Revenio Q2'25: Solid performance in brisk headwinds

Translation: Original published in Finnish on 8/8/2025 at 8:00 am EEST.

We reiterate our Accumulate recommendation for Revenio but revise our target price to EUR 28.0 (was EUR 30.0) due to negative forecast changes. Q2's operative EBIT was in line with our expectations, although revenue growth fell short of our expectations. Our forecasts decreased mainly due to FX changes, but we also believe that the growth outlook for the coming years has weakened slightly. Overall, things are progressing more or less as expected despite external headwinds, but the valuation demands earnings growth.

Solid performance given the circumstances

Revenio's revenue increased by 4.2% to 26.5 MEUR in Q2. FX rates weighed on growth as expected, and adjusted for them, revenue grew by 7.2%, which still fell short of our expectation of around 10%. Although growth remained somewhat subdued, sales increased across all product categories and on all continents. The role of the US decreased slightly (H1’25: 44% of revenue), as the most significant growth drivers were found outside the country. According to the company, the new MAIA was well received and has been delivered to customers who pre-ordered it.

Q1 EBIT was 6.1 MEUR (Q2’24: 5.3 MEUR) but included 0.5 MEUR in one-off “project costs”. In our view, these were related to an M&A project which did not materialize. Excluding these, adjusted EBIT (6.6 MEUR) was well in line with our forecast of 6.7 MEUR, although revenue fell short of our expectations. The weaker dollar is also reflected in costs, a significant portion of which are dollar-denominated. Earnings per share was only EUR 0.12, while our estimate was EUR 0.16. This was due to unrealized FX losses from the weakening dollar, which led to the net debt-free company incurring net financing expenses of 1.7 MEUR. Operating cash flow for Q2 was a solid 6.7 MEUR, and the company's balance sheet is very strong, enabling acquisitions if agreement can be reached with sellers on prices.

Forecasts were lowered primarily due to FX impacts

Revenio reiterated its guidance expecting 6-15% comparable growth and good profitability (excluding non-recurring costs). In H1, the company progressed in terms of growth near the midpoint of its guidance (9.6%), although Q1 was relatively clearly stronger. No other significant changes were apparent in the outlook: the trade war maintains uncertainty, but demand in the United States has been stable according to the company. The company commented that 15% import tariffs would burden the earnings level by 0.5-1.0 MEUR without the company's own measures, but the majority can be covered by inventories and price increases. The situation has not dramatically changed from the previous 10% level. Our earnings forecasts for the coming years decreased by around 10%, however, the main reason for this is the significant weakening of the US dollar against the euro. Revenio's growth drivers remain largely unchanged, but there are still delays in FDA approvals related to the integration of AI, and approval is not expected before 2027. This had a slight negative impact on our growth estimates. 

No significant changes in the valuation picture

The attractiveness of Revenio's valuation is strongly linked to the growth rate of its revenue and consequently its profit. Currencies distort the Q2 figures, but the situation is likely to continue until the end of 2025 and weakens positive development 'on paper'. Relative to the outlook for the next few years, we think the valuation (2025e adj. EV/EBIT 21x) is very reasonable, but the market's patience is questionable as the reported result lags.  There are also no clearly positive drivers visible in the short term, while the valuation does include expectations of earnings growth. In our view, the relative valuation is reasonable, and the cash flow model would support an even higher target price, through which we see the risk/reward ratio as quite attractive despite the continued high uncertainty.