Observit (OBSE) Q1 2026 earnings summary

Executive summary

• Annual recurring software revenue (ARR) grew by 24% year-over-year to 26.5 MSEK, reflecting strong demand for scalable SaaS solutions in public transport.

• Gross margin improved to 56.2% from 52.3% year-over-year, driven by a higher share of software sales and reduced hardware sales.

• Net sales for Q1 2026 were 14.1 MSEK, down from 17.3 MSEK in Q1 2025, as the business shifts focus from hardware to software.

• Investments continued in platform development and sales organization to accelerate international expansion, with a new focus on the Indian market.

• A major Nordic contract was secured for video-based fire detection in electric bus depots.

Financial highlights

• ARR at quarter-end reached 26.5 MSEK, up from 21.4 MSEK year-over-year.

• Net sales for Q1 2026 were 14.1 MSEK, compared to 17.3 MSEK in Q1 2025.

• EBITDA was 2.2 MSEK (2.4 MSEK in Q1 2025); EBIT was 0.4 MSEK (0.8 MSEK); EBT was 0.3 MSEK (0.6 MSEK).

• Result per share was 0.00056 SEK, up from -0.0012 SEK in Q1 2025.

• Cash flow from operations after working capital changes was 1.9 MSEK, compared to -1.2 MSEK in Q1 2025.

Outlook and guidance

• Management expects continued growth in recurring revenues, supported by long-term contracts averaging 9.8 years.

• Commercialization of AI-based damage management system is anticipated to contribute to future revenues.

• Expansion outside the Nordics, especially in India, is a strategic priority due to favorable regulatory changes.