selected Pexip’s self-hosted software to secure operational government communications.

  • European Financial Services Firm: Displaced an incumbent global public cloud vendor to comply with strict internal data governance rules.

• Private AI catalyst: In regulated sectors like healthcare, justice, and finance, organizations want to use AI tools for real-time translation and automated meeting summaries. However, streaming confidential audio to public cloud AI servers often violates regulatory compliance policies. Pexip allows clients to process AI workloads locally within their own security boundary, keeping sensitive data protected while enabling modern automation.

2. Connected Spaces (The Utility & Cash Engine)

• Financial Performance: Segment ARR closed at $76.1 million, up 11% year-on-year and adding $0.3 million quarter-on-quarter. Quarterly NRR rose to 99%. This is the best retention score the segment has seen in three years. New sales ($1.2M) and net upsell ($0.9M) comfortably covered quarterly churn ($1.8M). Connected Spaces acts as a predictable utility, generating high-margin cash flow that funds group R&D and capital returns, including the $44 million dividend paid YTD.

• MTR on Android Launch: In June 2026, Pexip launched Pexip Connect for Microsoft Teams Rooms on Android in close collaboration with Microsoft. This feature allows meeting room devices to connect directly to third-party services (such as Zoom, Google Meet, or Webex) right from the Microsoft Teams Room interface.

• Opening a 1.5 Million Room Market: This expansion significantly widens Pexip’s reach across Microsoft’s global installed base of roughly 1.5 million meeting rooms. While Pexip previously supported Windows-based Teams Rooms, bringing native SIP interoperability to popular Android-based video bars (from vendors like Poly, HP, Neat, and Logitech) lets enterprise customers manage multi-platform meetings without buying extra hardware compute boxes.

Profitability, Margins, and Cash Flow Generation

What stands out most with Pexip is how easily extra revenue turns into profit. Because their cost base is mostly fixed, new sales drop straight to the bottom line. Adjusted EBITDA came in at $7.2 million for the quarter (a 22% margin), which pushes EBITDA over the last twelve months to $40.4 million, a 31% margin. Gross margins stayed very high at 90%.

Crucially, these are not just paper profits. Free cash flow reached $8.1 million for the quarter and $37.9 million over the last twelve months (+44% year-on-year). Because the core software is already built, growth requires limited reinvestment. Capitalized R&D was just $1.0 million in Q2, showing that Pexip can expand without spending heavily on new hardware or infrastructure.

The balance sheet is clean, with no debt. Cash and money market funds dropped from $81.0 million in Q1 to $44.8 million in Q2, but that is actually a positive sign for shareholders. The drop was caused by a $44 million dividend payout (NOK 4.00 per share) in April. It is good to see management hand excess cash back to owners rather than sitting on it or making risky acquisitions.

Base, Bull and Bear Case update

Following my Q1 2026 review, I upgraded my assumptions to reflect a stronger growth engine in Secure & Custom Spaces and a far healthier cash cow in Connected Spaces than expected. Pexip’s Q2 2026 report confirms that Q1 was no anomaly.

Once again, I see a need to up-adjust my assumptions given very strong operational performance across both product engines.

Base Case: Moving up again

Our previous Base Case assumed Pexip would settle into a 14–16% growth profile with EBITDA margins around 28–30%. After Q2, those assumptions again look slightly too conservative:

• Blended ARR growth accelerated further to 18% year-over-year ($140.2 million total ARR).

• Secure & Custom grew 27% year-over-year to $64.2 million, now representing 46% of total company ARR.

• Connected Spaces delivered 11% year-over-year growth with a 3-year high quarterly Net Revenue Retention (NRR) of 99%.

• LTM Adjusted EBITDA margin expanded to 31% ($40.4 million), pushing Pexip’s Rule of 40 score up to 49%.

What to assume now: I bump the 5-year Base Case revenue CAGR from 15% up to 16% and anchor our terminal EBITDA margin at 31%.

Bull Case: High-teens to 20% growth profile

My previous Bull Case required blended growth moving toward 17–19% with EBITDA margins holding around 30%+. Q2 demonstrates that this profile is increasingly becoming the operational baseline:

• Secure & Custom is scaling rapidly into a dominant sovereign IT engine, with defense accounts doubling to 15% of group ARR.

• Connected Spaces continues to stabilize rather than drag down group performance, aided by the June commercial launch of Pexip Connect for Microsoft Teams Rooms on Android.

• Operating leverage is compounding cleanly, with LTM free cash flow reaching $37.9 million (+44% YoY).

What to assume now: I adjust the Bull Case revenue CAGR from 18% to 20% and raise our terminal EBITDA margin assumption by 2 percentage points to 37%. In short, the upside case is that Pexip sustains 20% ARR growth while converting over a third of revenue into EBITDA.

Bear Case: Further softened

The original Bear Case was built around Connected Spaces becoming a “melting ice cube” that would pull overall growth below 10%. Q2 results further weaken that thesis:

• Connected Spaces churn has stabilized (99% NRR), with new sales and upsells exceeding quarterly cancellations.

• Secure & Custom now represents nearly half of total ARR (46%), giving the higher-growth segment greater influence over group-level trajectory.

What to assume now: I raise my Bear Case revenue CAGR from 8% to 10% and lift the EBITDA margin floor from 23% to 25%.

Updated valuation - Closing in on buy territory

While business fundamentals continue to improve quarter after quarter, the stock price has remained largely range-bound in the NOK 70–80 corridor. This divergence between operational progress and price action is creating an increasingly interesting setup. As earnings and recurring cash flows grow into the current valuation, the stock is naturally becoming cheaper on a forward basis, steadily compressing multiples.

For the model, I now assume:

• Base Case: 16% ARR growth, 31% EBITDA margin. EV/ARR remain at 6.0x.

• Bull Case: 20% ARR growth, 37% EBITDA margin. EV/ARR increase to 7.0x.

• Bear Case: 10% ARR growth, 25% EBITDA margin. EV/ARR compress to 4.0x. This is an increase from 3.0x, motivated by impressive underlying fundamentals.

Under my updated 5-year Base Case assumptions, the expected return setup at 18% CAGR is closing in on our 20% annual hurdle rate, but it hasn’t quite crossed the threshold just yet.

Pexip is getting very close to a great entry point. We don’t need a dramatic sell-off. A price dip into the high 60s range would make complete sense as an entry point, providing enough margin of safety to comfortably clear our 20% hurdle rate. Even without a dip, another quarter or two of steady fundamental compounding will open up a clear window to step in.

For now, Pexip sits right at the top of my watchlist.

Across the prior memos; from the profitability inflection in Q3 2025 to buying the AI disintermediation panic in Q4 2025 and tracking the core acceleration in Q1 2026, the original thesis still held fast.

What I believe the market currently is missing is that Carasent has become a highly profitable, multi-vector expansion platform.

• The integration of InfoSolutions is creating high-margin diagnostic transaction flows.

• Medsum AI documentation assistant has moved from pilot status to a commercial add-on driving organic average revenue per user (ARPU).

• The German expansion via the localized Webcur platform (formerly Webdoc X) has achieved its critical initial milestone by onboarding its first paying customers.

Trading at SEK 24.70, the market continues to price Carasent at a disconnect from its underlying cash generation potential.

Snapshot: Carasent AB (publ)

• Ticker: CARA.ST (Nasdaq Stockholm)

• Share Price: SEK 24.70 (5th of August 2026)

• Market Cap: ~SEK 1.7 billion

• Enterprise Value (EV): ~SEK 1.55 billion

• Net Cash: SEK 140 million

• Sector: Healthcare Vertical SaaS

• 5-year outlook: High-conviction BUY with a Base Case target of SEK 77 (+25.5% CAGR next 5 years)

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ARR growth re-accelerated to 17% year over year, reaching $135.0 million, up from 12% in the prior period. At the same time, profitability stepped up meaningfully, with a record 46% Adjusted EBITDA margin in the quarter. Even allowing for some timing effects, the 93% conversion of incremental revenue into EBITDA shows that Pexip is becoming a much more scalable business.

On an LTM basis, the company now screens firmly as a Rule of 40 performer, combining 17% ARR growth with a 30% EBITDA margin for a score of 47.

The old Base Case now looks too cautious. Secure & Custom Spaces is becoming a larger part of the mix, blended growth is moving toward the high teens, and Connected Spaces is contributing rather than dragging down the group. The Bull Case is therefore more credible than it was before Q1.

The problem is that the market has noticed. With the share price now hovering just above NOK 80, the easy re-rating is probably behind us. Pexip is clearly a better business than it was a few quarters ago, but at today’s valuation, execution now needs to keep catching up with the stock.

The changing business mix

Pexip enters the next phase of growth with clear momentum, but also with a business mix that is becoming less linear from quarter to quarter. Management’s Q2 2026 ARR guidance of $137–$141 million points to continued growth, while also reflecting the reality that a larger share of the pipeline now comes from bigger, more complex enterprise and public-sector deals. These opportunities can be highly attractive, but the exact timing of when they close may shift across quarter boundaries.

The broader strategic backdrop remains supportive. Demand for secure, sovereign collaboration solutions continues to strengthen, particularly in Europe, where technology sovereignty is moving from an ambition to a more concrete procurement requirement. This creates a favorable environment for Pexip’s Secure & Custom Spaces business, while the more mature Connected Spaces segment continues to provide stability, cash generation, and a practical bridge for enterprises modernizing their meeting-room infrastructure.

Against this backdrop, the investment case is increasingly built around two complementary engines. Secure & Custom Spaces as the higher-growth, higher-leverage segment, and Connected Spaces as the resilient cash-generating platform.

Secure & Custom Spaces: Strong growth and more strategic

Pexip’s Secure & Custom Spaces segment has moved well beyond its earlier positioning as a defense-led niche. It is now one of the company’s main growth engines, representing 44% of total ARR. In Q1 2026, the segment reached $59.3 million in ARR, up 24% year over year, with $2.9 million of sequential growth. Net Revenue Retention also improved to 104%, its highest level since 2021, supported by both new customer wins and continued expansion within the existing base.

The growth is increasingly broad-based across regulated and high-stakes environments. Q1 included a large three-year contract with a Canadian healthcare provider, while a European Justice System is now using Pexip to support more than 3,000 court cases per day. Defense remains an important anchor, contributing $1.3 million of the quarter’s growth, with both the U.S. Department of Defense and a European Ministry of Defense expanding their secure meeting deployments.

The segment is also becoming more profitable as Private AI adoption grows. Management indicated that customers adopting features such as captions and transcripts can generate a 20–30% revenue uplift. Since customers cover the underlying compute costs, these features appear to carry attractive incremental margins and supported Pexip’s 46% Adjusted EBITDA margin in the quarter. Importantly, this growth was delivered with nearly flat operating expenses, with 93% of incremental revenue converting to EBITDA. This level of operating leverage is pushing Pexip firmly into Rule of 40 territory, with an LTM combined score of 47.

Connected Spaces: Stabilizing and cash generating

Connected Spaces also performed better than expected in Q1. After having been viewed as a more mature, slow-growth part of the business, the segment delivered 12% year-over-year ARR growth, reaching $75.8 million. The $1.1 million sequential increase marks a clear improvement from the flatter performance seen in late 2025. NRR improved to 98%, suggesting that churn has normalized after the more uneven Q4 period.

The main driver is momentum in Native Rooms, Pexip’s interoperability solution for Microsoft Teams, Zoom, and Google Meet rooms. This remains a practical and valuable proposition for large enterprises that want to standardize on modern collaboration platforms without writing off existing room hardware. A key upcoming catalyst is the planned June 2026 rollout of Pexip Connect for Microsoft Teams Rooms on Android. Management sees this as opening up a much larger opportunity, particularly in organizations with mixed device environments, as the Microsoft Teams Rooms installed base continues to expand rapidly.

Financially, Connected Spaces continues to provide high-quality earnings. Despite higher cloud compute usage, gross margins remained stable at 92%, supported by operational efficiencies and cloud platform rebates. This makes the segment an important cash flow contributor, helping Pexip generate $19.8 million of free cash flow in Q1.

Very strong margin development

The margin development in Q1 was arguably the clearest proof point in the quarter. Gross margin remained very strong at 92%, despite higher cloud usage, which confirms that the core software model still has attractive economics.

The bigger shift was below gross profit. Operating expenses were broadly flat year over year, while revenue and ARR continued to grow. That combination created a very strong drop-through to earnings, with Adjusted EBITDA reaching $18.7 million and the quarterly EBITDA margin hitting a record 46%. Even if some of the quarter was helped by timing effects and accrual reversals, the direction is clear. Pexip has become a much more disciplined and scalable business.

What stands out is the 93% conversion of incremental revenue into EBITDA. That is not a normal software margin profile unless the company has strong pricing, limited incremental delivery cost, and a cost base that does not need to grow in line with revenue. Pexip appears to have all three. Private AI can add revenue uplift without Pexip carrying the compute burden, Secure & Custom is becoming a larger part of the mix, and Connected Spaces continues to generate high-quality cash flow.

Future management guidance

Management’s Q2 guidance points to continued growth, with ARR expected to land between $137 million and $141 million. The wider range reflects a pipeline increasingly driven by larger enterprise and public-sector contracts, where the underlying demand is strong but closing dates can move between quarters.

The message is therefore positive, but not perfectly linear. Pexip appears to have good momentum, especially in Secure & Custom, supported by sovereign IT demand and regulated-sector wins. At the same time, investors should expect some lumpiness as larger deals become a bigger part of the mix. If Q2 lands toward the high end of guidance, it would be a strong signal that the Q1 re-acceleration is not just a one-off.

Base, Bull and Bear Case update

Q1-26 does not change the core thesis, but it does change the probabilities. The original setup was built around a two-speed business: Secure & Custom as the growth engine and Connected Spaces as the slower cash cow. That still looks right, but Q1 suggests the growth engine is stronger, the cash cow is healthier, and the margin potential is higher than previously assumed.

Base Case: needs to move up

The original Base Case assumed Pexip would remain a low-teens ARR grower, with Secure & Custom offsetting a flat or slightly declining Connected Spaces business. After Q1, that now looks too cautious.

• Blended ARR growth has accelerated to 17%, versus the original 12% Base Case assumption.

• Secure & Custom grew 24% year over year and now represents 44% of total ARR.

• Connected Spaces grew 12% year over year, rather than being flat.

• LTM EBITDA margin is already 30%, above the original Base Case assumption of 25%.

• The company is now already inside Rule of 40 territory, with an LTM score of 47.

What to assume now: the Base Case should move from “low-teens ARR growth and mid-20s EBITDA margin” to something closer to 14–16% ARR growth and a 28–30% EBITDA margin. This still leaves room for some normalization after a very strong Q1, but it better reflects the current run-rate.

Bull Case: now more credible

The original Bull Case required blended ARR growth moving toward 18%, continued mix shift toward Secure & Custom, and EBITDA margins expanding toward 30%. Q1 delivered much of this earlier than expected.

• Blended ARR growth is already close to the original Bull Case level.

• Secure & Custom continues to scale and should become an increasingly important part of group growth.

• Connected Spaces is not dragging the group down, which makes the blended growth profile more attractive.

• Operating leverage is coming through clearly, with 93% of incremental revenue converting into EBITDA in Q1.

• The Rule of 40 target has effectively been reached earlier than expected.

What to assume now: the Bull Case should still assume 17–19% ARR growth, but the margin assumption can be more confidently set around 30%+ EBITDA margin. The real upside case is no longer just margin expansion; it is that Pexip can sustain high-teens ARR growth while keeping margins around 30%. That would justify a higher-quality software multiple.

Bear Case: less likely, but still relevant

The original Bear Case was built around Connected Spaces becoming a “melting ice cube” and dragging blended growth below 10%. Q1 weakens that argument, at least for now.

• Connected Spaces grew 12% year over year, rather than shrinking.

• NRR improved to 98%, suggesting churn has stabilized.

• Native Rooms appears to be giving the segment a clearer growth driver.

• The segment continues to support group cash flow and profitability.

• Secure & Custom is now large enough to have more influence on the group trajectory.

What to assume now: the Bear Case should be softened. Instead of assuming a sharp decline in Connected Spaces, it is more reasonable to assume low-single-digit growth or mild decline in that segment over time. For the group, a Bear Case of 7–9% ARR growth and a 22–25% EBITDA margin now seems more appropriate than a more severe “melting ice cube” scenario.

Updated valuation - no entry here

The conclusion is fairly clear. The old Base Case has moved closer to the old Bull Case. Pexip is now showing better growth, better margins, and a more resilient segment mix than expected. The share price has also moved, so the opportunity is not as cheap as it was at NOK 57, but the business quality has improved meaningfully.

For the model, I would now assume:

• Base Case: 14–16% ARR growth, 28–30% EBITDA margin.

• Bull Case: 17–19% ARR growth, 30%+ EBITDA margin.

• Bear Case: 7–9% ARR growth, 22–25% EBITDA margin.

Pexip has clearly become a better business after Q1-26. Growth has re-accelerated, Secure & Custom is scaling, Connected Spaces looks healthier than feared, and the company is now firmly operating with a Rule of 40 profile. The old Base Case has moved closer to the old Bull Case.

But the stock has moved as well. At around NOK 80 and roughly 6.8x EV/Sales, the market is already giving Pexip credit for much of the improvement. Under my updated Base Case, the implied five-year investment CAGR is around 11%, below my 20% hurdle rate for a single-stock mid-cap position.

To become a Conviction Buy again, I would need either more evidence that high-teens ARR growth can be sustained, or a better entry point. For now, Pexip is a higher-quality company than before, but not yet an attractive enough stock at the current price.

The stock is also up 80% since my original BUY recommendation back in December 2025.

In the Q4 write-up I noted the following: The stock price recovery we have seen lately is justified by this de-risking. The “floor” is solid. However, for the stock to truly “fly” back to its former highs, we need to see the margin leverage kick in during the second half of 2026. We need the US fiber volumes to return and the cost cuts to drop to the bottom line.

We are starting to see exactly this. After five consecutive quarters of margin compression, adjusted EBITA margin improved sequentially from 7.2% in Q4 to 8.6% in Q1. More importantly, the profit mix has changed. Data Center is now the largest contributor to Group adjusted EBITA, generating SEK 73m in the quarter and overtaking Fiber Solutions.

That matters because Hexatronic is becoming less dependent on the cyclical fiber-utility market and more exposed to structural growth in AI infrastructure, defense, energy, and harsh-environment connectivity. The recovery is still early, especially in Europe, but Q1 provides the clearest evidence yet that the investment case is shifting from “restructuring and survival” to “margin recovery and growth 2.0.”

• The Profit Pivot: Data Centers now generate more profit than Fiber Solutions. It should justify a multiple re-rating.

• The US Green Shoots: Organic growth has finally returned to the US fiber market, and the “Great Recovery” might be ahead of schedule.

• The Margin Bridge: With the SEK 120m cost-savings program now fully implemented, we might see double-digit margins in H2

• Offensive Capital Allocation: The JOWO acquisition in Germany signals that management is back on the hunt.

When I wrote in February, the stock was hovering around 28 SEK. Following the Q1 report rally, it now trades around 38 SEK. Some of the easy turnaround money has clearly been made, but the bigger question remains: is the market still valuing Hexatronic as a cyclical fiber supplier, rather than as a broader critical-infrastructure platform?

Q1 beyond the headlines: The 8.6% margin signal

The headline numbers in Hexatronic’s Q1 report were not spectacular at first glance. Group sales declined 10% year over year to SEK 1,698 million, with organic growth at -2%. FX was a major drag, accounting for 9 percentage points of the reported decline, while acquisitions added 2 percentage points. Adjusted EBITA came in at SEK 146 million, down from SEK 184 million a year ago, corresponding to an adjusted EBITA margin of 8.6% versus 9.8% in Q1 2025.

But the more important signal is not the year-on-year decline. It is the sequential improvement. The adjusted EBITA margin rose from 7.2% in Q4 2025 to 8.6% in Q1 2026, ending a five-quarter margin decline. That matters because it suggests the performance improvement program is no longer just a management promise but starting to show up in the P&L. Hexatronic also finalized the initial program during the quarter, with Fiber Solutions seeing a clear sequential margin improvement despite lower sales.

The quarter therefore looks like a transition point rather than a simple weak top-line print. Fiber Solutions is still under pressure, especially in Europe, but margins are stabilizing. Data Center is now the group’s largest adjusted EBITA contributor. Harsh Environment continues to grow organically, even though near-term mix effects temporarily weighed on profitability. In other words, the quality of earnings is increasingly shifting away from legacy FTTH cyclicality and toward more structurally attractive end-markets.

The Tale of Three Segments

Data Center: The MVP

Data Center was the clear standout in Q1. Sales increased 20% year over year to SEK 434 million, with organic growth also at 20%. Adjusted EBITA reached SEK 73 million, making Data Center the largest contributor to group adjusted EBITA in absolute terms. The adjusted EBITA margin was 16.8%, down from 18.8% a year ago but up sequentially from Q4’s 15.3%.

The key point is that the margin decline is not a demand problem. Management attributes the lower year-on-year margin mainly to deliberate investments in organic growth initiatives and organizational strengthening. In other words, Data Center is absorbing growth investments while still delivering a margin above Hexatronic’s long-term target level for the segment. The company is broadening the offering, including toward campus environments, and that management sees no slowdown in order activity.

This makes Data Center the most important proof point in the quarter. The AI and cloud infrastructure tailwind is no longer a narrative benefit sitting outside the numbers but visible in revenue growth, EBITA contribution, and group mix. The segment accounted for 25% of group sales but 46% of group adjusted EBITA before eliminations, up from 19% and 34%, respectively, in Q1 2025.

The implication is straightforward. As Data Center becomes a larger part of Hexatronic, the group’s earnings profile should become less dependent on the timing and cyclicality of FTTH investment. The segment is growing at attractive profitability, with management guiding for continued strong demand and modest margin improvement in Q2.

Fiber Solutions: The Stabilizer

Fiber Solutions remains the weak point in the portfolio, but Q1 contained the first credible signs of stabilization. Sales fell 20% year over year to SEK 982 million, with organic growth at -11%. Europe remained the main drag, with weak FTTH demand made worse by an unusually cold winter. The segment also faced price pressure and lower capacity utilization.

However, the quarter was not purely negative. The US fiber business returned to positive organic growth, a major milestone after a prolonged downturn. This improvement came earlier than expected and was consistent with management’s recovery guidance for 2026. Management also expects positive organic growth in the US to continue into Q2.

The more important detail is margin resilience. Despite the sales decline, Fiber Solutions delivered adjusted EBITA of SEK 61 million and a 6.2% margin, up from 5.2% in Q4 2025. The restructuring program appears to be the main driver, with cost savings realized slightly ahead of the original plan. That matters because Fiber Solutions is still Hexatronic’s largest sales segment, representing 58% of group sales in Q1, so even modest margin stabilization has a meaningful group-level impact.

The outlook is mixed but improving at the edges. Europe is expected to remain challenging as the FTTH market shifts from building “homes passed” toward connecting subscribers. At the same time, North America is validating management’s expected recovery path, and submarine cable demand remains strong, with a fuller order book for 2026 and larger shipments expected in Q3.

The investment case for Fiber Solutions is therefore no longer about near-term growth. It is about downside control. If Europe stays weak but stops deteriorating, the US continues to recover, and restructuring savings hold, the segment can become a stabilizer rather than a drag.

Harsh Environment: The Sleeper

Harsh Environment delivered the most interesting revenue surprise. Sales came in at SEK 283 million, broadly flat year over year on a reported basis but up 9% organically. Growth was driven by both dynamic cables and connectivity solutions, confirming that demand remains healthy across the segment’s key end-markets.

Profitability was the weaker part of the story. Adjusted EBITA was SEK 24 million, corresponding to an 8.5% margin, down from 10.3% a year ago. The decline was driven by an unfavorable product mix and timing effects, including lingering effects from the 2025 US government shutdown. Management expects some additional margin pressure in Q2 before a normalization in Q3.

That said, the strategic direction remains attractive. The segment is exposed to defense, energy, offshore, marine technology, aerospace, and other demanding environments where connectivity reliability is mission-critical. These are not low-quality cyclical end-markets. They are areas where technical requirements, customer relationships, and specialized products can support more resilient long-term demand.

The announced acquisition of JOWO Systemtechnik strengthens this story. JOWO is a German manufacturer and distributor of connectors and related products serving primarily defense, energy, and industrial customers. The acquisition expands Hexatronic’s connectivity solutions exposure and gives Harsh Environment a broader platform in Europe.

For now, Harsh Environment is a “sleeper” because the near-term margin print does not fully reflect the segment’s longer-term potential. The demand signals are solid, the order activity remains robust, and management continues to prioritize M&A in connectivity solutions. If margins normalize after Q2, Harsh Environment could become a larger and more strategically important earnings contributor.

Checking the pulse on the US

The “US Recovery” thesis is being validated in real-time by the hard data. Management confirmed that conditions in North America have shifted from stabilization to “gradual improvement,” explicitly guiding for continued positive organic growth in Q2 2026. This is a massive milestone. Q1 marked the first time the US fiber business returned to positive organic territory in over a year, signaling that the industry-wide inventory correction has finally washed through the system.

While commercial demand is providing the current lift, the massive Broadband Equity, Access, and Deployment (BEAD) program is finally moving to implementation. As of early May 2026, 54 states and territories had received NTIA approval for their final BEAD proposals, while 52 had NIST approval making grant funds available and 50 had signed award agreements.

The 2025 restructuring moved BEAD toward a more technology-neutral framework and, according to NTIA, delivered an estimated $21bn in savings. Large US operators are already preparing for a heavier 2026 deployment cycle, but the exact timing and technology mix of BEAD-driven demand remains uncertain.

Hexatronic management continues to timestamp the primary BEAD momentum for H2 2026, but the fact that the US market is growing ahead of this stimulus is the real bull case. We are looking at a “double-wave” recovery: commercial demand is rebounding now, just as the largest federal investment in broadband history enters its four-year execution window starting this summer.

And what about M&A?

With the balance sheet stabilized and leverage well within the targeted range, offensive M&A is officially back on the table. The headline move this quarter was the acquisition of JOWO Systemtechnik AG, a specialized German player in high-performance connectivity solutions. This is a strategic expansion into the European defense, aerospace, and energy sectors, which are currently seeing unprecedented structural investment. JOWO brings a prestigious tier-1 customer base and a stellar financial profile, generating approximately EUR 13 million in annual sales with an exceptionally high EBITA margin of ~20%.

This acquisition is the final piece of the puzzle for the Harsh Environment business area, which now reaches a critical mass of SEK 1.5 billion in pro forma annual net sales. By folding JOWO into the Group, Hexatronic has successfully built a high-margin, non-cyclical pillar that provides a powerful hedge against the volatility of the fiber market. Management noted that the M&A pipeline remains active, with a clear focus on “critical digital infrastructure” businesses that offer the same blend of technical complexity and recurring defensive demand.

Update on the performance improvement program

The initial phase of the performance improvement program, first announced in Q3 2025, was officially finalized this quarter, with management realizing the majority of the projected cost savings slightly ahead of the original schedule. These efficiencies were the primary engine behind the sequential recovery in the Adjusted EBITA margin, which climbed to 8.6% (up from 7.2% in Q4).

While the 26% cash conversion (SEK 29 million operating cash flow) appears lower on paper, it was heavily influenced by a sharp spike in accounts receivable following an exceptionally strong end to March. Despite a slight uptick in adjusted leverage to 2.2x (due to currency headwinds and a tough comparison against a record Q4 EBITDA) the balance sheet remains robust with SEK 603 million in liquid assets.

Is the “Fallen Angel” flying? Valuation update

Hexatronic is entering the summer with:

• A repaired margin profile that is expanding sequentially.

• A “rather full” order book for submarine cables for the rest of 2026.

• A structural mix shift toward high-margin Data Center and Defense revenue.

When plugging the numbers into my valuation model, it remains a BUY for me, although the margin of safety has narrowed. My base case assumes 10% sales CAGR, a 9% EBITA margin, 50% EBITDA-to-FCF conversion, and a 17x EV/EBITA exit multiple. That produces a 2031 target price of roughly SEK 95 per share, implying around 20% annualized return from today’s level. The key sensitivity is the exit multiple: this target assumes the market increasingly values Hexatronic as a diversified critical-infrastructure platform rather than a purely cyclical fiber supplier.

My Verdict: Q1 was an inflection point. I am maintaining my BUY rating as we move into the seasonally stronger H2, where the full impact of cost cuts and US growth may drive significant earnings beats.

Over and out.

As per recent quarters, and despite global uncertainties making the private M&A market somewhat hesitant, Vitec’s operational engine is humming along smoothly. The company’s niche / vertical focus provides a defensive moat that is more resilient to market disruptions.

The margin story: Discipline pays off

The standout narrative of Q1 is undoubtedly the return to margin expansion, with profitability outpacing top-line growth.

• EBITA increased by 11% to SEK 244 million, lifting the margin to 26%.

• Similarly, Cash EBIT, the crucial internal metric for Vitec, grew by 11% to SEK 197 million, yielding a 21% margin.

This wasn’t just a happy accident. Management highlighted that these margin expansions are the direct result of higher revenues paired with 1) strict cost control and 2) early efficiency gains. Vitec has managed to drive this growth without actively adding to its organic headcount during the quarter, signaling that their internal productivity initiatives are bearing fruit.

Revenue drivers: Healthy subscriptions and an Enova boost

Digging into the top line reveals a healthy mix. Total recurring revenues grew to SEK 839 million (subscription + transaction), making up a high 88% of total net sales.

The core subscription-based revenue grew by 8% overall, with organic growth coming in at a solid 6%. I see this organic growth is structurally sound, driven evenly by a 50/50 split between price adjustments and actual volume increases via upsells and innovation.

Transaction-based revenues, which tend to be volatile, provided a pleasant surprise by beating analyst forecasts by 20% to reach SEK 177 million. This was largely driven by Enova, Vitec’s Dutch energy balancing subsidiary. Geopolitical tensions in the Middle East caused a spike in Dutch gas prices during March, which in turn elevated balancing service activity and boosted Vitec’s transaction line. While management was quick to remind analysts that this segment remains weather- and market-dependent, it certainly provided a nice tailwind for the quarter.

M&A: Navigating a hesitant market

As I have written about earlier, Vitec’s identity as a serial acquirer was reinforced early in the year. The company welcomed over 75 new colleagues through two high-quality acquisitions:

• Autonet B.V.: A Dutch software provider for the vehicle dismantling industry.

• Infometric AB: A Swedish company focused on energy and water consumption analytics for property management.

Olle mentioned that the business environment feels cautious, with potential sellers showing reduced investment appetite and hesitation. Rather than overpaying to force growth, Vitec has cautiously lowered its own price expectations and is maintaining an active dialogue pipeline, waiting for sellers’ expectations to align with reality.

The AI perspective: Why “legacy” is a strength

Perhaps the most interesting comments in the Q1 earnings call revolved around AI. In a market where it’s easy to fear that agile AI startups will disrupt legacy software providers, Backman flipped the narrative.

He argued that having legacy code is a massive advantage because “legacy is what brought us here” and “legacy is what our customers are paying for right now”. In the world of mission-critical vertical software, there is no tolerance for failure, and the software just has to work.

Instead of being a threat, AI is serving as a tool for Vitec. Modernizing older code has suddenly become much faster and cheaper thanks to AI-assisted development. Furthermore, while I see Vitec rapidly adopting these tools internally to speed up ticket resolution and bug fixing, their customers are moving much slower. Clients prefer a “wait-and-see” approach and proof of value before fully committing to AI features. This cautious customer base virtually eliminates the risk of sudden, AI-driven churn.

Valuation and bottom line

My valuation model still supports a BUY, handsomely beating my 20+% expected CAGR hurdle rate over the next five years. For a deep dive into the underlying valuation assumptions, please see the extensive valuation section in my last report update.

To wrap up, Vitec closed out the first quarter of 2026 looking stable. With a fresh, oversubscribed SEK 700 million bond issued to secure capital, a strong cash conversion rate of 80%, and no planned organic headcount increases, the company is well positioned. They have the financial firepower to execute acquisitions when the private market opens up further, and the operational discipline to keep squeezing higher margins out of their existing portfolio.

Taken together, the Q1 report reinforces my constructive view on the stock. The core investment case remains intact, and with margins moving in the right direction again, I continue to view Vitec as highly attractive on a medium- to long-term basis.

Given the extreme pessimism currently surrounding the SaaS sector (driven by “vibe coding” and AI disruption fears), I am not going “all in” at once. I view this as a gradual accumulation zone, I am buying now, but keeping some powder dry until technical trends (MA50 and MA200) confirm the bottom is truly past us.

The headline numbers came in slightly below consensus. Net revenues fell 1.5% year-over-year to €513.0 million, and EBITDA dipped 1.9% to €335.3 million. The EBITDA margin landed at 65.4%.

However, judging Evolution by its consolidated top line right now is missing the forest for the trees. We are watching the transition from a Europe-dominated hyper-growth machine to a globally diversified, methodical grinder.

Let’s break down the regions, the margins, and of course the capital allocation strategy, which remains the massive elephant in the room.

Links to some of my earlier write-ups;

• Q4-25: A floor, not a victory

• Q3-25: Finding the green sprouts

• Evolutions’s Asian headwinds

• Evolution, the US enginge roars

• Evolution, original memo - the price of domincance

Read more

While bolt-on acquisitions are a familiar part of the SaaS playbook, this specific deal stands out for its strategic fit. Rather than simply buying a new customer base, Carasent has also acquired a deeper moat. The stock market has sensibly rewarded the share price today, with a small rally (+7% as of now).

Here is my take on the strategic rationale, the impact on Carasent’s moat and the valuation logic.

Strategic implications and moat expansion

Most clinics frequently need to order blood tests, tissue samples, or imaging diagnostics (like X-rays and MRIs). While public regional EHRs are usually hardwired directly to regional labs, private clinics rely heavily on third-party software, in Sweden predominantly InfoSolutions, to order, track, and display these results inside their own EHRs.

By bringing InfoSolutions in-house, Carasent achieves two major strategic victories:

1. Deepening the switching costs: InfoSolutions connects over 1,500 healthcare providers with more than 30 laboratories and 40 radiology clinics throughout Sweden. By controlling this critical integration network, Carasent makes its core platform (Webdoc) exponentially stickier. A clinic might consider switching its EHR, but untangling the seamless lab and radiology routing that Carasent will now control becomes a massive operational headache.

2. Owning the Ecosystem: Carasent’s CEO, Daniel Öhman, noted that InfoSolutions plays an “absolutely critical role” for Swedish private healthcare providers. Integrating this capability directly into Carasent’s platform shifts the company from being just a system of record to a true ecosystem hub, ensuring smoother interaction between clinics and the broader healthcare industry.

Valuation and financial impact

Carasent is paying an Enterprise Value of SEK 115 million for InfoSolutions. The deal is structured sensibly: 90% is paid in cash, utilizing Carasent’s strong balance sheet, while the remaining 10% is paid using repurchased Carasent shares valued at SEK 23.74 (based on a 90-day VWAP).

Looking at the numbers from 2025, InfoSolutions generated SEK 67 million in total revenue, with approximately SEK 41 million coming from recurring revenue streams.

• EV/Sales: ~1.7x (based on SEK 67m total revenue)

• EV/ARR: ~2.8x (based on SEK 41m recurring revenue)

On the surface, paying roughly 2.8x ARR for an established, market-leading network asset is a very attractive multiple. The catch? InfoSolutions operated at roughly breakeven profitability in 2025, generating an EBITDAC of around SEK 0 million.

However, this is where Carasent’s operational leverage comes into play. Management explicitly stated that they expect InfoSolutions to achieve the same strong margin potential as the rest of the group’s product portfolio. Consequently, Carasent is keeping its long-term organic growth and margin targets completely unchanged. The implication is clear: Carasent believes it can extract significant operational synergies and drive InfoSolutions’ margins up to the group’s target levels (35% EBITDA by 2028) through scale and cross-selling.

The bottom line

This is exactly the type of acquisition you want to see a vertical SaaS company make. It is not a costly gamble on a new geography or an unproven product (like Carasent of the past). Instead, it is a targeted strike to acquire a mission-critical piece of the Swedish healthcare infrastructure.

By owning the dominant network connecting clinics to laboratories and diagnostic centers, Carasent has widened its moat, improved its value proposition to existing Webdoc users, and deployed its cash pile at an attractive valuation multiple.

Operationally, Carasent checked these boxes. Volvat is wrapped-up and live, the first paying customers are on the books in Germany, and Medsum adoption has accelerated sharply following the switch to OpenAI.

However, the stock price tells a different story. Carasent’s shares fell following the release, dropping from SEK 24+ to SEK 22.90. The reaction was triggered by a “miss” on total revenue growth, which came in at just 6%. To the casual observer, it looks like a slowdown. To those of us looking at the unit economics, it was a quarter of continued de-risking obscured by one-off noise.

In this update, I break down why the market is misinterpreting the consulting revenue drop and why the core subscription business is actually healthier than it was three months ago.

Read more

Before getting to the reporting season, one development in the broader news flow really caught my attention. Anthropic released a preview of its newest LLM (“GenAI model”), Mythos, and it has reportedly been deemed too capable for public release. Among other things, it was able to identify new ways to exploit software, including critical systems such as Linux. In response, a project called Glasswing has been formed together with major industry players to help secure some of the world’s most critical software.

And this is still only the beginning. With GenAI, we are likely looking at one of the largest productivity leaps in a very long time. In my view, it may ultimately rank alongside industrialization and electrification. We will, in effect, outsource a large share of intellectual work to machines. That brings enormous opportunity, but also major disruption. It will be fascinating (and at times unsettling) to watch - and should provide us with plenty of investment opportunities. More on that later.

With that said, and back to basics, holdings in Fjord Alpha have been a mixed bag in Q1, both in terms of share price performance and near-term market sentiment. Some names have developed very well and are beginning to see stronger recognition from the market, while others have been more uneven, either due to softer operational momentum, tougher comparisons, or simply a less supportive backdrop.

Among the stronger performers, Ørsted, Hexatronic, Ovzon, and Pexip have stood out. In different ways, they have shown that when fundamentals begin to improve or market confidence returns, the upside can be meaningful.

The more mixed group includes Carasent, Evolution, Vitec, and Embracer. That said, “mixed” does not mean broken. In these cases, the underlying long-term case remains intact, even if the path has been less linear than one would have hoped.

GN Store Nord as you know sold after the divestment of the Hearing division.

Let’s have a look at where the main holdings of Fjord Alpha stand at the moment.

Carasent (Reporting on Apr, 14)

This remains a darling of mine. The company combines deep moats with a long runway for growth across several vectors, while high operating leverage should support meaningful margin expansion over time. There has been virtually no news flow in the last quarter, and the share price has largely been dragged down by the broader SaaS sell-off, albeit with a modest recovery lately. At this valuation, Carasent very clearly passes my 20+% CAGR bar.

The upcoming report should be particularly interesting in terms of the surgery module, the German expansion, and margin development.

Evolution (Apr, 22)

If Carasent news feed has been crickets the last quarter, Evolution is the opposite, making headlines pretty much every week.

To me, the big question is if the negative trend has finally been broken. I am starting to see early signs that the bottom may be in. Analyst sentiment has turned more constructive, activity trackers point to an increasing number of bets, and the recent capital allocation (no dividend, only buybacks) at least is a clear sign of confidence from the Board of Directors. The 200-day moving average has also turned upward for the first time in many months.

As always, this is one to watch closely. I find basically all data points to be of interest. Will we see recovery in Asia and Europe? Do we see continued strong momentum in the US? How are margins developing?

Ovzon (Apr, 23)

There has been limited news during the quarter beyond a small additional order, but the real story here remains the long-term one. The underlying macro tailwinds have probably never been stronger. Defense spending across Europe is rising sharply, and the willingness to reduce strategic dependence on the US appears to be increasing as well. In that context, Ovzon looks very well positioned. This is a long-term play, and I will be watching carefully for any larger updates.

Vitec Software (Apr, 23)

The stock has been heavily de-rated, as you know, but it has held up relatively well in the SEK 220–250 range since early February and has withstood the broader market turbulence better than one might have expected. My sense is that the market’s SaaS-related concerns around Vitec have become overdone.

Two solid acquisitions (Autonet and Infometric) during the quarter will provide growth tailwind. These two deals alone add nearly SEK 190 million in inorganic revenue to 2026 estimates before the year has effectively started, securing ~5% inorganic growth.

Analyst sentiment also remains clearly supportive, with all covering analysts currently at BUY.

Hexatronic (Apr, 29)

Hexatronic has had a very strong start to the year, with the stock up more than 50% year to date. The macro backdrop also remains supportive, particularly through exposure to data centers and a meaningful US footprint. News flow has been limited in Q1, beyond an acquisition out of Germany. The 2028 targets are aggressive (see below), and will be interesting to see how we are tracking in Q1.

RaySearch (Apr, 29)

For this one I refer to my very recent write-up.

Pexip (May, 5)

Pexip has remained comparatively stable and is up from our original entry. The broader case is still the same. It is a well-positioned business with attractive exposure to secure and mission-critical communication solutions. It may not be the most talked-about name in the portfolio, but it continues to look like a solid long-term holding with room for both operational progress and multiple expansion.

There has been no major updates from the company during the Q1, and I will mainly be looking for signs that my thesis is still holding.

Ørsted (May, 6)

Speaking of macro trends, Ørsted also looks very well positioned. Renewable energy remains a highly attractive theme, particularly in an environment of elevated energy prices, and the company has also taken steps to reduce its US exposure. The stock has rerated sharply and is up 34% year to date, but the broader strategic case still remains compelling.

Embracer (May, 20)

Embracer remains a more controversial name, but that is also what makes it interesting. Sentiment is still burdened by the company’s history, and confidence will need to be rebuilt over time. That said, the underlying asset base is substantial, and there is clear potential for value creation if management continues to improve execution, simplify the structure, and demonstrate greater capital discipline. This is not the cleanest story in the portfolio, but the upside is significant if the company gets it right.

The major update from Q1 is of course the announcement of the new Lord of the Rings movie, a clear sign of monetization of Embracer’s deep IP portfolio - and a movie I personally will be looking forward to!

In summary

So while the portfolio has been partly a mixed bag in the short term, the underlying businesses are performing well. Reporting season will no doubt bring both encouragement and frustration, but that is also what makes investing interesting.

In the end, the real test is not quarter-to-quarter perfection and near-term stock price development, but whether the underlying businesses continue to strengthen over time.

Reporting season, game on!

RaySearch is a Swedish oncology software company best known for treatment planning in radiation therapy. The stock has fallen sharply from prior highs, despite the business today appearing more profitable, more recurring, and more strategically relevant than the market seems to credit. That combination makes the stock interesting for Fjord Alpha.

The company is still primarily perceived as a treatment planning software vendor. That is true, but increasingly not fully correct. As radiation oncology becomes more data-intensive and operationally complex, software is becoming more central to clinical value creation across planning, workflow, treatment execution, and analytics.

This matters because the industry’s economic center of gravity is shifting. Historically, value accrued mainly to the treatment machine (hardware), with software playing a supporting role. Today, precision, interoperability, workflow integration, and efficiency increasingly increase the strategic importance of the software layer.

The key question is therefore not only whether RaySearch has a strong position in treatment planning. It is whether the company is evolving into a broader, workflow-critical oncology software platform that the market still values through a narrower lens. If that transition continues, the upside should come from both earnings growth and multiple expansion.

Let’s dig into it.

2. Background: From academics to clinical infrastructure

Origins: Mathematics as the original USP

RaySearch was founded in 2000 by Johan Löf, whose work at Karolinska centered on optimization algorithms for radiation therapy. The founding proposition was simple, i.e. better mathematics produce better treatment plans.

For its first decade, the company licensed algorithms to larger players like Philips, Nucletron, IBA, thereby generating royalty income while embedding its IP deep into the industry’s infrastructure. That OEM phase built a reputation for scientific excellence and gave management time to deepen the technical moat before going direct.

It also revealed the limitations of being a component supplier to slow-moving hardware vendors.

RayStation: Moving from supplier to platform owner

The launch of RayStation in 2009 was the decisive pivot. Instead of licensing algorithms into third-party systems, RaySearch chose to own the full treatment planning experience such as interface, optimization engine, workflow, and customer relationship.

The timing was excellent. Rising clinical complexity, the expansion of proton therapy, and the emergence of VMAT all favored a modern planning platform. RayStation won first in the hardest environments - proton centers and elite academic hospitals, and then leveraged that credibility across the broader market. If the software handles the most complex particle therapy cases, it can obviously handle conventional photon work. That top-down reputation became a powerful commercial asset.

The ecosystem phase: Beyond planning

The next phase came from a simple insight, that a great treatment plan is useless if the rest of the workflow such as scheduling, documentation, treatment control, analytics, runs on disconnected legacy systems.

That realization drove RaySearch into adjacent categories. RayCare for oncology information, RayCommand for treatment control, RayIntelligence for analytics. This was a move up the value chain, from departmental tool to operational infrastructure. A treatment planning system lives inside the physics team. An OIS and treatment control layer sit at the operational core of the clinic.

That distinction is the equity story.

3. Technical engine: Performance as a source of competitive advantage

In radiation oncology, software differentiation is not just a matter of interface or workflow. At the highest level, it depends on computational performance, physics accuracy, and the ability to function reliably across increasingly complex clinical settings. RaySearch’s technical position appears to rest on four reinforcing advantages: speed, openness, credibility in demanding treatment environments, and workflow-embedded automation.

Computational performance

Treatment planning is computationally intensive, and that burden rises with clinical complexity. RaySearch has invested heavily in high-performance calculation and optimization, including GPU-based capabilities, which is especially relevant in advanced use cases where accurate dose calculation can otherwise become a practical bottleneck. Faster planning enables more iteration, broader scenario testing, and better use of limited clinical time. Over time, that can become a source of stickiness, as clinics build workflows around a planning environment they are reluctant to slow down.

Vendor neutrality

A second differentiator is openness. Much of radiotherapy remains structured around vertically integrated vendor ecosystems, but many providers operate mixed machine environments and value flexibility at the software layer. RaySearch’s vendor-neutral positioning allows clinics to standardize planning and workflow across heterogeneous hardware fleets without having to replace installed equipment. In that setting, the software layer can become more embedded in day-to-day clinical operations than any individual machine, which strengthens customer retention and strategic relevance.

Proton therapy as a proof point

RaySearch’s position in proton therapy also matters beyond the revenue contribution itself. Proton planning is among the most technically demanding areas in radiation oncology and requires high levels of computational sophistication, accuracy, and clinical reliability. Success in that segment therefore serves as an external proof point of technical quality. Credibility earned in proton centers can support broader adoption in conventional photon therapy, where buyers may view performance in the most demanding settings as evidence of broader robustness.

Workflow-embedded automation

Automation is most valuable when it reduces friction inside systems clinicians already use every day. RaySearch appears well positioned here by embedding automation directly into planning workflows rather than treating it as a separate capability. In practice, that can reduce manual steps, improve consistency, and ease workflow pressure in resource-constrained departments. Commercially, this matters because customers often value time savings and usability more clearly than abstract innovation.

Taken together, these capabilities support the view that RaySearch’s technical position is not merely product-level differentiation, but part of a broader platform advantage.

4. Product ecosystem: Replacing the brain

RaySearch’s strategic logic is to leave the machine in place, replace everything above it. Decouple the clinic’s intelligence layer from the incumbent hardware stack. There are four key products in the ecosystem; RayStation, RayCare, RayCommand and RayIntelligence.

RayStation: The beachhead

RayStation is the entry point. It solves an immediate, visible problem which is faster, higher-quality treatment planning, and once installed, it embeds RaySearch into departmental routines, training, and clinical habit. Switching costs are high. That makes RayStation both a strong standalone product and an effective commercial wedge for the broader platform.

RayCare: The commercial unlock

RayCare is the most strategically important product in the portfolio. It moves RaySearch from planning into operational infrastructure such as workflow orchestration, not just record-keeping and billing.

The commercial bottleneck was always interoperability with Varian TrueBeam systems. That barrier constrained adoption in the largest installed machine base. The progress made in 2024 and 2025 changes the math. A clinic can now upgrade its software layer without replacing its hardware. That is the single most important commercial development in this story.

RayCommand: Optionality on fragmented hardware

RayCommand extends RaySearch into treatment control and creates asymmetric optionality. Large incumbents build their own control systems, but smaller or newer machine vendors often lack the resources for a full software stack. If hardware fragmentation increases, RaySearch benefits as the default software layer for new entrants. The company profits from hardware disruption rather than being threatened by it.

RayIntelligence: Building the data layer

RayIntelligence converts installed software presence into “data advantage”, aggregating operational and treatment data to benchmark workflows and lay groundwork for future clinical algorithms. Companies that control planning and workflow data will be best positioned to train and deploy the next generation of clinical AI. RaySearch is quietly building toward that position.

5. Market structure and industry tailwinds

Several industry shifts appear to be increasing the strategic value of software relative to hardware in radiation oncology. In each case, the common pattern is the same: as treatment becomes more precise, more adaptive, and more operationally demanding, the software layer becomes more important to clinical performance and workflow efficiency.

Read more

The consumer discretionary sell-off across Nordic markets is not subtle. Dometic is down nearly 25% since cancelling its dividend on March 12. Thule has been halved from peak. MIPS, Pandora, and the broader leisure and lifestyle names have all been repriced as though the consumer cycle never recovers. The macro backdrop is doing the work: oil rising on Hormuz risk, inflation re-accelerating, Norwegian consumer confidence continues to be depressed, and households across Sweden and Finland still in defensive mode despite what the rate cuts were supposed to fix.

None of this is surprising. What matters now is not whether the cycle gets worse from here (it probably does) but whether you are doing the work while everyone else is still selling.

Dometic, Thule, MIPS, Pandora. These are not businesses that disappear in a down cycle.

Dometic is the global leader in mobile living solutions such as RVs, marine, and outdoor. Service and aftermarket is now representing roughly 45% of revenue, a buffer the market is currently ignoring. Thule has one of the strongest brand moats in European outdoor equipment. Its core customer doesn’t stop cycling or skiing because oil is up. Mips has broad adoption among helmet brands, but customer concentration matters. Its largest customer accounted for 17% of 2025 sales and the top five for 43%. Pandora is buying back stock while bears fixate on silver prices, and the lab-grown diamond expansion is a structural margin story being underpriced.

The playbook is simple and requires patience. Build conviction now, while sentiment is at maximum ugliness, so that when the cycle turns (and it always turns) you already know what you own, what you paid, and why. The informed investor buys into the silence.

From FinTwit this week

A few notes I made scrolling FinTwit this week…

Yubico profit warning on March 26, stock down -31.6% in a single session. Now 90%+ below its August 2024 ATH. This was a darling of the security hardware narrative. The lesson, again: a great product is not a great business at any price.

Lars Wingefors buys Storytel. The Embracer co-founder took a 4.5% stake in Storytel and is proposing a board seat. Separate from his Embracer role, this is a personal conviction bet on audio books as a category. Worth watching what he does with it.

Kambi opens for dividend. The sports betting infrastructure provider signals it’s done investing for scale and ready to return capital. Structural shift in capital allocation for a name the market has treated as growth.

Lifco has missed earnings estimates for 17 consecutive quarters. Still a beloved Nordic serial acquirer. At some point that track record has to matter to the multiple?

Q1 Reporting Season: What I’m Watching

Q1 earnings kick off in earnest from mid-April, and this season matters more than usual. Every management team will face the same set of questions that the market has been pricing in fear around for weeks. Tariff exposure, input cost pressure from energy, consumer demand visibility, and FX headwinds from a volatile dollar. How companies answer those questions (and whether the actual numbers support the gloom) will do more to move Nordic mid-caps in April and May than any macro headline.

The macro backdrop sets a high bar for surprises in either direction. A company that simply holds the line on margins in this environment will look great by comparison to the fear being priced in. A company that misses and guides cautiously will most likely get punished hard. There’s not much room for “in-line.”

Personally, I am a bit extra excited for Evolutions report. We will get the hard data on whether Q1 is a revenue record. Player momentum through March has been strong. My key question though isn’t the operational business though. It is whether management addresses the governance noise (Dart, founders, US listing) directly or deflects. I highly doubt anything will be communicated on these points, but clarity here could re-rate the stock faster than any earnings beat.

Also Carasent will be interesting. The stock has been punished lately, but I do expect the operational progress to be stronger than ever.

I publish Fjord Alpha Signal every week, with fully free access. My full thesis analyses, earnings coverage, and valuation models are mainly for paid subscribers.

Correction, 1 November 2026. I previously described Mips’ customer concentration risk as negligible. That was incorrect. The figures above come from its 2025 annual report. I have also removed the near-monopoly description, which was too broad.