Merus Power Q2'25 preview: Energy storage doubles revenue

Translation: Original published in Finnish on 8/15/2025 at 9:05 am EEST.

Merus Power will release its H1 earnings report on Thursday, August 21. We expect the company's revenue to grow strongly relative to a weak comparison period, particularly supported by the electricity storage order book. We also anticipate earnings to improve, although still remaining loss-making in the seasonally weaker first half of the year. We reiterate our Reduce recommendation and EUR 4.8 target price.

Strong growth expected, supported by energy storages

We forecast Merus Power's revenue to have grown to 14 MEUR in H1, representing as much as 110% growth compared to the weak comparison period (H1’24). The revenue forecast is however only 3% higher compared to the strong H1 top-line in 2023. The company entered 2025 with a strong order book of 30 MEUR, representing an impressive 116% growth year-on-year. The order book has been particularly supported by large energy storage orders in Finland, but it also includes smaller deliveries.

For new orders, H1 may fall short of the comparison period, as per our calculations, the company has announced 22 MEUR in orders for H1 (H1’24 announced orders: 35 MEUR). However, in the comparison period, the company announced only two large electricity storage projects, but the order intake announced in H1 of the current year also includes significant orders for power quality solutions (totaling 9 MEUR), which we believe have a higher margin level than energy storage projects. We estimate the H1 order book to be 39 MEUR, which is 15% below the comparison period's level.

We expect earnings to have strengthened

We estimate H1 EBITDA at -1.8 MEUR and EBIT at -2.5 MEUR. Both show a significant 1.5-1.6 MEUR improvement year-on-year, which is particularly supported by revenue growth. However, we forecast the material margin to have weakened to 39% (H1’24: 43%), which is affected by a weaker revenue mix, as margins in energy storage solutions are generally lower than in power quality solutions. We estimate the company's personnel costs to have increased by 19%, as in addition to developing the organization, the company has likely needed significantly more labor for production to deliver large orders. We forecast a net result of -2.9 MEUR, which is affected by estimated 0.5 MEUR financing costs. We incorporated the effects of the company's 2 MEUR share issue carried out in June into our forecasts, which led to an increase in the number of shares, a strengthening of cash reserves and equity, and in our view, also a slight increase in H1 net financing expenses.

No change in guidance expected

Merus Power is guiding for revenue to grow strongly in 2025, which we estimate corresponds to 20% or higher growth (we forecast 25%). The company's EBITDA guidance for 2025 is 1-3 MEUR (we forecast 2.0 MEUR). We have no particular reason to expect changes to the guidance in connection with the H1 report. However, forecasting the company's business figures has so far been challenging in the early stages of its growth journey, and visibility, especially into 2025 profitability, is still quite low for now. There is relatively good visibility for 2025 revenue, supported by a strong order book.

The 2026 order book still needs to be filled

Orders announced for 2026 are so far fewer than at this time last year, which slightly increases the level of uncertainty regarding the 2026 forecasts, which assume revenue continues strong growth (23%) and profitability improving significantly further (EBITDA 3.8 MEUR). The strengthening of profitability in the 2026 forecasts is supported by the stabilization of operations within the rapidly grown organization, the streamlining of processes, and the improvement in demand for higher-margin electricity quality solutions. The company's comments on market development and the year-end order book may affect the 2026 outlook.