Translation: Original published in Finnish on 7/15/2026 at 7:45 am EEST.

Kreate's Q2 results continued where the strong Q1 left off, and the company's profitability potential also began to emerge from beneath the strong top-line growth. Given the H1 performance, the current order book, and the still very positive outlook, our updated estimates are above the company's guidance range for the current year. In addition, Kreate's order book currently contains significant multi-year projects that will provide support for future years. With our updated estimates, the pricing still looks attractive, although the safety margin has narrowed significantly after the share price increase. We raise our target price to EUR 30.0 (was EUR 25.0). We maintain our Accumulate recommendation.

Earnings again ahead of our expectations

Kreate's Q2 revenue grew by a whopping 152% year-on-year to 185 MEUR, clearly exceeding our 155 MEUR (+111%) estimate. In Sweden, revenue developed roughly in line with our expectations (Q2'26: 15.6 MEUR vs. 16.2 MEUR forecast), so the revenue beat came entirely from Finland. The growth was driven by themes already highlighted in connection with the June guidance upgrade, although the growth materialized stronger than we expected already in Q2.

Although revenue growth exceeded our expectations, in our opinion, the most positive aspect of the report was the clear improvement in profitability compared to the previous period, as strong growth was now more clearly channeled to the bottom line. Kreate's Q2 EBITA was 9.3 MEUR, significantly exceeding our 5.4 MEUR estimate. Relative profitability (EBITA margin 5.0%) also clearly exceeded our 3.5% expectation. The only weakness in the report was the operating free cash flow, which declined clearly year-n-year (3.8 MEUR vs. 9.3 MEUR). However, the decrease is explained by the normalization of working capital from exceptionally strong levels at the turn of the year.

Strong H1, order book, and outlook challenge guidance

Kreate reiterated its earnings guidance, which it had raised in mid-June. Driven by a strong order intake during the quarter, the order book rose to a record high, as expected. However, the level at the end of the quarter exceeded our forecast, even though higher-than-anticipated revenue consumed the backlog faster than we expected. Kreate estimates that 336 MEUR of the order book will be realized during FY2026. When considering the H1 performance, revenue from the expected recognition of the current order book alone would bring it close to the midpoint of the guidance range (619 MEUR, guidance 600-650 MEUR).

In addition to the current order book, the market outlook also remains positive. Kreate estimates that the market situation in both Finland and Sweden is currently stronger than normal and expects the outlook to strengthen further. Our current year estimates increased significantly due to a stronger-than-expected Q2 result and moderate positive estimate revisions for the rest of the year. We now expect the company's revenue to grow to 662 MEUR and EBITA to 28 MEUR. Thus, our estimates include a third guidance raise for the current year. We predict that the order book has reached a temporary absolute peak, although we expect the company to start next year with an even stronger order book than in the comparison period, which will support revenue development next year as well.

Earnings growth justifies the share price increase

With our updated estimates, Kreate is valued at 10x EV/EBIT and 12x P/E multiples for 2026-27. We still find the valuation attractive. In addition, Kreate's share offers a dividend yield of ~4% for the coming years. The fair value derived from our DCF model (EUR 30.4) also supports our target price and continues to advocate a positive recommendation. However, due to a significant share price increase, we believe there is no longer a safety margin in this year's multiples if earnings fall to or below the mid-point of the guidance range.