Q3 was the strongest in terms of revenue since Q2 2019, and sales in the period of SEK 101 million were up by just over 30% year-on-year and by 13% compared to the same period in 2019. All regions exceeded last year’s sales figures, contributing to the increase, alongside increased sales for the Aperi portfolio. Looking back, our customers’ investment appetite increased gradually in the first nine months of the year. Q3 2021 was the fourth consecutive quarter of year-on-year growth.
Operating earnings were SEK 12 million due to strong sales in combination with decreased personnel expenses as the third quarter included the holiday period. Revenue was derived from continuous orders from many different customers in the quarter. This is a sign of strength. For example, we received orders from customers that extended existing media networks, but also from customers that won rights to new sporting events.
Positive profit coupled with our systematic approach to reducing capital tied-up, generated positive cash flow in the year. As a result of the current components shortages, there is a risk of a temporary increase in capital tied up in inventories to secure customer deliveries.
Agreement in 5G synchronization totaling SEK 220 million after the end of the reporting period
Net Insight once again demonstrated its ability to commercialize its leading-edge tech expertise. On November 1, we signed an agreement with Turkish telecom operator Türk Telekom relating to 5G synchronization. The agreement is a milestone that opens up a large new market, estimated to have a future value of USD 1 Bn annually.
Components shortages affecting supply chain
The effects of Covid-19 include longer lead times and disruptions to the supply chain. Components shortages are expected to continue in 2022. We are proactively working to secure components, focusing on customer deliveries. Thanks to our systematic approach, we have been successful to date.
New IP functionality attracts customers
Our largest order of Aperi products to date, which was placed in the second quarter, was largely delivered during the third quarter. I am very proud of the successful integration of the Aperi products and this order win. It demonstrates how competitive our broad IP product portfolio is becoming as we transfer IP functionality to our other Nimbra MSR products. New functionality will be delivered continuously over the next year as part of our ongoing investments.
Award-winning Nimbra Edge confirms market-leading cloud solution
I am also proud that our cloud-based Nimbra Edge solution won the category Best Network Delivery Technology in the prestigious CSI Awards. The product has been installed and is operational with customers such as The Switch, which launched its cloud-based on-demand service MIMiC for transmission in August, which runs on Nimbra Edge. Last fall, The Switch supported a virtualized production of 21 Twitter Live programs for the NHL Stanley Cup. This is further evidence that our market-leading platform is reliable and delivers in demanding environments.
Repurchase of shares
As previously communicated, the AGM authorized the Board to repurchase a maximum of 10% of the total number of outstanding shares. The Board meeting on November 8 decided on a repurchase program will amount to at most 16 million shares or SEK 70 million. The repurchase program will commence in on November 11, 2021, and run until the AGM on May 13, 2022.
Net Insight well positioned for the future
We have made significant advances and our marketing has become much more effective. Continuous investment in product development, new functionality and our clear transition towards IP and cloud-based solutions are the foundation for the breadth of our product portfolio. Our extensive experience of remote production and time synchronization is closely aligned with market demand.
Alongside my dedicated colleagues, I’m pleased to conclude a positive quarter. Given the team’s strong commitment to our customers and Net Insight, we are taking positive steps in the right direction.
Solna, Sweden, November 9, 2021
Crister Fritzson, CEO