This article first appeared on GuruFocus .
Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Norbit ASA ( STU:4NK ) reported a 40% year-on-year revenue growth in Q1 2026, demonstrating strong performance in two out of three business segments.
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The connectivity segment achieved a record quarter with a 45% revenue increase, driven by the GNSS onboard unit sales.
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The product innovation and realization (PIR) segment saw over 100% revenue growth, supported by strong demand from defense and security clients.
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The company maintained a strong cash flow conversion rate of 105%, leading to a 36% pre-tax return on capital employed.
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Norbit ASA ( STU:4NK ) is in exclusive negotiations for an acquisition that is expected to be accretive to shareholders, indicating potential future growth.
Negative Points
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The ocean segment experienced a 12% revenue decline compared to Q1 2025, attributed to lower sales of Winged Sonar products.
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Gross margin decreased from 62% to 53%, partly due to a higher share of revenues from the PIR segment and lower realized margins in connectivity and PIR.
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Foreign exchange headwinds negatively impacted the top-line, with a 5% decline in constant currency for the ocean segment.
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Employee benefit expenses increased due to new hires and wage inflation, impacting overall profitability.
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The company faces challenges with supply chain constraints, particularly with elevated lead times and increased prices for memory circuits.
Q & A Highlights
Q: Can you help us understand the underlying trends in the ocean segment? Both Q4 and Q1 came in softer than expected despite strong comparables, with FX acting as a drag. Should we interpret this as a sign of weakening and market share loss or are there temporary company-specific factors driving the slowdown? A: We are satisfied with the development in the underlying markets and believe our position remains strong. The softness is largely due to timing of large orders from rental companies, which significantly impacted Q1 2025. Adjusting for these factors, the underlying growth in other markets is healthy, around 15-20% compared to last year. (Unidentified_1)
Q: Could you provide more details on the add-on acquisition? Specifically, where is the company located, which products it adds to your portfolio, and what synergies you expect to realize? A: We are not disclosing further details at this time. We are in exclusive negotiations and will provide more information once the due diligence is complete. (Unidentified_1)
Q: Could you provide an update on market traction for the deep sea winghead sonars? A: The deep sea sonar market is still new for us. We have delivered some initial orders, but it is not yet a significant part of our numbers. We expect to establish a position in this niche application with more references and data. (Unidentified_1)
Q: Can you give some color on the FX impact on your Q2 guidance? Also, how has customer response been to the new Winged product release? A: The FX impact on Q2 guidance is around 8% negative due to currency fluctuations. Regarding the Winged product, we have introduced new features like a 3D point cloud viewer, which enhances our offering and opens up new use cases. (Unidentified_2 and Unidentified_1)
Q: Could you provide a postmortem on the acquisition of iData and reflect on the key lessons learned? A: The acquisition of iData has been crucial in building our connectivity segment. It has strengthened our position in GNSS-based tolling. The key lesson learned is the time required to align on culture and gain momentum. We are now satisfied with the setup and its contribution to our long-term strategy. (Unidentified_1)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
