Welcome everyone, and thank you for joining us on our call this morning. My name is Steve Ferguson, and with me is our Chief Financial Officer, Monica Jönsson. We appreciate you taking the time to join us as we present CellaVision results for the third quarter of 2026. Following the presentation, we will be happy to take your questions. Before I jump into the quarterly results, I would like to take a moment to thank our employees, our customers, our partners, and our shareholders for their continued trust and commitment to CellaVision. It is through our combined efforts, bringing together innovation and strong commercial execution, that we continue to create long-term value and fulfill our mission, which is to advance laboratory workflow and diagnostic certainty through intelligent microscopy. With that, let us turn to our performance for the third quarter. CellaVision's third quarter reflected really solid progress across the group.
The quarter delivered an increase in net sales of 13.6%, and we reached SEK 200 million in the quarter. Sales increased organically by 13.4% with only a minor currency effect. EBITDA amounted to SEK 64 million , which corresponds to a 32% EBITDA margin. Across the regions, Americas continued to build on the strong second quarter that we saw earlier this year. Sales were up 32% to SEK 89 million , with the primary drivers being strong demand for large connected instrument platforms, and in this quarter, a notable software contribution. Small instrument sales also continue to recover, which is a positive sign for the overall product mix. EMEA was down 10% compared to a very strong quarter last year. That said, the picture is much more balanced. Sales have sequentially progressed since quarter one.
The key update from the region focuses on the bone marrow application, our most recent launch, and this has gone from customer evaluations to generating first revenue, with the initial installations in EMEA marking the beginning of customer adoption. APAC grew 91% organically. Broad-based growth outside of China with solid performance for both instruments and reagents is the picture here.
The standout is Japan, where we are seeing notable momentum in converting the installed base to CellaVision reagents, which strengthens the recurring revenue stream going forward. The bone marrow aspirate application has generated growing revenue in EMEA, and that is a meaningful milestone in our expansion into specialized microscopy. The rollout is progressing across the region, and we are seeing continued positive customer interest. On the regulatory side, the FDA 510(k) review is ongoing in the United States, and our aim is to obtain market clearance before the end of this year.
On the development side, the FPM technology and our next-generation hematology analyzers are progressing through key phases towards a future market introduction. We see this technology platform as a significant step forward for Digital Cell Morphology in hematology. It combines meaningfully higher image quality with substantially higher throughput than compared to what is available today on the market. It also opens the door for CellaVision to adjacent fields such as pathology and cytology. Let me hand over to Monica, who will present us with an overview of the financial results for the quarter.
Thanks, Steve. Let's unpack the P&L and cash flow. Net sales was 200 million SEK in the quarter, representing 14% growth or 13% organic growth against the same quarter last year. Also worth to notice is that year-to-date organic growth is 4% despite the weaker Q1. We had a gross margin of 66% in the quarter. That entails amortization of capitalized development expenditures for bone marrow and upgraded software program launched in Q1. This quarter, we are amortizing SEK 5 million versus SEK 2 million last year. The gross margin was also negatively impacted by the sales mix. Operating expenses landed at SEK 82 million , equaling 41% of net sales. If we unpack that, we see that sales and marketing expenses are kept on stable levels. Administration expenses were impacted by costs of SEK 4 million associated with the final settlement of the CEO transition.
R&D costs before capitalization were SEK 39 million , somewhat lower than last year, and reflecting lower consultant and personnel costs during summer vacation period. Comparing to same quarter last year, we have a higher capitalization of SEK 16 million , and that results in a R&D cost of SEK 23 million . The higher capitalization is mainly due to the fact that some projects have recently advanced into more mature phases. The EBITDA increased to SEK 64 million with an EBITDA margin of 32%. We are continuing to invest in R&D with 90% of net sales, and our R&D investment programs are developing well and maturing according to plan. Finally, operating cash flow was SEK 68 million . The higher sales and the reduced inventory contributed positively to the cash flow, and the cash flow was SEK 46 million for the quarter.
Our financial position remains robust with cash and cash equivalents of SEK 290 million sitting on the balance sheet. Let's look into the regional highlights.
Okay. Thank you, Monica. At a regional level, America continues to perform exceptionally strongly. Sales in the quarter were SEK 89 million , which is up 32%. This has really been driven by demand for large connected platforms. Our platform has flexibility to connect smaller and large laboratories, a nd demand for that as laboratories consolidate, is really helping drive sales in that region. In this quarter, the most notable win was a significant tender in Canada, which has led to a large installation in that region. If we look at EMEA, sales were SEK 86 million , like I said, down on last year, b ut after the inventory correction in quarter one, we've now seen underlying growth represented through two consecutive quarters of growing sales. Interesting here, looking to the future, bone marrow aspirate has started, as I've mentioned earlier.
Evaluations are generating positive feedback, and that is leading to early adoption, which is leading to growth. We expect sales in the quarter to be around 1%-2% of the growth. Reagent growth continues to strengthen across EMEA. This is positive for us because this is recurring revenue. This is an important part of the combined value offering or value proposition of CellaVision. Both the reagents and the microscopy combined give us a good platform and make us a more attractive proposition for laboratory customers. If we then look at APAC, really pleasing sales here, 90% growth in the quarter, all outside of China. This has been driven across the portfolio, so both instruments and reagents are growing strong there, and it's across the region, both in South Asia and East Asia.
I do want to call out the Japan performance here, which was fantastic and really has been driven by a conversion to CellaVision reagents in the largest national laboratory chain there. So a very pleasing result when you look at it across the three regions. If we look briefly at sales by product group, instruments represented SEK 105 million in the quarter, up 14%, as I've said, driven by the larger platforms in Americas. Reagents were up 12% at SEK 45 million . Again, this is pleasing for us. This is a region that we have focused on. Sales have positively developed there, in Asia, as I've mentioned, and in EMEA. Then finally, a word on software and spare parts. Sales there, SEK 49 million , were up 15%, again, driven by increased software sales, again driven by America. If we summarize then on the key takeaways.
The quarter really resulted in net sales that are up 13.6%, as I've said, driven by America's 32% growth there. EMEA is 10% down on last year. A tough comp last year, but quarter-on-quarter, we're seeing underlying growth on both the reagents and on the BMA platform. In APAC, really strong performance there driven by Japan. All of this is outside of China, and it's across both the reagents and the instrument platform. I just want to call out before we close today that the Power of Focus strategy was put in place to cover the five years up to 2025. That strategy has delivered across multiple areas for us. We've made commercial and regulatory progress with the bone marrow aspirate. A meaningful milestone. That's our first significant launch in that period. Following quick on that will be the development of the FPM technology.
Our innovation pipeline is extremely strong. I'd like to highlight to you that we plan to take you through the revised strategy. So we have a new strategy period, a new strategy focus, and we plan to launch that and to give you more insight into that in our Capital Markets Day, which will be on February 17th next year in Stockholm. So a heads up for now to hold that date. Those are the final remarks today. With that, I'll pause and hand over for any questions.
If you wish to ask a question, please dial pound 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Simon Larsson from Danske Bank. Please go ahead.
Yes. Good morning, Steve and Monica. My first question relates to the price increases that you mentioned in the report. Could you give us any hint of the magnitude of those. That would be the first one.
Yes. They came in place from Q2, b ut we really see the full effect now in Q3. The magnitude, more or less, I would say very rough, following inflation.
Okay. Good. I was also wondering on the gross margins, because obviously they contract a bit here quarter-over-quarter. You are mentioning, of course, this amortization, but also a bit mix effect in this. It would be super helpful if you could maybe split those two factors out and separate them so that we understand what is sort of the more long-term, maybe call it pressure on gross margin from the amortization and what can maybe be recouped, if you will, when mix improves.
Yep. Great question. On the amortization, I would say that will stay on this level until we launch the next product. You will be aware of that when you see that we will start launching, and you will see new effects on amortization, b ut until then, we expect to stay on this level. When it comes to sales mix, that is really due to the fact within the quarters where we see different mixes of small and large instruments, for example, as well as the total mix of more or less reagent software and so on. It is a natural swing between the quarters. Yep.
Yeah. That sales mix can vary quarter to quarter, Simon. There is no surprises in there. It is something in line with the nature of the business.
Yeah. But maybe to reframe the question a bit, I think you have SEK 3 million in increase of amortization. Do you know roughly how much of those SEK 3 million that ends up in the COGS department or line item? Just trying to back out underlying gross margin.
Okay. Yeah, all of that moves in there.
The full SEK 3 million COGS.
Yeah.
Okay. Very helpful. Lovely. Perfect. I was also wondering about this larger tender in Canada that you are mentioning, driving growth in America's region. Do you think it's possible to keep up this sort of level of sales in America also going forward, or should we expect to be a slower development now after two quite strong quarters? Not talking about you giving us any percentage guidance, but more on a sort of absolute level. If there's anything to be mindful of looking at America specifically in the future here.
Yeah. We're still confident that America is a growth case for us. The demand for connected laboratory solutions is high in those developed markets as the laboratory customers are looking for efficiencies, and our solutions combined can afford them with that. We obviously are working with our partner there. There's a really strong and positive relationship, and we have reasonable visibility into the future. We still see opportunities for growth there in that region.
Good. The final one from my end will then be on, you're talking in the CEO letter, Steve, about continued pressure on healthcare investments in some markets. Would you mind breaking those markets out for us, just putting some more color on which markets you see headwinds in, and if we should expect that headwind to increase or decrease as we move into the final quarter of the year? Any color on that would be nice.
Yeah. I think probably no surprises here that globally China is the market that is undergoing most pressure as government policy tries to drive cost from the healthcare system. That is probably the most notable one. I think generally across Europe, or EMEA, most of the Western governments are trying to get more value for money out of what they are investing there. It is a headwind, but it is something we feel as though we can navigate positively, so we have the solutions in place to deal with that.
Okay. Very good. Thanks so much.
Thanks, Simon.
Thanks, Simon.
The next question comes from Ludvig Lundgren from Arctic Securities. Please go ahead.
Yes. Hi guys. Thank you for taking my questions. I wanted to start out on instrument sales in Europe. It was down against a quite tough comp year-over-year. But it sounds like the demand trajectory is turning slightly more positive compared to H1. So, yeah, with the comparison base getting a bit easier, I believe in Q4, would you say it is possible for this segment to return to growth this year? And also how to think about into 2027?
Yeah. Thanks, Ludvig, for the question. I think there is clearly with the inventory correction in Q1, there is clearly been a comparator there from Q3 last year that may be slightly inflated. We expect the underlying business is robust. We expect that we have solutions there that are needed by our customers. So we expect that the instrument sales will continue to grow.
Okay, thanks. Very clear. I wanted to also jump over to reagents. Very strong growth there. I guess it was a bit boosted, a few million from the delayed orders in France, b ut I think it is typically not that much seasonality in this business. Is it fair to somewhere similar sales level and absolute level into Q4 as well on the group reagent sales?
Yeah. There's some seasonality there, but this is really a volume driven part of the business. As more tests are done, more reagents are consumed. So we grow in line with market value volumes, and the nature of that business is recurring. So, whether it's quarter- on- quarter or over six-month period, that's the nature of our business. You can have fluctuations, but this is recurring revenue, and we expect that to develop positively.
Okay. Do you see any seasonality difference Q3 versus Q4? Is Q4 a bit slower quarter in general, or how to think about just that difference?
No, not particularly. I think you just see if you look at the in vitro diagnostic industry, you do see seasonal variation or quarter-to-quarter fluctuations. I've said before that judging the performance of the company on a single quarter is a real challenge because it's a much more long-term orientated business than that, b ut we don't expect any particular trends in Q4 that poses any surprises.
Okay. Very clear. Then the final question from my side on the R&D cost, thinking now before capitalization. I believe this is down 10% versus same period last year, and you highlight related to less consulting cost and headcount. So yeah, I believe this can also fluctuate a bit between quarters, but it sounds to me that the current run rate of the R&D organization is down a bit versus last year. Is that a fair conclusion, and it's something we can extrapolate as well?
Yeah. We have the impact here from the vacation period in Q3, but we also have an impact of in which phase each and every project is in. It's kind of natural fluctuation as well between the quarters that we see. I would still expect us to be on a more towards 20%-21% of sales level rather than the 19% that we are at today in Q3.
Okay, thanks. Very clear. Just a final bit of a follow-up on that. I see that number of employees is still growing while OpEx is quite stable. Where is those additional employees going currently? Like what item in the P&L?
Majority is still towards R&D in Lund where we are growing. But they also, in some places, replacing then consultants. That's why you might not see that directly impacting OpEx.
Okay, thanks. Those were my questions. I'll jump back into the queue. 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 Elvin Rolder from DNB Carnegie. Please go ahead.
Yes, good morning, Steve and Monica. I hope you can hear me. I have a couple of questions. Some are perhaps a bit of a follow-up nature, but perhaps beginning in America. You obviously have very strong organic growth here again. Is it possible to kind of quantify or split out partly the effect from the tender in Canada, but also how much of the growth is coming from replacement of an installed base and from what is coming on new, so to say, customers or installments?
Yeah. Thank you for the question. The short answer there is that this is a mix across the portfolio. The tender win in Canada is a win. It's incremental for us. But there are a mix of instruments in there that will be refreshed as part of that. We look at the install base globally, and there are opportunities for refreshes and new business in equal measure there. There's a real balance across the quarter in terms of new business wins and instrument refreshes there.
Yep. Okay, great. Thank you. Then perhaps on APAC, obviously very strong growth here in Q3. Monica, what you say that you have a strong demand if we look beyond China. Are there any timing effects in installations that we should have respect for here in Q3 when we look towards Q4, Q1? Or would you say that the pace of installation of instruments has been normal, so to say?
Yeah. Nothing on timing effects that we are noting, Elvin. The one thing I would say is that any quarter can fluctuate. The timing of a tender, the timing of an install, the timing of qualification by the laboratories, that can have an impact. I think looking longer term than any single quarter, we're really pleased with the development of the reagent business. We have won the business with one of the largest national laboratory testing centers in Japan, one of the largest chains there. We expect that to be recurring over years, not just over a single quarter. So we think this is really stable and recurring revenue for us.
Maybe if I just add to that, one thing to have in mind is that in Q4 last year, we had some sales still in China, while, as we have mentioned, we have very limited sales now. So next quarter compare in APAC will be a little tougher versus this quarter compare where there was no sales in China last year either.
Very clear. Thank you. Then just the final one from my end, perhaps a bit tied to Japan's part. What has been kind of driving adoption in APAC as you're seeing it now? Would you say that there's a lot of tenders coming live that you've been strongly positioned in, or is there anything particularly that you've done within the product portfolio that is causing this to kind of take off now? Is it possible to comment on that?
Yeah. I think, not to oversimplify it, but this is actually a result of sustained focus on that part of the business in that region. The team have worked in a dedicated fashion, particularly on Japan and other major markets in that region, to really promote and ensure that customers are clear on the value proposition of combining our microscopy solution and our reagent solution. Customers benefit from both of those together. So it's really a commercial execution topic. It's a positive in the sense that this is an exemplar now for us. We can take that as a cookie cutter and start to look at right, where's the next region that we could replicate that in. But it's really down to commercial focus and strong execution there.
Okay. Great. Thank you so much. I will get back in line.
Thank you.
Thank you, Elvin.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Yeah. So thank you everyone for joining us this morning. Once again, a really solid quarter. Very, very pleasing to be part of this. It is my first full quarter with the company. I just want, before we close, to call out our employees in particular for the way that they have responded to the new leadership. I am grateful to the work that they have done previously, which has actually driven the results in this quarter. I just want to call out the team and thank them sincerely for all their hard work and all their efforts and for the way that they have embraced the change, but also for their focus in sustaining the business through another successful quarter. In terms of the financial calendar, our year-end bulletin will be published on February the 4th. I am looking forward to commenting on that report and taking questions then.
I would like to remind you to save the date for the Capital Markets Day event on February 17th next year in Stockholm. We will present at that our updated strategic direction and our priorities between now and 2030. We will hopefully be able to give you a greater level of granularity and more insight into the exciting prospects we have when it comes to our innovation pipeline. With that, I will close the call today. Thank you for joining, and have a great day. Thank you, Monica.
Thank you.