Interim report Image SystemsJanuary 1 – March 31, 2026

Weak first quarter in a continued challenging market

The first quarter was characterized by continued low willingness to invest and lengthy decision-making processes among our customers, which adversely affected the Group’s order intake, net sales and earnings. Performance was particularly weak in RemaSawco due to the continued pressure in the wood products market, while Motion Analysis showed more stable development with increased order intake and a stronger order backlog in subscription and support services. In the current market situation, we are prioritizing cash flow, cost control and measures that strengthen financial preparedness, while continuing to invest selectively in product development and market presence.

First quarter January–March

• Order intake amounted to MSEK 18.6 (30.9)
• Net sales amounted to MSEK 17.7 (39.0)
• Gross margin amounted to 90 (72) percent
• EBITDA amounted to MSEK -6.7 (2.8)

 

 

Financial overview	Jan–Mar 2026	Jan–Mar 2025	Full year 2025
Order intake, MSEK	18.6	30.9	125.1
Order backlog, MSEK	72.2	107.5	69.8
Net sales, MSEK	17.7	39.0	168.5
Capitalized development costs	3.8	3.3	10.6
Gross margin, %	90	72	68
EBITDA, MSEK	-6.7	2.8	9.1
EBITDA margin, %	-31.2	6.6	5.1
Operating profit (EBIT), MSEK	-13.5	-2.5	-14.7
Profit after tax, MSEK	-13.8	-2.5	-14.6
Cash flow from operating activities, MSEK	-8.7	16.1	22.3
Solidity, %	50	55	58
Average number of employees	73	70	77
Earnings per share	-0.15	-0.03	-0.16

 

Disclaimer
This document is an unofficial translation. In the event of any conflict in interpretation between the English and the original Swedish version, the Swedish version shall take precedence and be considered the authoritative text

A word from the CEO

Jan Molin – CEO and President

In a challenging market, we focus on financial discipline and long-term positioning

The first quarter of 2026, like the full year 2025, was characterized by low willingness to invest and lengthy decision-making processes among our customers. This primarily affected the RemaSawco business unit, where the weak wood products market led to significantly lower order intake and net sales compared with the corresponding period last year. For the Group, order intake amounted to MSEK 18.6 (30.9) and net sales to MSEK 17.7 (39.0). EBITDA amounted to MSEK -6.7 (2.8). The gross margin of 90 percent (72) reflects the quarter’s revenue mix. The low net sales, particularly within RemaSawco, had a negative impact on both EBITDA and profit after tax, and it is clear that the Group’s earnings level is not satisfactory.

Weak performance in RemaSawco

RemaSawco continued to be affected by a market situation where profitability for Swedish sawmills is under pressure due to weak demand and high raw material prices, resulting in continued restraint in investment decisions among our customers. We have maintained our focus on delivery precision, customer satisfaction and the continued development of our service offering, while also implementing efficiency measures to prepare the business for a period of lower market activity. At the same time, it is important for us to continue our product development efforts so that we are well positioned when the market turns.

Motion Analysis continues to build recurring revenue

Motion Analysis developed steadily during the quarter. Order intake increased compared with the corresponding period last year and the order backlog for subscription and support services strengthened further. This is clear confirmation that the transition towards a higher share of recurring revenue is progressing according to plan. The business model has a negative effect on earnings in the short term, but gradually contributes to greater stability, improved predictability and a stronger foundation for future growth. The new software solution, an increasing share of subscription revenues and continued innovation in prioritized markets are key elements of our long-term ambition to strengthen the business unit’s scalability and profitability. It also feels like an important step that we are now releasing versions targeted at specific application areas. Through increased direct sales, we are also strengthening our presence in selected markets.

Focus on liquidity, cash flow and adaptation to market conditions

Liquidity was strained during the quarter and available cash and cash equivalents, including the undrawn part of the overdraft facility, amounted to MSEK 28.4 at the end of the period, compared with MSEK 38.2 at the corresponding time last year. To ensure financial flexibility, the Company strengthened its financing during the quarter through bank borrowings. Solidity amounted to 50 percent, a capital structure in line with the Company’s long-term target. We are monitoring liquidity development closely, prioritizing cash flow and cost control, and implementing measures to adapt the business to current market conditions and gradually strengthen financial preparedness.

Our strategic direction remains unchanged: to increase the share of recurring revenue, invest selectively in product development and AI support, strengthen service and support operations, and develop our offerings in the segments where we see long-term potential. We prioritize customer value, cost control and financial discipline, while building for improved profitability as market conditions strengthen. Our businesses have strong specialist expertise, established customer relationships and offerings that address clear efficiency and quality needs among our customers.

THE GROUP’S DEVELOPMENT IN THE FIRST QUARTER

Order intake, net sales and profit

Order intake amounted to MSEK 18.6 (30.9). Order backlog as of March 31, 2026, amounted to MSEK 72.2 (107.5).

Net sales amounted to MSEK 17.7 (39.0). Capitalized development costs amounted to MSEK 3.8 (3.3) and relate to both business units.

Gross margin amounted to 90 (72) percent.

EBITDA amounted to MSEK -6.7 (2.8). Other external costs decreased compared with the same period last year.

Personnel costs decreased slightly compared with the same period last year.

Depreciation/amortization amounted to MSEK -6.8 (-5.3). During the year, we have begun depreciation/amortization of several development projects in connection with commercial launch.

Net financial items amounted to MSEK -0.4 (-0.1).

Profit after tax decreased to MSEK -13.8 (-2.5), which is attributable to low net sales in RemaSawco in the continued weak wood products market.

Financial position, investments and cash flow

The Group’s investments in fixed assets during the quarter amounted to MSEK 4.3 (5.5), of which MSEK 3.8 (3.3) related to capitalized development projects. Capitalization of development projects takes place in both business units.

The operational cash flow during the quarter amounted to MSEK -13.0 (10.6). Solidity as of March 31, 2026, amounted to 50 (55) percent. The debt-to-equity ratio amounted to 0.2 (0.0) times.

Available cash and cash equivalents including the undrawn part of the overdraft facility amounted to MSEK 28.4 (38.2) as of March 31, 2026. During the quarter, the Company strengthened its financing through bank borrowings.

ROLLING 12-MONTH ORDER INTAKE, REVENUE AND EBITDA

The Group’s rolling 12-month EBITDA margin during the quarter amounted to -0.3 percent. The Group’s long-term EBITDA target of delivering a stable 15 percent EBITDA margin requires growth in net sales and, given current market conditions in the wood products industry, this proved difficult to achieve during the first quarter. The pace of the ongoing transition to a higher share of subscription and support agreements within the Motion Analysis business unit may also affect how quickly the long-term target is reached. Over time, the changed business model will lead to growth in both net sales and EBITDA, and we see again this quarter that the development continues positively according to plan.

BUSINESS UNIT: REMASAWCO

RemaSawco provides solutions to optimize production in the sawmill industry. The product portfolio includes proprietary software that, with the help of laser, 3D scanning, X-ray, and automation, measures and analyzes timber and boards throughout the sawmill process to maximize value exchange, minimize waste, and thus increase customer profitability.

Performance during the period

During the first quarter of 2026, market conditions for Swedish sawmills remained weak, which also affected RemaSawco. Raw material availability was uneven but increased somewhat as a result of the storms that hit Sweden, which provided access to storm-felled timber. Log prices remained at historically high levels, but began to decline during the quarter, easing the cost pressure on sawmills somewhat without resulting in any clear improvement in profitability.

Export conditions for the sawmills remained under pressure, mainly due to weak construction activity in Europe and lower delivery volumes. Overall, the combination of high raw material prices, weak demand and pressured selling prices meant that margins for Swedish sawmills remained low during the quarter. The sawmills continue to show a reluctance to make investment decisions, and order intake declined to MSEK 6.5 (22.2).

The business unit’s earnings were negatively affected by lower sales volumes. Net sales amounted to MSEK 9.8 (28.3) and EBITDA to MSEK -5.9 (4.6), corresponding to a margin of -50.4 (15.6) percent. Delivery precision was high and customer satisfaction remained good. The business unit is well positioned for a market recovery, and efficiency improvement projects already implemented have built resilience for periods of subdued demand.

 

	Jan–Mar 2026	Jan–Mar 2025	Full year 2025
Order intake, MSEK	6.5	22.2	79.2
Net sales, MSEK	9.8	28.3	133.7
Capitalized development costs, MSEK	1.9	1.2	4.1
EBITDA, MSEK	-5.9	4.6	19.8
EBITDA margin, %	-50.4	15.6	14.4

 

Product development

During the quarter, we continued to develop and update our product portfolio with a focus on increased performance and long-term competitiveness. The work included further development of our X-ray scanner as well as improvements in log measurement and sorting. We also worked on standardizing our hardware platform in order to increase the scalability of our solutions and strengthen key functions for digitalization and optimization throughout the sawmill process. We also continued to implement AI models both in internal ways of working and in our products, with the aim of increasing customer value, efficiency and predictability in our deliveries.

BUSINESS UNIT: MOTION ANALYSIS

Motion Analysis offers its customers software for the analysis of high-speed film and is the world leader in this niche. The software is sold under the product names TEMA and TrackEyeⓇ.

Performance during the period

Motion Analysis developed steadily during the quarter. Order intake amounted to MSEK 12.1 (8.7), an increase compared with the corresponding period last year. The order backlog for subscription and support services strengthened further and amounted to MSEK 42.2 (31.5) at the end of the quarter, contributing to increased long-term stability.

Net sales amounted to MSEK 7.9 (10.7) while EBITDA improved to MSEK 0.4 (-0.7). When fully implemented, the subscription-based business model will provide a more even revenue flow and higher earnings. The business unit continues to invest in both product development and market development, including through a higher share of direct sales in selected markets.

The new software solution constitutes a strategically important part of the Company’s growth agenda. The solution, in combination with an increasing share of subscription revenues and greater market presence in prioritized markets through direct sales, is expected to be a significant driver of future growth and improved profitability.

 

	Jan–Mar 2026	Jan–Mar 2025	Full year 2025
Order intake, MSEK	12.1	8.7	45.9
Order backlog subscription and support services, MSEK	42.2	31.5	40.7
Net sales, MSEK	7.9	10.7	34.8
Capitalized development costs, MSEK	1.9	2.1	6.5
EBITDA, MSEK	0.4	-0.7	-4.0
EBITDA margin, %	4.1	-5.5	-9.7

 

Product development

During the quarter, one of our products was adapted to a new release focused on the medical technology industry. Several development initiatives are under way with a focus on innovation for our target markets. A common denominator of these initiatives is AI, which is applied in the development of new functionality as well as being integrated parts of the solution.

OTHER INFORMATION

Parent Company

The Parent Company’s net sales for the first quarter amounted to MSEK 0.6 (1.0). Operating profit amounted to MSEK -1.2 (-1.1). Profit after tax amounted to MSEK -1.2 (-1.1). Investments in fixed assets amounted to MSEK 0.0 (0.0). The Parent Company’s available liquid funds as of March 31, 2026, amounted to MSEK 0.0 (0.0). The Parent Company’s equity as of March 31, 2026, amounted to MSEK 114.9 (116.2) and the solidity was 99 (98) percent.

Significant events after the period

The Motion Analysis business unit has received an order worth MSEK 1.5.

The RemaSawco business unit has received an order worth MSEK 3.3.

Personnel

The average number of employees was 73 (70). The number of employees at the end of the period was 72.

Number of shares

The number of shares on March 31, 2026, amounted to 89,207,818.

Accounting policies

Image Systems applies the International Financial Reporting Standards (IFRS) as adopted by the EU. The interim report for the Image Systems Group is prepared in accordance with IAS 34, Interim Financial Reporting, and the Swedish Annual Accounts Act. Disclosure in accordance with IAS 34, Interim Financial Reporting, is provided in notes as well as elsewhere in the interim report.

The interim report for the Parent Company, Image Systems AB, is prepared in accordance with the Swedish Annual Accounts Act as well as the Swedish Financial Reporting Board’s recommendation RFR 2, Accounting for Legal Entities.

Image Systems applies the ESMA (European Securities and Markets Authority) Guidelines on Alternative Performance Measures. Definitions of indicators are provided on page 15 and relevant reconciliations on page 14.

Risks and uncertainties

The Group’s significant risks and uncertainties include business risks related to agreements with customers and suppliers as well as other external factors such as currency fluctuations. The Group’s significant financial and business-related risks are discussed in the management report and under Note 3 in the 2025 Annual Report. No significant new or changed risks or uncertainties were identified during the quarter.

This interim report has not been reviewed by the Company’s auditors.

Financial calendar

Annual General Meeting 2026	May 7, 2026
Interim report January–June 2026	July 17, 2026
Interim report January–September 2026	October 23, 2026
Year-end report 2026	February 5, 2027

Long-term financial objectives

Image Systems aims to create long-term value growth for its shareholders. To achieve this, the Board of Directors has set long-term financial objectives:

EBITDA	>15%
Solidity	>50%
Dividend	20% of profit after tax

 

Linköping, April 24, 2026

 

Jan Molin

CEO

 

The information in this report is disclosed pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 AM on April 24, 2026.

Financial reports are available on the Company’s website http://www.imagesystemsgroup.se

Questions will be answered by:

Jan Molin, CEO and President

telephone +46(0)13-200 100, e-mail jan.molin@imagesystems.se

Image Systems AB, Snickaregatan 40, 582 26 Linköping, Sweden. Corporate registration number 556319–4041