GomSpace Group AB (publ) (GOMX.ST) Earnings Call Transcript & Summary

Welcome to today's event where we have the pleasure to present GomSpace. To help us through today's presentation and answer questions in the end of the presentation, we are joined by CEO, Carsten Drachmann. Today's topic, financial report Q3, and I guess, also a little bit of insight into the market development. As always, there's a box down below. Do ask questions. We have already gotten a lot in. See if something is asked and maybe you can avoid it. And of course, you're also free to do it in Danish. I will try and translate to the best of my ability. But for now, Carsten, I think I will take off my picture and leave you to the center stage.

Thank you, Michael. And yes, welcome to our third quarter 2025 presentation. Do let -- do put in as many questions as you like. I know there's a lot already. I'm looking forward to answering them. I think I'll cover a lot of it during the presentation, but there will be time at the end. So we make space yours. This is the slogan we are using right now. This is what we're telling the world, and this is actually what we are doing. So we are really enabling commercial use cases, governments, nations to realize their business cases in space or perhaps protect a country, maybe Denmark. We'll talk about that. We'll talk about the investor communication key highlights, business unit summary and market talk. I will share a bit more what I see in the market. I know from your chat forums, you're paying attention. So there's a lot happening in Europe. We'll talk about that. And I'll [indiscernible] I think GomSpace should head compared to where we are now. Clarity and communication, always, always, always, try to communicate as much as possible internally and externally. Remember, we are doing now -- this is a trading statement, so it's quite short. So we do that in the first quarter and the third quarter. We will give guidance on 2025 in addition to cash flow. Also press releases, remember, they come out if there's any significant things on -- impacting the share price. So I have to communicate quickly. If I don't communicate quickly on something, it is not a major event. So anything that I need to say to -- that might influence the share price, I will communicate quickly. You can count on that. Then there will be other press releases that I think are useful for you that I send out. Other than that, please, please, follow us on, if you don't already do it, LinkedIn, social media. We have now a very capable marketing manager. So our social media presence has actually gone up a lot. So you will find a lot of useful information in there. Now, key messages for Q3. Let's take it. So revenue, well, year-on-year, we are up 94%. I think that's pretty good. And actually, the third quarter is also higher than Q1 and Q2 this year, so trending very well there. We delivered an EBITDA of SEK 15 million. So we're keeping the trend of delivering a positive operational result. Cash flow, minus SEK 38 million. It is related to some late payments I did not anticipate [indiscernible] that I had expected that we would be at breakeven for Q3. I will get a little bit more into that in a second. Strong delivery of order backlog; really, we are executing. We have a strong backlog from the previous quarters, and we are now executing on that. Hence, the higher revenue, hence, the EBITDA. Also, the EBITDA is driven by healthy margins. Those of you who have been with GomSpace longer remember, in the beginning, 2.5 years ago, I was talking about the profitability of the order backlog that we had was not good. It's really difficult to make money when the projects are close to 0 or negative. So we cleaned all of that up now. So the result also in an increased volume and then together with a healthy order backlog in terms of margin is helping us delivering these results. And that's where we need to be. That's how you do a business. Free cash flow, so shifting -- customer payment shifted out. There were 2 customers actually that had not paid as anticipated. One has paid in full. Other has paid in part. I saw there was a question, can we get some reassurance? I'm absolutely sure that they would pay in Q4. That is the arrangement we have. But it did shift from Q3 and pay. Actually, one of the reasons why we wanted to bolster our balance sheet with more cash, which we have done in Q3 -- we got a significant amount of cash in from a capital increase -- is exactly to be able to handle these situations. If you look at it going 2 years back, this would have been very difficult for us to handle. It's not a problem at all. We have SEK 250 million in the bank today. So it's totally fine, and it's part of doing business. It's also part of the programs that we are running are getting bigger and bigger, which also means the impact, when you see a shift between quarters, is growing. Let's take a look at the year-to-date. We are up 71% compared to same -- the first 9 months last year. EBITDA at SEK 35.4 million, I think that is very decent, up from a negative, minus SEK 17 million last year. So again, we are trending as a total for the year also towards delivering profitability. The accumulated cash flow, minus SEK 78 million. This is partly related to the deferred payment, as I mentioned, and also that we have -- we're increasing our investment level, especially into go-to-market resources, but also scaling up internally in terms of being able to test more and do more in the solutions space. So accumulated revenue well ahead of 2024. That trend continues. We are reaching a more steady level of delivering profitability. That's good, at least on the EBITDA level. We are now at 9% EBITDA. This is good. Adjusted, if you take out some of the warrant adjustments, it's actually at 12%. What is 9%? Let me try and give you a feeling for that. If you look into the industry, somewhere between 10% to 15% is average for the industry. Some run with a lot less, some with a little bit more. But I would say 10% to 15% is quite decent. And then, we are looking at -- we are growing. Growth typically means you have higher costs in anticipation of capturing more business into the future. So 9% is actually quite decent, and as you've seen also, well in the upper range of what we have been guiding on previously. EBITDA is also -- year-to-date, very happy with that EUR 3.4 million. It's not a lot positive, but it's positive. That's good. So we'll take it. And then, as I said before, the cash balance is SEK 255 million end of Q3. No, I'm not happy that there was a delay in payment. Am I worried about it? No, I'm not worried about it. I do believe that, that will be settled in Q4. That is a clear agreement. And I'm not worried because we have plenty of money to continue to execute. So it's not really an issue for us. That doesn't mean we're throwing away money. It just means we have exactly the right level of maturity, stability, solidity that we need to have. Some of you will also remember, I said we need to have a strong balance sheet to do business with nations, government business. We cannot have a weak balance sheet. We cannot have a weak cash balance. We don't. This is exactly the situation that the market also wants to see. We can put business with GomSpace. They're fine. They're solid, and they can execute without any problem. So that's basically where we are today. Okay. Let's dive into our 3 business units that we're operating in. Remember, satellite projects, programs running over a longer period of time. We have our products. We have some new cool pictures here. I thought you'd enjoy those, latest shots. The products where we're building the parts, the inside of the satellites, there's a battery pack here, could be a power module. So this is a very strong business and healthy business for us. Now, platform kits: I mentioned it previously, but let me dwell with that for a second. What are we doing here? In very, very simple terms, in order to build your satellite, you need a broad range of components inside. Like when you have your laptop, you need a hard disk. You need a keyboard. You need a screen. You need to have a processing board. You need a lot of things. The same thing in a satellite. We have now done it so that because we have all the bits and pieces that you need to build a satellite, we have that in-house. We have tested everything together. We're selling it as a kit, call it an IKEA kit, to keep it in Scandinavia. So basically, it's a plastic bag. You put all the stuff you need to build a satellite in that bag, and we have tested everything. So we have tested that all bits and pieces are working. We give them a put-it-together manual, make sure that all the screws are there like IKEA is getting good at or not. So we're delivering that, making sure that the customer has everything they need, so they don't have to worry about buying from 10 different vendors and trying to make everything work together. They don't have to do that. It works from us. So this is an example. I think it's a pretty cool picture that's exploding out and showing that the bits and pieces inside we are delivering as a kit. It gives a number of advantages, much higher reliability for the customer to do that. We aim at being able to deliver this within a few months, so from the customer decides to they actually have this. It's quite fast. It is also enabling us ourselves, GomSpace, internally that when we do on contract, we build satellites for customers, we need to build in volume, we can start from this. So it's very fast and much easier for us. A big competitive advantage for our product customers, big advantage for ourself as well when we need to build and especially when we need to scale. North America, I hope you all saw there was an order announced yesterday, about SEK 15 million for -- it was a product order for a fairly well known -- we couldn't disclose the name, but a larger satellite builder and operator. So this was great. It's -- some of you also noticed, it's actually a doubling up on the order intake in North America for some time. So that's very good. And we see also, we are a little bit behind in the Q3, but now here in Q4, we will definitely catch up on that front. So revenue overall for the third quarter, about SEK 118 million in total, majority in programs, not a surprise; year-to-date, about -- just shy of SEK 300 million. And that is -- I don't know if you remember, we closed around SEK 248 million last year for 2024. So in the first 3 quarters, we are well ahead of that. We have an adjusted EBITDA running up at around SEK 15 million here. And the -- sorry, I can't even read it myself -- for the year is SEK 33 million or SEK 35 million, I think it says. So nice growth. You will also see on the graph that we are now steady, so Q1, Q2, Q3 with a nice EBITDA performance. This is great. I've had a lot of focus on that with the organization. So I hope that we will stay at this level. That is my expectation. Operating profit: so EBIT is actually positive year-to-date. So that's good. Net profit is still negative. [indiscernible] some technicalities on the loans that we have with EIB and now with Hargreaves. There's some warrants attached to that. Those of you who are financial techies can look into it, but it's basically because when the better the share price does, it actually has a negative impact on the net profit. It has no impact on cash. It has no impact on our operational performance. It is purely a financial rule that you have to do it like that. I don't like it, but some people tell me I have to do it. Okay. No cash impact on this one. Free cash flow, we talked about that. It was negative in Q3. I don't like it, but I am okay with it. It is what it is. It's part of the operation. We have got plenty of money in the bank, and I do expect that in Q4, this is remedied. And for the full year, we're going back to a positive or at least breakeven free cash flow. So this is fine, not something I am worried about. Order intake: we had a lower order intake in programs as compared to the previous quarters. It's okay. There's SEK 215 million in one order coming in second quarter. We don't necessarily see that every quarter. And there will be more of those deals coming in a quarter. And if you look at the revenue delivered, it was about SEK 85 million from the programs for the quarter. Then you take that out. Of course, you need to have at least SEK 89 million -- or SEK 85 million again to replace that. We didn't in this quarter. It's fine. There will be more orders coming next time. If you say also in relation, let's say, programs needs to be around SEK 90 million or if you get an order for SEK 200 million every quarter, then yes, that's a really, really good backlog. So we are fine here. Product BU: order intake at a good level is about SEK 27 million. So that's good. I'd like it to go higher. That's, of course, the ambition. The revenue conversion was SEK 21 million in the quarter, which means we have a net positive impact on the order backlog. This will go up and down a bit, but it should preferably trend like this all the time. As mentioned before, North America, somewhat behind plan, still building momentum over there. But the SEK 15 million that came in yesterday was great. And obviously, you see that in the fourth quarter reporting that North America is doing quite a lot better. Other than that, they did drop on the order backlog because we converted a lot of that to revenue. Overall, I am satisfied with the order backlog. It was solid from the previous quarter. It dropped some SEK 40 million, SEK 50 million this quarter. It's okay. It will come up again in the fourth quarter and running into next year. Now, guidance: we updated on October 15. So what are we saying? Well, right now, with everything, all the orders we have come in, the way things are going in execution, we are now guiding at between SEK 420 million to SEK 450 million for the year. This is up with more than SEK 100 million from the previous guidance -- from the previous lowest guidance, which was SEK 320 million. This is good. You can do the math yourself. Right now, we are a little bit less -- below SEK 300 million for the first 3 quarters. So then, you can do the math and see what you think fourth quarter is going to be. We are also increasing our guidance on EBITDA percentage. We had said from the beginning of the year, minus 2%, maybe we'll have a small negative EBITDA, but on a good year, on a good day, we'll have 10%. We are now increasing that to between 7% to 13%. So we are very confident that we'll deliver a positive EBITDA, which would be quite an achievement for this year and considering where we are coming from. I maintain my guidance on positive free cash flow, expecting that we will resolve the negative cash flow from the first couple of quarters -- for the first -- from Q2 and Q3. It will be resolved in Q4. So overall, well done on revenue, I think. Thank you, team at GomSpace. Thank you sales team. Thank you, program management team. Thank you, product team. Thank you [indiscernible] production. Everybody is working very hard to make this flow. As our orders are going up and revenue is going up, there's a lot more that has to go through. We start all the way out of supply chain with our vendors who has [indiscernible] we need to build things faster. So it's a big teamwork, and it's quite an end-to-end event when this is going up, but we're doing well here. EBITDA is now, as I said, expected positive for the year. Double-digit growth in all business units, though America -- North America is a little bit behind, but the latest order is actually making up for that. Free cash flow, we talked about that, unchanged. But overall, and I'll talk a bit more about it, I think it's fair to say that I feel we are turning a page now in the GomSpace storytelling. We are coming from a challenging time, slowly, slowly building it up, executing a strategy to now we are in a situation that the results are very decent. Actually, they're really good. It's okay. We have a growing market, and we are now in a position with a strong balance sheet and a strong cash balance, so we can execute well into next year. We can really go out and try and capture the market. So for me, this is a turning page in the book of GomSpace. So let's look at a couple of other things. Well, look at that beauty there. This is a picture of a microsatellite, one of the microsatellites that we are building right now. So we are -- for sure, we are a world leader. We are, obviously, winning business around the world. And here, you see what the slightly bigger satellites look like compared to the CubeSat we've looked at before. Remember, we do business in many areas. It is a modern word, it's dual use. It means our satellites for earth observation and signal intelligence can be used for civil purposes, observing the changes of foresting, looking for efficient ship traffic, looking for illegal fishing around the world. Those same technologies can be used for defense purposes as well, looking for warships that we don't want in our waters or observing the front line in Ukraine with a camera from space. So the advantage of this technology, it is really dual use. And with all the defense spending coming in now, obviously, we are really well positioned to capture that growing market as well. Now, let's talk a bit about what's happening in the market right now. And again, thank you, online. Please keep posting. I think you're very impressed with the amount of information you're able to pick up, and I hope everybody reading there is appreciating the investors who are contributing well on the chat forum. So let's -- I picked a couple of things from Europe in particular. So did you see the 4 EU flagship programs announced recently? European Drone Defence Initiative. Okay. We were taking -- we weren't out of bed when drones came in over Denmark recently. You all know the impact. You all saw it. Something needs to happen. Clearly, EU is waking up and says, oops, that's not good. Big question is, of course, can we monitor this from space, from satellites? The answer is, well, we can monitor a lot of things, but it hasn't been a focus before. But by -- if you go in and work together with the defense and try to understand what kind of drones we are talking about here, we can see so many other things. So why not see this as well. This is probably in combination with other things. But I know it's on people's mind, can we do this from space? Yes, probably, we can do something from space that will help detect this. Eastern Flank Watch: this is about -- really about Ukraine and towards Russia and Belarus. So this is on the agenda. But look at the next one, European Air Shield. So really, it's a defense system, a defense detection system. And the last one here, European Space Shield. So I read -- in all of this, I read space. Space is part of this. Space can enable those ambitions that EU is having. So there's no doubt that space will grow. And obviously, GomSpace is part of that [ show ]. What kind of business we'll get, from where it's coming? We'll see. But what is for sure is that there's lots of budget coming. And if you take a look at that, so public investments in the space, Germany just recently announced EUR 35 billion investment into space only. It wasn't even for defense. This is space only over the next 4, 5 years. This is significant. This is actually more than the German space industry is able to deliver by themselves. So there's no doubt that money is not going to just stay in Germany. It will go outside as well. So this is great. So obviously, opportunity there. EU allocates EUR 800 billion towards defense and space. So here's [indiscernible] in that. But part of that EUR 800 billion also goes to the 4 flagship programs. So is there an opportunity for GomSpace and also for any space company in Denmark? Absolutely, yes. Denmark triples the contribution to European Space Agency. How it works with the European Space Agency is that each member state put in money to ESA, and then they choose which programs they want to support. And then, there's so-called geo-return. So when they support a certain program -- when Denmark supports a certain program in ESA, the money comes back to Danish space industry in terms -- in the shape of projects. So the fact that -- and thank you, Christina Egelund, well done, has actually managed to triple. This will also impact -- it's not just about GomSpace. It will impact positively the Danish space industry. So that's really well done. So there should be more opportunities coming our way. You can say, but Carsten, what's different from before? Well, the difference is obviously the amount going up. The biggest contributors to this is typically France and Italy, Spain, Germany to some extent. But it also means when they put in [ EUR 1 billion, that EUR 1 billion ] goes back to the country where it's coming from. So it's difficult for us to grab that. But here, we can. It's another reason why we have been in Luxembourg over the years is that Luxembourg Space Agency and Luxembourg actually contributing a lot more than Denmark to space. And that's why we are there because that has been benefiting us as well to get programs. I know some of you are interested in hearing about what's happening in Denmark. Well, you can follow the news as I can, and we are going to build war ships, and we're going to build jet fighters and we're going to buy anti-tank missile systems and long-range missiles, great. We absolutely need all of that. I am sure that within not too long, Denmark will also start buying space assets for surveillance of the Danish waters, including Greenland and Arctic, where we actually don't have as much information as we should have. And the Danish space industry and GomSpace can absolutely deliver into this. There's no doubt about that. I think it would be suitable and very likely that we have a Nordic joint solution with contribution from all the Nordic countries, including Denmark. Let's see how it plays out. Somebody wrote, but are you active in this? And the answer is, absolutely yes. Are you busy? Absolutely yes. Do you have a lot of meetings? Yes, we do. How it's going to play out? We'll see. So looking ahead, with considering the financial results we have delivered and considering everything that's happening in the market, what should GomSpace do now, looking ahead a little bit? So 5 key focus areas that I see, and you will see them repeated going into 2026. We need to align with the market. First of all, we need to continue to increase our product business. That will not change. It is good business. Every time a satellite is set up, it's an opportunity for us to sell. Right now, we are probably -- if you discount China and Elon Musk and Russia and all other launchers, which are very proprietary, GomSpace is in about 30% to 50% of all missions launched, all satellites launched. There's some kind of GomSpace component in there, big or small, expensive, not expensive, doesn't matter. We're already a big part of that. So, as this market overall is growing, we have a chance with our product business that we should pursue that. Two, prepare to deliver satellites in high volume. This is really important. The 18-satellite program we got earlier in the year has been super important for us because it has really helped us scale up our production, all the way up from our suppliers of components into our product production, into our AIV assembly room, which is in here where we are putting together the satellites. This is important. And now, having a real time having to put together 18 satellites in a very small period of time has really, really helped us. It's very important. We need to do more of that. To grow GomSpace, we need volume as well, and that volume comes with an ability -- you have to have an ability to deliver. We can't close 100 satellite program unless we have the capacity and the processes and we can document that we can do it. And this is the road we are on right now. So focus area #2, prepare to build satellites in high volume. Number three, continue to focus on North America. It is the biggest market. We will get traction. I have absolutely no doubt. Will it be very fast? Will it be a bit slower? I don't know. We'll see. We'll see. But it's definitely growing, and there is a demand no matter what. Then we really need to focus and we are focusing more on end-to-end solutions. For nations, it can be defense or it can be for civil use. What do I mean? Our opportunity, and I know you'll ask me about that, in Indonesia is an example of an end-to-end solution. The customer, the nations are not interested in buying a piece of technology. A satellite in itself is a piece of technology. Many of them want to have an end-to-end solution. I have a problem with illegal fishing, give me a solution. And we were able to do that in Indonesia. We need to replicate that. And we need across all aspects, also earth observation, signal intelligence, to have more end-to-end solutions. So we have to prepare for that. We cannot win without having prepared. So a lot of our focus going into 2026 is preparing for that, potentially including launching some of our own satellites to -- simply to test and verify and to show customers what we can do and also do use cases together with them. So number four, create end-to-end solutions, primarily for nations for defense and civil work. Five, very much tapping into the European market. We need to capture part of the EU and national space budgets in Europe, either through grants or funding, which is what Denmark is doing, and Christina Egelund has helped getting more money in there, but certainly by capturing contracts as well in this space coming out of all the money flowing through Europe. It's not going to be an easy process. It's a very political process, who gets what, geo-return, all kind of stuff. It's all fine. We will play a part in that. And this would also include certain scientific projects. We have our Juventas flying in deep space. I think there will be lunar programs coming up soon, so orbiting around the moon. So we'll take a piece of that. So focus on product business, deliver satellites in high volume. We need to get better, even better at that, continue to build North America, create end-to-end solutions, and gear ourselves towards tapping into the big budgets that are in Europe right now. All of these are also market-oriented. So it's not an internal structure based on who we want to sit next to at GomSpace. It is very much oriented towards the market. And it's very important for me to say that these are all things that are related to very specific go-to-market. Then we -- and behind that, we have to align ourselves to capture that. Okay. So next chapter, let's summarize it. Guidance going up, SEK 420 million to SEK 450 million, great. I think very, very decent EBITDA here. Market probably somewhere between 10% to 15% when it's performing at its best. We'll recover on EBITDA. I would say our strategy is working. The transformation we've been through has -- in the past 24 months or more is paying off. We will execute the final stretch of 2025 with confidence. You do the math. I'm not going to do it for you again. But we should be able to execute based on backlog. There is not a lot of outstanding orders that we need to take in. It's very minimal. So everything is backlog, so it's up to us to execute. We will -- we are positioned to scale with confidence. I don't need -- I can get more cash if I want to, but we have plenty. So we can really start focusing on scaling. And then, making -- market is moving in GomSpace's favor. We just looked at that. So there is a tremendous movement -- EU is one thing, but the whole notion of nations want to own assets. Nations does not want to buy from Elon Musk and Starlink. Nations want to control their own assets in space, meaning they want to control their satellite network. They want to decide what to do with them, when to do with them, when they're on, when they're off. This is a trend we see globally very much. In Southeast Asia, we see a lot of trends for that. We see it in Africa, and we see it in Latin America as well. So this is really a key thing. So I said that last time, cautious optimism from my side that the trend we see now should also continue into 2026. I don't see any particular reason why not. And if I may, I'd talk back to first quarter 2023. That was my first reporting here. I talked earlier about setting the sales. You have to set the sales correctly in terms of getting to where you want to. So we set our sales forward. And now, I would say, now we reset ourselves. Back in Q1 2023, I was very clear, focus on cash flow, focus on profitability. Already at that time, we said we're going to do North America products and customer contracts and programs. So we have focused relentlessly on that for now 2, 2.5 years. And I hope you acknowledge and see that the results are here now. It's paid off. It was the right thing to do. Now, going forward, from Q3 and onwards, it's really changing towards scaling and capturing market. The market is there. We're ready to capture it. So it will be a little bit different for us. We're also internally working on what is that mindset, how do we scale? And I know the GomSpacers are sitting out there. So GomSpacers, remember, we have to think a bit differently now that we need to scale. We have to embrace it and say, yes, yesterday was this, tomorrow is something else. Tomorrow is more complex likely. Tomorrow is a lot more. Tomorrow is a lot of new cases coming in, more customers coming in. So we need to prepare for that. But the market is there. We are ready, and we have delivered the results, I think, very well over the last 2.5 years. So let's assume it's go GomSpace also in 2026. Thank you.

Let's jump into some questions, Carsten. First, there's a lot of questions coming in, of course, of the delayed payments. I think you actually touched upon it. You are confident that money will come in. Sitting from the outside, I think maybe the last thing we need to get confirmed is, there is nothing you need to deliver. It's a delayed payment, not a dispute or something like that. Can you confirm that? I think you covered that subject very well.

Yes. Let me answer it even more precisely to that, Michael. No, it is not about a delayed delivery from our side. We have delivered what we should. Two customers, like I said, are paying -- should have paid money in Q3. They didn't. One has paid in full. The other one has paid partly now. It will be resolved in Q4. I know they are -- oh my God, this happened in the past. Yes, I know, it happened in the past, but that was in the past. I think we have a fairly good control of what's going on here. And also, we are in a solid position. We can manage it. I expect we'll see more of this shifting between quarters as the business is [ growing up ]. It's okay. That's why we need a strong balance sheet and a strong bank account, which we have.

Perfect. Then, of course, there's a little bit -- there's a couple of questions on also rumor about Indonesia. I know you have told me many, many times that you will announce when there is something new to announce. But there's a question here also this CEPA, which is a deal with the European Union and Indonesia about free trade. Do you think that helps? Or has that given you anything new? So that's a specific question. So any comments about Indonesia?

Yes. So CEPA, for those of you who don't know, yes, it's a trade agreement and free trade -- focusing on a free trade agreement between Indonesia and Denmark. I'm not sure it's signed yet, though. But of course, it will help facilitating business in Indonesia. For our specific programs with the Ministry of Fishery, we are already well positioned there. We've done all the work. So it doesn't really change anything there. But going forward, it's not a bad thing at all. Let me answer the Indonesia question. I will tell you if something is changing, good or bad. If I tell you nothing, nothing has really changed there. And I remain, as before, optimistic that this is going to happen sooner or later. But when I -- if I know, for sure, it will not happen or something bad has happened, I will tell you. I have to tell you. If something good is happening and I can see there's a clear progress, I will tell you. So until I tell you anything, everything as before.

Then a specific question about the Unseenlabs in Singapore. Is there any launch dates set? And can these satellites function as a mother satellite for other nanosatellites? So launch dates and as a mother satellite.

Yes. Let's start with the launch. Actually 3 microsatellites we are working on right now, 3 different types of microsatellites. They are all set to launch in '27-ish, not later on that. It will be '27, maybe late '26. But right now, we believe '27 is the plan for those satellites. Can it work as a mothership or a mother of satellites? Well, it's a good question actually because what we want to build now going into the future is a constellation of satellites with different capabilities. Let me give you an example. We have an earth observation, so satellite with a camera that can take pictures in very high resolution. It's a lot of data if you have to take picture of a lot of ocean and you don't know where there's anything to look for. So the result is, you have a vast of blue. And then, sometimes there's a ship or sometimes there's something interesting. That could be problematic because you have so much data. You don't know what to do with it. The data processing takes time, so you don't have any real-time information. However, if you combine this with a so-called [ SIGINT ], where we can see radar signals, well, the little [ SIGINTs ] can fly in front and say, "Hey, there is something interesting here, here and here. Earth observation camera satellite comes after and look there and there and there. And you actually -- by combining different technologies, you get much faster and more precise information. Do you need a mother satellite for that? Not really so. And -- but there could be some intelligence built in, but it's not depending on the size. So it doesn't actually matter whether it's a CubeSat or a microsat or something bigger. But the notion that satellites are -- via something called intersatellite links that they communicate directly between satellites instead of through Earth, that is something that is definitely coming. We are actually good at it at GomSpace. We have that technology. And in that constellation, yes, there could be some intelligence built into a satellite, telling one satellite to do something else on its behalf. So it's a long answer to a short question. But yes, there is a level of motherhood in certain satellites.

And then, of course, there's a lot of questions on the European -- the gaining of these investments that yourself alluded to. I think the ESA will make the budget this month and approve it, and everybody expect it to go up. So I think you covered that part also. Maybe I don't need to ask you what gain do we have of doing all the conferences. I guess, kicking on doors is not a bad thing. I think you also alluded to that and about the potential. There's a question here. Can you put some words on what you're gaining being part of Space Connect North? And then, of course, there's a question on one of your competitors. I don't think you want to answer that. But can you tell me what you gain from being part of the Space Connect North?

Well, let's do Space Connect North and then go back to why are we participating in a lot of different conferences. So Space Connect North is really about promoting [indiscernible] and the space industry we have here, primarily in Denmark, so focusing on making sure that the politicians and different government organizations understand that we are here, especially the defense as well. We are here. Denmark is a leading space nation. We have leading companies in really, really many areas of the space industry. And Denmark has bought absolutely nothing. It's very, very limited, a few demo satellites, including -- in 2018, they bought 2 satellites from us at GomSpace, flying up or Greenland. But Denmark hasn't done anything. And I say it with a warm heart, but also with a chill that come on Denmark, we can do better than this, and I know it's coming. So Space Connect North is also -- the purpose is to make sure that it is understood how much actually skills we have in Denmark that we need to facilitate to build the industry, but we also need to leverage as a nation. Let's go back and look at all the different conferences. Well, we had space conference up here in Aalborg, the European Space Conference because we have the EU chairmanship. That [ works ] really well. Why do we participate in that? Well, a number of reasons. We want to have GomSpace -- as a brand, we're hammering in everywhere. And you see some of it we do here, but we go internationally. Thomas Pfister, our Chief Commercial Officer, was in Thailand not so long ago, speaking with [ generals ] on the stage, talking about what we can do with space and how we can help them. I'm going to Singapore in the beginning of next year, where I've been invited to speak at Singapore Space Summit to talk about what space looks like in Southeast Asia. This is all about hammering in the brand. Last week, I was in Brussels, speaking about European resilience from space. I was invited to speak there. There's a lot of EU commissioners and senior people, and they're asking us for our input. So there we go and influence and say, well, what should Europe think when it comes to resilience in space and defense in space. So we are contributing with that. That's important. If you're a contributor, we can become a thought leader. If you're a thought leader, people will come and listen to us and buy from us. The last thing why -- number three, why we are very active is that we want to make damn sure that the Danish politicians and the Danish defense understands we have solutions to the problems that Denmark is facing right now, which is surveilling, in particular, Greenland and the Arctic, but also the waters around Denmark and Bonholm and the Baltic Sea. We have solutions to monitor that. So I'm hammering that in there to make sure that they -- before anybody is making any decisions about what to do, they understand you can buy it in Denmark, we've done it for a long time. So it serves a lot of purpose being so present and it takes a lot of time, but I believe it's worth it.

Check. And there was actually -- whether you expect something from the Danish government signed soon? I think you actually gave us -- alluded to that at the end of your presentation. So I think people can just listen to that comment there. Then, there's -- what challenges and opportunities do you see in scaling up production to meet the growing demand for defense-related products and solutions? What are your challenges and, of course, opportunities by scaling up? What gives you [ a lot of ] opportunities that you're able to fast scale up? And what challenges do you actually see in scaling up in that specific business segment?