Welcome to Devyser Diagnostics Q1 2026 Presentation. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the speakers. CEO Jan Wahlström and CFO Sabina Berlin, please go ahead.
Good morning and welcome to the Devyser Q1 2026 earnings call. My name is Jan Wahlström. I'm the CEO of Devyser and would like to thank you everyone for joining our call today. On the call today we have, in addition to myself, also our CFO, Sabina Berlin. I will start with a short summary of highlights from the quarter before handing over to Sabina for a more detailed review of our financial results for January to March, and then we'll go through an update on our recent commercial activities. First quarter came in with a positive EBIT, the fourth consecutive quarter in a row. As you know, we started the journey in the beginning of last year, focusing the company towards profitable growth. It's been a successful journey, and we're happy to deliver a strong growth and positive EBIT.
In the first quarter of the year, we continued to grow faster than the market. We grew 24% in fixed currencies. We received quite a few orders from Thermo in this quarter, a step towards a more stable order pattern. We're also very pleased with the gross margin of 82%. It's better than full year 2025, and we will continue to work on improving cost of goods sold. EBIT came in on a positive SEK 2.6 million compared to last year's negative SEK 14.8 million in the first quarter. We're growing faster than the market with a clear focus on profitable growth. In the first quarter, we signed the agreement to acquire Cybergene, a Swedish company with products in similar areas as Devyser, giving us a stronger commercial position in several markets.
Cybergene is a Stockholm-based diagnostic company and has operated in the same market as Devyser for many years, providing Devyser with in-depth knowledge of Cybergene's products and customers. The acquisition was completed on April first, and we have already integrated the company in our daily operations. Cybergene has demonstrated steady growth driven by a strong product offering and consistent market expansion and will contribute positively to Devyser's gross profit and gross margin. As presented early in the year, in Q1, we also signed a significant agreement with Illumina, giving us the opportunity to do reagent rental on the European market. As we spoke about in the last quarter, we continue the ongoing MolDX application for a post-transplant kidney test as a service in the U.S. Since last quarter, we have gathered more clinical data, and we're now analyzing the clinical samples.
After that, we will send in a renewed application, and hopefully we can have an approved product before the end of the year. At the same time, we continue to work on our FDA project in transplantation, and we've had very positive development here. We have all the six sites up and running, and we gather patients in a good pace and will continue to do so 2026 and 2027 to be able to file in 2028 if everything develops in a positive way. With that, I would like to hand over to Sabina Berlin to share more details on our financial results for Q1 2026.
Thank you, Jan. I will continue with a summary of the financials for Q1. Revenue for January to March came in at SEK 62 million compared to SEK 55 million in the same quarter of last year. That amounts to a quarter-over-quarter growth of 13%, which equals almost 25% in local currency, as we're still seeing FX headwinds with a strong SEK. Our revenue growth curve continues upwards in the rolling twelve. Q2 and Q4 quarters have historically been stronger based on distributor purchasing patterns, but we expect that to flatten out over time. We have a stable underlying growth that is very clear when we work with our growth numbers in local currency.
North America keeps growing at a quick pace and made up 20% of sales in the quarter, built up from revenue from Thermo, the CLIA lab, and a very strong performance from direct sales of the hereditary portfolio in the quarter. EMEA had a slower reported growth in the quarter, but all our indirect markets are performing well, and there will always be fluctuations between individual quarters. Asia-Pacific remains at a small but steady level. Q1 saw the same growth in both direct sales and distributor sales of 12% and 13% respectively during the quarter. Apart from the distributors in the Middle East, our sales channels have seen limited impact from the current ongoing conflicts, and we have been able to ship according to plan on all orders.
Gross margin came in at 81.6%, a healthy margin that shows the low production cost for our products. Q1 of 2025 had an even higher margin as part of the lumpiness in the margin that we saw last year, and that should now be reduced for 2026 and forward. Our EBIT for the quarter was 2.6 million SEK, and we now have a full 12 months rolling of black numbers. Last year's Q1 was heavily impacted by the reorganization that we initiated early in 2025 and that we have been able to harvest the benefits from during the following quarters.
We will continue to drive business with profitable growth and leverage both our strong product portfolio and innovation engine to drive growth and keep being careful with our cost base. We closed the quarter with SEK 75 million in cash, not much below Q4 numbers. Cash flow from operating activities was SEK 12 million positive for the quarter, just as strong as last quarter, showing that our cash flow now fully finances daily operations. Cash flow continues to be an important focus for us as we grow and invest. I remain confident that we will reach cash flow positive, also including investments within the foreseeable future. With that, I hand back over to Jan.
Thank you, Sabina. I'm pleased to share several promising highlights from our strong Q1. After a strong Q4, we continued with an equally strong Q1, 24% growth. We had good results across the board, both in Europe and U.S. Our direct business in U.S. grew multiple times, showing a continued strong position for us with our hereditary products. We have some challenges, as Sabina talked about in the Middle East, but managed to get some of that sale out at the end of the quarter. I'm just back from a productive and positive meeting with Thermo, and was happy to see that they continue to win new accounts and grow our joint business in a good way.
Looking at the Illumina agreement, as you know, January 28, we announced that we are now a system integrator with Illumina and entered into a collaborative framework agreement. Illumina is by far the market leader when it comes to the DNA sequencing market. We presented this already in the previous quarter report, but can now add that we see a strong interest in this solution from our customers. The reagent rental model is a proven business model in our market, and we believe it will give us many opportunities to win over more business in the quarters to come. Moving on to an update on our partnership with Thermo Fisher for our transplantation products. Q1 was a good quarter where we have, as I mentioned before, seen several new accounts won.
Our Kamri sales have developed well before, but it's good to see that our cell-free DNA products also see good market uptake now. In Europe, we're making significant progress related to having cfDNA become recognized and endorsed as a preferred rule-out test of biopsies and supported by the new reimbursement schemes. North America had another strong quarter, both in kit sales to end customers, as well as good development in our CLIA lab. The kit sales growth came mainly from our cystic fibrosis and thalassemia products. The collaboration with Cyded continues in a good way, at the same time as we're working on more customers for the CLIA lab. Sales has developed well in the quarter in Europe as well, but the big news this quarter was the Illumina agreement.
On the product side, we launched IVDR products for cystic fibrosis late last year and thalassemia in Q1. These launches have been successful with great interest from customers that has given high growth numbers on tests sold in this quarter. Going forward, we now have four quarters in a row with positive EBIT and continuing profitable growth. We also keep our focus on becoming a one-stop solution for clinical genomic labs with new launches and moving more of our products to IVDR status. We will continue focusing on our collaborations with Thermo and Illumina, collaborations that give us access to bigger markets and strong partner organizations. Our focus remains on continuous improvement and increased profitability alongside strong top-line growth. With that, I would like to open up for questions.
The next question comes from Ulrik Trattner from DNB Carnegie. Please go ahead.
Thank you very much, Jan and Sabina, and a few questions on my end. You talked about some smaller orders coming in from Thermo Fisher in Q1 to soften the curve. Is it possible in any way to quantify this? Should we estimate a bit lesser orders coming in in Q2 when they historically has put in larger orders?
I cannot give any exact comments because I don't know the orders coming in the quarters to come. We see it as a positive sign that we start to get orders in also Q1 and see that it's gonna be less lumpy going forward.
Yeah, no, I understand that obviously you don't have sort of the full scope of Q2. I guess sort of my question is whether this is just a smoothing of the curve or if this is like should be seen as a trend in accelerated customer onboarding from Thermo Fisher on your transplantation products.
I cannot comment on that in details, but I mean, as I said, we had a positive meeting, and we see an onboarding of new customers on the Thermo side when it comes to our transplantation products. If that is gonna show in the numbers going forward, that's still to be seen.
Fair enough. Just if you can highlight how important is this trigger of yours to obtain MolDX reimbursement that you've stated that hopefully be done before year end?
I didn't hear the beginning of the question. Could you repeat the beginning of the question?
I just sort of how important it is for volume uptake, like beyond the growth we're currently seeing that you obtain MolDX before year-end.
I mean, of course, it's important for us to get the MolDX approval. We've worked on it for a long time, and we believe it's an important way to reach customers in U.S. As you know, service as a business is a big part of the transplant business. It's something that it will be important, and when we have that approval, and we believe that we're gonna have it, as you said, at the end of the year. Then we can. It's difficult to quantify it. It's a new business model and I think we have to wait and see.
The other commercial collaboration with Quest, how is that evolving? You have obtained cost coverage for RHD and/or been included in the cost coverage for your RHD screening test in the U.S. Is there any changes in testing volume, anything that you can give us some more granularity on?
The collaboration with Quest is developing in a good way as we see. I cannot give you any numbers on the sales to them. It's been very positive to get the RHD coverage that's mainly for our own CLIA lab. It's developing in a good way with Quest, and we're very positive that they have this product and hopefully that we can work and see if we can get more products into the portfolio.
Okay, great. Just a question on the Illumina collaboration, which will, I guess, have a financial impact first from Q2 onwards. First of all, like, you talk about some initial high interest, it sounds like. If you can elaborate on that please, as well as is there any risk we should see, given that this is a reagent rental business that we should expect some hampering of margins in the near term or just financially, how should we view this in the short run?
I think in the short run, we see that we should see it as a possibility for us to get good growth. It will, of course, be a little bit less margin on some of those deals in the short term for that, but it will increase the top-line sales and the total profitability will definitely be better on each customer. Talking about the interest that you asked for, as I said, we have a number of different accounts that are showing interest, and we've seen that across different parts of Europe. As soon as we have agreements in place, we will of course inform you about that as well.
Is there any way where you can sort of quantify how much more a contract of this kind would be over, say, a five-year period on a reagent rental business, given that you are increasing the sort of average sales price per test, I would assume. Over a five-year period, given that you would have a little bit less margin, how would the profitability look ballpark? Is it 20%, 30%, 40% more over a five-year period, or how does it look like?
They are all individual contracts and negotiated, but it's definitely a higher revenue per contract. We'll see if we can give some more detailed information about that going forward. I don't have that as we're still in the discussion with the customers, the first ones. When we have the first agreements in place, then it's probably easier to answer that question.
Great. And just last question on my end, I guess this would be addressed to you, Sabina. Like SEK 12 million in operational cash flow. Like it looks like really strong cash flow here in Q1, 120% cash conversion to EBITDA. You sound fairly optimistic regarding sort of reaching free cash flow positive here within in short. Like is there any one-offs that we should not extrapolate here in Q1, and what is sort of a reasonable cash conversion ratio going forward?
No, we don't foresee any one-offs that will impact the upcoming quarters. There will be continuous and well-balanced investments, both in our commercialization in the U.S. and in our R&D. We do think that our free cash flow will also move towards the positive. There are no cash flow one-offs in Q1 either impacting this. We did see strong sales in Q4, and that has had a positive effect on our accounts receivable, but not in terms of one-offs.
Okay, great. Just what is a feasible long-term cash conversion ratio?
I don't think we'll be sharing that at this time.
Okay. Well, thank you very much, both of you, and then I'll get back into the queue.
Thank you.
The next question comes from Filip Wiberg from Pareto Securities. Please go ahead.
Hi. Hi. I've got two questions, but I'll take them one by one. First, maybe a little bit of a follow-up on the Thermo sales here. I'm just thinking about the rest of the year now, the growth outlook and what kind of visibility that you have. You wrote in the report that you see clear continuity in the growth trend established during 2025, and obviously you've had quite a good growth rate in Q1. How should we think of that now going forward? Do you think the growth rate in this quarter was the highest that it's going to be, or do you see an acceleration, or what's the expectations there?
Thank you, Filip. As in the previous question, I cannot comment on revenue for Q2 to Q4 from Thermo. One reason for that is because we don't have those orders, and we don't have that visibility. It's something that we'll see when we get there.
All right. Okay. Then maybe, like, one other thing that could drive growth is obviously new product launches. I don't know if you've talked about that a lot lately, but have you done any new product launches this year, or are you planning for any sort of launches that you expect to drive growth in any meaningful way going forward?
Well, we did have the launch of the CFTR product for IVDR in Q4 and the thalassemia one in this quarter, and we've seen very good uptake in the number of tests for those two products in this time. As you know, CFTR is one of our biggest products, so a good uptake in that one is significant for us and very important. Apart from that, we don't have any other launches in Q1, but of course, we're working hard to see if we can get some products out in the second quarter onwards as well.
Okay. Thank you. Yeah, that was all for me.
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 Jan and Sabina, and thank you for taking my question. I also have two and starting off on EMEA, which organic growth slowed a bit sequentially here in Q1, but that follows, of course, the very strong Q4. Can you comment a bit about this phasing and what to expect in terms of phasing for 2026?
Yes. You're right in that comment about EMEA. As Sabina said during the call, that quarters can go a little bit up and down. We've seen a good development in Europe, as I also said in the call. When it comes to the phasing, I don't have any exact data to comment on the phasing going forward, but we have strong belief that we will continue on a good growth pattern both in Europe and U.S.
Okay, thanks. Very clear. Then a second one on the Cybergene acquisition, which, I guess will start to contribute to growth here in Q2. I just wonder if you can elaborate how this is expected to affect operating expenses, and margins and also cash flow.
Yes, absolutely. When it comes to the margins, the margin that the Cybergene products has, we said that previously as well, that they are actually higher than what we have, so that should impact on the positive side. When it comes to the, I mean, the total volume of sales of the Cybergene products is very low, so I don't think that it will be visible in the bigger scheme on the numbers. It is a positive contributor, if any.
Okay. Okay, thanks. Very clear. I'll jump back into the queue.
The next question comes from Ulrik Trattner from DNB Carnegie. Please go ahead.
Thank you, and thanks for taking my follow-up questions. It's about accounting-wise, capitalized R&D or net capitalized R&D. Like, we have seen the sort of quite stable level for the last few quarters, and where should we expect sort of capitalized R&D going, especially as you're approaching a few new product launches? I would assume that that would come down. What to expect here?
Look, it's a good question. What we said before, and I believe is a good statement still, is that we don't see it coming up. We see it to be fairly stable, at least during the time when we are doing the FDA studies, because a lot of the capitalized development comes from the MolDX and the FDA work we do. I would say flatish is probably the best estimate going forward.
Great. Thank you. Last question, also accounting-wise. It's kind of going back to I know that you didn't want to state any sort of targets for cash conversion, but if we were to change it and sort of assume, what is sort of a fair net working capital to sales ratio for Devyser in the sort of near to medium term?
Well, thank you. It's a number we sort of also don't publicly announce, but our expectation is that both, like, operating cashflow will continue to strengthen as well as free cashflow will go above zero. As we grow our margins, that will continue in a positive direction, but it'll also give us an opportunity to invest in continued R&D to support our growth.
Sure. I guess I can rephrase it further then. Like, yeah, are you anticipating to do any larger sort of investments into working capital here in the near term, or will the sort of cash flow be more dependent on what you achieve in FY?
I think working capital ratio will pretty much stay the same. We will grow our inventory in proportion to our sales and, as well when it comes to, accounts receivable, accounts payable, they will also grow, very much in proportion to our cost and revenue side. I think when you do your calculations, you can assume pretty much the same ratios.
Perfect. That's great. Thank you very much again, Jan and Sabina.
Thank you, Ulrik Trattner.
Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Yeah. Again, thank you everyone for joining our call today, and we are looking forward to the next quarterly call.