Hello and welcome to Vaisala's second-quarter and January-June 2026 results call. I'm Niina Ala-Luopa from Investor Relations, and today with me in this call are President and CEO Kai Öistämö and CFO Heli Lindfors.

Like always, first Kai and Heli present the results, and then we proceed to Q&A. Kai, you may start now.

Thank you, Niina. Welcome everybody from my side as well.

We had a very good quarter as a second quarter. We continued to perform well on all fronts, Industrial Measurements being really the highlight of the day having an extraordinary quarter with a record-high demand and order intake, which then drove also the company's order intake to increase 11% in quarter two compared to the year before.

Xweather continued on a very good track, having kind of a good double-digit growth, 15% in constant currency to be exact. Of course, a key event that I'll talk about a bit in the quarter--

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As I was saying, a very strong strong orders orders received in in in the in in the quarter. We continued to perform across the company very well, and really the the order intake was really driven by extraordinary ordinary demand in terms of Industrial Measurements, and that drove the company's order intake to increase 11% compared to the year before.

Xweather continued on on a on a on a good track, on double-digit growth, 15% year-on-year growth in constant currency. A key event in the quarter for Xweather and for the company itself was was the acquisition of of the AI weather company Atmo Inc.

had been announced in in the second quarter. I'll talk about that in in in a little while.

In in terms of Weather, Energy and Environment, the quarter was more muted as we expected going into the quarter. Even in this environment, I I think the team performed really well and and and delivered strong profitability results.

We-- So are we still having the problems? No.

We we we we are reconfirming the business outlook, as I'll I'll conclude in in the in in the in the end. Before going into the numbers themselves, I'll I'll talk about the two key key events during the the quarter.

I'll start with the product launch, which I rarely do, but I I think this Presicap product that we launched in the second quarter I think merits very much of of taking it as a key highlight in in the in the quarter. The state-of-the-art way of measuring rain is what we would know ourselves if you have a your own rain bucket somewhere in your summer place in your at your house at your place.

It's a bucket where which then catches all the drops and and then you just read how much water is in the cup. If you own one, you also know that it in the in the fall, it's full of leaves, it it it will have insects, the accuracies are whatever they are, it requires maintenance, and it's kind of remote operator operation really is not possible at all without maintenance on on-site.

This has been the state-of-the-art way of of of operating rain measurement since almost past 100 years. We took on a challenge that with modern technologies this probably is not the best way of doing things, given all the challenges related to the the the rain buckets.

What we did is is take a miniaturized version of a radar, turn it upside turning pointing up upwards so that we can actually measure with it, with Presicap sensor now, every single droplet that that it it sees. Not only can we measure all the rain, but we can actually see the size of the droplets, we can distinguish the different sizes of what kind of a rain or hail it may be, and and we can actually see even the direction that the rain comes, i.e., we can see the wind impact on on the rain as well.

Oh by the way, it is also more accurate, it it requires no no maintenance to speak of, it's it's very easy to to save on the maintenance cost and and and use in in especially on the remote sites. It's a great example of, taking something which everybody works on and nobody thoughts about thinks about it, even the challenges that it has, that can be reimagined with right kind of an insight, right kind of a team, right kind of a capabilities, and it it really is what I would like defines really an innovation.

I I think it really kudos to to the the capabilities that the company and and the team involved really has had. It also highlights how well we understand the the phenomena in order to in order to do this kind of a reinventions, such as this, in this case, rain.

This very much actually combines to to the AI topic that I'll talk next. In terms of an AI world, there are two things that are super important.

It is about all about the data: what kind of a data, who owns the data, who understands the data that feeds AI. I think the the Presicap is is a fantastic example of how we as a company we actually understand and and and can measure data can measure weather-related data better than anybody else.

That in combination combination with what we have been building in in Xweather in terms of capabilities on on on forecasting and capabilities in machine learning and AI AI, building it building the entire asset on on machine learning and AI, and now together with with Atmo, which we find really the world's leading, by far, in terms of a company and asset and a team in terms of weather-related AI AI capabilities. Weather forecasting is going to change based on AI.

That's that's already happening. There's lots of attempts by different different companies, different teams around the world.

What sets Atmo apart is that that they really have a unique, scalable model where you can take, based on local data—that can be kind of weather data that I was talking about, it can be customer data as well—and you can create a local AI-based weather forecasting model very scalable in a very scalable way. You can do very local, just imagine we could do on our our site here in in in at that headquarters, or it could be regional, it could be global, anything where Atmo's model is not based on a single AI model, but it actually takes as an input, it can utilize anything that anybody else may innovate, and and it kind of can ingest those into its own world-leading model.

It's also run by a team which we find really a best AI-capable team that we've seen in in within our industry, and proven by a very, very interesting customer set who are paying for the service already today. Couple of examples of this would be from a civilian side, Met agencies.

Philippines Met meteorological agency has been relying on Atmo's model now for more than a year in their weather forecasting, and other other great examples is is on the defense side. Multiple US US branches of US military, but most notably US Air Force, who is also relying some of their operations in AI's in in Atmo's AI-based model.

What we, together now with what we know in the traditional side of the weather, what we've been building on on in Xweather, and now in combination with with with Atmo, I think we have world's leading assets, teams, capabilities in all parts what weather business will look like in the future, from providing and understanding the data to building building that into a modern modern modern platform, customer customer-focused offering based on AI. Very, very exciting exciting news.

Now, with that, I'll hand over to to Heli to talk about the financials in more in-depth.

Thank you, Kai. Good afternoon from my part as well.

Kai already mentioned the financials, but if we deep in a dig in a little bit deeper. The growth in the orders received, 11%, really driven by the Industrial Measurements with 28% with constant currencies, while the Weather side had a little bit muted and so a slight decline on the orders received side.

This orders increase growth also boosted the order book close to 200 million, 7% above the level at the end of the 2025, and also the ARR similarly rose by 7%. If you then look at the net sales, it increased by 4% or 6% in constant currency.

Also here the kind of main driver is coming from the Industrial Measurements with 10% growth and Xweather with 13% growth. Also here the net sales had on the Weather side a slight decrease.

The kind of net sales growth as well as the favorable sales mix improved the gross margin, and it also had a positive impact from the kind of lower tariff level of 10% we have seen since February. Going further, we do expect that this has been a temporary level of 10%, and once the US and EU trade agreement comes to force, it may be again 15%, but we will, of course, see then what it will be later on now in Q3.

The gross margin improvement and the increase in sales also improved the EBITA to 14.6 percentage points. Of course, here we do see that we also increase our spend in our OpEx by 8 percentage points, and that is investments in the sales and marketing activities, as well as the R&D in our growth areas of Industrial Measurements and Xweather.

Also, the return on capital employed improved from last year to 18.2 percentage points, driven by the higher EBITA, as well as the strong cash flow and releasing our capital employed. If we then move on to the Industrial Measurements and a record-high quarter in all means, the orders received, as said, increased by 28% in constant currencies, coming from a very wide base, all market segments and regions were growing, but particularly the Americas, and it was further boosted by the large orders from data center and power customers.

This is or this one also boosted the order book to 33% above the level of the end of last year. This is due to the increase in the late larger data center- and power-related orders.

If you consider a year back and before, most of our orders were delivered within weeks, whereas now these larger orders, on top of this kind of deliveries within weeks, we have now orders that also span across a few months going further, and this is visible in the order book. We are delivering 44 million out of this order book still within this year, it is still a fairly short order book overall.

Net sales increased by 10%, and here you see that the increase was less than in the orders received due to this change in the mix of orders. This was still 13% in constant currencies, and here the driver was the APAC region.

The gross margin improved then following the net sales increase, and also the positive impact on the tariff side. This also boosted our EBITA to 24.5%.

We also gave you some further granularity on our largest market segments in the Industrial Measurements side, and this is now you can see the new split here. The Life Science continues to be the 30% as we have said before, and now the new information is the quantification of data centers and power segments, both being at around 10% of sales.

We do have other the other key kind of focus industries as we have been saying: semiconductors and battery manufacturing, and then, of course, a wide range of other industries as well. If we then look at the Xweather side, the annual recurring revenue increased from the 7% from a year ago.

Here we can remember the seasonality we have in our ARR, as well as these is then including the FX. Now, of course, in the beginning of the year, we still had a larger FX impact compared to last year, whereas now at the end of Q2, we have now seen a full year of the depreciated dollar and related currencies, now the impact starts to be smaller.

This you can also see that the net sales increased by 13% and 15% in constant currencies, now the reported currency as well as the constant currency, they are much closer to each other again. Here you can also see that the net sales growth came from many many areas, not only one: so insurance industry, as well as transportation and logistics, and then also the developers and API customers that buy more of the DaaS side of business.

The increase in net sales also boosted our gross margin, the same as in other businesses, and this also boosted our EBITA percentage. Of course, if you see the kind of EBITA improvement, it is material, but as the Xweather figures are still fairly small, this is, of course, only €800,000 difference to last year.

Then moving on to the Weather, Energy and Environment side, it was a slower quarter, as expected, and the orders decreased by 5%, in the mainly coming from the project orders. The order book as such remains on the same level as it was at the year-end.

The Indonesian weather project order that we have announced already a while back, it did move ahead and the customer's financing arrangements were clarified. We are still missing the last steps of this order before we book it to our order book, and that we do expect to happen now within the third quarter.

Net sales as such were they were close to previous year's level. We did see an increase in the product project and product deliveries on the Weather side, whereas the decline in the renewable energy sales continued on that side.

The favorable sales mix then also improved the gross margin and also the EBITA side. Here you can see that also the operate operating expenses were maintained following the development on the sales side as well.

Then moving on to the cash flow side, the cash flow from operating activities increased to €48.9 million, not percentages. The it is really boosted by kind of increased net result, as well as timing of tax payments compared to last year, as well as lower level of project receivables.

The cash conversion was strong, 1.3 in January-June. Then if we look at the half-year half-year results as such, net sales increased by 7% in constant currencies, as is our strategic target.

The operating expenses increased by 4 percentage points, and this is investments in the Industrial Measurements and Xweather side, in the areas where we grow. The corporate and non-operative items, they were 4.5 million, up from 2.7 last year.

These are one-off items among other M&A expenses. As such, the solid profitability continued and improved to 14.8, and the then one item to highlight is also the financial income and expenses that is fairly different from last year.

There you can see that the kind of volatility of the currencies have been less, and as we are also less leveraged, the financial expenses were more than half less than last year. This, of course, then boosted also our earnings per share, in total to be the 78 euro cents.

The strong profitability as well as cash flow does bring us to strong financial position that continued has been strong for us also for a long time, we continue to be low-leveraged in our balance sheet. One thing to highlight here is the CapEx that is on a lower level than last year.

Last year, we were building our automated logistics center, and we don't have that this year, so that is why we are on a lower level of CapEx year-to-date. Then we move on to the market and business outlook.

Yes. When we look at the market outlook for the rest of the year, no changes in this.

We expect all markets underlying Industrial Measurements as well as Xweather to continue to grow, industrial, Life Sciences, power, and then the markets for Xweather and subscription sales. Then the markets that the Weather, Energy and Environment is focusing on—meteorology, aviation, and renewable energy—continuing to be stable for the rest of the year.

This leads then to reconfirming the business outlook in terms of a net sales. We continue to estimate that our net sales will be in the range between €600 to €630 million, and our EBITA result will be in the range between €95 and €110 million.

This brings to the end of the prepared remarks, and we would be happy to answer any questions that you may have.

Hello, this is Niko Ruokangas from SEB. Thank you for the presentation.

I have a couple of questions, and I'll go one by one. First one, you highlighted large orders in data center and power segments in Industrial Measurements, and I guess individual orders have typically been relatively small in the area earlier.

How big were the individual large orders now in Q2, and how much of the order growth in Industrial Measurements was extraordinary, as you phrased in your presentation?

The larger orders are a few millions of euros, the largest ones. As Kai actually mentioned, the order intake came from a kind of wide range of different industries.

As such, we say that it's extraordinarily good, but it was not solely driven by these larger orders, so-- Or

extraordinary orders per se.

Yes, exactly.

Good. Thanks.

That clarifies. Then on Xweather side, the ARR did not grow Q-on-Q despite the year-on-year growth.

You highlight the seasonality there, but how much was this seasonality impact, and can you give a bit more color on that?

I think that the best proxy for this is the seasonality impact of last year. If you look at the ARR development within last year, you can see that it is the winter maintenance, as well as the lightning, that is there kind of causing this seasonality.

The winter maintenance contracts, some of them still end in the-- Tota

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Hello, unfortunately we have some technical difficulties with the conference call function, we need to close the audiocast now and we will come back on the questions recording a bit later, hopefully. Right now we will close the audiocast.

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Thank you for your patience, and thank you for joining the call. Thank you very much.