New products are also being developed for the needs of the defense sector. Growth is not stalling—it could even accelerate—but things hardly ever happen as quickly as we hope.
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Inderes’ updated view.
We are upgrading our recommendation for Bittium to Accumulate (previously Reduce) and our target price to EUR 44.0 (previously EUR 36.0). The Q3 result was excellent, although it was driven by an exceptional milestone payment from the Indra license agreement. Earnings for 2026 are now largely secured, and pressure for the rest of the year is moderate in this respect. On the other hand, the company needs significant orders relatively quickly to meet growth expectations for next year as well. Our positive recommendation is speculative in the sense that it relies heavily on the heavy order flow we expect toward the end of the year. The share’s valuation is very high, which significantly increases the risk level.
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The mystery country is likely France. If the translation went even decently well, the article reveals that a couple of units have already been using the products. Wonder what Thales thinks about this.
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NuWays’ Julius Neittamo reiterates “Buy” and a target price of EUR 46:
Exceptional Q3 beat on Indra licence; guidance up
Looking ahead, whether further Indra milestones fall in Q4 remains open, but with D&A only seen to normalise in 2027e, we expect some additional Indra licence revenue to land in Q4, albeit well below the Q3 level (eNuW). We previously estimated that the € 50m licensing deal from last December contributed c. € 10m in Q4’25, and we now estimate a further c. € 20m was recognised in Q3’26. This leaves max € 20m still to be recognised, which is seen to be spread across Q4’26 and FY27 (eNuW).
With a backlog of € 71.7m, Bittium is well positioned to deliver on this year’s sales guidance, and we stay slightly above the range at € 156m (guidance: € 140-155m). Order intake in Q4 remains the key item to monitor for 2027 runway, and given the typical seasonality of the business, we expect a strong Q4 once again.
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Yeah, it certainly looks that way when you read the article and compare the timeline to when Bittium announced this “test batch for special forces, ordered by a certain country.”
A framework agreement with Safran has been made. Last year, when leaks and rumors started trickling out from Spain, it didn’t take long before the framework agreement with Indra was published, and after that, news of the licensing deal followed fairly quickly. Can we now expect a similar Christmas present from France?
After all, the products have been tested there for a long time by special forces and the Foreign Legion(?), before the framework agreement with Safran was announced. So it’s unlikely that framework deal was signed just for the fun of it, but I suppose we’ll know more soon enough.
The difference compared to the Spanish case, of course, is that over in France there’s Thales on their “home turf,” which (as far as I know) competes for the same deals with Safran/Bittium.
However, (in my opinion) the mere fact that Bittium’s products are being tested and trialed this seriously in France, which also has domestic options available, speaks volumes about the excellence and competitiveness of Bittium’s products compared to other manufacturers.
Still, let’s wait and see whether any more orders actually come in beyond that roughly two-million-euro test batch before getting ahead of ourselves. But the situation for Bittium certainly looks good right now. Of course, more of these new and above all large wins (new countries) are needed to sustain growth, even if, judging by the numbers and the order backlog, business is continuously being conducted in the background.
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SEB bumps up its ‘fair equity ratio’ by a euro, now at €35-45/share. More details behind the link, incl. pdf
Bittium provided another quarter with strong sales growth driven by Defence & Security. This led to high earnings in D&S, illustrating not only the milestone payments in Spain but also Bittium’s business model scalability. Profitability guidance was hiked. Order intake was at a low level on an absolute basis. While this is seasonally typical for Q3, new clients are needed to continue strong growth. Our fair equity value range is EUR 35-45 (34-44) per share.
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The business review states that “The growth was driven by product deliveries and licensing of tactical communications solutions to both new and long-term customers.” Does this mean that license revenue was also received from new customers in Q3, or did the phrase refer to the combined effect of product deliveries and licensing? From an investor’s perspective, there is a considerable difference between these two interpretations.
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