Modelon (MODEL) Q2 2026 earnings summary

Executive summary

• Net revenue for Q2 2026 was MSEK 16.6, down 10% year-over-year, with software revenue at MSEK 12.1 (-16%) and service revenue at MSEK 4.4 (+10%).

• Annual recurring revenue (ARR) declined 14% year-over-year to MSEK 45.9, mainly due to license churn among temporary and single-user customers.

• Operating losses continued to decrease, with adjusted EBIT at MSEK -4.4 for Q2, a significant improvement from -9.4 last year.

• Major product launches in Physical AI and a new Data Center Library were completed, targeting growth in AI-driven simulation markets.

Financial highlights

• ARR was MSEK 45.9, down 14% year-over-year and 3% sequentially from Q1 2026.

• Net revenue for H1 2026 was MSEK 31.9, down 18% year-over-year; software revenue was MSEK 24.2 (-18%), and service revenue was MSEK 7.7 (-18%).

• Adjusted EBIT for H1 2026 was MSEK -11.6, improved from -17.7 last year.

• Net income for Q2 was MSEK -4.3 (SEK -0.24/share), and for H1 was MSEK -12.1 (SEK -0.66/share).

• Cash balance at June 30, 2026 was MSEK 32.2, down 35% year-over-year.

Outlook and guidance

• ARR growth is expected in H2 2026, driven by a growing sales funnel and new AI features.

• Profitability and cash flow are projected to improve, with positive free cash flow targeted from Q1 2028 (previously 2026).

• Long-term operating profit margin target remains above 20%.