GOMSPACE (HAFN) Q2 2025: 45% Revenue Surge Powers 18-Satellite Win, Capitalizes on Defense Demand
GomSpace’s Q2 delivered a sharp revenue acceleration and a major contract win, underpinned by fresh capital and an assertive pivot to defense and government markets. Management’s confidence in full-year targets is bolstered by a strengthened balance sheet, but the strategy now rides on scaling execution and sustaining order momentum into 2026.
Summary
- Defense and Government Tailwind: GomSpace leans into surging demand for sovereign satellite solutions.
- Capital-Driven Execution: Fresh equity enables rapid scaling and larger contract pursuit.
- Scaling as Strategic Imperative: Management signals readiness for bigger deals and global expansion in 2026.
Performance Analysis
GomSpace posted a 45% year-over-year revenue increase for Q2, with programs (satellite build contracts) driving roughly two-thirds of total sales and products (satellite subsystems) growing even faster at 71%. This surge was punctuated by an 18-satellite contract worth SEK 215 million, a milestone that both validated GomSpace’s operational capacity and expanded its order backlog into 2026. EBITDA turned positive at SEK 9 million, a significant swing from last year’s near break-even, reflecting improved project mix and volume leverage.
However, free cash flow turned negative (SEK -45 million) as the company invested upfront to secure and deliver the large contract, a calculated move enabled by new equity and credit lines. Product revenue reflected Q1’s robust order intake, now translating into deliveries, while North America remained a small but growing contributor, at break-even, as the region’s pipeline builds. The order backlog is now more heavily weighted toward programs, enhancing revenue visibility but also increasing operational complexity and delivery risk.
- Program-Driven Growth: Programs contributed about 60 million SEK, nearly two-thirds of revenue, up 40% YoY.
- Product Revenue Rotation: Products surged 71% YoY, following strong Q1 orders, but backlog cycles remain short and volatile.
- Cash Flow Sacrifice for Scale: Negative free cash flow reflects strategic pre-investment to win and execute large contracts, not operational weakness.
Net profit was negative due to warrant-related accounting tied to share price appreciation, with no cash impact. The equity ratio rebounded to 40% after capital infusion, restoring the company’s ability to win government business and take on larger, more complex projects.
Executive Commentary
"We are growing with confidence. You’ll hear me say that a couple of times... Our cash flow this quarter was negative... But we knew now that we have cash coming in. We have capital coming in. We have good credit facilities. So we have been much more forward leaning to capture the growth that we've seen in the market. And this is then the outcome here that we are negative on the free cash flow."
Carsten Blackmann, CEO
"We have restored our balance sheet... Our equity ratio right now is about 40%. We have more than 200 million SEK equity and cash in bank, middle of August was 260 million SEK. It's the most money I've seen in a very long time. So everything is fine and we can continue to execute here."
Carsten Blackmann, CEO
Strategic Positioning
1. Capital as a Growth Catalyst
Fresh equity and credit lines have transformed GomSpace’s risk appetite, allowing the company to pre-invest in long-lead items and scale up for larger, more complex satellite programs. This capital cushion is now a strategic lever to win contracts that demand upfront delivery credibility and working capital flexibility, especially with government and defense customers who prioritize supplier stability.
2. Defense and Dual-Use Market Focus
Management is aggressively targeting defense and government markets, where urgency for sovereign control, surveillance, and secure communications is rising. Dual-use technology, meaning satellite systems that serve both civilian and defense applications, positions GomSpace to benefit from Europe’s increased defense budgets and the global push for marine domain awareness and national security solutions.
3. Scaling Execution and Organization
With order size and complexity rising, GomSpace is investing in headcount, solution architects, and outsourced production partnerships (notably with Nekas) to ensure delivery speed and operational scalability. This shift is essential to deliver on the 18-satellite contract and to position for further wins in North America and Asia, where the company sees significant pipeline potential.
4. Short-Cycle Product Model
The products business unit continues to operate on a short backlog cycle, with revenue visibility typically limited to three or four months. Management is intentionally keeping inventory and backlog lean, emphasizing fast delivery and cash rotation rather than accumulating long-term product orders, which they see as a sign of operational inefficiency.
5. Brand and Talent Magnet
The company’s improved financial standing and industry reputation are attracting both customers and talent, with GomSpace reporting increased inbound interest from engineers globally. This brand momentum is seen as a strategic asset for scaling into new regions and verticals, particularly as the company builds out its North American presence.
Key Considerations
GomSpace’s Q2 marks a decisive phase shift: from survival and cash preservation to growth and scaling, powered by new capital and defense market momentum. Investors must weigh the sustainability of this growth trajectory as the company transitions from smaller, opportunistic contracts to larger, multi-year government programs.
Key Considerations:
- Order Book Quality and Visibility: The 18-satellite contract extends backlog into 2026, but future growth depends on continued deal flow and successful execution.
- Execution Risk in Scaling: Rapid headcount and supply chain expansion introduce operational complexity—outsourcing partnerships must deliver on both speed and quality.
- Cash Flow Timing: Negative Q2 free cash flow is expected to revert positive in Q3 as contract payments arrive, but working capital swings may persist with larger projects.
- Defense and Regulatory Exposure: Greater exposure to government and defense may increase sensitivity to policy shifts, procurement cycles, and geopolitical risk.
- Short Product Backlog: The products unit’s fast-turn model supports cash discipline but may limit longer-term revenue visibility outside of major programs.
Risks
Execution risk is rising as GomSpace shifts to larger, more complex contracts that require upfront investment and flawless delivery. Order timing and working capital swings could pressure liquidity if project milestones slip. Defense and government exposure brings regulatory and political risk, while competitive intensity in satellite solutions remains high. Accounting volatility from warrant revaluation could obscure underlying profitability in headline results.
Forward Outlook
For Q3, GomSpace expects:
- Return to positive free cash flow as contract payments from the 18-satellite deal are received
- Continued revenue momentum as backlog converts to delivery
For full-year 2025, management maintained guidance:
- Revenue of SEK 320–380 million
- Adjusted EBITDA margin of up to 11%
- Positive free cash flow for the full year
Management cited confidence in outlook, supported by the major contract win and a strong balance sheet. Cost increases in sales and solution engineering are intentional, aimed at sustaining growth and capturing new government and defense opportunities. The company signals cautious optimism for 2026, with momentum expected to carry into the new year.
- Backlog visibility supports H2 and early 2026
- Strategic investment in talent and partnerships to drive future growth
Takeaways
GomSpace’s Q2 demonstrates a pivot from survival to scaling, with capital now deployed to chase larger, more strategic contracts in defense and government. Execution discipline and continued order momentum will be critical to sustaining the current growth trajectory.
- Capital-Enabled Growth: Fresh equity and credit lines have unlocked the ability to win and deliver larger projects, but also raise the bar for operational execution.
- Defense Market Focus: The shift toward dual-use and government contracts aligns GomSpace with long-term sector tailwinds, but increases exposure to procurement and political cycles.
- Execution Watchpoint: Investors should monitor backlog conversion, delivery performance, and cash flow timing as the company scales into more complex programs.
Conclusion
GomSpace’s Q2 marks an inflection point: robust revenue growth, a landmark contract, and a fortified balance sheet set the stage for ambitious scaling in defense and government satellite markets. The challenge now lies in sustaining order momentum and delivering flawlessly as operational complexity rises.
Industry Read-Through
The satellite and space systems sector is experiencing a pronounced shift toward sovereign solutions and dual-use (civil and defense) technology, as governments prioritize national security and data control. GomSpace’s success in winning a large, rapid-delivery contract signals that capital strength and operational credibility are now prerequisites to compete for major deals. Industry players must be prepared to invest upfront, scale quickly, and deliver on compressed timelines to capture these opportunities. The pivot to government and defense also raises the bar for compliance, partnership management, and geopolitical risk navigation—factors likely to shape competitive dynamics across the sector in the coming years.