Q4 preview; exceptional quarter expected, eyes on guidance

For FY25, management guides net sales to land between € 116m to € 120m and operating profit to be between € 19m to € 21m. In our projections, net sales are seen at € 115.6m, slightly below the lower end of guidance, while operating profit is estimated at € 19.7m (eNuW).

Q4’25 net sales is seen at € 50.3m, or +52.9% (eNuW). Adjusted for the Indra contribution, we estimate Q4’25 LfL net sales would have increased by +22.5% yoy (eNuW). In December, Bittium announced it had received an order of € 15.9m for Tough SDRs from the Finnish Defense Forces and an order of € 18.5m for TAC WIN systems from Cancom Austria AG. In both instances, deliveries started in Q4’25 and extend into FY26. Top-line Q4’25 in segment detail:

• Defense & Security net sales is estimated to increase to € 40m, or +68.8% yoy (eNuW)

• Medical net sales is estimated to increase to € 5.7m, or +11.8% yoy (eNuW)

Aggregate FY25 operating margin should expand to 17.1%, mainly driven by Defense & Security (~35% EBIT %, eNuW). Here, the licensing agreement with Indra offers significant margin boost. We see Medical’s operating margins to stay improved, following strong profitability in the last quarter, on the back of a leaner business. For reference, Medical achieved operating margins of 12.3% in Q3’25. Q4’25 operating results in segment detail:

• Defense & Security EBIT is estimated at € 14.1m, or 35.3% margin (eNuW)

• Medical EBIT is estimated at € 0.6m, or 10.9% margin (eNuW)

• Engineering Services EBIT is estimated at € 0.3m, or 5.5% margin (eNuW)

All eyes will be on outlook and guidance for this year. FY26 is a year full of expectations, with a long list of potential catalysts, to name a few major ones; (i) the UK tender, in which a win is possible, should be concluded by the end of Q2’26, (ii) potential Tough SDR orders from the Swedish Armed Forces; and, (iii) increased strategic flexibility following the strengthening of the balance sheet, including potential M&A activity. Further clarity is expected regarding management’s view on the financial targets presented at the 2025 CMD, particularly in light of the strong newsflow in recent months.

Following our update last week, we keep our BUY rating and our PT of € 40 based on DCF model unchanged.