Yesterday, Bittium announced a licensing agreement with major defense player Indra Sistemas, whereby Bittium licenses its Tough SDR technology to Indra. The technology transfer has already begun, with Indra set to develop and manufacture handheld, vehicular, and manpack radios for its customers. The initial € 50m order targets the Spanish Armed Forces, with Bittium estimating an additional € 70m order over the next decade. Noteworthy, the deal also allows Indra to extend the manufacturing of SDRs for customers outside of Spain.
As a result, Bittium raised its financial 2025 outlook. The company now estimates Net Sales of € 116m - 120m (previously € 95m - 105m) while Operating Result was significantly increased to € 19m - 21m range (previously € 10m - 13m).
The finalisation of the Indra deal has major positive ramifications for Bittium:
The financial implications are overwhelmingly positive. The licensing deal can be divided into three revenue streams; (i) licensing, (ii) technology transfer projects and (iii) royalties. Due to the nature of the agreement, the first order of € 50m, should come with an EBIT margin of 70% (€ 35m) to be realised until the end of 2027. Noteworthy, the additional € 70m order is only a rough estimate and could potentially be higher. As mentioned, the deal permits Indra to develop and manufacture Tough SDRs also for countries outside of Spain, increasing Bittium's commercial reach in regions where it is not yet strongly entrenched.
Bittium has transformed itself from a niche Nordic player, to a European powerhouse in the field of tactical backbone networks and secure radio communications. We view the finalisation of the Indra deal as confirmation of Bittium's exceptional know-how in military-grade radio technology. Bittium possesses a technological lead over major peers, some of which struggle due to tech and integration issues, while others face challenging business environments due to politics. Bittium is now a major supplier of radio technology for the militaries of Finland, Estonia, Austria, Croatia, and Spain, and should win further tenders in the mid-term (eNuW).
Looking ahead, we continue to remain upbeat about the case. The company looks well positioned to cross-sell to existing customers; for example, Tough SDRs for the Austrian Armed Forces or TAC WIN systems for the Spanish Armed Forces. Importantly, we also see Bittium growing by winning further major customers. For instance, we think that Scandinavia, especially Sweden, represents a high potential market. As a reminder, in November 2025, the Finnish Defence Forces, the Swedish Armed Forces and Bittium signed a framework agreement in the field of command-and-control systems, which paves the way for Sweden's first orders from Bittium. We are also awaiting a highly anticipated tender in the United Kingdom, where Bittium will offer its tactical backbone networks and Tough SDRs by way of a partnership with BAE Systems.
We confirm our BUY rating with a new € 31.50 PT (old: € 26.50) based on DCF.
ISIN: FI0009007264
