In the first quarter of 2023, Netmore recorded impressive net sales of SEK16.3m, representing a y/y growth of 48%. This achievement was primarily driven by the company's IoT and Property segments. It is noteworthy, however, that a significant portion of the revenue was non-recurring, a trend that was also observed in the preceding quarter. We attribute this to the ongoing geographical expansion and roll-out of infrastructure. Thus, we anticipate an increase in recurring revenues as the infrastructure becomes fully operational, and sensors get connected.

Netmore is experiencing impressive sales growth and geographical expansion, evidenced by its recent entry into the French and Polish markets, signing a deal with Kumbro stadsnät, and securing a record-breaking order in England, indicating a doubling of the total connected sensors compared to the previous quarter. The company's strong position in the European market and robust expansion are reflected in the remarkable sequential (46%) and yearly (217%) increase in connected sensors. With many new partnerships and accelerating order intakes, Netmore is well-positioned to continue on its path of rapid expansion and growth.

Following Netmore's Q1 2023 report, we have made minor adjustments to our sales estimates and cost base. Additionally, we anticipate an increase in recurring revenues, which is likely to result in margin expansion. While these adjustments have been made, the overall impact on our valuation is negligible. As a result, we are maintaining our fair value range and base case.