Vaisala Oy Earnings Call Shows Resilient Growth

Vaisala Oy ((FI:VAIAS)) has held its Q4 earnings call. Read on for the main highlights of the call.

Vaisala Oy’s latest earnings call painted a cautiously upbeat picture as strong operational execution offset a tough macro backdrop. Management highlighted that growth exceeded long-term targets in constant currencies, cash generation was robust and Industrial Measurements was a standout, even as renewable energy demand collapsed, tariffs bit into margins and currency swings clipped reported results.

Revenue Growth Tops Long-Term Target

Net sales rose 7.4% year-on-year in constant currencies for 2025, beating Vaisala’s 7% long-term growth ambition. This performance underlines the company’s resilience, given significant headwinds from weaker renewables, tariffs and adverse foreign exchange movements that weighed on reported numbers.

Industrial Measurements Delivers Record Orders

Industrial Measurements booked record-high orders in 2025, up 13% year-on-year, or 21% in constant currencies. Net sales in the segment increased 1% in reported terms and 7% in constant currencies, driven by strong demand in the Americas, particularly the U.S., as well as data centers, semiconductors and power markets.

Order Intake Rebounds in Q4

After a softer trend earlier in the year, orders received turned a corner in the fourth quarter, rising 5% in reported currencies and 10% in constant currencies. This recovery lifted the total order book to EUR 185.8 million, signaling improving momentum heading into the new financial year.

Xweather and Subscriptions Accelerate

Subscription revenues, grouped under Xweather, surged 50% year-on-year, supported by the WeatherDesk and Speedwell Climate acquisitions. Excluding these deals, organic growth was still firmly in double digits, and management emphasized an ambition to sustain double-digit expansion in Xweather going forward.

Cash Generation and Balance Sheet Stay Strong

Operating cash flow increased by more than EUR 10 million year-on-year, driving a cash conversion ratio of 1.1 and underscoring solid earnings quality. EBITDA margin remained close to 15% for 2025, and the Board proposed a dividend of EUR 0.86 per share, supported by low leverage and a strong balance sheet.

Operational Gains and Safety Milestones

Vaisala completed and fully deployed an automated logistics center in Finland, aimed at improving efficiency and throughput. At the same time, health and safety metrics improved markedly, with a TRIR of 1.15 placing the company in the top tier of industrial peers in this area.

Cost Actions Stabilize Weather Segment

Cost adjustments in the Weather & Environment business, with one-offs booked in the third quarter, are largely behind the company. In the fourth quarter, management saw visible improvements as meteorology and aviation orders recovered to prior-year levels, suggesting the segment is stabilizing after a tougher period.

Renewable Energy Demand Plummets

The renewable energy market, once a high-growth and high-margin engine for Vaisala, “plummeted” in 2025 and left an estimated EUR 20 million hole at the start of the year. This sharp drop in project activity hit the Weather & Environment side hardest, denting both gross margin and overall profitability.

Tariffs Squeeze Margins and Operations

The introduction of up to 15% import duties between the U.S. and Europe disrupted trade flows and forced tactical responses. Mitigation steps such as price adjustments, pre-shipping and supplier negotiations limited the damage but still reduced gross margin by roughly one percentage point.

Currency Headwinds Hit Reported Figures

Exchange rate volatility proved to be another key drag, with euro strength versus the U.S. dollar and others reducing reported sales and earnings. Xweather, with more than 60% of its revenue in U.S. dollars, and other USD-heavy lines were particularly exposed to the EUR/USD move from about 1.02 to 1.16–1.18.

Margin Pressure from Mix and Investments

Gross margin declined slightly year-on-year, reflecting the combined effect of tariffs, foreign exchange and the collapse of high-margin renewable orders. EBITDA also edged down, as one-off items and increased spending on sales, marketing and commercial excellence initiatives weighed on profitability.

Weather & Environment Order Book Lags

Despite the late-year recovery in orders, the Weather & Environment order book finished below the prior year-end level. The main culprit was subdued renewable project activity, which more than offset the improvement in meteorology and aviation bookings in the final quarter.

Large Orders and Market Volatility Add Uncertainty

Management flagged that some large potential deals remain contingent on external factors such as public financing, exemplified by a sizeable Indonesian airport project. Because timing and execution are uncertain, these orders are not included in the current order book or in the official guidance.

Earnings Per Share Slightly Softer

Earnings per share came in slightly below the previous year, mirroring the combined impact of margin pressures and higher strategic investments. This occurred even though the EBITDA margin remained stable and cash generation was strong, underscoring the role of mix and external shocks.

Guidance Points to Continued Growth in 2026

For 2026, Vaisala guides net sales of EUR 600–630 million and EBITDA of EUR 95–110 million, implying continued growth from a solid 2025 base. The outlook builds on improved order intake, record Industrial Measurements demand and strong subscription momentum, while acknowledging persistent headwinds from FX moves, tariffs and a still-muted renewables market.

Vaisala’s earnings call balanced evidence of solid execution with clear-eyed acknowledgement of external challenges. Investors heard a story of resilient growth, strong cash flow and improving operational efficiency, set against tariff, currency and renewables headwinds, leaving the company positioned for further progress if markets normalize.