Welcome to CellaVision Q1 report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions- and- answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Simon Østergaard. Please go ahead.
Thank you very much. Thanks for dialing in to this quarterly financial call. I have our CFO, Monica Jönsson, with me, and we are pleased to present our results and answer any questions you may have subsequent to the presentation. We just released the first quarterly report, and it was with the header, Soft Quarter due to Lower Sales in EMEA. The quarter resulted in net sales that decreased by 14.6% to a revenue of SEK 166 million. That's an organic decrease of 6.6% as we had almost 8% headwind on currency. EBITDA amounted to SEK 40 million, so that corresponds to 24%. As we say in the report, and given the title here, EMEA is affected by inventory adjustments with our main distribution partner, and that is what has caused this significant negative growth compared to the comparable quarter last year. That's the bad news.
There are no fundamental changes to our business model or the market conditions, but this is the situation that we announce today. We are also announcing that we have continued momentum in our strong region in Americas, and we continue to see double-digit organic growth in Americas. Furthermore, and this is getting more broader, within APAC, we see traction to convert labs and we see positive development coming out here in Q1. With regards to our strategic direction, since we've been investing in new product development for quite some years, now we are starting to launch these new components, and there are good examples coming out here in Q1. We have launched the CellaVision's Bone Marrow Aspirate Application after we received CE mark. That was planned for Q1, but we got it just before Christmas 2025.
We have started our SoMe campaigns, we've started participating at conferences, and we're in the process of training our distribution partner, Sysmex, to really position this, I would say, great product to the clinical community. We expect to see a funnel being built throughout 2026 and that will result in revenues contributing in the second half of this year. We've also launched, globally, our updated software. This is the largest software upgrade for our platform ever. It contains both user interface, improved workflow features, and also, in fact for new DI-60s, higher turnaround , so more blood samples can be processed. It's a very, very powerful package that is now available, both to upgrade existing networks, but also as part of the new DI-60s result.
Then finally, in our investment program, it is important to emphasize that we are still extremely confident and we're pushing our next generation solutions with FPM, both for hematology, and then we're exploring our opportunities very successfully to also be deployed in other areas such as cytology and pathology. Let's unpack the P&L. As said, SEK 166 million, excuse me, representing -15% growth or -6.6% organic growth up against last year. We had a growth margin of 68%, and that entails also an increase in our amortization of capitalized development expenditures, given the bone marrow and the upgraded software program that I just talked about. Here we are now depreciating SEK 3 million versus SEK 2 million. Operating expenses landed at 51% versus 41%.
In fact, it's equivalent to a higher spend of operating expenses of SEK 5 million, and that SEK 5 million is actually also the difference in terms of what we are capitalizing. EBITDA of SEK 40 million as set, so 24%, which is of course lower than our expectations, which is a function of the miss in top line that I will explain a little bit later. We are still investing in our R&D, but there are changes also to the maturity or the early stage program that we are running, which is also a function of how much we can capitalize. That's also part of the reason why you see a different capitalization of SEK 12 million this quarter versus in the comparable quarter, SEK 18 million. We had a lot of hardware investments in the comparable quarter, which are not sitting in this quarter. That's a function of the program.
Finally, operating cash flow-wise, SEK 62 million. We had SEK 40 million, and then plus the working capital, we had accounts receivable that contributed positively to our operating cash flow of SEK 62 million. We had investments and financing activities that are deducted, and that results in a total cash flow of SEK 42 million. Still, as always, a positive cash flow. Now, with cash and cash equivalents, the company has SEK 230 million sitting on the balance sheet. The regional highlights. America, here, it is really important for me and the team and our partner to emphasize the strong momentum we have with 13% organic growth. 2%, but negative currency effect of 12% gives us the 13% growth. We saw continued strong adoption of our integrated large instruments for the hospital community around the U.S.
We are focusing and pushing the concept of connected labs to position the DC-1 in these integrated health networks. We are working very strongly together with our American partner organization to push this. We also saw a little bit on, speaking about the small lab segment that is served by the instrument DC-1. We saw actually a little bit of instrument decline, but there was also a little bit of a pent-up purchase of small instruments given the tariffs and uncertainties throughout 2025. There's a lot of activities going on to really serve this segment, and there's a lot of appetite for that value proposition of connecting that with our integrated solution. For EMEA, yes, we mentioned some market uncertainties. I'd say demand-wise, there is still really an ongoing appetite to digitalize the labs across the different markets that are immature and mature in very different degrees.
What we hear is that public funding is a little bit under pressure given the defense situation of Europe, which does delay certain tender specs. That's kind of the market condition. The -32% growth or -26% organic growth is not related to the market. This is really a situation around the temporary reduction in excessive inventory that hit us in this Q1. The root cause here is pinned- up a number of units sitting in multiple affiliates. It's probably over some time that has happened a bit to mitigate delivery risk from ERP implementations. Here, as our partner Sysmex comes to their fiscal year, which ends by the end of March, then there's been a strong push to cut down and really examine where they have inventories, and that has resulted in obviously less orders, significantly less orders for us in this quarter.
That is really what we're reporting here. It's important for us to emphasize that we flag that. Is it over? Is all inventory done in Q1? We cannot promise that. There may be something that sits in the second quarter. Stock may still remain in Q2. However, we expect better instrument sales in Q2. We don't expect negative growth, but it's a little bit too early to say what growth will come in Q2. We're being extremely transparent and conservative here, but I think it is really the best of the knowledge that we have currently. I said it's early days with one month into Q2. APAC, here we landed at 10% growth, so SEK 22 million, of course, up against its smaller numbers, so to speak. Having said that, the positive thing is that we start to see traction across APAC.
We have previously been very exposed in China, and we are seeing diversification and a broader demand for our solutions across Southeast Asia, which is super positive. We'll take the numbers, which on this slide is cut per product category. Yeah, for the instruments, I think what I'll highlight there is that the miss that amounted to SEK 86 million in instruments versus the SEK 115 million in the comparable quarter, that is essentially the EMEA miss that we are seeing here. For the reagent business, a stable business, I would say what we have managed to do is over the years, if you've followed APAC, which has been insignificant, now we're getting to a level where it starts to really contribute. It's across multiple countries as we have launched our RAL Classic stain portfolio across APAC, together with Sysmex.
This quarter, we reached almost SEK 4 million versus a comparable figure of SEK 1.4 million. We are starting to see some traction here, which is really the signal of a long journey, which is extremely positive. For software and others, -2%, so pretty much flat. I would say, though, that the software is less than it was in the comparable quarter, and that is a function of less instruments. Then there's a little bit more on others, which entails spare parts and also our FX. On this slide, the final slide here, our key takeaways. Yes, we are extremely transparent around our softer quarter, which is really due to the lower sales in EMEA. This is the root cause for having only -7% organic growth, which is, of course, not in line with our expectations.
However, we still think that there is opportunities across EMEA, and that is also the signal we get from our partner, that there are multiple opportunities across the different segments we operate in. For Americas, strong momentum, it continues. Also here, I would say there are opportunities with new products, and that leads me into the bone marrow. Another news that we report is that we have filed to the FDA our bone marrow application. We're in process of registering our bone marrow application as a 510(k) and get clearance for that for the U.S. so we can start commercializing the bone marrow application together with the DC-1 and our remote review software as a package to support the clinical that are diagnosing leukemias, lymphomas from bone marrow. Then again, I mentioned our software upgrade.
There are multiple global training activities going on across the Sysmex organization to position our Software 7.2, which allows the hospitals to get improved user interface and a better workflow, more speed if they go with the new DI-60s. That's really another pivotal thing. As also mentioned in the beginning, we are extremely confident but also extremely committed, development-wise, to continue to push our relatively mature development program for our next generation solution that entails our new microscopy technology under the name of FPM, Fourier ptychographic microscopy, and which we're also exploring and seeing opportunities in adjacent segments such as cytology and pathology. With that, I think I will close the presentation and then Monica and myself would be happy to take any questions you may have. Thank you.
If you wish to ask a question please dial pound key five on your telephone keypad to enter the queue. If you wish withdraw your question please dial pound key six on your telephone keypad. The next question comes from Simon Larsson from Danske Bank. Please go ahead.
Yes. Thank you. Good morning, everyone. Maybe starting off with the obvious question here on the inventory dynamic situation in EMEA. Could you help us understand when did the stocking take place? And how do you see the stock churn out here, given that you say that this could potentially also affect the second quarter? Any more flavor here would be very helpful.
Yeah. Thanks, Simon. I think when it took place, so you can say we were informed in this quarter. I think the increase has probably been throughout last year when there were ERP implementations. That's kind of how we understand the situation. We believe that the majority of the stocking is probably digested throughout this quarter, but there may be somewhat of a spillover of a little bit stock left in the subsequent quarter. That's the best information we've gotten.
Got you. Also if you could give any more color on the European public healthcare budget constraints that you mentioned also. What are your customers telling you now, and do you have any kind of timeline for when things could potentially improve?
No, I think what we hear is that in general, and I think we all know that there is a debate in all countries around investments into the defense, and that is driving a little bit pressure also on the healthcare side. That's what we also, when we discuss this with our partner, with certain countries. It's not all countries, but there are countries, as an example, the U.K., where there appears to be a little bit of delay of tenders coming up as a result of the demand for financing other activities outside healthcare.
Yeah. No, makes sense. Also on the sort of focusing on America's large instruments seems to be doing quite all right. Small instruments, yeah, still a bit muted. Could you help us understand, I guess, what initiatives you are taking and the go-to-market strategy to really reach your full potential with the DC-1 instrument on the smaller customer side.
Yeah. Sure. Yeah, I think it's doing okay. I would modify it and say I think they're doing extremely well. It's a large market where our partner has the vast majority of the market. They continue to win across those mid and large segments. There is a lot of activities going on to embrace also the small lab segment, and especially around the IHNs, the integrated health networks, where smaller labs are connected and administered under the large lab umbrella. You can do the blood work distantly by placing these DC-1s, and then you can remote and take the diagnostic decisions centrally at the large labs. That value proposition and the way to set up these digital networks, both with the server structure and so forth, that's an ongoing training exercise towards our partner, all the reps.
It's also a demonstration exercise towards the integrated health networks in the U.S. that takes place in a very sort of structured and a very focused way. That value proposition has been, let's say, increased focus has taken place, as an example, also during our national sales meeting with our partner Sysmex this year. This was a key focus and this is what we believe will be part of the conversion of these labs over time.
Yeah. Okay. Good. Maybe the final one from my end. On the bone marrow application, I think you're writing that you expect it to contribute positively in the second half of the year. What kind of volumes are you expecting, and should we read this as it will be meaningful to group growth already this year, or it's more 2027 story?
No, I think what we do here, it's always when you talk about launch, it's very important also to be aligned on what does launch mean. The first step in our launch was actually getting the registration in place so that we could start the commercial launch activities, and that is where we are. We have positioned, we've made all the launch material, we've launched, we've gone live on so many channels, various so many channels. We are very active. Last weekend, we participated at the ISLH, a big European show for bone marrow and hematology, and here we presented our solution. We are launching marketing-wise, and obviously the exercise in parallel is to train Sysmex to explain the value of our product, how to demonstrate it, and to persuade the clinicians, essentially. That's the sale process.
We're in the process of really getting Sysmex trained and competent in conveying our product and our solution, and that's what takes place pretty much from now on and onwards. That will gradually build a funnel, and that's what we say, that we expect that to translate into sales. The first couple of sales are coming in, but it's more meaningful to talk about it in the second half, I would say. We hope it will contribute. We expect it to contribute with 0% or 2% in terms of company growth. That would be our ambition level. Let's see, as we start building the channel. We are very confident that we have a very good offering. That's the initial feedback we get from the community.
Super. Very clear. Thanks a lot. I guess back to you.
Excellent, Simon. Thank you.
The next question comes from Christian Lee, from Pareto Securities. Please go ahead.
Thank you, and good morning, Simon, and Monica. I have a couple of questions, please.
Sure.
I think you mentioned that you didn't expect negative growth in EMEA in the second quarter, if I heard you correctly here. Does this refer to EMEA overall or specifically to instrument sales in the region?
Yeah. I think my comment. Thanks for asking that question because I want to be clear on that. My comment relates to the inventory issue, so that relates to the instrument. I would say that it probably translates to the quarter as well. That would be my initial feeling around that. It will not be what we've seen in Q1, but we are being very transparent that we don't necessarily see the actual stock level being depleted in Q2. We do expect an increase if we compare Q2 to Q1. We do expect that we will sell more instruments, and we will have no negative growth on that.
Okay. Clear. There also appear to be elevated inventory levels of smaller instruments in the Americas. Do you see a similar risk of inventory overhang impacting sales in the second quarter there?
For the U.S. specifically, Christian?
Yeah
Yeah. For the U.S., I don't foresee any inventory issues with regards to the large instruments, only the small instruments. That could still be the case. That is a little bit of a journey, and also because of the major uncertainty and mixed signals that has come out with regards to tariffs, that has influenced the stock situation on the American side. Having said that, I'd say after the sales meeting, we've really ramped up and focused on this connected labs concept, and our Sysmex colleagues are really hanging on to that now and really doing a great job in pushing it. We expect that the demand will increase throughout the year.
Okay, perfect. If we exclude the impact from smaller instruments and the currency headwinds in the first quarter, would instrument sales still have shown a double-digit decline or been closer to flat?
Monica, maybe you can help me out here.
Yeah.
I would.
More closer to flat.
On the large instruments, right?
On the large instruments.
Yeah.
In the EMEA, we're talking about.
Yeah, maybe a little.
Okay, great. Thank you.
little higher, maybe slightly positive.
Flattish for the larger instruments or for the whole instrument?
I think it's fair also to emphasize here that so that's why I'm doing the math. We're up against a very tough compare. That's important to say. The Q1 in 2025 was actually a very strong quarter in EMEA. Having said that's where we aspire to be. Just to get when we talk about growth, I think it's important to emphasize what we're up against.
Okay. Thank you. My last question here, R&D expenses are almost SEK 30 million in the first quarter. Should we expect this level to persist throughout the year, or was Q1 elevated?
Yeah.
Yeah. Maybe I can take that one. The SEK 30 million on R&D spending is also related to that we are capitalizing less at the moment. We see that the organization is working on early-stage projects, and we're looking into starting to capitalize some of those coming up Q2, Q3 somewhere. When we start capitalizing that, then you will see somewhat of a decrease on R&D costs at that stage. Q2, Q3, you will see somewhat of a decrease, but that will come with an increased CapEx then.
Okay, great. Thank you very much.
Yeah, Christian, it's a little bit of a portfolio shift due to the accomplishment of launching these products. That's the process we go through.
Okay, perfect. Thank you.
Pleasure.
The next question comes from Ulrik Trattner from DNB Carnegie. Please go ahead.
Good morning, Simon and Monica. Just essentially a few follow-ups on my end. Looking in hindsight here for the EMEA region, I don't see a single quarter throughout 2025 where we're supposed to see any type of elevated levels of inventory build-up, or does this gradually happen throughout the entire 2025? Because if I look at the first half of 2025, you had SEK 88 million in sales. If I look at the second half of the year, you had SEK 88 million in sales. Where are we supposed to see the inventory build-up in historical numbers, is essentially my first question, please.
Yeah. It's spread out. To the best of our knowledge, the first event actually goes back. There are two disruptions taking place. One was back in autumn 2024 when Sysmex changed their inventory, or sorry, their warehouse in Hamburg, which was a disruption, and then followed by SAP implementations. That has caused certain affiliates, or quite some affiliates, to actually build up a little bit of local stocks so they were able to supply and install the blood lines when the customer was ready to do so. That has sort of persisted gradually over time, both to mitigate any disruption from SAP and part of the pieces from the disruption of the distribution center. That is what has been sitting inventory apparently throughout quite a few quarters, small blips, which adds up to now prior to this fiscal year closing.
There was an attempt to really work on the capital tied up in instruments, so their working capital, their inventory level. This is where we saw this major dip, which came a little bit as a surprise on our side. That is the situation.
Okay. Just to get some clarity, if we were to adjust for this throughout 2025, we would have sort of reached X growth or you presented 5% growth in 2025. Yes, some negative effects, some headwind there, but it's not that much growth from EMEA in 2025. Adjusting for this, was growth negative in 2025 by your estimates?
No, I'd say more flattish.
Okay.
Excuse me.
I understand, yeah, the uncertainty here and I guess lack of transparency from Sysmex side, but what's your sort of confidence level that we have sort of churned out the built-up inventory in the first half of 2026, given the sort of prolonged buildup of inventory heading into this?
Yeah, I think it's important for me to emphasize that we would never excuse them not for being transparent. I think this was also. There are much larger organizations. This is a symptom of running a global business in EMEA with multiple entities. This also came to their attention. They have been super transparent around the situation. I think that's important for me to emphasize. Having said that, and that's what we try to communicate, the biggest hit inventory-wise, we've already taken that. There may be some spillover. If they don't come down to quite the level, then there will be a little bit sitting in Q2. However, we already see that we're on a positive trajectory when we compare to this quarter.
This is why we say we are confident that we are at least not coming out with negative instrument growth in this quarter that we're in. We can certainly sort of emphasize that. Having said that
And so-
over time
We're still working on the market opportunity. That is also emphasized that the tender opportunities and the market opportunities, they remain. There's a solid foundation for the business still. Of course, the macro environment, we sense that it's more influenced in Europe than what we see in the U.S. That's not necessarily macro piece, it's probably also the more private hospital setting with the networks, et cetera, where we have a working model with Sysmex.
Just on the market environment, and as you mentioned, some delays in terms of tender activities. Even from sort of absolute numbers here, obviously, you have this sort of inventory share. I'm trying to sort of find some type of confidence level here in absolute numbers, and I'm not really sure sort of which period historically to look at. Should we look at post-COVID? Should we look at
No. I think.
in 2025, a year you're supposed to have interest rate fear.
Yeah. It's a little.
Is it worse macro environment now compared to 2025?
Probably a little bit more unpredictable. That's kind of the signal we get, that it's getting a little bit more unpredictable as opposed to a year ago.
Okay.
That would be the frame. I wouldn't go back to COVID and so forth, Ulrik. I'd just say sort of.
Okay
If your question was also related to the inventory period, I'd say six quarters.
Okay. Great. That's fine. I think that's all on my end, and I'll get back into queue. Thank you, Simon, for taking my questions.
Of course, Ulrik. Pleasure. Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Ludvig Lundgren from Nordea. Please go ahead.
Yes. Hi. A few follow-ups on my end as well. Starting off in EMEA, I just wonder if you saw any effects or weakness in the Middle East here in Q1, and if you'd expect any effects from this in Q2?
Yeah. Middle East, we've actually seen effects on the reagent side, where it's been very challenging to deliver. We've definitely seen some impact there. That would be the majority, or that would be the main point I would emphasize here, Ludvig.
Okay, great. Is it possible to quantify that, a few million lost sales or something?
Yeah. That's probably appropriate.
Great. Secondly, I wonder on the bone marrow application, you mentioned that you have filed the 510(k). So just when was this filed, and have you gotten any indication of when they could come back, so to say? I think they typically aim for a 90-day review period, right?
Yeah. No, that's right. We follow also what is the process for me and so forth. I think to the best of my knowledge, we filed on the 11th of March. Then we've started the interactions with the FDA. We are also sort of saying, okay, process-wise, I'd say in general, we get the feedback from the diagnostic community that the response with FDA has probably increased sort of lately. I'd say over the last year or two. That's kind of the general sense in the industry. If you ask me sort of when do we expect it to come, I'd say, I'll emphasize, of course, we need to qualify to get the 510(k). That's the first thing. There's always a little bit of probability there. Having said that, we expect it to go well and to have this in 2026.
Best case would be mid 2026. That's the best case. Assuming we get it, then we do expect to get it sometime in this year. There is some phases in terms of questioning, et cetera, and they stop the clock and so forth, so we're up against a timeline which is pretty controlled. I'd say 2026 is what we aim for, and hopefully we have good news at some point, as the earlier, the better.
Okay. Very clear. Thanks.
We've obviously also started our launch considerations with our partner on this pivotal product to supplement our offering. Thanks.
Yeah. Great. Thanks. I'll jump back into the queue.
Cool.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you very much. First of all, thanks to everybody for taking the time to dial in and following us here at CellaVision. I will close the call by saying that the Q1 results, they, of course, represent a mixed bag across the regions. It is important to confirm that we have momentum in our strong market position in the U.S. We are reporting an unforeseen inventory adjustment in EMEA. We said this is a temporary blip, which is also the nature of our business model, I should say. Not that we like surprises, but that is what we need to deal with. I think it's also important to emphasize that we are really expanding across Southeast Asia, so I'm looking forward to share other further development in those regions.
Then finally, you've seen that things are starting to come out of the power of focus with the product launches. We're very excited about that, and I want to use the opportunity to close the call also by thanking our partner organizations, both on the development side when we have assessed our products, but also now that we are launching and we are training the staff and we are rolling it out to build pipelines that can translate into additional sales. We can just emphasize that our leading product offering and the underlying market demand, it remains intact and unchanged with this report, despite this blip on the inventory side. With that, I'll close the call and I'm looking forward to report the next time. We will have our Annual General Meeting here in Lund on the 28th, so on Tuesday.
The next interim report will be launched, published on the 17th of July, 2026. I'm looking forward to present that report and to take any questions you may have. With that, I wish you a good day. Thanks for listening in.