I.A.R Systems Group (IAR) Q2 2025 earnings summary

Executive summary

• Transition to a subscription-based business model led to short-term revenue decline but increased recurring income and customer retention, with 21% of Q2 deals from subscriptions and 80 new customers added, especially in APAC.

• Net sales for Q2 2025 were SEK 109.4m, down 11.2% year-over-year (–4.5% in local currency), mainly due to currency headwinds and deferred income from subscriptions.

• Adjusted EBITDA margin for H1 2025 was 28.8% (down from 38.0%), impacted by FX effects, higher personnel costs, and the business model shift.

• Order book grew 6% year-over-year to SEK 138.7m, with a stable and expanding pipeline driven by subscriptions.

• Finnish software company Qt made an acquisition offer of SEK 180 per share in July, affecting EBIT/EBITDA due to related costs.

Financial highlights

• Q2 2025 net sales: SEK 109.4m (–11.2% YoY), EBITDA: SEK 17.3m (15.8% margin), adjusted EBITDA: SEK 25.5m (23.3% margin).

• H1 2025 net sales: SEK 233.5m (–3.9% YoY), EBITDA: SEK 55.9m (23.9% margin), adjusted EBITDA: SEK 67.2m (28.8% margin).

• Q2 operating profit: SEK 4.6m (4.2% margin), adjusted operating profit: SEK 12.7m (11.7% margin).

• Earnings per share (basic) Q2: SEK 0.16 (vs. 1.19), H1: SEK 1.65 (vs. 6.34).

• Cash flow from operating activities Q2: SEK 41.9m (vs. 35.7m), H1: SEK 65.6m (vs. 68.4m).

Outlook and guidance

• Focus for H2 2025 is on accelerating the subscription transition, expanding the customer base, and increasing platform usage.

• Positive signals include a growing pipeline, strong customer feedback, and signs of recovery in the US and continued outperformance in China.

• Long-term targets: 20% annual sales growth in local currency and operating margin above 20% within 3–5 years.