Serstech AB, a Swedish-based company specializing in chemical identification technology for security and safety applications, reported a net loss of KSEK 20,908 million for the year 2025. The company attributed the decline to geopolitical tensions and uncertainty surrounding new tariffs, which disrupted government procurement processes and significantly reduced order intake for most of the year. Total sales in 2025 amounted to 38.6 million Swedish kronor, a sharp drop from the prior year.

Impact on Revenue and Profitability

The company noted that threats of new trade tariffs effectively halted incoming orders for more than half of the year. With government agencies unable to predict which bidders would be affected, many delayed tenders until the situation became clearer. As a result, Serstech faced limited order intake during the first seven to eight months of 2025, leading to a significant decline in both revenue and profitability. Earnings per share fell to SEK -0.12, down from -0.04 in the previous year.

Despite the challenging conditions, Serstech achieved several key strategic objectives during the year. The company successfully completed the closure of its Romanian subsidiary in the second quarter, which reduced operational costs and improved R&D productivity. Budgeted R&D spending for 2026 is slightly lower than in 2025, but the company expects to continue accelerating development output.

Strategic Milestones and Future Growth

In the third quarter of 2025, Serstech launched an investment in artificial intelligence, significantly enhancing the performance of its products. Handheld Raman spectroscopy, a core offering of the company, is particularly well-suited for AI applications due to the need to process large volumes of noisy data in infinite variations. According to company officials, Serstech’s AI integration surpasses that of many competitors, offering a unique advantage in the market.

The company stated that its in-house production is now fully operational, complemented by continued production from its trusted manufacturing partner. This dual setup has reduced supply chain risks and is expected to cut the cost of goods sold. Serstech anticipates an average gross margin improvement of approximately ten percentage points in 2026 compared to 2025, with the long-term goal of achieving an 80% gross margin remaining unchanged.

According to the company, the main limitation in driving sales until 2025 was the product performance relative to competitors. That is no longer the case, and Serstech has begun to significantly increase its investment in sales. Throughout the year, the company saw a steady increase in its opportunity pipeline, leading to ambitious financial targets for the next five years. Serstech aims to achieve an average annual sales growth exceeding 30% through 2030, with an expected EBITDA margin of over 20% by 2027.

Shift in Focus and Path to Recovery

Serstech has invested heavily in R&D over the past eight years, with a notable increase in 2025. From 2026 onward, the company plans to shift its focus more toward sales and marketing. With a larger sales organization in place since the second half of 2025, improved product performance, and in-house production fully operational, Serstech believes it can significantly increase sales volumes while only marginally increasing operating expenses.

The company expects to return to strong and profitable growth in 2026. According to Serstech’s certified advisor, Svensk Kapitalmarknadsgranskning AB (SKMG), the firm’s strategic steps and enhanced capabilities position it well for future expansion. The company is listed on Nasdaq First North Growth Market, and more information can be found at www.serstech.com.

Serstech delivers solutions for chemical identification and has customers around the world, mainly in the safety and security industry. Typical customers include customs, police authorities, security organizations, and first responders. However, the company’s technology is not limited to security applications and could be applied to any industry that uses chemicals.