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.

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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 is a near-monopoly in helmet safety technology with negligible customer concentration risk. 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.

I thought I’d try a slightly different format this week (…without the pay wall!) - a short market digest with a few observations on the names I follow most closely, plus the macro and sentiment shifts that seem to be driving everything right now.

If time allows, I’d like to turn this into a weekly note. The aim is not to cover everything, but to focus on the handful of situations where the setup, the debate, or the market reaction looks most interesting.

Macro first: sentiment has turned sour

The broader backdrop matters more again.

A lot of the market conversation this week has been dominated by macro rather than single-stock fundamentals. Iran/Hormuz risk, higher oil sensitivity, and a more defensive tone have pushed many investors toward energy and cash. E.g., multiple markets are now firmly in correction territory after a weak March.

That does not mean stock-specific stories have disappeared, and it is opening up new opportunities. But it does mean the market is becoming less forgiving. In this type of sentiment, execution matters, weak narratives get exposed faster, and companies that can show clean operational progress tend to stand out.

Hexatronic: The recovery is hard to ignore

Stock has been very constructive lately, despite the strong macro head-winds, and is up 30+% MoM. Hexatronic savings program has delivered SEK 122m in cost savings, with a full annualised EBITDA effect of SEK 110m expected by the end of Q1 2026. For a company that spent much of 2024 and 2025 dealing with weaker margins and operational inefficiency, that matters.

A strong signal came in early March, when Hexatronic signed a binding acquisition in its Harsh Environment segment - which suggests management sees the business as stable enough to start building again.

The long-term case remains intact with fiber build-out in Europe and North America. What held the stock back previously was execution, but that is now looking more and more like it is fixed.

Carasent: Strong growth, limited attention

Carasent’s annual report, published on March 19, showed net sales of SEK 343.8m, up 25% year on year. Growth came from both the core business and the Data-AL acquisition.

Management is targeting average organic growth of 15% between 2026 and 2028, alongside a 35% EBITDA margin by 2028. With margins still in the mid-20s today, there is meaningful operating leverage left in the story.

What makes it interesting is the combination of a Nordic healthcare SaaS, solid growth, a credible margin path, and still limited market attention with a depressed stock price.

The AGM on April 20 in Stockholm should be worth watching, especially for commentary on capital allocation and M&A.

Ovzon: Quietly building a stronger base

Ovzon’s latest DoD order now in March, a $1.3m SATCOM contract starting immediately, is small on its own. But it fits an increasingly clear pattern.

The main point is that the DoD relationship now looks recurring rather than speculative. Add the $25.2m NATO nation contract announced in December, and defense revenue is becoming more visible and more durable.

The individual contract sizes are still modest, but the direction is right. The core thesis remains intact, and so does the conviction. Stock is also up vs. the broader market sell-off.

Evolution: Cheap buyback or more complicated?

Evolution is easily the stock generating the most debate right now, both fundamentally and on Nordic FinTwit. Stock has performing extremely well vs. the broader market lately, up 14% in the last month when the broader market is down, a welcome change.

The immediate trigger for debate was the decision to skip the 2025 dividend. On one level, the move can be read as a capital allocation shift, i.e. a proposed buyback of up to 10% of shares at roughly 10x free cash flow. On valuation alone, that looks attractive, and some investors have welcomed it as the more rational use of capital.

But the wider context has made the market uneasy.

Kenneth Dart has steadily increased his exposure through equity swaps and now controls close to 28%. A buyback is more tax-efficient for him than a dividend. At the same time, the founders pledged 13.54 million shares in February, reportedly to fund a new investment outside the casino industry. That is a notable move, especially as the company pauses shareholder distributions.

The company says these events are unrelated. The market is not fully convinced. Add the allegations around sanctioned markets and the Galaxy Gaming merger delay to July, and the result is a stock where the business itself looks stable, but the shareholder story is driving uncertainty.

That is also more or less how the FinTwit debate has lined up. Bulls see an obvious opportunity - if a company of this quality can buy back 10% of its stock at around 10x free cash flow, that should be accretive. Bears are asking a different question - why does the surrounding shareholder behaviour look so messy at exactly the moment the dividend disappears?

That is why Evolution remains so interesting here. This may yet resolve into a very attractive buyback at a trough valuation. But for now, the story is clearly more complicated than the headline suggests.

GN Store Nord: The rally told a too simple story

GN Store Nord jumped 36% on March 16 after announcing the sale of its Hearing business to Amplifon for DKK 17bn. The market’s first reaction was simple, i.e. clean up the structure, unlock value, move on.

That has proven too optimistic, and the stock has then fallen back. And I agree.

The Hearing segment was not just an asset that had lost favour. It was also a key support for the group’s margin profile and an important part of the original MedTech thesis. What remains is Enterprise and Gaming, including SteelSeries, both of which face more obvious structural pressure.

I think it is time to step off the GN Store Nord train, and looks elsewhere for better opportunities.

Read my full break-down here (paid content).

Closing thought

I hope you found something useful here. I’ll keep refining the format as I go. I aim to send another one next week. In the meantime, keep an eye out for the next company deep dive.

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Here is my review of the Q4 print, structured around the three core takeaways that I believe the market needs to digest.

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Let’s have a look at what the Q4 report tells us.

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Let’s look at what the Q4 report actually tells us.

When GN released its Q4 2025 numbers, the stock initially ticked up in early trading. The raw data looked solid, GN delivered massive free cash flow and market-share-grabbing growth in its core Hearing division. But during the day, the sentiment violently reversed. The stock ultimately closed down 15% for the day and continues to hover around 98 DKK.

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Good. That panic has created an amazing entry point for a company that is executing across a multitude of growth vectors, with ultra deep moats.

While the market frets about AI disruption, Carasent delivered 15% organic growth and swung from a loss last year to a 16% EBITDAC margin. We are seeing classic operating leverage kick in. Revenue is up, the cost base has stabilized, and incremental growth should increasingly convert to profit.

In this Fjord Alpha update, we cut through the “SaaS scare” to look at the math. Inside, subscribers will find:

• Updated valuation model: refreshed 2030 scenario analysis (base/bull/bear). Even the bear case implies reasonable upside from today’s price.

• The operating leverage equation: how much incremental revenue converts to cash profit, and why margins can expand from here.

• Why you can’t “AI” a clinic: why “AI disrupts SaaS” is the wrong frame for healthcare systems of record, and why the moat can deepen.

Sure, there are watch-outs. Germany is delayed, and the macro sentiment is tough. But when a company executes like this and trades like this, you pay attention. That is the kind of asymmetry we hunt for.

Starting February 1, the detailed post-earnings analyses are exclusive to the paid tier. If you want the full valuation sheet, scenario math, and the line-by-line breakdown of what’s driving value, upgrade to the paid tier.

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If you are looking for clarity in the price action, you won’t find it. The stock is currently caught in a tug-of-war between a stellar earnings report and a broader sector panic. The narrative that “AI will kill SaaS” is dragging down every software multiple, regardless of quality.

Look past the sector panic and the Q4 report does one important thing. It chips away at the bear case.

Yes, net sales were up only 6%, but the bigger story is what drove the growth. The “Vitec is growth-starved” narrative just took a hit as the subscription-based recurring revenue accelerated to +12%.

Profit optics were noisy. The reported operating profit rose 16% but was skewed by one-offs. Strip out the noise and Cash EBIT landed at SEK 227m. This is slightly down, but fully consistent with a healthy underlying business.

This is what a “sleep-well-at-night” compounder looks like when it starts to re-rate.

In today’s deep dive, I cut through the sector noise to value the actual business. I have updated my proprietary 2030 valuation model to show you why the current price offers asymmetric upside.

Inside the analysis:

• The “hidden” beat: Why the 8% organic growth in subscription revenue is the most important number in the report.

• The “noisy” P&L: A massive SEK 165m one-off item made the profit look messy. I explain what happened and why it actually signals management discipline.

• The 2026 setup: With Autonet and Infometric already announced in Q1, the M&A flywheel has re-ignited. I model what this adds to 2026 earnings.

• The AI reality check: Everyone is panic-selling SaaS on “vibe coding” fears. I explain why Vitec is less sensitive to this threat (and might even be a winner).

• New valuation model: I break down my Bear, Base, and Bull cases for 2030. Hint: My “Base Case” now implies a very favorable return from today’s levels.

The full investment case and valuation model are available exclusively for subscribers.

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Over the last half-year, the response has been incredible. The community has grown faster than I ever imagined, and discussions on various stocks have proven that there is a real appetite for serious, deep-dive research.

But - producing high-quality analyses takes time. A lot of it. The Hexatronic and Evolution analyses I just published took basically all my waking time since the reports came out to finalize.

To sustain this level of depth and take it further, I need to evolve the model.

Investing in “The (Fjord) Alpha”

Starting February 1st, I am introducing a paid subscription tier.

By moving to a paid model, I can align my incentives 100% with yours. I don’t work for advertisers or sponsors, but for you. My only goal is to help you (and myself!) make better investment decisions.

Here is how the new structure will look:

1. The Free Tier

I will never stop writing for the public. Free subscribers will still receive, e.g.:

• Market commentary and macro thoughts

• Teasers on earnings reports

• Occasional full articles

2. The Paid Tier

This is for the serious investors who want the full game plan.

• Deep Dives: Full, unredacted access to reports like recent Q4 Analyses.

• “Game Plans”: Actionable advice on what to do (Buy, Sell, Hold ratings) immediately after earnings prints.

• Portfolio moves: Full transparency on what I am buying, selling, or watching in my own portfolio - plan to launch in 2026

• The Archive: Unlimited access to the library of past reports and deep-dives.

The “Charter Member” Offer: Join the Seed Round

I want to reward the people who have been here from the start, the ones who read the early posts and helped build this community.

I am treating you like the “seed investors” in this new business.

If you upgrade before February 28th, you will lock in the Charter Member Rate, which gives you 20% OFF the subscription price FOREVER.

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Why Join Today?

We are heading into a volatile 2026 (Conflicts, GenAI, Politics…), and I think the next few years will be defined by stock picking. I plan to be right there in the trenches, turning over every rock to find the compounders that will drive our returns.

I hope you will join me for this next chapter!

Thank you for reading,

Fjord

P.S.

The Q4 Deep Dives are starting to come live for paid subscribers. If you upgrade now, you can read the full analysis immediately and see exactly why I think;

Evolution Q4-25: A floor, not a victory lap

Hexatronic Q4-2025: The Fallen Angel has stopped falling

Many more to come…

While everyone was fixated on the fiber slowdown, Hexatronic’s Data Center segment exploded, delivering 62% organic growth this quarter. This is rapidly becoming a critical infrastructure play for the AI build-out.

For context, see my original write-up here: Hexatronic: Fallen Angel offers asymmetric opportunity

In this deep dive, I answer the three critical questions determining the stock’s future:

• The Growth Reality: Is the US recovery broad-based, or is the 10% organic growth entirely driven by the new Data Center focus?

• The Margin Bridge: Management increased the cost-savings target to SEK 120m, but are we seeing it in the margins yet, or is the heavy lifting still ahead?

• The BEAD Timestamp: How is management framing the stimulus timing? (Hint: The goalposts for the “Great Recovery” have moved to H2 2026).

The full investment case is available exclusively for subscribers.

I started the paid tier 1st of February, to be able to continue to deliver deep, high-grade research. If you want the full game plan for Hexatronic (and upcoming reports), now is the time.

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Is this still a durable compounding machine, or is the growth story starting to fray?

Looking back to the Q3, it landed with a clear revenue disappointment an…

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Over the next three weeks, the companies I cover will report their final 2025 numbers. Some, like Vitec, are trading at historical valuation lows despite strong compounding. Others, like Evolution, are battling narrative headwinds that need to be disproven.

This post is my Game Plan. It is a checklist of what I am looking for in each report, what confirms the thesis, and what breaks it.

But before that…

Important Update: Moving to paid

This project has grown from a personal journal into a research operation, and I have decided to upgrade the publication with a paid tier.

The decision to introduce the paid tier is simply because high-conviction analysis takes time. Your support funds the hundreds of hours required to produce this level of depth. It ensures I can keep Fjord Alpha humming.

Starting February 1st, the detailed post-earnings analysis for these companies will mostly be moved to the paid tier. If you want the real-time breakdown of these reports as they land, upgrade your subscription today!

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The earnings prints I care most about

A few companies look more interesting than the rest going into reporting. The setups are similar across them. The underlying business trends have been broadly in line with my theses, but the share prices have been flat to down. That creates a situation where expectations feel more moderate, and where a report that confirms the direction can matter more than usual.

I am looking for continued execution in the key drivers, and for management commentary that reduces uncertainty for the next quarters.

Carasent AB

• Original Analysis: Carasent: From messy roll-up to world-class compounder (Aug 1, 2025)

• Base case 5Y CAGR: 22%

• Price at analysis / current: SEK 28.60 → SEK 26.30 (–8%) 🔻

• Thesis status: Intact, even stronger. The Q3 showed strong operational progress (growth, NRR, and margin trajectory), but the stock has not repriced beyond the day-of reaction. You can read the Q3 review here; Carasent Q3-25: The Inflection Point

• Context & Recent developments: Stock has traded in a SEK 26-30 range. The company has repurchased 5% of their own shares, showcasing strong confidence in the future.

• What I am watching:

  • Do we get concrete milestone updates for Germany, the surgical module rollout, and Medsum, and any indication of 2026 being a “harvest year”?

  • Does NRR stay firmly above ~110% (vs. 111% in Q3), and is churn stable?

  • Is organic growth still tracking 18% and are margins progressing towards 37% (my base case)?

• Next Report: February 15, 2026

Hexatronic AB

• Original Analysis: Hexatronic: Fallen Angel offers asymmetric opportunity (Dec 10, 2025)

• Base case 5Y CAGR: 36.8%

• Price at analysis / current: SEK 21 → SEK 24 (+14%) ✅

• Thesis status: Main thesis is that US footprint, Data Center exposure and the massive BEAD investment program will drive meaningful growth for Hexatronic across coming years, combined with cost savings program that will drive higher margins.

• Context & Recent developments: Stock price has moved well. I did this write-up not too long ago, so mainly looking for confirmation of the original thesis.

• What I am watching:

  • Is the US and data center momentum clearly visible in both numbers and commentary (orders, backlog, customer wins)?

  • Do we see proof that the cost-savings program is flowing through to margins, and how quickly can it scale?

  • How is management framing BEAD timing and demand visibility for 2026?

• Next Report: February 5, 2026

Evolution AB

• Original Analysis: Evolution AB: The Price of Dominance (Aug 8, 2025),

• Base case 5Y CAGR: 33%

• Price at analysis / current: SEK 650 → SEK 588 (–10%) 🔻

• Thesis status: My main thesis is that the market is extrapolating temporary headwinds into a permanent decline. I believe the thesis still to be true, but with some nuance. See here for my latest write-up. Evolution Q3-25: Finding the green shoots in a disappointing report

• Context & Recent developments: Stock has traded down since last report in line with the broader iGaming market, lacking any short-term positive catalyst.

• What I am watching:

  • Is Asia back on a growth path after the weak Q3, and do we get further explanation for what changed?

  • Do we get a concrete update on cybercriminal activity, including impact, mitigation, and residual risk? Read my deep dive; Evolution AB’s Asian headwinds

  • Does the US keep delivering strong underlying growth around 20 percent plus on a constant currency basis, and how large is the FX drag this quarter? Read my deep dive; Evolution: An American fortress

• Next Report: February 5, 2026

GN Store Nord

• Original Analysis: GN Store Nord: Finding signal in the noise (Aug 30, 2025)

• Base case 5Y CAGR: 21%

• Price at analysis / current: DKK 116.00 → DKK 110 (-5%) 🔻

• Thesis status: My main thesis is that GN Store Nord has successfully executed on a painful turnaround, and now sees the light at the end of the tunnel. This thesis is intact and even stronger. I did a write-up following the Q3-2025 report that you can find here: GN Store Nord: Thesis and mispricing intact

• Context & Recent developments: Virtually no updates from the company, and stock still trading in the DKK 105-120 interval.

• What I am watching:

  • Does the hearing (MedTech-tilted) division continue to outperform?

  • Do we see continued margin expansion despite tariffs, and does cash generation improve meaningfully?

  • Are Enterprise and Gaming stabilizing, and is there any signal of a return to growth rather than just cost control?

• Next Report: February 5, 2026

Vitec Software Group

• Original Analysis: Vitec Software: A Swedish Constellation Software (Aug 15, 2025)

• Base case 5Y CAGR: 23%

• Price at analysis / current: SEK 362 → SEK 264 (–27%) 🔻

• Thesis status: Intact.

• Context & Recent developments: Vitec is now trading at a very significant discount vs. peers, after a continued stock decline. The ‘vibe coding will kill SaaS’ narrative has weighed on sentiment.

  In the meantime, CEO Olle Backman is making a major purchase of 10,000 shares, and both a co-founder and BoD member have made significant purchases. There is also generally positive broker coverage.

• What I am watching:

  • Is subscription-based revenue still growing at a healthy double-digit rate, and does management sound confident about demand durability?

  • Is transaction-based revenue stabilizing after recent declines (or at least becoming less of a drag)?

  • Is Cash EBIT still compounding at a double-digit pace, supporting the quality compounder case, even in a softer sentiment?

• Next Report: February 6, 2026

Further companies on the conviction list

Ovzon AB

• Original Analysis: Ovzon AB: Compounder of the New Space Race (Jan 15, 2026)

• Base case 5Y CAGR: 24.9%

• Price at analysis / current: SEK 50 → SEK 56 (+12%) ✅

• Thesis status: Not changed since the above write-up just a few weeks ago.

• Context & Recent developments: Stock continued to rally after my memo, but has since stabilized in the mid-50s.

• What I am watching:

  • What does management say about the outlook for 2026 and beyond, including demand drivers and contract momentum?

  • Are there any near term wins or partnerships that further de-risk the growth plan?

  • Do we see signs of operating leverage improving as capacity utilization increases?

• Next Report: February 19, 2026

Ørsted

• Original Analysis: Ørsted: Reset, recapitalized, repriced (Sep 25, 2025) - at that point not crossing the 20+% threshold, but after the Q3 report I made an entry into this stock, see write-up here: Ørsted Q3’25: It is windy - but now a buy!

• Base case 5Y CAGR: 20.6%

• Price at analysis / current: DKK 113 → DKK 145 (+28%) ✅

• Thesis status: Balance sheet improved and company in prove-it phase.

• Context & Recent developments: Stock has traded generally positively following secured financing and announcement of a large cost-out program. Now, focus is all on execution of the large projects.

• What I am watching:

  • Do we get project level updates that change confidence in delivery, especially on timelines and cost control?

  • Are there additional impairments, or does asset quality look stable after the reset?

  • How does management frame EBITDA for 2026, and how much confidence do they attach to that outlook?

• Next Report: February 6, 2026

Embracer Group

• Original Analysis: Embracer: Forged in fire, awaiting a new fellowship (Sep 16, 2025)

• Base case 5Y CAGR: 37%

• Price at analysis / current excl. Coffee Stain: SEK 65 → SEK 52 (-20%) 🔻

• Thesis status: Intact, monitoring execution. This is a classic turnaround story. If the AAA pipeline delivers and costs remain disciplined, the re-rating potential is substantial. Looking ahead, there is both Metro (likely 2026) and Tomb Raider (2026-27) in the pipeline.

• Context & Recent developments: Coffee Stain separation executed according to plan in December.

• What I am watching:

  • Do we get higher confidence on the AAA pipeline (timing + quality), and any signs of further slippage?

  • Do we see licensing progress (e.g., new LOTR deals) and what is the earnings impact?

  • Is cash discipline holding under the leaner cost structure?

• Next Report: February 12, 2026

The Watchlist

These are high-quality companies whose current valuations, based on my analysis, do not yet offer a clear path to my 20%+ annual return hurdle. I am watching them closely for either a significant operational improvement or a more attractive entry point.

Pexip

• Original Analysis: Pexip: From video bridge to fortress (Sep 25, 2025)

• Base case 5Y CAGR: 17.2% (just below threshold)

• Price at analysis / current: NOK 57 → NOK 77 (+35%) ✅

• Thesis status: My thesis is that strong growth in Secure will continue, partly being offset by Connected decrease. At the same time, growth will meaningfully increase margins and open up for a multiple expansion.

• Context & Recent developments: Stock has rallied recently. I am waiting on the sidelines for a better entry.

• What I am watching:

  • Is Secure still growing fast enough to more than offset the decline in Connected?

  • Are margins expanding in a way that supports a rerating case, not just a steady state story?

  • Do bookings and pipeline commentary improve visibility for the next two quarters?

• Next Report: February 12, 2026

ChemoMetec

• Original Analysis: ChemoMetec: The Danish tollbooth for the cell therapy revolution (Sep 6, 2025)

• Base case 5Y CAGR: 10%

• Price at analysis / current: DKK 519 → DKK 640 (+23%) ✅

• Thesis status: Watchlist, somewhat stronger fundamentals, valuation stretched.

• Context & Recent developments: Strong report and very positive guidance for next year (EBITDA DKK 295-315 million) on 11 September sent the stock surging. Seems to be on track for automated solutions for advanced therapies.

• What I am watching:

  • Do instrument sales stay strong enough to keep feeding the recurring consumables and services base?

  • Is growth consistent with a high teens type trajectory without giving up margin quality?

  • Does guidance look sustainable beyond the next year, or are there signs of demand being pulled forward?

• Next Report: February 4, 2026 (trading statement)

Ambu

• Original Analysis: Ambu A/S: Beyond the Bag (Aug 22, 2025)

• Base case 5Y CAGR: 12%

• Price at analysis / current: DKK 94 → DKK 85 (-10%) 🔻

• Thesis status: On my watchlist, new strategy, stretched valuation.

• Context & Recent developments:

  • Stock trading sideways, currently down slightly since original memo.

  • Executing on a buyback program, which I am somewhat skeptical about given what I believe is a stretched valuation.

• What I am watching:

  • Are growth and margins tracking what management communicated at CMD?

  • Do we see clearer proof points of execution improvement in mix, pricing, and utilization?

  • Does capital allocation, including buybacks, look aligned with value creation at the current valuation?

• Next Report: February 4, 2026

Next week, when e.g. Hexatronic and Evolution report, I will be sending out immediate, actionable notes to paid subscribers detailing exactly how the numbers impact our long-term valuation models. Subscribe today to make sure you get the updates fresh of the press!

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