Strong momentum, multiple growth drivers - Q3 review

The Q3 result provides further signs that management’s strategy is delivering, with strong revenue growth translating into significant operating leverage and an EBIT margin of 41.4%. We expect Q4 to be another strong quarter, supported by improved performance in Americas, where we expect the renewal of a recurring contract with a US government agency that had been slated for Q3. We also expect support from continued customer migration to XRY Pro and growth in APAC. As we make no significant changes to our estimates, we maintain our fair value of SEK130–160 per share.

Americas stronger than the headline suggests. The reported 4% Y/Y revenue decline is partly explained by an anticipated US government contract renewal, worth cSEK20m, not materialising in Q3. With a relatively weak Q4 2025 comparison and the contract expected to be renewed in Q4 2026, we anticipate strong Americas growth in Q4.

Multiple drivers underpinning growth. Micro Systemation’s (MSAB’s) growth is supported by several factors, including the migration of existing customers to XRY Pro, which commands a c4x higher price than legacy XRY. MSAB also continues to gain market share in established markets while expanding into less mature geographies. Finally, growth in historically smaller customer segments, such as defence, provides an additional avenue for expansion.

Higher opex to moderate operating leverage. Management indicated that planned investments would limit margin scalability, although it aims to maintain an EBIT margin broadly in line with 2026 levels in the coming years, provided revenue growth remains strong. We believe this aligns with our forecasts, and we make no significant estimate changes.

Fair value reiterated. Our valuation is based on 2027e EBIT and an EV/EBIT range of 15–19x, corresponding to implied P/E multiples of 21–26x.