Magnus Grenfeldt Good morning, and welcome to Smartoptics' financial presentation, financial report for Q2 2026. It's great to be here. It's fantastic times for us. I hope also for you guys. Most of you should now be enjoying some sunshine. I hope you are, and thank you very much for taking the time to spend some time with us this morning. Next slide, please. Not only are we delivering a quarter in which I expect us to grow faster than anyone else in the market, but we have also started our journey towards the next goals for Smartoptics, for the next big things that we have ahead. Thus, we want to spend a little bit of time in this presentation, in this call, to talk about that, to introduce our thinking around the future for the company. As usual, let's turn to the main happenings in the quarter, and I will leave the details of the numbers, with very few exceptions, to Stefan's part, where he will cover those in great detail in a few minutes. We can only conclude that we're continuing to have a fantastic Americas, fantastic USA, stellar performance by Team USA. Since a few quarters, we have been discussing an increased momentum, an increased traction, particularly around large accounts in Europe. This quarter, we're seeing the result of that. Also a fantastic Europe with growth in all sub-regions and fantastic growth in U.K., Ireland, and the Nordics in particular. Our business is increasingly driven by AI and indirect hyperscaler business. As an example, this is now happening across the globe, so it's in every region we are working with these type of opportunities. As an example, our South African partner, HardwareCo, together with us, are building a network for a hyperscaler in Africa in the quarter. Important momentum there. We can also see that the traction from Q1 is continuing with book-to-bill comfortably over one in the quarter, exactly the same scenario as in Q1. Gross margin is a little bit down in the quarter. This is related to one project, one customer in the quarter, where we can see that the difference between the lower gross margin in the quarter and a perfectly normal quarter that we've been delivering recently, all of the difference there between the two numbers is related to this case. This is a case that has been restored, that will be restored in Q3 and onwards from a margin perspective, where we are choosing to support our customer in a critical phase, where we were undergoing qualification for a number of large applications. This is a U.S. Tier 2 that is building networks across America. A very good win and a very good proof point of our large account strategy that is resulting in short-term, a little bit lower GM. We have been talking about this for years, that we want to have the flexibility and need to have the flexibility to act in the best interest of the company, and in particular, our growth journey when we need to, and that's the full story behind it. No big drama around the gross margin from my perspective. Quite expected, in fact. Yes. Obviously, we are here in Stockholm today from our new super nice main office location and production and so on and so forth. As you all know, we were talking in Q1 about Q2 being a catch-up quarter. Of course, catching up towards a normal Q2 performance versus Q1, and we can see that we are way up there in the upper range of what normal seasonality is. A very good performance. In particular, bearing in mind that we delivered about 11% of the revenue in the first month of the quarter. The company was effectively shut down from a delivery standpoint for a few weeks, and the team has performed really well. Thank you very much team operations for your efforts through the quarter. Reminding everyone, what have we done? We have moved all of our production facilities, the two of them into one. Going forward, the work to make this even more efficient is going to start and continue for years. Clearly, we're demonstrating in the last two months of the quarter that our capability is already at a very high level. Right. Revenue and the geographical spread, as I said, fantastic performance in America. There is no doubt it's a record quarter over there. Largely driven by the results of our efforts in the large account strategy over the past several years. We can see now that large parts of our revenue, still being fairly broad, but large parts of it is now coming from the accounts that we have been talking about, typically regional Tier 2s and Tier 2s and similar, both data center operators and network operators delivering bandwidth to the data centers in the region. Very good America percent growth. Quite expected that we would see a good EMEA after several quarters of having very good traction and very good win rate in the larger projects that have been out there for tender and similar. All good. As I mentioned earlier, good growth in all sub-regions, DACH, Eastern Europe, Southern Europe, but stellar performance in the Nordics and U.K., Ireland. APAC is still project-dependent, as we point out in the headline here, and we can see quite modest growth in APAC. However, what we are seeing in this region, much like the other ones, is that the larger data center, AI-related projects are popping up in several regions within the APAC territory. We have developed our partner landscape in the region. We have, of course, developed our product to have a better fit going forward. We have invested in the region with more people working for and with Smartoptics. I'm very positive about APAC for 2027 and second half of 2026. Timing is, of course, a little bit uncertain, but I think that we can see a much better performance from the APAC region going forward. That's very nice to have yet another contributor to our growth. Product mix. As usual, it is the more advanced products that is sold together with our software and service offering that is leading the way. Those of you who have been with us for quite some time probably noticed that we have shuffled around the order in this slide. We have done that to clearly outline the fact that Solutions, software, and service belong together nearly to 100%. Fantastic growth. This is important because it is telling us that where we are investing, we are also achieving growth. That is always comforting. It is a proof point that our product roadmap, the products we have developed are the right products for the market. The regions and customers and applications that we are going after are the regions and customers and applications where we can see growth. Very good proof points. As you all remember, we have since some time also put a little bit more focus on our business area optical devices, with Björn Andersson leading those activities for us since quite some time now. We have been engaged in really upping the performance of the back end of that business, investing into our software platforms, investing into our production tools, investing into the tools that our customers are using to configure these products for their live environments. We are seeing that much like the previous two quarters, very good growth in business area devices too. It is no longer an anchor for the company. It is yet another growth vehicle contributing to the overall revenue. I am very pleased with that situation. I will hand over to Stefan to take you through some of the details on the financials. Stefan Karlsson Thank you, Magnus. The revenue increased 54.6% to a record high $28.9 million compared to $18.7 million last year. As Magnus mentioned, we have had very strong growth in EMEA of 112% and in the Americas of 36%, primarily driven by business area Solutions. The gross margin was 46.1% compared to 48.6% last year and 47.0% year to date. The lower gross margin is fully related to the breakthrough deal that Magnus mentioned and follow-on business with this customer is expected to deliver normal margin levels going forward. The underlying gross margin remains stable quarter-over-quarter and the full year 2025 gross margin remains as a good reference for future quarters. We have a record EBITDA of $4.5 million compared to $2.6 million last year, up $1.9 million year-on-year. The strong revenue growth increased gross profit by $4.2 million, more than offsetting higher operating expenses. The employee benefit expenses increased 29% to $6.7 million compared to $5.2 million. Main drivers is the organizational growth of 21%, where FTE grew from 132 to 160 people, including the expansion of the U.S. sales organization earlier end of last year. The FX impact is impacting 3% and the annual salary increase and other factors are contributing with a 5% increase. Other operating expenses increased to $2.2 million compared to $1.4 million, reflecting the business growth and organizational expansion. Total operating expenses in relation to revenue amounted to 31% compared to 35% last year. An improvement. The EBITDA margin improved to 15.5 percentage points compared to 13.7% last year. The year-to-date margin increased to 13.8% compared to 11.4%. If we exclude non-recurring costs relating to the relocation of the production in Q1, the year-to-date EBITDA margin was 14.7%, a difference of 0.9 percentage points. The profitability is improved despite continued investments to support the future growth. The EBIT margin improved to 12.5% compared to 9.8% last year. The year to date, the margin increased to 10.5% compared to 7.3%. Excluding non-recurring, the EBIT margin year to date was 11.4%. The operating cash flow amounted to +$0.9 million compared to -$0.5 million last year. Positive operating cash flow despite a $2.2 million increase in working capital, driven by the higher sales and deliberate inventory build-up to support the future growth. The equity ratio was 42% compared with 53% a year ago and 56% at the end of the first quarter. The decrease is mainly explained by the recognition of the new Stockholm office lease under IFRS 16, which increased total assets without a corresponding increase in equity. Total assets increased to $66.6 million compared to $49.9 million last year. That's mainly reflected by the Stockholm office lease addition as well as inventories and trade receivables that increased in line with the continued growth of the business. The increase in asset was financed mainly by corresponding lease liability to the Stockholm office, as well as higher trade payables, reflecting the higher level of business activity. Despite the dividend paid out during the quarter, total equity increased to $27.9 million, supported by continued profitable operations. Cash ended at $2.1 million compared to $3 million. It is of $7.6 million, equivalent to NOK 75 million. We have a high focus on cash, including continued management of trade receivables. The working capital increased to $16.8 million compared to $15.7 million last year and up from $14.6 million last quarter. The inventory increased to $21.3 million compared to $16.8 million last year and up from $18.4 million last quarter. The increase versus last year is mainly driven by longer component lead times and a deliberate strategy to maintain higher inventory levels to secure product availability and support the future sales growth. Inventory quality remains high, with a very limited inventory risk. Trade receivables increased to a record high $26.4 million compared to $19.8 million. This is, of course, reflecting the highest level of sales. We have had a back-end loaded quarter with more than half of the quarterly revenue invoiced during the final month of the quarter. We have had no normal collections and no increased credit risk. The trade payables increased to $12.7 million compared to $7.7 million last year and up from $5.7 million last quarter. We have had higher inventory purchase towards the quarter end. The accounts payable mainly consists of suppliers with 60 days payment terms. Net other short-term liabilities increased to $18.2 million from $13.2 million last year. The largest item is deferred revenue that increased to $13.3 million compared to $10.7 million. We also have the tax liabilities that increased to $2 million, reflecting the higher taxable profit level. Thank you. Back to Magnus. Magnus Grenfeldt Thank you. We will now leave Q2 behind and start looking forward into the future and give you a taste of the new financial aspirations and the new strategic choices that has been worked out through the first half of this year. The material here is short and sweet, I hope, and I'm expecting that we will continue to talk about this now over the foreseeable future and clarify more and more the material and how we're progressing against that. The first thing to note is that the ever-growing demand for bandwidth is continuing to drive our business. Our business is the growth, the underlying growth is broad-based. Of course, it's impossible to overlook the fact that recent CapEx investments in AI and AI data centers is coming on top of this as an additional driver. Reminding people that building an AI data center on a corn field in any Tier 2 market is pretty useless unless you can connect it to the bigger cluster and to its users. The technologies that we are working with are absolutely instrumental to make this work. It is, of course, a privilege for us who have been dealing with optical technologies for a longer period to see a second wave of really changing the behavior of the humankind going forward. Maybe big words, but that's in fact what's happening. Smartoptics Group has, over the years, systematically and strategically been working to develop our product offering hardware, software, and support services to address more and more applications with the purpose to broaden the addressable market for the company. We have always viewed ourselves as a metro optical networking player leaving the long-haul market to others to deal with. We have since some years started to move into that long-haul market, and we have done it with pretty large steps. Now building really high-capacity networks, terabits of bandwidth over thousands of kilometers. It is no longer true to say that we are a pure metro play. This journey will continue. Adding a substantial and fast-growing market onto our list of opportunities is, of course, a great way for us to scale the addressable market. Why can we do that now, and why is it a suitable timing for us to do that now? I would like to point out a few facts. Number one, the way Smartoptics Group has developed. We have built a product offering that is highly suitable for some of these applications, these longer-haul, higher capacity, not for all yet. In terms of suitability, one should understand that of course you can build the whole internet and all AI infrastructure using only Smartoptics Group products, but on the peak and most advanced applications we would probably not be cost-effective today. The journey we have ahead of us is to become a very cost-effective and technically capable alternative also for some of those more advanced applications. We can do that today because if we look at the longer-haul market, traditionally, who has been building those type of networks if we go way back a long time you would see that there were a handful of selected Tier 1s who were building those type of networks, as an example, AT&T in America. Those are organizations that come with a large set of requirements a very big backpack of legacy equipment that needs to be supported, and so on and so forth. That is not true anymore. Of course, the hyperscalers have been building long-haul networks for many years, we're now seeing new players coming in to support the hyperscalers and to support the build-out of AI infrastructure. A lot of new network operators, new challengers are building these type of networks. We're seeing neoscalers building fairly long-haul networks to support their business model, et cetera. The market has changed, and we believe strongly that that market is a market that's highly suitable for a company like Smartoptics Group. Not only our products, but also our role as a challenger in the market, and the cost efficiency that we can bring to the table. The other thing that has happened over and above the market changing is, of course, that technology has evolved. In the past, you have nearly been forced to deal with a high degree of vertical integration to address this market space. We see now that the merchant technology that we use in our transponders and muxponders are becoming very capable and indeed, becoming the go-to choice for many organizations, making also our products technically more suitable for going after the larger and more advanced opportunities. This will not come without an effort from Smartoptics Group, so we are going to move into an investment phase that we have already started since some time back. We have some investment areas that are incremental to what we're already doing. It's not a revolution, it's an evolution of the product offering. Those three investment areas are simply to build AI-ready optical networks, to deal with interconnected clusters or scale-across, as we say in the market lingo that we are using. Basically, when you outgrow one AI data center, you need to build a new one, and you need to connect them together. That's what we're talking about. In order to do that, we need to improve our products and develop a few new alterations of our products to support longer reach and higher capacity networks. Those products are now on the drawing board, and we have a way forward that we believe in very much. Some of it being, of course, not suitable to share to the open market yet, but it will be announced and released down the line. The third area of investments, where we are getting exceptionally good feedback from our customers on the work that we have already done, is in the software space, agentic AI software and automation, where we've had the luxury not only to have the right team in place to do this, but also to have the right timing to develop new software platforms where we can utilize everything that's available to us through modern software development, which is, of course, more difficult to do if you have a huge legacy to deal with while developing your products. As I said, we're getting very good feedback from our customers. We believe that we are ahead of competition broadly. We believe that some of the ideas that we are bringing to the table are unique and very beneficial for our customers. Stepping into a new era of growth is the ambition, we will, as we have always done in Smartoptics Group, plan, execute, measure, change the plan as needed, execute, and measure again, systematically invest into our products, systematically invest into scaling our organization to also utilize new technologies to enhance our operations, and to become a much more efficient company overall. When we measure ourselves against competition and peers, we can see that already today, Smartoptics Group is producing a higher revenue per full-time employee than most other organizations. We want to continue to scale that in order to outperform the market in yet another way. That's something to study going forward, how we're performing against those metrics, and that's something that I expect us to talk a little bit more about down the line. When we are there, lead and really become a top-three vendor in the target markets in North America and EMEA and increasingly APAC. That is the ambition. Of course, scenario planning is everything, we've been doing a lot of that in the spring here to give us a solid roadmap forward, also a financial roadmap that we believe in, that we think that we can execute on. When we do that, we're seeing a number of scenarios, and we therefore provide you with a range in terms of revenue potential, the $300 million-$400 million being the next target for the company. And of course, to achieve a CAGR of over 25% going forward. We are very committed to profitable growth as we have been over the years, and we're now starting our journey towards EBIT margins above 16%. Having said that, I think it's important to look at the roadmap that we have ahead of us. I think that the EBIT margin target that we are talking about here, it's something that we're striving against and that we are absolutely targeting, and we're absolutely seeing an upside to those numbers when we do our modeling. It's something that we want to talk about for the second half of the planning period. My focus and the team's focus is now going to be on revenue and revenue growth and the investments that we need to do to achieve that. Only keeping one eye on the long-term EBIT target for now and coming back to that in a while. This is it. Full throttle ahead. We have a just do it attitude in the company, we will move forward. With that, I would like to hand over to Per to look at questions. Per Burman Yes. We will start with our analysts on the call. First up is Christoffer Wang Bjørnsen from DNB Carnegie. Christoffer, unmute yourself and ask your questions, please. Christoffer Wang Bjørnsen Good morning. Congrats on the great quarter. I just want to start out with the issues you mentioned in the first couple of weeks of the quarter, where you essentially said that you were, for battery purposes, shut down when it comes to deliveries. I think, does that kind of imply that if you had moved more effectively over to the new site, your revenues would be more into the $30 million? I guess you've said in the past that you shouldn't expect near-term quarters to go towards the 60s. Given that you are supply constrained rather than demand constrained, and you have a decent book-to-bill well above one, that the underlying output as an indicator for second half is quarters in the 30s rather than in the 20s. Are there particular component supply issues that makes it difficult to enter into the 30s in the second half quarters? That's my first question? Magnus Grenfeldt Yes. Thank you, Christoffer. As you know, we are not providing near-term quarterly guidance, and I will, of course, not do that here either. What I can say is that clearly our growth will not be limited by our own capability in the second half of the year. Production is fully up and running, and as Stefan mentioned, we delivered about half of our revenue in the last month of the quarter. No problem there. The remaining risk in this market is, of course, the component shortages that we see out there. That is something we've been talking about for a while. It's something that we need to continuously work with, and we have very strong partnerships, and we get very good support from our component suppliers today, actually delivering better than expected. Our hope is, of course, that they will continue to do so, promise one thing and deliver more. We have certainly done our homework, doing revenue planning for Q3, Q4, Q1, and Q2 now, scaling our inbound component purchases, et cetera. Yeah. Christoffer Wang Bjørnsen Just then backwards looking, are we correct to understand that you had two weeks of potentially zero output and that revenues would be in the 30s if you didn't have those transitional hiccups at the beginning of the quarter? Magnus Grenfeldt Well, we're talking theory here. I don't know what it would've been if we had not had those two weeks, but clearly we're delivering half of our revenue in the last month. Of course, the revenue could have been much higher if we had the similar performance through the quarter. Three weeks. I think a good data point is the fact that we delivered about 11% of our revenue in the first month. Really not a lot. Christoffer Wang Bjørnsen Okay, great. Thank you. Just moving on to the long-term targets. You have good visibility on the market forecast and so on, but can you help us understand a bit what kind of visibility you have on, let's say, the 2027, the 2028, the 2029? I guess there's not really a good degree of backlog backing data, but maybe more visibility on projects you expect or stuff you're already planning to bid on, just beyond the market forecast from Cignal AI, what gives you confidence that there is business out there for you to lift the revenues as materially as you're now indicating? That would be helpful. Magnus Grenfeldt Absolutely. The pipeline of projects that we are working with is considerably higher than it has been in the past. Of course, we have a very close dialogue with our customers around projects that are to materialize in 2027 and beyond. We are, of course, guiding our customers to give us as much visibility as they can, because that's the only thing that's jointly going to help us through any upcoming supply problems that we can see. We're seeing some of the larger competitors we have in the market now guiding that they have basically filled their order books for the year and beyond, which means that choosing Smartoptics Group, because we are the nimble player in the market who can deliver quickly, is going to continue for a considerable time. Last but not least, of course, the traction we have in our large account strategy and, of course, the amazing opportunities that we have ahead of us in relation to that is also giving us a lot of confidence. It's a journey. You need to get through all of the steps that you need to get through. In general, I would say that what you have seen of the large account strategy so far that has been driving our growth, the opportunities we are working on now are bigger rather than anything else. Yes. We have data points that give us confidence. Christoffer Wang Bjørnsen All right. Thanks. Just finally, more on the investment side. You mentioned more focus on revenues than earnings near term, which is, I think, great. Just, I think you added a lot of people during the quarter and now at 160 FTEs, which is a record number of adds both sequentially and in the year-over-year, as far as we can tell. Is this kind of a new ramp which puts you at the number of people that you targeted for the year, or will this new pace of hiring continue in the next couple of quarters? As an add-on to that, 13 new people quarter-over-quarter, what areas are you primarily hiring in right now? Just to get the sense of your pace of investment going forward. Magnus Grenfeldt The 160 is a little bit inflated. As you know, we moved production and those are still counted as FTEs, so we have 10-ish people that will be removed in the second half. It's not that dramatic. Good day. We have five minutes left before we need to close this call to get on to the next one. Per Burman I suggest we go to the next on the list, which is Markus Heiberg from SEB. Please ask your question, Markus. Markus Heiberg Thank you. The first one from me is on the new addressable market here, moving from 5 billion to 6 billion market to 11 billion to 12 billion, roughly. How much of your revenues are currently in these new segments, and how do you see that portion of revenues for Smartoptics Group moving over the coming quarters and years? Magnus Grenfeldt I can say that it will increase. We are not measuring that. We do not really have that visibility in our ERP systems. Unfortunately, I don't have the data. It's gradually growing and it's bigger and longer distance all the time. Growing for sure. We are still reporting all of our numbers into the metro regional segment. Markus Heiberg Yeah. It's fair to assume that you have meaningful revenues in those new segments already? Magnus Grenfeldt Yes. Markus Heiberg That's good. Last one for me to get through the queue here. On the gross margin and maybe in relation to EBIT margin and phasing over the coming quarters, it sounded like it was a one-off to some extent, or a one large account explaining the lower gross margin this quarter, but that could happen, I guess, also in the future. How should we think about the coming quarters in relation to gross margin and also the phasing towards your EBIT margin target? Magnus Grenfeldt I think on the gross margin, 2025 is a pretty good reference going forward, which is just below 48%. You are absolutely right that from time to time, we may choose to be a little bit more aggressive on a particular deal or account. That can happen in the future, too. I think the second part, the phasing to EBITDA, do we have an answer on that? Not really, no, for the second part of your question. Can you repeat, Markus, please? Markus Heiberg Yeah. More about. If you look at consensus, it's already in 2027, you will be about more than 16%, which is your target. Do you think that's reasonable, that you will be there already at more than 16% EBIT margin in 2027? Or will it be more backend loaded towards the end of your forecast period? Magnus Grenfeldt I think it's all going to depend on the revenue growth, which is, of course, the biggest contributor here. We will see, as I mentioned, only one eye on that target in the near term. The remaining three eyes we have will be on the investments that we need to do and the revenue growth, and yeah, to go after the bigger target. Markus Heiberg Understand. Thank you. Magnus Grenfeldt Thank you. Per Burman Up next, Øystein Lodgaard from ABG. Øystein Lodgaard Good morning. Congrats on the blowout quarter. A couple of questions to start off. First, if you can give some more flavor on this new breakthrough customer that you mentioned. Secondly, with these new targets, you're not specifying a timeframe. You're just saying long-term and second half of the period. Can you be more specific on when do you expect to reach $300 million-$400 million in revenue? Magnus Grenfeldt Yes. The new customer, I cannot give that much more flavor. It's a large U.S. Tier 2. It's a very good potential customer for a very long time at higher levels. That's great. When it comes to the timing of the target, you can see that we're also guiding for, or rather, we're putting an aspiration on what we expect in terms of growth. We have, of course, been working with several scenarios here. If you use our aspiration of 25%, you will end up in 2031. If we grow a little bit faster than that, it may happen a bit earlier, of course. Yeah. I think that's the timeframes we're talking about. Øystein Lodgaard Perfect. The second half, you say an EBIT margin above 16% in the second half of the period. Does that mean like 2029, 2030, or? Magnus Grenfeldt Yes. Øystein Lodgaard Also, you're saying you see a potential for higher margin longer term. Can you say something about what you think the margin potential of the business is? Is that something you don't want to comment at this point? Magnus Grenfeldt No, we'll save that for later. Øystein Lodgaard Okay. Thank you very much. Congrats again. Magnus Grenfeldt Thank you Per Burman Good. We have a couple of questions on the portal. We have some more time, actually. I just got notified we're not in a squeeze. From Jörgen Weidmann

Magnus Grenfeldt Good morning, and welcome to Smartoptics' financial presentation, financial report for Q2 2026. It's great to be here. It's fantastic times for us. I hope also for you guys. Most of you should now be enjoying some sunshine. I hope you are, and thank you very much for taking the time to spend some time with us this morning. Next slide, please. Not only are we delivering a quarter in which I expect us to grow faster than anyone else in the market, but we have also started our journey towards the next goals for Smartoptics, for the next big things that we have ahead. Thus, we want to spend a little bit of time in this presentation, in this call, to talk about that, to introduce our thinking around the future for the company. As usual, let's turn to the main happenings in the quarter, and I will leave the details of the numbers, with very few exceptions, to Stefan's part, where he will cover those in great detail in a few minutes. We can only conclude that we're continuing to have a fantastic Americas, fantastic USA, stellar performance by Team USA. Since a few quarters, we have been discussing an increased momentum, an increased traction, particularly around large accounts in Europe. This quarter, we're seeing the result of that. Also a fantastic Europe with growth in all sub-regions and fantastic growth in U.K., Ireland, and the Nordics in particular. Our business is increasingly driven by AI and indirect hyperscaler business. As an example, this is now happening across the globe, so it's in every region we are working with these type of opportunities. As an example, our South African partner, HardwareCo, together with us, are building a network for a hyperscaler in Africa in the quarter. Important momentum there. We can also see that the traction from Q1 is continuing with book-to-bill comfortably over one in the quarter, exactly the same scenario as in Q1. Gross margin is a little bit down in the quarter. This is related to one project, one customer in the quarter, where we can see that the difference between the lower gross margin in the quarter and a perfectly normal quarter that we've been delivering recently, all of the difference there between the two numbers is related to this case. This is a case that has been restored, that will be restored in Q3 and onwards from a margin perspective, where we are choosing to support our customer in a critical phase, where we were undergoing qualification for a number of large applications. This is a U.S. Tier 2 that is building networks across America. A very good win and a very good proof point of our large account strategy that is resulting in short-term, a little bit lower GM. We have been talking about this for years, that we want to have the flexibility and need to have the flexibility to act in the best interest of the company, and in particular, our growth journey when we need to, and that's the full story behind it. No big drama around the gross margin from my perspective. Quite expected, in fact. Yes. Obviously, we are here in Stockholm today from our new super nice main office location and production and so on and so forth. As you all know, we were talking in Q1 about Q2 being a catch-up quarter. Of course, catching up towards a normal Q2 performance versus Q1, and we can see that we are way up there in the upper range of what normal seasonality is. A very good performance. In particular, bearing in mind that we delivered about 11% of the revenue in the first month of the quarter. The company was effectively shut down from a delivery standpoint for a few weeks, and the team has performed really well. Thank you very much team operations for your efforts through the quarter. Reminding everyone, what have we done? We have moved all of our production facilities, the two of them into one. Going forward, the work to make this even more efficient is going to start and continue for years. Clearly, we're demonstrating in the last two months of the quarter that our capability is already at a very high level. Right. Revenue and the geographical spread, as I said, fantastic performance in America. There is no doubt it's a record quarter over there. Largely driven by the results of our efforts in the large account strategy over the past several years. We can see now that large parts of our revenue, still being fairly broad, but large parts of it is now coming from the accounts that we have been talking about, typically regional Tier 2s and Tier 2s and similar, both data center operators and network operators delivering bandwidth to the data centers in the region. Very good America percent growth. Quite expected that we would see a good EMEA after several quarters of having very good traction and very good win rate in the larger projects that have been out there for tender and similar. All good. As I mentioned earlier, good growth in all sub-regions, DACH, Eastern Europe, Southern Europe, but stellar performance in the Nordics and U.K., Ireland. APAC is still project-dependent, as we point out in the headline here, and we can see quite modest growth in APAC. However, what we are seeing in this region, much like the other ones, is that the larger data center, AI-related projects are popping up in several regions within the APAC territory. We have developed our partner landscape in the region. We have, of course, developed our product to have a better fit going forward. We have invested in the region with more people working for and with Smartoptics. I'm very positive about APAC for 2027 and second half of 2026. Timing is, of course, a little bit uncertain, but I think that we can see a much better performance from the APAC region going forward. That's very nice to have yet another contributor to our growth. Product mix. As usual, it is the more advanced products that is sold together with our software and service offering that is leading the way. Those of you who have been with us for quite some time probably noticed that we have shuffled around the order in this slide. We have done that to clearly outline the fact that Solutions, software, and service belong together nearly to 100%. Fantastic growth. This is important because it is telling us that where we are investing, we are also achieving growth. That is always comforting. It is a proof point that our product roadmap, the products we have developed are the right products for the market. The regions and customers and applications that we are going after are the regions and customers and applications where we can see growth. Very good proof points. As you all remember, we have since some time also put a little bit more focus on our business area optical devices, with Björn Andersson leading those activities for us since quite some time now. We have been engaged in really upping the performance of the back end of that business, investing into our software platforms, investing into our production tools, investing into the tools that our customers are using to configure these products for their live environments. We are seeing that much like the previous two quarters, very good growth in business area devices too. It is no longer an anchor for the company. It is yet another growth vehicle contributing to the overall revenue. I am very pleased with that situation. I will hand over to Stefan to take you through some of the details on the financials. Stefan Karlsson Thank you, Magnus. The revenue increased 54.6% to a record high $28.9 million compared to $18.7 million last year. As Magnus mentioned, we have had very strong growth in EMEA of 112% and in the Americas of 36%, primarily driven by business area Solutions. The gross margin was 46.1% compared to 48.6% last year and 47.0% year to date. The lower gross margin is fully related to the breakthrough deal that Magnus mentioned and follow-on business with this customer is expected to deliver normal margin levels going forward. The underlying gross margin remains stable quarter-over-quarter and the full year 2025 gross margin remains as a good reference for future quarters. We have a record EBITDA of $4.5 million compared to $2.6 million last year, up $1.9 million year-on-year. The strong revenue growth increased gross profit by $4.2 million, more than offsetting higher operating expenses. The employee benefit expenses increased 29% to $6.7 million compared to $5.2 million. Main drivers is the organizational growth of 21%, where FTE grew from 132 to 160 people, including the expansion of the U.S. sales organization earlier end of last year. The FX impact is impacting 3% and the annual salary increase and other factors are contributing with a 5% increase. Other operating expenses increased to $2.2 million compared to $1.4 million, reflecting the business growth and organizational expansion. Total operating expenses in relation to revenue amounted to 31% compared to 35% last year. An improvement. The EBITDA margin improved to 15.5 percentage points compared to 13.7% last year. The year-to-date margin increased to 13.8% compared to 11.4%. If we exclude non-recurring costs relating to the relocation of the production in Q1, the year-to-date EBITDA margin was 14.7%, a difference of 0.9 percentage points. The profitability is improved despite continued investments to support the future growth. The EBIT margin improved to 12.5% compared to 9.8% last year. The year to date, the margin increased to 10.5% compared to 7.3%. Excluding non-recurring, the EBIT margin year to date was 11.4%. The operating cash flow amounted to +$0.9 million compared to -$0.5 million last year. Positive operating cash flow despite a $2.2 million increase in working capital, driven by the higher sales and deliberate inventory build-up to support the future growth. The equity ratio was 42% compared with 53% a year ago and 56% at the end of the first quarter. The decrease is mainly explained by the recognition of the new Stockholm office lease under IFRS 16, which increased total assets without a corresponding increase in equity. Total assets increased to $66.6 million compared to $49.9 million last year. That's mainly reflected by the Stockholm office lease addition as well as inventories and trade receivables that increased in line with the continued growth of the business. The increase in asset was financed mainly by corresponding lease liability to the Stockholm office, as well as higher trade payables, reflecting the higher level of business activity. Despite the dividend paid out during the quarter, total equity increased to $27.9 million, supported by continued profitable operations. Cash ended at $2.1 million compared to $3 million. It is of $7.6 million, equivalent to NOK 75 million. We have a high focus on cash, including continued management of trade receivables. The working capital increased to $16.8 million compared to $15.7 million last year and up from $14.6 million last quarter. The inventory increased to $21.3 million compared to $16.8 million last year and up from $18.4 million last quarter. The increase versus last year is mainly driven by longer component lead times and a deliberate strategy to maintain higher inventory levels to secure product availability and support the future sales growth. Inventory quality remains high, with a very limited inventory risk. Trade receivables increased to a record high $26.4 million compared to $19.8 million. This is, of course, reflecting the highest level of sales. We have had a back-end loaded quarter with more than half of the quarterly revenue invoiced during the final month of the quarter. We have had no normal collections and no increased credit risk. The trade payables increased to $12.7 million compared to $7.7 million last year and up from $5.7 million last quarter. We have had higher inventory purchase towards the quarter end. The accounts payable mainly consists of suppliers with 60 days payment terms. Net other short-term liabilities increased to $18.2 million from $13.2 million last year. The largest item is deferred revenue that increased to $13.3 million compared to $10.7 million. We also have the tax liabilities that increased to $2 million, reflecting the higher taxable profit level. Thank you. Back to Magnus. Magnus Grenfeldt Thank you. We will now leave Q2 behind and start looking forward into the future and give you a taste of the new financial aspirations and the new strategic choices that has been worked out through the first half of this year. The material here is short and sweet, I hope, and I'm expecting that we will continue to talk about this now over the foreseeable future and clarify more and more the material and how we're progressing against that. The first thing to note is that the ever-growing demand for bandwidth is continuing to drive our business. Our business is the growth, the underlying growth is broad-based. Of course, it's impossible to overlook the fact that recent CapEx investments in AI and AI data centers is coming on top of this as an additional driver. Reminding people that building an AI data center on a corn field in any Tier 2 market is pretty useless unless you can connect it to the bigger cluster and to its users. The technologies that we are working with are absolutely instrumental to make this work. It is, of course, a privilege for us who have been dealing with optical technologies for a longer period to see a second wave of really changing the behavior of the humankind going forward. Maybe big words, but that's in fact what's happening. Smartoptics Group has, over the years, systematically and strategically been working to develop our product offering hardware, software, and support services to address more and more applications with the purpose to broaden the addressable market for the company. We have always viewed ourselves as a metro optical networking player leaving the long-haul market to others to deal with. We have since some years started to move into that long-haul market, and we have done it with pretty large steps. Now building really high-capacity networks, terabits of bandwidth over thousands of kilometers. It is no longer true to say that we are a pure metro play. This journey will continue. Adding a substantial and fast-growing market onto our list of opportunities is, of course, a great way for us to scale the addressable market. Why can we do that now, and why is it a suitable timing for us to do that now? I would like to point out a few facts. Number one, the way Smartoptics Group has developed. We have built a product offering that is highly suitable for some of these applications, these longer-haul, higher capacity, not for all yet. In terms of suitability, one should understand that of course you can build the whole internet and all AI infrastructure using only Smartoptics Group products, but on the peak and most advanced applications we would probably not be cost-effective today. The journey we have ahead of us is to become a very cost-effective and technically capable alternative also for some of those more advanced applications. We can do that today because if we look at the longer-haul market, traditionally, who has been building those type of networks if we go way back a long time you would see that there were a handful of selected Tier 1s who were building those type of networks, as an example, AT&T in America. Those are organizations that come with a large set of requirements a very big backpack of legacy equipment that needs to be supported, and so on and so forth. That is not true anymore. Of course, the hyperscalers have been building long-haul networks for many years, we're now seeing new players coming in to support the hyperscalers and to support the build-out of AI infrastructure. A lot of new network operators, new challengers are building these type of networks. We're seeing neoscalers building fairly long-haul networks to support their business model, et cetera. The market has changed, and we believe strongly that that market is a market that's highly suitable for a company like Smartoptics Group. Not only our products, but also our role as a challenger in the market, and the cost efficiency that we can bring to the table. The other thing that has happened over and above the market changing is, of course, that technology has evolved. In the past, you have nearly been forced to deal with a high degree of vertical integration to address this market space. We see now that the merchant technology that we use in our transponders and muxponders are becoming very capable and indeed, becoming the go-to choice for many organizations, making also our products technically more suitable for going after the larger and more advanced opportunities. This will not come without an effort from Smartoptics Group, so we are going to move into an investment phase that we have already started since some time back. We have some investment areas that are incremental to what we're already doing. It's not a revolution, it's an evolution of the product offering. Those three investment areas are simply to build AI-ready optical networks, to deal with interconnected clusters or scale-across, as we say in the market lingo that we are using. Basically, when you outgrow one AI data center, you need to build a new one, and you need to connect them together. That's what we're talking about. In order to do that, we need to improve our products and develop a few new alterations of our products to support longer reach and higher capacity networks. Those products are now on the drawing board, and we have a way forward that we believe in very much. Some of it being, of course, not suitable to share to the open market yet, but it will be announced and released down the line. The third area of investments, where we are getting exceptionally good feedback from our customers on the work that we have already done, is in the software space, agentic AI software and automation, where we've had the luxury not only to have the right team in place to do this, but also to have the right timing to develop new software platforms where we can utilize everything that's available to us through modern software development, which is, of course, more difficult to do if you have a huge legacy to deal with while developing your products. As I said, we're getting very good feedback from our customers. We believe that we are ahead of competition broadly. We believe that some of the ideas that we are bringing to the table are unique and very beneficial for our customers. Stepping into a new era of growth is the ambition, we will, as we have always done in Smartoptics Group, plan, execute, measure, change the plan as needed, execute, and measure again, systematically invest into our products, systematically invest into scaling our organization to also utilize new technologies to enhance our operations, and to become a much more efficient company overall. When we measure ourselves against competition and peers, we can see that already today, Smartoptics Group is producing a higher revenue per full-time employee than most other organizations. We want to continue to scale that in order to outperform the market in yet another way. That's something to study going forward, how we're performing against those metrics, and that's something that I expect us to talk a little bit more about down the line. When we are there, lead and really become a top-three vendor in the target markets in North America and EMEA and increasingly APAC. That is the ambition. Of course, scenario planning is everything, we've been doing a lot of that in the spring here to give us a solid roadmap forward, also a financial roadmap that we believe in, that we think that we can execute on. When we do that, we're seeing a number of scenarios, and we therefore provide you with a range in terms of revenue potential, the $300 million-$400 million being the next target for the company. And of course, to achieve a CAGR of over 25% going forward. We are very committed to profitable growth as we have been over the years, and we're now starting our journey towards EBIT margins above 16%. Having said that, I think it's important to look at the roadmap that we have ahead of us. I think that the EBIT margin target that we are talking about here, it's something that we're striving against and that we are absolutely targeting, and we're absolutely seeing an upside to those numbers when we do our modeling. It's something that we want to talk about for the second half of the planning period. My focus and the team's focus is now going to be on revenue and revenue growth and the investments that we need to do to achieve that. Only keeping one eye on the long-term EBIT target for now and coming back to that in a while. This is it. Full throttle ahead. We have a just do it attitude in the company, we will move forward. With that, I would like to hand over to Per to look at questions. Per Burman Yes. We will start with our analysts on the call. First up is Christoffer Wang Bjørnsen from DNB Carnegie. Christoffer, unmute yourself and ask your questions, please. Christoffer Wang Bjørnsen Good morning. Congrats on the great quarter. I just want to start out with the issues you mentioned in the first couple of weeks of the quarter, where you essentially said that you were, for battery purposes, shut down when it comes to deliveries. I think, does that kind of imply that if you had moved more effectively over to the new site, your revenues would be more into the $30 million? I guess you've said in the past that you shouldn't expect near-term quarters to go towards the 60s. Given that you are supply constrained rather than demand constrained, and you have a decent book-to-bill well above one, that the underlying output as an indicator for second half is quarters in the 30s rather than in the 20s. Are there particular component supply issues that makes it difficult to enter into the 30s in the second half quarters? That's my first question? Magnus Grenfeldt Yes. Thank you, Christoffer. As you know, we are not providing near-term quarterly guidance, and I will, of course, not do that here either. What I can say is that clearly our growth will not be limited by our own capability in the second half of the year. Production is fully up and running, and as Stefan mentioned, we delivered about half of our revenue in the last month of the quarter. No problem there. The remaining risk in this market is, of course, the component shortages that we see out there. That is something we've been talking about for a while. It's something that we need to continuously work with, and we have very strong partnerships, and we get very good support from our component suppliers today, actually delivering better than expected. Our hope is, of course, that they will continue to do so, promise one thing and deliver more. We have certainly done our homework, doing revenue planning for Q3, Q4, Q1, and Q2 now, scaling our inbound component purchases, et cetera. Yeah. Christoffer Wang Bjørnsen Just then backwards looking, are we correct to understand that you had two weeks of potentially zero output and that revenues would be in the 30s if you didn't have those transitional hiccups at the beginning of the quarter? Magnus Grenfeldt Well, we're talking theory here. I don't know what it would've been if we had not had those two weeks, but clearly we're delivering half of our revenue in the last month. Of course, the revenue could have been much higher if we had the similar performance through the quarter. Three weeks. I think a good data point is the fact that we delivered about 11% of our revenue in the first month. Really not a lot. Christoffer Wang Bjørnsen Okay, great. Thank you. Just moving on to the long-term targets. You have good visibility on the market forecast and so on, but can you help us understand a bit what kind of visibility you have on, let's say, the 2027, the 2028, the 2029? I guess there's not really a good degree of backlog backing data, but maybe more visibility on projects you expect or stuff you're already planning to bid on, just beyond the market forecast from Cignal AI, what gives you confidence that there is business out there for you to lift the revenues as materially as you're now indicating? That would be helpful. Magnus Grenfeldt Absolutely. The pipeline of projects that we are working with is considerably higher than it has been in the past. Of course, we have a very close dialogue with our customers around projects that are to materialize in 2027 and beyond. We are, of course, guiding our customers to give us as much visibility as they can, because that's the only thing that's jointly going to help us through any upcoming supply problems that we can see. We're seeing some of the larger competitors we have in the market now guiding that they have basically filled their order books for the year and beyond, which means that choosing Smartoptics Group, because we are the nimble player in the market who can deliver quickly, is going to continue for a considerable time. Last but not least, of course, the traction we have in our large account strategy and, of course, the amazing opportunities that we have ahead of us in relation to that is also giving us a lot of confidence. It's a journey. You need to get through all of the steps that you need to get through. In general, I would say that what you have seen of the large account strategy so far that has been driving our growth, the opportunities we are working on now are bigger rather than anything else. Yes. We have data points that give us confidence. Christoffer Wang Bjørnsen All right. Thanks. Just finally, more on the investment side. You mentioned more focus on revenues than earnings near term, which is, I think, great. Just, I think you added a lot of people during the quarter and now at 160 FTEs, which is a record number of adds both sequentially and in the year-over-year, as far as we can tell. Is this kind of a new ramp which puts you at the number of people that you targeted for the year, or will this new pace of hiring continue in the next couple of quarters? As an add-on to that, 13 new people quarter-over-quarter, what areas are you primarily hiring in right now? Just to get the sense of your pace of investment going forward. Magnus Grenfeldt The 160 is a little bit inflated. As you know, we moved production and those are still counted as FTEs, so we have 10-ish people that will be removed in the second half. It's not that dramatic. Good day. We have five minutes left before we need to close this call to get on to the next one. Per Burman I suggest we go to the next on the list, which is Markus Heiberg from SEB. Please ask your question, Markus. Markus Heiberg Thank you. The first one from me is on the new addressable market here, moving from 5 billion to 6 billion market to 11 billion to 12 billion, roughly. How much of your revenues are currently in these new segments, and how do you see that portion of revenues for Smartoptics Group moving over the coming quarters and years? Magnus Grenfeldt I can say that it will increase. We are not measuring that. We do not really have that visibility in our ERP systems. Unfortunately, I don't have the data. It's gradually growing and it's bigger and longer distance all the time. Growing for sure. We are still reporting all of our numbers into the metro regional segment. Markus Heiberg Yeah. It's fair to assume that you have meaningful revenues in those new segments already? Magnus Grenfeldt Yes. Markus Heiberg That's good. Last one for me to get through the queue here. On the gross margin and maybe in relation to EBIT margin and phasing over the coming quarters, it sounded like it was a one-off to some extent, or a one large account explaining the lower gross margin this quarter, but that could happen, I guess, also in the future. How should we think about the coming quarters in relation to gross margin and also the phasing towards your EBIT margin target? Magnus Grenfeldt I think on the gross margin, 2025 is a pretty good reference going forward, which is just below 48%. You are absolutely right that from time to time, we may choose to be a little bit more aggressive on a particular deal or account. That can happen in the future, too. I think the second part, the phasing to EBITDA, do we have an answer on that? Not really, no, for the second part of your question. Can you repeat, Markus, please? Markus Heiberg Yeah. More about. If you look at consensus, it's already in 2027, you will be about more than 16%, which is your target. Do you think that's reasonable, that you will be there already at more than 16% EBIT margin in 2027? Or will it be more backend loaded towards the end of your forecast period? Magnus Grenfeldt I think it's all going to depend on the revenue growth, which is, of course, the biggest contributor here. We will see, as I mentioned, only one eye on that target in the near term. The remaining three eyes we have will be on the investments that we need to do and the revenue growth, and yeah, to go after the bigger target. Markus Heiberg Understand. Thank you. Magnus Grenfeldt Thank you. Per Burman Up next, Øystein Lodgaard from ABG. Øystein Lodgaard Good morning. Congrats on the blowout quarter. A couple of questions to start off. First, if you can give some more flavor on this new breakthrough customer that you mentioned. Secondly, with these new targets, you're not specifying a timeframe. You're just saying long-term and second half of the period. Can you be more specific on when do you expect to reach $300 million-$400 million in revenue? Magnus Grenfeldt Yes. The new customer, I cannot give that much more flavor. It's a large U.S. Tier 2. It's a very good potential customer for a very long time at higher levels. That's great. When it comes to the timing of the target, you can see that we're also guiding for, or rather, we're putting an aspiration on what we expect in terms of growth. We have, of course, been working with several scenarios here. If you use our aspiration of 25%, you will end up in 2031. If we grow a little bit faster than that, it may happen a bit earlier, of course. Yeah. I think that's the timeframes we're talking about. Øystein Lodgaard Perfect. The second half, you say an EBIT margin above 16% in the second half of the period. Does that mean like 2029, 2030, or? Magnus Grenfeldt Yes. Øystein Lodgaard Also, you're saying you see a potential for higher margin longer term. Can you say something about what you think the margin potential of the business is? Is that something you don't want to comment at this point? Magnus Grenfeldt No, we'll save that for later. Øystein Lodgaard Okay. Thank you very much. Congrats again. Magnus Grenfeldt Thank you Per Burman Good. We have a couple of questions on the portal. We have some more time, actually. I just got notified we're not in a squeeze. From Jörgen Weidmann

Good. From Bent Mikael Haugan

Good. From Bent Mikael Haugan

Good. We have one more from Jörgen Weidmann