Hello everyone, and welcome to GN's conference call in relation to our annual report announced this morning. Participating in today's call is Group CEO, Peter Karlströmer, Group CFO, Søren Jelert, and myself, Rune Sandager, Head of Investor Relations. The presentation is expected to last about 25 minutes, after which we'll turn to the Q&A session. The presentation is already uploaded on gn.com. With that, I'm happy to hand over to Peter for some opening remarks.
Thank you, Rune, and thank you all for joining us today. 2025 were a year where we continued to execute on our strategic and operational agenda in a difficult market environment, influenced by uncertain trade and macroeconomic weakness. In Hearing, we continued to deliver very strong performance, and we are now at record high market shares, driven by recent Vivya that was launched in the beginning of the year. Our premium products sell very well, and our margin is under control, in spite of an adverse country and business growth mix in 2025. Our product and software platforms are in strong shape, and we plan to launch further innovation in 2026 that will support our growth. In Enterprise, the US and APAC market continued to grow modestly throughout the year, while the European market still experiences some weakness.
We are pleased with our own execution in this environment, and well prepared to benefit from a continued gradual strengthening of the market. In 2025, we successfully accelerated several supply chain and pricing initiatives to manage the uncertain trade environment. We have managed this well and have mitigated most of this change. We have a strong pipeline of products in video and headsets that we will launch in 2026. The most important one for our financial results is Evolve3 headset platform, which we announced a few weeks ago and will start to ship later in this quarter. Additional launches under this new platform will follow later in the year. In Gaming, we continue to gain market shares in a challenging gaming equipment market.
While gaming also faces some of the same margin headwinds as Enterprise, we have executed sustainable margin initiatives and operational resilience initiatives, supporting our long-term margin aspirations for the division. In addition, we have also launched exciting products in gaming, including our new gaming headset, the Nova Elite, which is very much a premium offering. Also here, our product pipeline is strong, and we look forward to exciting launches in 2026. The markets that our three divisions operate in have been challenged in 2025. While we aspire to deliver stronger absolute numbers in the year, we feel very good about our relative performance across our divisions and focus on the things that are within our own control. We have taken several supply chain and operational improvement initiatives that we will benefit from in the years to come.
In addition, our product pipeline across our three divisions is stronger than it's been for a very long time. We remain firm in our beliefs that our markets remain attractive and look forward to further developing our business in 2026 and the years to come. With this introduction, I'm happy to hand it to Søren for further details on our performance in the group.
Thank you, Peter, and thank you all for joining us today. Essentially, as Peter mentions, we are satisfied with what we achieved during 2025 under these challenging circumstances. The group delivered a -1% organic growth for the year, supported by a 5% organic growth from our Hearing divisions, a -6% organic growth from our enterprise divisions, and a -2% organic growth from our gaming division. Our profitability, we are pleased with where we landed for the year with an EBITA margin of 11.4%, as this essentially demonstrates strong mitigation of what is within our own control. We have successfully increased prices and kept a strong focus on cost while harvesting group-wide benefits from the scale of GN.
The profitability also positively influenced the free cash flow generation, where we ended the year with DKK 1.1 billion in free cash flow. Moving to the financial details on slide 6. Starting with results of the Q4 of 2025, the group delivered organic revenue growth of -2%, reflecting solid execution across our divisions in some difficult market conditions. The EBITA margin ended at 13.4%, reflecting a group-wide cost focus, offset by an extraordinary R&D write-down due to the new partnership with Huddly in our video collaboration business. Lastly, the group generated free cash flow, excluding M&A, of DKK 744 million, reflecting the strong profitability and positive development from our working capital. For the full year, the group landed at an organic revenue growth of -1%, in line with our financial guidance.
The group delivered an EBITA margin of 11.4%, which reflects prudent cost management while strengthening business fundamentals and preparing for future growth. The free cash flow, excluding M&A, generated for the year was 1.1 billion DKK, driven by solid earnings and positive impact from working capital. In 2025, we have decreased our net interest-bearing debt by more than 800 million DKK, which also allow us to refinance our main loan facilities during the year with attractive terms. In summary, at a group level, we delivered solid profitability and good cash generation while continuing to improve the balance sheet. We also accelerated our efforts to ensure a flexible and diversified operational setup while making important progress on our product roadmaps, paving the way for growth opportunities in 2026 and beyond.
With those group highlights, I'm happy to hand you over to Peter for some additional color on the three divisions.
...Thank you, Søren. Let me start with our Hearing division. In Q4, we finished the year well with 7% organic revenue growth, reflecting a market that continued to grow slightly below its normal trends. Divisional profit margin for the quarter was 35.2%, reflecting a focused cost control. When looking back at 2025 as a whole, we can conclude that Hearing grew faster than the market and continued to gain market share. The full year organic growth was 5% in a market growing slightly slower than normal. The gross margin ended at 61.1%, which was below 2024, due to an adverse development in country and business mix, as well as a divestment of Dansk Hørecenter.
Divisional profit margin ended at 33.6% due to prudent management on sales and distribution costs, offset by the gross margin development and ongoing investments to support the strong momentum of our recent Vivya platform. The divisional profit margin was slightly below 2024, which is explained by margin underperformance in the difficult and unusual Q1 that we and the market experienced. In the last three quarters of 2025, we delivered a slightly better divisional profit margin compared to the same period in 2024. We are confident in the underlying margin structure and plan for margin improvement in 2026 and beyond. Let's move to the next slide for some highlights on the performance on Enterprise. The Enterprise division ended the year with a Q4 organic growth of -3%. This includes a larger FalCom order that continued its good progress.
Our Enterprise business grew in North America and APAC, while the weakness in EMEA continued. Sell out in the quarter was a few percentage points stronger than the sell-in, reflecting some channel inventory reductions in EMEA. Channel inventories were stable in North America and APAC. The divisional profit ended at 33.3% for the quarter, reflecting positive contribution from price increases and cost control, and offset by direct tariff costs. For the year of 2025, Enterprise managed to maintain its market-leading position in a challenged European market, while executing positive sell out growth in North America and APAC, resulting in organic revenue growth of -6%. As part of these numbers, it's worth highlighting that our sell out growth numbers were around 3% better than this, so global channel inventories have decreased compared to last year.
The gross margin increased 0.3 percentage point compared to 2024, in spite of the extra tariff cost. We are pleased about how we mitigated an uncertain trade environment through accelerated diversification of our supply chain and targeted price increases. The development of divisional profit margin reflects focused cost control, negative operating leverage, and cost related to the upcoming launch of the Evolve3 platform. Moving to the next slide and Gaming. In our Gaming division, we delivered organic revenue growth of -12% in the Q4 , reflecting a difficult gaming equipment market influenced by low consumer sentiment, as well as a very demanding comparison base, as we delivered 16% organic growth in the same quarter 2024. In the quarter, we demonstrated good cost control, delivering a divisional profit margin of 16.4%, despite the direct tariff cost.
For the year, we have increased our market share in a difficult market, resulting in organic revenue growth of negative 2%. We increased the gross margin for the division due to strong pricing discipline and benefits from the supply chain integration with Enterprise, partly offset by direct tariff cost. The divisional profit margin for the year reflects investments in product launches and extra costs related to managing the difficult trade environment. Let me move to the next item on the agenda, where we'll provide some more flavor on the divisional growth ambitions for 2026 and beyond. Starting with Hearing. In 2025, the market grew slightly less than normal. We still very much believe in the underlying growth drivers of the market, with increased adoption and a growing elderly middle class around the world. This will continue to support healthy market growth over time.
We are pleased that we have managed to outgrow these attractive markets for the last years, driven by strong commercial execution and product innovation. With the help of our latest platform, ReSound Vivya, we have further strengthened our position, and our momentum remains strong around the world. As announced earlier this week, we will now also expand the Savi portfolio, which will support growth, especially in countries and channels looking for a more affordable product solution. On top of these exciting portfolio additions, we have even more innovative product launches planned for the second half of 2026. Altogether, this gives us high confidence that we can continue to grow above the market and strengthen our competitive position in the coming years further. Let's turn to the development of the Enterprise business.
I think it's worth taking a step back and looking at how our headset business has been shaped over the last decade. We have been one of the front runners establishing the market and driving the professional headset penetration, and the enabler for this has been technology shifts, where we have been successful in developing products that caters for customers' needs over time. Back in 2014, we launched our award-winning Evolve portfolio that supported a rapid adoption of different UC platforms, driven by large technology infrastructure companies. What was unique and industry-leading at that time was the easy integration of our headset portfolio in the different UC platforms. We were also launched ANC and a strong microphone pickup.
The result was clear: professional headset quickly became popular and a standard for the knowledge workers wanting a high-quality experience.... Moving into 2020 and the hybrid work age, as we would call it, this was accelerated by COVID-19. This period in time required new technology for headset performance and integration. In early 2020, we launched the Evolve2 portfolio that significantly increased headset performance across multiple dimensions. As a result, global headset penetration increased further to around 20%, where it is today. And now, with a fast-developing AI solution, we're entering what we believe is the next era. We call this the modern work shift. And with increased adoption of AI solution, we believe that the next headset penetration will be driven by new technology demands. For it to succeed, you need to have a headset that fits evolving trends of tomorrow. Let me give you a few examples.
99% of knowledge workers acknowledge that poor sound is impacting online meetings. 78% of knowledge workers from multiple locations, which means that the design of headsets is important, and that a headset needs to handle ever-changing noise situation in different environments. Currently, we're also seeing a return to office trend among many companies, as well as a trend that the majority of new offices being built are having more open landscapes and less square meter per worker. This means that all of us need great solutions for work in these open spaces that are comfortable, and where we can have online meetings where all background noise is filtering out. And that would help you to come across very clearly, even in these challenging environments. AI workflows will also be a driving force.
Voice is three times faster than typing, making AI voice interaction much more efficient than if we type. Simply, we will likely speak more to our computers and devices and type less. This puts new requirements on the headsets in terms of how they can handle this with great accuracy. It will also likely increase the sound level in open spaces further, and further increasing the need of a great headset that can handle that. Lastly, cybersecurity is important today and will likely increase even more into the future and grow in importance, while an enterprise-grade framework for security is becoming an essential to be in this market. We have talked to numerous customers, partners, and analysts over the years to form a strong view on what's needed, and we believe that we have announced the...
What we have announced last week is really the headset that can take us into the new modern work era. Our latest enterprise-grade headset launch, the Evolve3, is designed to take the user experience to a new level while playing up against future and technology trends. It's not just another hardware update that is slightly better all around. The Evolve3 is also based on close to 10 years of research and development in its underlying technology. First and foremost, the AI-driven deep learning technology had been trained on more than 60 million real-world sentences, taking microphone technology to a completely new level with outstanding ability to separate speech from noise, and this is quite impressive, considering that it's also been possible even without the traditional boom arm.
These headsets captures 99% of words accurately in an open office environment, making it built for voice-led AI and screen productivity in any environment. In addition, it is the first of its kind to feature adaptive noise cancellation while you're on a call, and it comes through with improved connectivity and a significant step up in battery life, with the possibility of a full day use from only ten minutes of charging. In addition to impressive technical development, Evolve3 is also designed to be compelling. It is released in black and warm gray with a modern design. It's also designed for comfort. It is light and comfortable to wear all day.
From March, Evolve3 will be globally available in our high-end form factors: the 85, which has an over-the-ear fit and is designed for immersed focus, and the 75, which has an over-the-ear fit if you prefer a lighter wear and greater environmental awareness. We call this the best headset for modern work, and it's really built to match the pace and flexibility of what we all require. So let me move to the next page. As the working habits change, we need technology that adapts well. Whether you're in an airport, working at home, in the office, or somewhere else, Evolve3 is a perfect companion. Even in very noisy environments, voice clarity is state-of-the-art due to our DNN-based voice processing, taking the benefits from the wider GN Group.
As an example, you can literally stand in a room with loud music playing in the background, and the person that you're speaking to will only be able to hear you and what you are saying and not the music at all. The same applies when you're taking a call outside on a windy day, in a noisy coffee shop, or basically anywhere in any situation you can imagine. It's only you that are being heard. And perhaps most important, the strong sound processing make the headset the perfect companion for working, also in the normal open landscape, where you likely will be shielded from the noise around you, and when you make call, you need to be heard without any background noise and the chatter to enter your meeting.
The sound performance is so strong that you do not even need to mute when you're not talking any longer. The participants in the meeting will essentially only hear your voice and nothing more. We cannot be more excited about this launch and have more confidence in that it is really taking the headset to the next level and help us with the growth for the enterprise division in 2026 and beyond. It is developed to be the next penetration wave, while it also will assist the ongoing replacement of existing legacy products. Stay tuned because more will also come. We will, as normal, launch across mid and entry-level price points later, and then more affordable price points will come over time in the next 15 months.
Let's move to the next slide, where we'll also talk more about our aspirations for the gaming business. SteelSeries have been on the journey with increasing market shares for quite some time now. Since 2019, we have increased our market shares significantly in our core categories of headset and keyboards due to our best-in-class innovation. In mice, we have been defending our position during the last five years. This will be one of the focus areas for the coming periods, as we obviously want to improve our position in this market as well. The core gaming equipment market remains structurally attractive, supported by continued growth in the number of gamers, time spent on gaming, and a growing appetite for premium features.
These dynamics underpin a healthy long-term growth profile for the market, even though the near-term environment is held back by a muted consumer sentiment, in particular in the US. Against that backdrop, SteelSeries continues to win, and we expect our current momentum to continue in 2026 and beyond, and we continue to deliver new product innovation in the market that will support this growth. SteelSeries is not just another gaming equipment option. In SteelSeries, we continue to challenge status quo and expand our categories into new and better options. For 2026 and beyond, we expect to harvest broad-based market share gains by strong brand momentum and significant launches across categories, and into new form factors on top of the growing core portfolio.
While it is, of course, important that gaming returns to deliver strong growth, the division has also been on a journey to increase margins as they become a part of GN. We have come a long way by fully integrating gaming into the same systems and product flows as the enterprise business, and there are even more margin benefits to come over time by fully utilizing the GN at scale. In addition, we will continue our strong pricing discipline to mitigate impact from direct tariff cost and other unforeseen future external headwinds that could be a threat to our margins. Moving to next slides. Let me go through the assumptions for 2026. In 2026, we are planning for growth across our three divisions. We are convinced about our strong product portfolio that will help us to further gain market share in flat to slightly growing markets.
For the Hearing aid market, we expect the market growth for 2026 to be at the low end of the structural value growth of 3%-5% due to the current low level of consumer sentiment around the world. In this market, we assume that we can continue to gain market share, driven by our current momentum and further product innovation, and this is why assuming an organic revenue growth for the years between 3% and 7%. For the enterprise market, we believe that the growth patterns that we have observed outside EMEA in 2025 will continue. We also believe in some level of stabilization of the macroeconomic environment in the EMEA region to materialize during the year. All in all, we believe the global enterprise market will likely grow between flat and 2% in 2026.
In this market, we assume we can gain market shares, driven by the launch of our Evolve3 headset platform and a gradual strengthening of our video portfolio. As a result, we're assuming an organic revenue growth for enterprise between 0% and 6%. For gaming, we expect the market growth for 2026 to be modest, influenced by the current low consumer sentiment in the near term. In this market, we assume continued market share gains, though, driven by current momentum and a strong product innovation. And we believe that for gaming, we can grow between 7% and 13% in the year. And with that, I'm happy to hand it back to Søren to speak more about our guidance for 2026.
Thank you, Peter. All in all, when we apply these divisional assumptions, it leads to our guidance for the group, where we guide for an organic revenue growth of 3%-7%, driven by a continued strong execution and market share gains across our three divisions, as mentioned by Peter. Moreover, we are guiding for a reported EBITA margin of between 11.5%-13.5%, driven by a continued cost focus and operational leverage, offset by some short-term headwinds. All in all, the financial guidance supports our ambition to grow in a sustainable and profitable way that eventually will lead to realization of our long-term targets. On the next slide, I'll provide you with some more details on the elements that drives our 2026 EBITA margin guidance.
First and foremost, we are pleased with our ability to mitigate the impact on tariff in 2025 by effective price increases and a successful acceleration of our diversification of our supply chain. Specifically, in 2026, we will experience a margin tailwind from the temporary cost taking in 2025 to relocate our production lines. That tailwind is then more or less offset by the full year effect of tariffs, as these were only really impacting our costs from the Q3 of 2025. Then we will have a net negative effect from a step-up in absolute amortizations following the product finalizations of a number of projects, including the recent Evolve3 portfolio. This is, by definition, a non-cash effect, but is following our accounting principles.
Taking these factors into account, we do believe that we can drive a very healthy underlying growth in 2026, which will materialize across cost margins and operating leverage. Depending on the growth development in the year, we will be able to expand our underlying EBITA margin.
... by 1-3 percentage points, this once again underpins our strong group-wide margin platform potential. We remain firm on our long-term structural margin target of 16%-17%. With the underlying margin target we are guiding for this year, we are convinced that we can continue to drive yearly margins expansions beyond 2026 as a result of healthy top line growth and prudent OpEx management. On top of this, we will naturally look for gross margin opportunities as well. So to conclude, following a difficult 2025 due to a wide range of external headwinds, we are excited about the prospects of the coming year. With growth coming back to our three divisions, we will be able to deliver a strong, profitable growth while continuing our focus on strong cash flow generation and thereby continuing deleveraging. And with that, happy to hand you back to Rune.
Thank you, Peter and Søren, for the updates. This was the end of presentation. I will hand you over to the operator for the Q&A. Please limit your questions to two at a time, please.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone telephone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your questions, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Andjela Bozinovic with BNP. Please go ahead.
Hi, good morning, and thank you for taking my questions. Maybe one on Enterprise and one on Hearing. So on Enterprise, having in mind the Q4 performance, can you give us more details on underlying assumptions supporting the guidance and phasing of the growth throughout 2026? And just more broadly, what is your take on the expected decline in the PC volumes following the memory price hikes? How do you see this affecting IP budgets and GN markets, in particular? And on Hearing, can you maybe discuss the moving parts going into 2026 and the phasing of growth, and any indication of what is baked in, in your guidance in terms of market share gains, competitor launches, and market growth assumptions for both at the top end and front end? Thank you.
Thank you so much. Great questions and quite a lot to unpack there. Let me start with Enterprise. We recognize that 25 was, of course, not the year where we delivered the growth which we aspired for, but with that, there were still some positive things happening in the year. We saw the US market and the APAC market actually growing throughout the whole year, so the difficulties were in EMEA. We did see some underlying improvements throughout the year. Q4 ended a bit weaker than what we anticipated. Still, if we look back over the years, it has improved. Then, of course, also with our launches here, I talked a lot in the opening about Evolve3. We also have video products which we are launching this year.
We do believe that will support and growth also on top of the market improvement. In terms of the sequencing, I think it's fair to expect that it will be a gradual return to growth, so we will build up the growth over the year. So in some ways, the second half will be stronger than the first half. We also expect more product launches throughout the years, and the launches we have made now, while the products I think are truly fantastic, it is a premium product that's still a smaller part of the total enterprise volume. So all in all, I think we will build up the growth in Enterprise throughout the year. Then you asked about the relationship to PC shipments.
I think we need to admit that we have seen a correlation before over time. We saw a little bit less of that last year, and it's probably also linked to quite an accelerated forced upgrades of a lot of PCs, so with a significant amount of budget for many companies spent on this, so it's probably crowded out spending in other categories. So now perhaps PCs decline a bit, we do not necessarily see this as something negative for us. And so we believe in the underlying growth here and the gradual improvement of our market.
Then, if I move to Hearing, I think it's fair to say that there is, of course, a lot of many moving pieces when we're building up our growth aspiration here for the, for the year. I mean, as we talked to, we believe that the market underlyingly is growing slightly below its normal trends, and we're talking about the lower end of the 3%-5% value growth, which we consider to be normal. You asked about what we have factored in. We have tried to factor in everything that we know, of course. We do assume some competitive launches. We do assume, of course, some larger customers making a different type of decisions with opening up for more entrants.
So we have tried to factor in everything we can, but we, of course, also factoring in our own new innovation on our own launches. And we are entering the year with a good momentum. We had a 7% growth in Q4. We're entering with that momentum into this year and feel good about the momentum of Vivya. And with more innovation throughout the year, we think we can support a healthy growth over the year. So in Hearing, in terms of sequencing, I think we should probably expect a fairly even momentum throughout the year. Every quarter, we see a good opportunity to grow in, essentially.... Thank you.
Thank you.
Thank you. Next question comes on the line of Martin Brenøe with Nordea. Please go ahead.
Hi, John and Peter. Thank you for the presentation, and thank you for taking my questions. I have a quite long question here, so I think I'll just limit myself to this one question, and then I'll jump back in the queue. In your Q3 report, you wrote that GN has minority investments in non-core assets that may contain significant value and could be divested. I've done some channel checks, which are indicating that valuations Benefits is a billion-dollar valuation company, which is looking for external funding here in 2026. And this should translate into a potential divestment opportunity deal worth potentially billions in DKK, based on my analysis at least.
I know it's a bit out of your hands whether this happens or not, but could you maybe just confirm whether you expect a funding round in 2026, and whether you expect to monetize that opportunity when it arises? And then just, you know, as part of that, I guess it would also explain why you're not having a cash flow guidance for this year, which, you know, indicating that you are a bit more comfortable with your leverage ratio. And if possible, I know I'm asking for a lot here, but could you maybe just provide some details on what you think such an opportunity would affect your deleveraging path from here and how you would if you monetize it?
Otherwise, potentially just give some basic information about the revenue and the growth of this minority investments.
So, Martin, thanks a lot, and thanks for laying this out and your work around this. We started to talk about valuations because we realized it started to build up to a valuable asset that we wanted to be very open about. But we've also been clear on that. There are some unknowns also for us. This is a company that is privately held. It is, of course, we have an ownership share of about 19%. We have a founder in that that's been there since the beginning, and another large investor also. So we're one of the larger investors. I think we are very happy, of course, with the underlying performance of the company.
We do not want to comment on the details here, since it's not a public company. I think that all of you can approach valuations for requests directly from them. But I can just confirm that our view is that the underlying performance of valuations is strong and is strengthening over time, and been a very successful business build-up. So that's probably all we can say. And then in terms of how we think about our ownership, this is not strategic to us in terms of that is interlinked a lot with our existing business. At the beginning, valuations were very Hearing aid-focused, but they've grown in to be much more than that today, and as such, there is not a very strong link to our existing business.
So at the right point in time, to the right valuation, we would be open to consider if we're the right owner. But it's not anything we are unilaterally seeking. We probably will do that in great harmony with other key owners and the founder, which we respect a lot. And we will update you over time as opportunities will present themselves. There is nothing very imminent around this, but could very well be over time. I hand it over back to Søren for more commenting on the cash flow guidance and how to think about that.
Yeah, I think in many ways, you're absolutely correct that we do not guide for cash flow this year. Just to echo what Peter said, in the event something would happen, it would be M&A, and as such, we would always guide excluding M&A. So in that sense alone, it is not interlinked. But that's fundamentally, mentally not why we are not guiding for free cash flow this year. It's more the fact that we now, the last three years, have generating more than plus DKK 1 billion in free cash flow. We have demonstrated that when we have the margins that we've had, that we can generate the cash flow.
In addition to that, we have also now made a new loan agreement that in many ways is also testimony to that our endeavor to go towards 2.0 leverage by 2028 is definitely on the right track. And it was our opinion that where we need to focus now is to generate growth and the earnings, and when we do that, it will yield cash flow. And rest assured, we'll stay focused on getting to the deleveraging of 2.0 as fast as we can.
Thank you very much for taking my questions. I'll jump back in the queue.
Thank you. Next question comes from the line of Hassan Al-Wakeel with Barclays. Please go ahead.
Good morning, and thank you for taking my questions. Firstly, can you talk us through the drivers of Hearing aid market outperformance, and any regional performance that you can highlight? Your market outlook is for another softer year in 2026. It'd be great if you can walk us through how you see Europe within this and whether you're seeing any signs of improvement. And then secondly, on margins, given this should be a strong year of launches across your businesses, can you talk us through some of the building blocks for expansion in the margin over the course of 2026? I appreciate this is a wide range for the year, but the gap to the mid-term ambition remains pretty large. So, any updated thoughts on the bridge to 2028 would be very helpful. Thank you.
Thanks a lot. Let me start in the order you're asking this, essentially. So if I take Hearing, if we look on 2025, as you have heard us talk about before, in the first three quarters, this was very much Europe and international markets providing the growth for our business. We have been doing very well there. I think what's positive is, I think Q4, we saw a bit of a stronger performance and growth contribution also from the US side of our business. And if we look into then next year, I would say market-wise, we do expect the US to be a little bit stronger than it was in 2025. As we remember, Q1, in particular, was a very difficult quarter in the US.
But generally, still, the global market outlook, as we're saying, we do believe it's adding up to slightly below the structural growth of the market. That's our planning assumptions. Then in terms of our own plan for how to outgrow that market, I would say it's broad-based. We like to see outperformance versus the market growth in each of the region, and also very focused to drive success in each of the channel types, everything from larger key accounts to more smaller independents. So this has been the approach we have taken the last few years. It's very important for us to have that kind of balanced exposure and balanced ambition for our growth across, and this the same is how we think about 2026. And then you ask about Europe specifically.
I think it is clear that Europe has been a little bit better. I would say that the markets where we have been doing very well has been in particular in Germany. That has been a growth driver for us, and we continue to have very good momentum there. I think it is probably what I would highlight, but generally, I mean, the European markets for us has provided quite healthy support for our growth. I think it is also fair to say that in some European markets, we have a bit of a lower market share, also presenting an opportunity for us to catch up a little bit to what we think are natural market shares for us.
Then when it comes to the margins, I think a couple of questions here, one linked to this year's margin. For us, I think it's important to also recognize that we all the time have said that gaming is an area where we will, through the good synergies with enterprise, improve, amongst others, our gross margin. As such, we also do believe that the group as a whole will be able to improve its gross margin in 2026. Then in addition to that, actually, we also do see an opportunity on leverage of the OpEx base, essentially.
But to your point, we have factored in that we are launching, and then bear also in mind that within Hearing, we did launch Vivia in 2025, so those costs were actually sitting in 2025 as well. So in many ways, we are at a level of the cost base which we believe is adequate to actually support the growth that we are striving for within the three divisions. Then, when you look at the long-term margin aspiration of 16%-17%, I think fundamentally, it's also important the decomposition we did of the aspirations for 2026, where we have some cost items, amortizations as one.
We do believe when you come out to the outer years, that we will be able to leverage the top-line growth, and as such, be able to generate these margin increments as you see. So fundamentally, the underlying performance of our business should be able to get us to the 16%-17%, which we believe is right for GN as a group.
Perfect. Thank you.
Thank you. Next question comes from the line of Carsten Lønborg Madsen, Danske Bank. Please go ahead.
Excellent. Thank you very much. Yeah, a quick follow-up on valuations and the value here. Could maybe, I know you can't really talk about the value of it, but what will happen tax-wise, if you realize a gain on this then, should we strike some tax from that, at least then we know that. And then I have a question on Huddly. You talk a lot about Huddly, and you also mentioned video as a growth driver for you in 2026, something we have here on the outside been waiting for for a very long time. How meaningful is this collaboration, and do you expect... And have you factored in some of the means of growth of the video segment into your enterprise outlook for this year? That's it.
Okay. No, no. Thank you, Carsten. Let me start with the video and then hand it back to Søren for valuations Benefits and tax. I think that the Huddly partnership is meaningful in the way that it's addressing a gap which we've been having for a while, which is to work with companies in large video rooms. And Huddly is a company, it's a smaller company, but with great technology for how you can add cameras into video rooms. So we essentially have integrated this into our existing video platforms, together with their R&D. So it helps us a lot to now be able to address the full needs of companies, and it's been very well received when we're talking to customers, and I presented this.
We are launching this now in Barcelona this week at the big conference there, ISE. And we also have our own other video launches, some which we have made and some that's coming. I think it's meaningful for the video business, what we're launching. It should definitely support the growth of the video business. If you look on the total growth support for both enterprise and for the group, we need to remember that video is still a relatively small part in absolute numbers, so to say. But it's certainly are important steps to see some acceleration of growth on the video side.
But if you look into the growth ambition of our enterprise of 0%-6%, we are counting on some contribution from video, but the majority will come from the core of the business, which still is a headset.
Carsten, when it comes to your further deep dive on valuations question, I mean, I'll refer back to the question or the answer that Peter gave before, and as such, neither are we speculating in a potential tax implication of this, and as such, are planning on group level still with around these 22%, as we have also reported out on this year.
A small thing about whether we should, when we calculate the value, whether we should just assume that the value is the value or whether we should subtract 20% of tax?
Again, I wouldn't speculate in the value is the value. I mean, honestly, we do not have a comment on the value as such and when it will materialize on Nations. So that's the way we look at it.
Okay. Thank you.
Thank you. Next question comes from the line of Veronika Dubajova with Citi. Please go ahead.
Hey, guys. Good morning, and thank you for taking my questions. I will keep it to two, please. One, I just was hoping you could quantify the contribution from FalCom to the Q4 revenues, and then what your expectations are for 2026, and whether those have changed in any way, and kind of maybe just gauge some sort of risks to the upside and the downside around that, just so that we can think about that since it was a driver. And then I apologize, but I have to go back to sort of the expectations around the enterprise business growth. I guess, you know, there is a lot of concern and uncertainty in the sort of broader IT spending market.
I guess it'd be helpful to understand, you know, the conversations that you're having with your distributors, with some of the larger customers. What are you picking up in terms of corporates' willingness to spend, especially as they face a lot of other competing priorities for investments, whether, you know, that's PC units or it's things like AI? It'd be kind of good to understand what you're Hearing there, just to give us a bit more confidence in your kinda what seems to be a very clear message that enterprise should grow this year after many years of decline. Thank you so much.
Hi, Veronika. Thank you so much. Starting with FalCom, as you remember, we had a very good quarter in Q2, where we talked about more than DKK 100 million of business. In Q4, we had a similar quarter, so also very good quarter, and we did pre-announce that already earlier in the year because we had a more or less agreements for that order in a firm way already then, but it was delivered and revenued in the Q4. So if you look on the year in total, we made a bit more than DKK 200 million on FalCom for the full year of 2025.
And if we look into 2026, at the minimum, we see that we should be able to do the same level of revenue, but our base case scenario is probably to grow that a bit further. So I would say it could have some small growth contribution to the overall group growth, but I think we also need to remember, FalCom still is relatively small in absolute terms, so it's not a real needle mover. But we continue to see very positive development of FalCom, and we are pleased about that and very focused on continuing to growing it, of course. And then if I move to enterprise, now, I appreciate a lot, your questions around this and also how to think about this.
I do think that we can approach this both top-down, what we hear from leading analysts in terms of IT budgets and how much they spend on software versus hardware and so on. And if you do that, I think you're coming to a conclusion that IT hardware is probably modestly growing in most of the forecasts, but the relatively low growth numbers. And then if we observe it more from our own trends and the markets where we operate, which is predominantly headsets and video, as I talked about before, the market has been growing in the U.S. and APAC, which it's great to see actually stability of that growth. It's been going on every quarter for more than a year.
And then EMEA has been the troubling area for us and the whole industry. It is still not in growth in EMEA, so I would say that that's perhaps a major uncertainty here on what the market growth will end up with. But our best assumption, if we take the growth in North America, APAC, and an improvement in Europe, is market growth then for around 0%-2%. That is also consistent with what we are picking up with our largest distributors and resellers, and when we speak to large customers and I mean, trying to both plan our own business, but also talk about how they see and observe the future. So that's a market, and then we are guiding slightly above that because we feel very good about the products we are launching.
I hope you all have a chance to test them at some point in time soon, because we really think that this is, not just like, another product, so to say, another headset, but it really is taking the performance to next levels, and the initial reception have been very positive. It will take some time to build up the volume on this new line of products in the Evolve3. We will see some limited contribution already in Q1, but more throughout the year, essentially. So, that's the combined thinking in the resulting into the guidance then of 0%-6% growth for enterprise.
Got it. And can I just maybe ask a very quick kind of financial modeling question? Would you expect enterprise to grow already in the Q1 ? And I guess maybe, I don't know, Søren, if you wanna comment on the phasing of growth for you specifically, given some of the destocking dynamics you saw in the Q4 ?
No, no. We don't know, and we're not guiding per quarter per se, but we do believe you will see gradual strengthening of it. And at this point in time, we have some level of negative growth momentum, and we need to turn that into a flat to growing momentum. If that is happening in Q1 specifically or a little bit later in the year, we are not really guiding a lot among. It will be gradual. I do think, though, and I could have talked about that also in the overall dynamics. It's worthwhile to highlight that we did see some channel destocking for the full year of 2025. So that affected our growth in enterprise with a few percentage points.
What we have assumed for next year are fairly stable channel inventories, and that is also what is a little bit helping to create the range of the guidance, what is happening to the channel inventories.
Got it. Thank you so much.
Thank you. Next question comes from the line of Jack Reynolds-Clark, RBC Capital Markets. Please go ahead.
Thank you so much for the questions. I had a couple also on enterprise please across the US and Europe. So within the US, can you kinda quantify the positive growth coming out of the quarter? And has that sell-out growth translated into a recovery in sell-in so far in Q1? And how much—and if not, kinda how much destocking is there left in the US? Then within Europe, again, in enterprise, you mentioned some sell-out great recovery there. Can you point to which markets are seeing sell-out growth and kinda quantify that recovery? And again, are you seeing any kind of translation into sell-in growth recovery, and/or kind of how much destocking or how much inventory are your distributors holding there?
Thank you.
Thank you. So, on the U.S. market, in the quarter, we did see a sell-out growth, and we also had a sell-in growth, and they were actually fairly aligned, those two numbers. So, the channel inventories in the quarter in the U.S. were stable. We saw some more significant channel reductions in the beginning of the year, 25, in the U.S., but towards the end of the year, they have actually stabilized. So, the delta of sell-out and sell-in, in the last quarter were predominantly in the EMEA, and there we saw it with several percentage point differences. And then to the markets have been going best.
I mean, the last few quarters, a highlight of EMEA has been Germany, which is very encouraging for us because it is the largest market in the EMEA. It is also a market where we have a very strong position. So that market has been both in sell-out and sell-in growth in the last few periods. UK has also improved a lot lately. And then I would say the Nordics and a few others of the more Central European countries have been, I mean, also improving. And then we've been having a bit of a further challenges in Southern Europe.
But, I think that overall, if you look in the EMEA, it is ending stronger than it started, 25, so to say, and that's why we're talking about some level of improvement in trends. But the channel destocking have impacted also the numbers in EMEA.
Thanks so much.
Thank you. Next question comes from the line of Martin Parkhøi with SEB. Please go ahead.
Great. Thank you very much. Martin Parkhøi, SEB. First question, again, to Søren, on the margin. I'm still a little bit, you know, curious to understand the bridge towards 2028. In the short term, which is 2026, you have a range of two percentage points on the margin, and you believe three years later you have a better transparency, only have 1% range in your margins. So, how can that be? How can you? If you land in the low end, like 11.5%, how can you reach up in the 16%? What tools do we have to make such cost control? Then, second question, on the Hearing aid market.
We saw your gross margin going down this year, as you also rightfully say, that due to some channel and country mix. How should we see that mix in 2026? Also, if we get Hearing aid market, a slightly softer Hearing market again in 2026, as we saw in 2025, then there's a tendency to manufacturers starting to compete a little bit more on prices to reach their budgets. What kind of price environment have you baked in, and margin have you baked in on Hearing?
Hi, Martin, Søren speaking, and that's on the longer-term aspiration. I think it's the way we have also decomposed the 2026 guidance. We are of the opinion that it will, in our minds, also be a question of timing, as we will strive for the growth as the key vehicle for us to get to the long-term 16%-17%. Fundamentally, some of the investments we are taking in 2026 in, for instance, operations, will yield gross margin improvements when we come out in the outer years, closer to the 2028.
So in reality, we believe we'll be able to catch up in the event that we land in the lower end, and we believe that it's if it's timing, it will definitely be possible. So we are investing in an underlying improvement structure that will yield results towards the 2028 target.
Hey, Martin, for more on the Hearing aid margins in 2026, now, as we commented on, and you also highlighted in 2025, the gross margins reduced due to the growth mix essentially we had in the areas where we have low gross margins, channel types and geographies, basically. As we're looking into 2026, we do expect a little bit of a reversion of that into the higher margin areas growing more normally, and as such, supporting the gross margins.
What I also like to highlight here and had that in the opening readout are the divisional margins, because they were actually, if we look on after the difficult Q1, which was challenging in many ways, we're actually stable vis-a-vis the year before. And the explanation of that is that some channels where we have low gross margins also have a very, what should we say, compelling cost to serve, and as such, you might get a lower gross margin, but you still can protect the very good divisional margins. And we remain very focused on both type of margins. They're helping us to manage the business in a good way, but the planning assumption is some type of improvement on the gross margins for the year.
Thank you.
Thank you. Next question comes from the line of Richard Felton with Goldman Sachs. Please go ahead.
Thank you very much for taking my questions. Two, please. The first one is on gaming. I'd like to understand the confidence in the 2026 guide. I suppose that business was down slightly in 2025. Momentum sort of decelerated into the end of the year. So just trying to understand sort of the gap from 2025 to the 7%-13% guide for 2026, you know, between how much of that is the market getting better, how much is market share gains and product launches? That's the first one, please. And then the second one, thank you very much for sharing the detail on the Evolve3 launch. My question is, how impactful have launches been historically on the enterprise business?
I know for Hearing aids, you all get quite excited about new platform launches, but thinking about the business model and the type of customer base in enterprise, how important is that launch cycle to drive growth? Thank you.
Thank you so much for the questions here. If we take the gaming first, I think it's a combination of an improving market and, and then market share gains. If we look on the 2025, the market was relatively weak, I mean, around the world, and in particular in the US and Europe, where we have the majority of our business. So we do expect a bit of a stronger market environment. And then also have several great launches in the pipeline for the year across key core categories where we have meaningful business. Then I appreciate also when you're looking at... We all get a bit scared, of course, about Q4, which looks like loss of momentum.
I think it's important to bear in mind the outstandingly strong quarter, Q4, the year before, where the comp was also part of seeing that decline in growth. So, if you look more on sequential growth, quarter-over-quarter growth, it looks a little bit less daunting, so to say, to go from where we ended the year to growing into 2026. So, it is what we believe in as the base assumptions. And then the Evolve 3 launch for Enterprise, we think it's a very meaningful launch and that this really will support our business. And given that we are the market leader in headsets also, hopefully can help the whole market to grow, so maybe get a double help here in some way.
We have had this headset in early trial programs with both channels and lead customers for a while, and the feedback is overwhelmingly very positive. At the same time, we need to recognize that several years since we launched a line like this, so it's hard for us to analytically come back and say exactly what it would mean, but definitely we are of the firm belief it will be a strong contributor to finding a way back in growth for Enterprise, essentially.
Thank you very much.
... Thank you. Next question comes from the line of Niels Granholm-Leth with DNB Markets. Please go ahead.
Thank you for taking my questions. You are calling out a headwind in your margin for this year because of less positive effect from R&D capitalization. I mean, the effect for 2025 was actually a little more than 2 percentage points. So would you expect to neutralize the effect completely this year, or is it just gonna be a less positive effect in 2026? So that's my first question. And then getting back to the phasing in the enterprise division, so how should we think about the growth trend throughout the years? I mean, how are you continuing to expect kind of flattish to negative growth in quarter one to improve in the second half, or how should we think about that? Thank you.
Yeah, hi, Neil, and and thank you for your question. The way we have planned it out and can see it, of course, operating in the asset base we have under R&D, we believe that the headwind or the less headwind is or the headwind, this case, is to the tune of 1%. So it's not a full erosion of the 2% that you rightfully quote, but think of it at least as 1%. That's for the planning purposes. And then when it comes to enterprise facing, I think the best way to do it is to expect a gradual buildup of the growth, so second half stronger than the first half.
And I think it's both about generally getting the growth momentum going and also linked to the Evolve3 launch. We will see some impact in the Q1, but we will see more impact of the Evolve3 launch later in the year. We will also launch more headsets later in the year, also further contributing to that growth. Then, of course, if we look on the enterprise overall number, I think it's helpful, of course, to keeping a track on the large two FalCom orders and the in the comparison base from last year. And if we look on FalCom for 2026, I said we aspire to have at least the same level of revenue, but also FalCom will likely be bigger in the second half than in the first half for 2026.
So that's probably as much as we can help you here, but do expect a gradual buildup of the growth momentum. I think that's the conclusion here.
But shouldn't we expect any channel filling from the Evolve3 launch already here in quarter one?
Some level, definitely. But again, as I said, the Evolve3 85 and 75, these are the premium products, which is meaningful, but a smaller part of the total enterprise sales. The mid-tier is where we have most of our Evolve3 sales, and these type of products will launch at a later point in time. So that's what I meant with the sell-in will contribute in Q1 to some extent, but I think you will have even stronger Evolve3 contributions later in the year.
Thank you.
Thank you. Next question comes from the line of Julien Ouaddour with Bank of America. Please go ahead.
Good morning. Thank you very much. I mean, like, sorry, guys, I come last, it won't be too different from my peers. I want to focus on the enterprise guide again. I just think you need to give us a little bit more confidence for that. Just if I summarize, you're talking about gradual markets improvements, 1Q unlikely to grow, back-end loaded year for enterprise and gaming. I think 4Q was softer than expected and not yet significant improvement in EMEA, with declining PC shipments for next year. That's basically what I take from the call. I'm just wondering, why putting such guide with ambitious market and share gains expectations, instead of trying maybe to rebate expectations for beat and raise if the market recovers and the share gains materialize later?
So that's just a question about just your thoughts behind how the guide was set and the visibility. I mean, you have today, given, let's say, it was a little bit challenged to call the markets in recent years. So that's the first question. The second one, so switching to Hearing, you're the largest OTC player out there, probably. Could you maybe update us on what you're seeing on this channel in the US and globally? And I'm asking the question because we're seeing some slowdown in the Hearing aids market. AI seems to have unlocked possibility for smaller OTC players to get out with pretty good products from a performance standpoint.
My question is just: Do you see some traction from small competitors, and could it be one of the reasons the U.S. market was soft for prescription Hearing aids recently? Thank you.
Thank you so much. Now back to enterprise, and I run the risk of repeating some of the things I said before, but we've really tried to take all facts into account. I mean, both what we are picking up top-down from all the sources we have available to us, and then discussions with partners, distributors, and customers. And finally, what we observe ourselves in the underlying momentum of the business. As I highlighted before, we do see the U.S. and APAC market in growth. It's been a lot about the EMEA, and I mean, what we do believe and have incorporated into the guidance is some gradual improvement in EMEA. It doesn't say that the market will enter a high growth.
We are saying a global growth of flat to 0%. It can even cater for some level of decline in EMEA for the year, flat scenario there. We very much believe in the launches we are doing across the portfolio. We do believe that the guidance we are giving with the midpoint as the most likely is our best effort here to give a meaningful guidance. We could, of course, have given an even broader range, but we do think the best way we can help you and the market is to guide like this to, in what we believe will be the most likely outcome.
Then if I move to the OTC side, we, I can speak about our own business first. I mean, we have shared with you that we saw a little bit of a disappointing growth momentum in the first three quarters of 2025. We actually had a fairly good quarter in Q4, so reentered a double-digit growth in our Jabra Enhance our OTC offering. But I think I would say that still, if we look on the whole for both the market and our business, I think we've seen actually relatively similar dynamics to what we've seen in the overall Hearing aid market. In the beginning of the year, in particular in Q1, also the OTC business was really negatively impacted.
Then the Q2 and Q3, I mean, our business, but I would also believe that's true for the overall business, didn't really perform at the, in, in the normal ways, and now we're seeing a little bit of stronger momentum in the OTC. But to be fair, we actually see that in the US business overall for ourself. I personally do not believe it is what you would say, cannibalizing significantly the traditional market. I think it continues to be a complement. It's interesting for us when we analyze our customer data, and so we do see that the customers buying from OTC are a bit different from the traditional Hearing aids. In particular, it seems to be people that are younger. On average, it's about 10-year younger profile.
And so there probably are some differences in the user base also. Appreciate there might be some limited overlap, but this is our best read on the market, so we don't think it will be the key explanation of the performance of the traditional Hearing aid market, so to say.
Perfect. No, thanks, thanks a lot. I mean, if I may just squeeze a very last one. Do you have any view on Section 232, maybe the potential impact for, like, on the new protocol for the Hearing aids? I mean, could it change your tariff for 2026?
No, we don't have any privileged insights in this. We're, of course, observing this also. And so have no further insights or comments.
Perfect. Thank you.
Thank you.
Thank you. Next question comes on the line of Martinien Rula with Jefferies. Please go ahead.
Hi, I hope that you can hear me okay. Most of my questions have already been addressed, so I'll probably keep it to two quick ones and just to be as well conscious of time. So the first one is on your formerly called Lively business, which, if I remember correctly, was supposed to be breakeven by late 2025, early 2026. Could you elaborate a bit on how much of a drag it was for 2025, and, if you have considered any potential scenarios for a divestment or something like that into 2026 and beyond for this business? And the second question would be on the gaming.
I appreciate that you've been gaining consistently on shares in the headsets and keyboards categories, but I was a bit surprised to see that your share in the mice category, sorry, have remained stable. As such, I would appreciate if you could remind us of the revenue contribution of each of these categories and elaborate on why you haven't been able to grow your share in mice. Thank you.
Thank you so much. Now, starting on the Lively business, which is what we call Jabra Enhance today, and as I mentioned, this year, we have not been able to have the same growth profile as in the previous years. The positive, I mean, fact is that Q4, we are back to the double growth, which we like to see. But given that the slow growth profile this year, our break even has been a bit delayed. We talked about that it will happen late 2025, early 2026. I will say with the growth momentum we have now, it's probably a bit later in 2026 or early in 2027. But what is positive is that, I mean, the P&L works, so to say.
I mean, it will help to break even with the growth of volume, so we've been very focused on getting the business back to growth, and it's encouraging to see that now in Q4. Then on the gaming side, I mean, you're absolutely correct. I mean, the key category for us in gaming are headsets, and here we're really the leader for premium headsets in gaming, and we are also large in headsets overall. So that is the largest category for gaming. And then keyboards has been another category where we're really been building up a good business and over time, and very meaningful. You highlight mice as an area where there should be a growth opportunity, and I would say I agree with that.
I don't want to forgo future launches, but it was a while ago since we launched new products into the mice area, so I think you should expect us to have something going there that can help us to capture that opportunity, essentially. I very much agree with your observation that that is a growth opportunity for us.
Okay, perfect. Thank you very much.
Thank you. This concludes our question and answer session. I would now like to turn the conference back over to the management for closing comments.
Thank you very much, operator, and thanks, everybody, on the call.