April-June 2025

• Net sales increased during the quarter by 23,6 % to 127,2 MSEK (102,9). The organic and currency adjusted growth amounted to -0,8 %.
• Adjusted EBITDA increased during the quarter by 87,7 % to 21,8 MSEK (11,6) corresponding to an adjusted EBITDA margin of 17,1 % (11,3).
• Operating profit was 9,6 MSEK (2,5), corresponding to an operating margin of 7,5 % (2,4).
• Profit for the quarter was 7,0 MSEK (1,2).
• Result per share basic and diluted was 0,48 SEK (0,08).
• Cash flow from operating activities for the period was -2,7 MSEK (15,4).

January-June 2025

• Net sales increased during the first half year by 12,5 % to 227,2 MSEK (201,9). The currency adjusted growth amounted to -9,4 %.
• Adjusted EBITDA decreased during the first half year by 5,3 % to 19,7 MSEK (20,8), corresponding to an adjusted EBITDA margin of 8,7 % (10,3).
• Operating profit/loss was -1,6 MSEK (0,7) which corresponds to an operating margin of -0,7 % (0,3).
• Profit/loss for the period was -0,6 MSEK (-1,9).
• Result per share, basic and diluted was -0,04 SEK (-0,13).
• Cash flow from operating activities for the period was 11,5 MSEK (41,2).

Comments by the CEO

I am pleased to report that we delivered a relatively strong result for the second quarter, despite it being marked by uncertainty and a cautious sentiment in our market. The Group's improved sales of SEK 127.2 million - an increase of 23.6 percent compared to Q2 2024 - are clear signs of strength. Part of the positive outcome is attributable to our latest acquisition, Spanish company Quercus, which had a strong quarter and contributed positively to profitability. We also laid the foundation for improved margins going forward by introducing a new action program aimed at strengthening our long-term resilience and profitability. This initiative is expected to result in annual cost savings of over SEK 10 million.

Demand for our solutions is closely tied to long-term investment decisions and is therefore significantly affected by the global economic uncertainty that characterized the second quarter. That we are still able to deliver stable revenue with improved profitability under these conditions is a clear sign of strength. A key contributor to this is our recent acquisition of Quercus Technologies, which has significantly enhanced our offering within parking and access digitalization. At the same time, we have increased the share of our sales to business customers (B2B), complementing the remainder of the Group’s operations primarily directed toward the public sector (B2G).

Quercus, our latest acquisition, which develops and manufactures advanced digital solutions for the parking industry based on AI-powered video analytics - introduced its products through our own channels in the US and the UK during the quarter. This broadens and strengthens our overall offering. Additionally, Quercus’ operations in France were integrated into our existing French business, which over time will create significant opportunities for increased cross-selling.

During the quarter, we initiated a Group-wide efficiency program covering our operations in the UK, France, and Spain. The program aims to enhance organizational efficiency, simplify structures, and reduce costs - while continuing to invest in the development of industry-leading products and strengthening our commercial capacity.
These measures are expected to generate annual cost savings of just over SEK 10 million, with full effect from the fourth quarter of 2025. In connection with the program, we recorded a one-time cost of just under SEK 4 million.

Our leading technological expertise in key technologies for Intelligent Transport Systems (ITS) positions us well to meet the growing demand for multi-sensor solutions. Following the acquisition of Quercus, the Group’s capacity to develop industry-leading solutions has been further strengthened. We now have a total of 50 development engineers, of whom 27 are focused on advancing AI-based video solutions. In the second quarter, investments in product development accounted for approximately 14 percent of the Group’s total revenue.

The Group’s sales for the second quarter amounted to SEK 127.2 million, an increase of 23.6 percent compared to the same period in 2024. The organic revenue change for the quarter - adjusted for currency effects and acquisitions - was SEK -0.8 million, corresponding to a decrease of 0.8 percent. The Group’s total costs increased by SEK 5.5 million compared to the same period last year, entirely due to the inclusion of newly acquired Quercus from December 2024. Excluding these costs, the Group’s total costs were approximately SEK 5 million lower than in the corresponding period last year.

Sales from the Traffic Solutions business in the second quarter amounted to SEK 104.6 million, an increase of approximately 16 percent compared to the same quarter in 2024. During the quarter, Traffic Solutions accounted for 82 percent of total sales, while Rail Solutions represented 18 percent.

Gross margin at the group level amounted to 67.8% (69.3%) during the quarter, with an adjusted EBITDA of SEK 21.8 million, corresponding to an adjusted EBITDA margin of 17.1%. The decrease in gross margin is primarily attributable to Quercus operating with a slightly lower margin compared to the rest of the group, impacting the margin by just over 2 percentage points. Cash flow from operating activities amounted to SEK -2.7 million, and the group’s solvency ratio stood at 51.1% at the end of the period. Efforts to reduce working capital - mainly inventory levels, which had increased during previous component shortages - remain a key focus. Sequentially, inventory for comparable units decreased by nearly 7%, and compared to the same quarter last year, it has declined by over 17%.

Looking ahead, I can confirm that TagMaster is well positioned to contribute solutions to some of the major challenges facing the world’s transportation systems, such as congestion in densely populated areas, improved traffic safety, and the reduction of emissions from transportation. These challenges drive increased demand for our solutions, and we remain firmly committed to strengthening TagMaster’s position as a leading company in Intelligent Transport Systems (ITS). Uncertainty around tariffs, geopolitics, and regulations has led to a cautious stance, but we continue to focus on long-term growth based on a balanced approach to managing our costs.

Jonas Svensson, CEO

Auditor’s review

This report has not been reviewed by the company auditor.

Financial calendar

October 23, 2025: Interim report third quarter 2025
February 5, 2026: Earnings release 2025

This report and previous reports and press releases are found at the company home page www.tagmaster.com.