The revenues came in at SEK3.4m (SEK1.8m), 48% lower than our revenue estimate of SEK6.4m. The gross margin came in at 81% (76%), a bit higher than our gross margin estimate of 79%, and operating expenses amounted to SEK-3.7m (SEK-4.8m) compared to our OPEX estimate of SEK-4.9m. Moreover, adjusted EBITDA came in at SEK-0.7m (SEK-3.2m), and EBIT was SEK-1.0m (SEK-3.5m), which was lower than our estimates of SEK0.4m and SEK0.1m, respectively. Overall, the report did not include any major surprises in our view. Revenues came in lower than expected; however, we highlight the order flow after the reporting period, where ISAB has already received projects worth SEK7m.

We are positive about the order flow after the reporting period. We have high expectations for Q4, where we estimate revenues of SEK7.2m, and argue these four orders in Q4, so far, show that the company is on track to reach our estimate (however, we do not know how much of the orders that will be disclosed as revenues and how much that will be included in the order stock). We look forward to more orders during the quarter and argue there is a solid likelihood that ISAB will be profitable during Q4.

We have made some estimate changes for Q4 2023e and full year 2024e. Moreover, due to an internal policy, we have increased the risk-free rate in our model from 2.5% to 3.0%, increasing the WACC from 13.5% to 14.0%. However, these changes do not render in an updated fair value range, including a base case of SEK17, a bear base of SEK4, and a bull case of SEK27.