Good morning, and welcome to this earnings call, where we will mainly cover the fourth quarter of 2025, summarizing our business done in October, November and December, and also some comments regarding the full year of 2025. I am Fredrik Ruben. I am the CEO of Dynavox Group.
Hi, I'm Linda Tybring, and I'm the CFO of Dynavox, and I will cover the financials at the end.
Yeah. So for those of you who have participated in these calls before, you will be familiar that we'll start with a quick recap about what Dynavox Group does, and then we will summarize the main takeaways from the quarter and the full year. We will dive deeper into the financials, and thereafter, there will be a Q&A session. And you can submit questions during the Q&A session in the chat function here in Teams, or you can ask them live if you have been given prior notice to our team. And of course, we always welcome offline questions sent by email to the above email address, which is Linda's, linda.tybring@dynavoxgroup.com. All righty, so a brief overview of Dynavox Group.
First and foremost, it's important to reiterate our mission and our vision, which I know is very dear, not only to now our over 1,000 colleagues around the world, but also to our ecosystem of partners and investors. Our vision is a world where everyone can communicate, and we will contribute to this via focusing on our mission, which reads, "To empower people with disabilities to do what they once did or never thought possible." This also summarizes two of our main user stories. The do what you once did, that may be a person who lived a normal life until a diagnosis, such as ALS, which rendered her unable to control the body or communicate like before.
The other story is the never thought possible, and that can refer to the child diagnosed at an early age with a condition such as autism or cerebral palsy, where, thanks to our solution, he can do much more than the world around him ever thought possible. On the picture here, you see Lane from Lawrenceburg in Kentucky, in the U.S., and she's one of our amazing users diagnosed with cerebral palsy and is using... She's a great example of this. So the market that we serve, it remains hugely underserved. We estimate some 50 million people have a condition so grave they simply cannot communicate unless they have a solution like ours, and every year, about 2 million people are being diagnosed, and yet we estimate that only some 2% of those are actually being helped, and the rest remain silent.
The main reason for this is lack of awareness, also among the professionals and the prescribers tasked to assist these users and poor healthcare reimbursement systems. We operate with a global footprint. Today, some three-quarters of our business stems out of the U.S., largely because of reasonably well, reasonably well-functioning funding system established some 20-30 years ago. But our products are also sold in more than 65 markets around the world, of which 11 are markets where we sell directly, while the others are sold by a network of some 100 reseller partners.
Our own staff is distributed in a similar way as the revenue, meaning that some 60% or so of our staff are based in North America, with our U.S. headquarters in Pittsburgh, in Pennsylvania, and our second-largest office is our headquarters here in Stockholm, but we have branch offices in several European countries, as well as in Suzhou, in China, in Adelaide, in Australia. As of today, we are just north of 1,000 employees in total. We provide a comprehensive portfolio of solutions, ranging from, A, the content and the language system, such as the world's leading library of communication symbols, and they're called PCS, and the leading solutions for off-the-shelf or custom-made synthetic voices of the highest quality with a large diversity of languages, ages, and ethnicities.
We also do highly sophisticated communication software tailored to the type of user, which of course, can vary greatly based on the need of that individual. We develop and design devices with cutting-edge technology and medically certified durability, including communication aids, controlled via eye tracking, and accessories such as the Rehadapt mounts. We have a services portfolio to help our users through the complexity of obtaining and getting funding for solutions. And then last but not least, we are there to help our users, the therapists, the caregivers, through a global team of support resources. As mentioned, we operate this model globally, and it's important to note that each piece is critically important and also a significant differentiator for us, making us absolutely unique. Our go-to market model is predominantly as prescribed aids.
That means that some 90% of our revenue comes from public or private insurance providers. This also means that we have solid paying customers and have always been resilient towards changes in the overall economic climate. Righty, but now we will go back at focusing on the main topic of today, namely the earnings report for the fourth quarter, 2025. If I would be looking at the highlights, we had another strong quarter when it comes to revenue growth. The growth compared to the same quarter previous year sums up to 31% after adjusting for the currency effects, and this marks a further acceleration of an already strong trajectory over the past four years.
The demand for our solutions remains high, improving the solidity of our underlying business, obviously, but we also see robust growth across all geographies and markets. We continue seeing increased growth in the touch control product portfolio, which typically then serves younger users with autism. However, in the quarter, we also continued to see good traction in the eye gaze controlled solution, serving users with more complex needs. Our EBIT came in at SEK 103 million , and this includes non-recurring costs of roughly SEK 17 million in the quarter, and that implies then, of course, an even stronger underlying profitability. In November, we moved our entire North American headquarters and logistics hub to a brand-new location, from where you will see pictures during this presentation, including on this one.
And then last but not least, on December 2023, we entered into an agreement to acquire all the shares of our Italian reselling partner, SR Labs Healthcare, and I will come back to that in a little bit. If we then instead look at the full year of 2025, we can conclude that it was a solid regarding our top line growth. In local currencies, the growth was 34%. Our profitability improved in the year. The EBIT grew by 11%, earnings per share grew by 13%, and this really proves the case that our business is continuing to scale quite well. And the fundamental factor behind this is, again, the hugely underserved potential in the market that we addressed.
The growth in profitability during 2025 should be seen in the light of the investments that hit our P&L with around SEK 100 million in total of non-recurring nature, related to two main projects. First, the new ERP system that was successfully launched in North America on July 1st, which represent, you know, some three-quarters of our business. And then in November, we finalized the consolidation of the product and development organization into a central hub in Stockholm, reducing our U.S. based team by some 50 FTE, and in parallel, building up an even larger team here in Stockholm. And as a company with a clear focus on innovation, having our products and development function concentrated in one location enables further scalability and resilience.
Another important way to scale and grow our business is to expand our direct market and the presence there. More than 70% of our revenue from Europe and the rest of the world comes from markets where we have direct presence. In 2025, we completed the acquisition of former reseller partners, Cenomy in France and RehaMedia in Germany. As mentioned on December 23rd, we announced our third acquisition for the year, this time in Italy, where we agreed to acquire our reselling partner, SR Labs Healthcare. The company reported revenue of approximately EUR 3 million in 2024, and we are paying the current owner EUR 4.2 million in cash at closing. The closing is expected during the next half year, when we look forward to welcoming some 10 amazing new colleagues to our team. But now I hand over to you, Linda, to take us deeper into the financials.
Thank you, Fredrik. Let's start with Q4. Revenue for the fourth quarter came in at SEK 677 million , a 31% year-on-year growth after adjusting for the currency effects. Recent acquisitions contributed with 3%, and the organic growth was a solid 27%. This marks another chapter in our four-year strike of robust growth and consistent execution. Currency fluctuation had 15% negative impact on revenue, hence, the reported revenue growth was 16%. Sales continued to grow across all our markets. Also, in previous quarters, we continued to see growth among younger users with autism, using handheld touch control devices. At the same time, they continued to see good traction in our eye gaze control solutions, serving users with more complex needs.
The gross margin ended up at 69%, a decrease of 1.1 percentage points, and the gross margin was, at the same time, negatively affected by currency fluctuation, resulting in SEK 13 million loss. But also somewhat strengthened by sales growth and the addition of new direct markets contributed an extra layer of the gross margin. So EBIT for the quarter was SEK 103 million, and the EBIT margin was 15.2%. Our OpEx increased with 17% organically, and the OpEx increase was affected by factors such as staff increases, mainly within the sales and marketing organization. In total, we added 155 FTEs, including M&A, versus last year. During the quarter, as Fredrik already mentioned, we continued to invest in new systems and tools to strengthen scalability.
The total non-recurring spend related to this in the quarter was SEK 6 million , which was SEK 4 million lower than prior year. Operating expenses was also affected by non-recurring costs related to the restructuring cost in the product and development organization. The total non-recurring spend in the quarter was SEK 8 million , which was SEK 6 million higher than prior year. Both these two investments are in line with the announced strategic plan. The development of the Dynavox Group share price has rendered an increased cost for employee long-term incentive programs of SEK 3 million compared to fourth quarter last year.
All in all, non-recurring costs in the quarter sums up to SEK 17 million but this was partly offset by operating income that was positively impacted by SEK 6 million related to adjustments of earn out liabilities. In addition, currency effects both from lower exchange rates versus prior year, and together with transactional timing effects, had a negative impact of SEK 36 million on EBIT for the period. Net R&D cost decreased by SEK 3 million , and this includes non-recurring cost of SEK 8 million related to the restructuring within research and development organization. If you look at the basic earnings per share, it total at SEK 0.72 per share, to be compared with the last year, SEK 0.51 per share.
So to the full year, at 2025 financials, revenue for the year came in at SEK 2.467 billion, at 25% year-on-year growth. Excluding currency effects, revenue grew by 34%. Acquisition contributed to 2%, and the organic growth was a solid 32%. As with the quarter, we see growth across the board in not just regions, but also product and user group. We also see the trend where markets where we go direct grow stronger. The gross margin ended up at 68%, a decrease of 0.34 percentage point, and this was negatively impacted by the currency effect, about SEK 31 million. And this relates to that inventory purchase in U.S. dollar at a higher exchange rate, resulting in a loss upon sale due to the strengthening of SEK.
At the same time, the margin was strengthened by addition of new markets, which contributed to an extra layer of gross margin. EBIT for 2024 was SEK 254 million, corresponding to a margin of 10.3% versus 11.6% last year. Our OpEx increased organically with 27% versus prior year. The OpEx increase mainly relates to staff increases in the sales and marketing organization, and salary adjustment that came into force in April 1st. During the period, we continued to invest in systems and tools to strengthen scalability. This non-recurring cost contributed approximately with SEK 28 million to the cost increase, with a total cost of SEK 46 million in the period. Operating expenses was also affected by the non-recurring cost of approximately SEK 41 million related to the restructuring of product and development organization.
The cost of the long-term incentive program increased by SEK 18 million, driven by the share price development during the year. The amount also includes a non-recurring cost of SEK 5 million related to historical long-term incentive cost. To summarize, a total of non-recurring cost amounted to SEK 106 million. We should also say that currency effect, both from the lower exchange rates versus prior year and transactional timing effect, effects, had a negative impact of SEK 78 million on EBIT for the period, an impact of 3 percentage points on EBIT. R&D expenses had a negative impact on EBIT of SEK 61 million, compared with corresponding period last year. This includes non-recurring cost of SEK 35 million related to the restructuring within the research and development organization. Of course, we are very happy with our revenue growth and how we delivered on our strategic investment.
Adjusted for this, we are now seeing an EBIT in line with our financial target. For the quarter, cash flow after continuous investment was positive, with SEK 46 million, and cash at hand at the end of the quarter was SEK 195 million. Net debt was SEK 90 9 million , and the total unused credit facility at the end of the period was SEK 300 million. The net debt over last twelve months EBITDA was 1.7 times. Those were numbers.
Yeah.
Fredrik, back to you.
Great, thank you, Linda. A lot of numbers, but on the other hand, we're also summarizing both the quarter and the year. So before we open up for questions, I'd like to reiterate the main takeaways and bring further nuance to our performance and outlook. We continue our strong trajectory, and that's a trend that started early in the spring of 2022. As we said, the revenue grew by 31%, adjusted for currency, which of course, is highly satisfactory. And going forward, we are clearly meeting tougher comps. As noted, as well, the strengthened SEK to the U.S. dollar poses headwinds, both on revenue and earnings. But we still saw that, sales continued to grow across all markets. We continue to see the growing adoption among younger users, typically with Autism.
At the same time, we also see good traction in the eye-gaze controlled solutions, serving users with more complex needs. Our profitability was negatively affected by non-recurring costs, totaling some SEK 100 million in the year, or over 4 percentage points. And that relates to the long-term investments that focus on building a more robust company and a more resilient company. And obviously, the strengthened SEK and the weaker dollar posed significant headwinds. Our operations infrastructure got a significant upgrade with the opening of our brand new and modern offices and operating hub in Pittsburgh, Pennsylvania, serving our entire North American market, and that represents some three-quarters of our business. We continue to expand our direct market presence by agreeing to acquire our Italian reseller partner, SR Labs Healthcare.
The overall exposure to import tariffs to the U.S. is limited, since our products generally are classified as medically certified assistive devices, and that exempts them from tariffs under the so-called Nairobi Protocol. While the recent U.S. government shutdown and general uncertainty on policies had no apparent impact on our business, we acknowledge the broader societal effects that this may cause, and may cause some slowdown to the business, but the financial impacts are quite difficult to quantify at this point. It continues obviously to be a very fluid situation in and around the U.S., and we continue to monitor all macroeconomic and policy change developments very closely.
All in all, we remain confident there is ample opportunity for growth over a long period of time, given the low penetration of communication aids, and we continue our efforts in helping more users by expanding and servicing a market that is largely under-penetrated. As we have learned from the history, it will never, ever be a straight path forward, but our past performance solidifies our long-term confidence. Our current financial targets were communicated in February of 2024, and then expressed with a time horizon of 3-4 years. The first target to, on average, grow revenue by 20% per year, adjusted for currency effects, in, but includes contributions from acquisitions. In local currency, the fourth quarter growth for 2025 was 31%, which means that we've found a revenue growth momentum to build on. The market we serve remains hugely underserved, but also quite immature.
With the example of growth levers, such as sales team expansion, adding direct markets, and operational excellence, we continue to build our growth journey. The second target is to deliver an annual EBIT margin that reaches and exceeds 15%. We have proven to build strong growth with incremental improvement in profitability, and we need to continue to invest, obviously, in future growth with improvements in scale. The recipe for us is quite simple: continued revenue growth, high and stable gross margins, and then a total operating expense that increase at a lower pace than the revenue growth. As a consequence, we see good opportunity to further leverage how revenue growth translates to reaching and exceeding an EBIT margin of 15%. Last but not least, the dividends policy.
So we do have an attractive cash flow profile, and given the growth opportunities, we need to maintain a capital structure that enables strategic flexibility to pursue growth investment, and that obviously includes acquisitions. But it's still expected that over time, Philip, are you on the call?
Okay, let's see. Philip, if you are able to unmute by pressing star six. Okay. Let's try with Jakob instead. Jakob, maybe if you can try and unmute by pressing star six?
Can you hear me?
Yes.
Do we have Jakob on the line?
Yes, I'm on the line.
Good. So please ask your question.
Okay, thank you. My first question is on the sort of growth outlook you see. Obviously very good momentum here continuing in Q4. But given that now that from Q1 you are facing this more tougher comparables, do you still see that you can still sustain a sort of 20+ organic growth momentum?
I think you're absolutely right, Jakob. Hi, by the way, sorry for the technical issues. This is Fredrik. You're absolutely right. We are seeing tougher comps, and without kind of talking too much into the future, we also remain confident in our long-term predictions, and that is expressed as we believe in an annual growth of 20%, adjusted for currencies and contributions from acquisitions. So we're making no change to the outlook. We have never been in a situation where the current growth has been, you know, something we have comment on in more detail.
Do you have any-
Okay.
Any more questions?
Can I continue? Yeah.
Yes.
Sure. Yeah, no, another question, if you can elaborate on the development in your U.S. sales force during the last year, sort of how much it has grown from the beginning of 2025 to where you are now, and also what trends you're seeing in sort of sales force efficiency?
Sure. Can I hand over to Linda to maybe elaborate on that?
I mean, we have added more feet on the street. Over 20 people in the sales organization or solution consultant, as we call them, have been added during the year. We also see an improvement in efficiency for our sales organization on a good trajectory, which is a really good sign, considering how many people we have added during the past year. So that's great.
And that equates to roughly 20%, or is it-
It's about 10%, yeah.
Sorry, the growth in terms of number of FTE.
Yes, that's about 20% increase.
Yeah.
Good. Any further questions?
Yeah, then I'm also wondering a bit on your balance sheet. I mean, it's good to see the dividend here you announced today. But given the sort of stronger profitability, I guess we will come down to quite low leverage level here towards the end of 2026. So just what are your thoughts on how you will use the balance sheet going forward?
I mean, we should always prioritize and make sure that we look at future investments. It could be M&A, etc, so we need to make sure that we have access to cash for that. But if we, for the future, I mean, now we have a good situation, and that's why we decided on doing a dividend this year.
I think it's, it's also important to stress the fact that given the type of business that we're in, the type of payers that we are, as a company, we should carry a certain leverage, and we obviously feel quite confident in the ranges where we're currently operating. But, you know, that can change with market interest rates and whatnot. But obviously, we feel quite confident at the leverage rate that we're on, and hence doing the dividend.
Good.
Maybe I can just take one more, and then I'll get back. But-
A quick one.
Yeah, i f you can comment on the situation with RAM memory prices and if you see any impact on gross margin or ability to deliver.
Sure. So just for everybody to understand, the prices for high technology memory chips has gone up dramatically, typically associated with the AI boom. We do have memory chips in our products, and yes, we have seen that the memory prices have gone up. But you should see that in the light of two things. First of all, we don't use the, you know, highest specs memory chips that you typically use in, you know, in AI computing, etc. So we're not really in that market, and the other part is that the bill of materials cost for the memory chip, per se, in our products is very, very small.
So even if you would look like, you know, a doubling of a memory chip price, etc, etc, it only would affect, you know, some tens of percentage points on our gross margin for our products. So we are, you know, with a 70% or so gross margin, the bill of material cost for a specific component doesn't actually affect us all that much.
Good. Thank you so much.
Thank you.
I think we also have Daniel Djurberg from Handelsbanken with us on the call. So please, Daniel, unmute by pressing star six.
Yes, you have here. Can you hear me?
Yes, Daniel. Hey.
Yeah. Good morning, and congrats, a great report, I think, and also thanks for the clarification for some analysts on the COGS side. I have a question on, you mentioned the Nairobi Protocol. Have you seen any policy impact or changes so far? I have looked myself, I haven't found anything.
Nope.
No.
Good. Another question, in the autumn, on the close down, you were quite safe out due to prepayments. Is this something changed this time on, you know, this prepayment thing that could be that it could be a larger impact directly, given the close down?
We didn't see any direct impacts of the close down, and that's because the system, there are buffers, as you allude to, in the system. But I need to stress the fact that this type of close down, and I would also say if you go up in the helicopter and look at the general uncertainty in the U.S. society, it will and have some sort of impact on us. It's affecting schools, it's affecting, you know, the life for our own staff and societies at large. It's, however, super difficult for us to quantify exactly what that meant in terms of dollars. But I would be wrong saying that we are, you know, unaffected largely. But there is nothing that we can really point at or quantify.
Super. And also in terms of ramping up the sales force, can you comment a bit on the efficiency on, you know, the number of prescribers and so on, that this sales force can help, i.e., your indirect sales force, more or less?
Yeah.
How you work with that?
So three factors. The first one is the number of reps that we have in the field, and as we said in the previous question, that increased by roughly 20% or so, or 20 people, to be exact, in the U.S. last year. At the same time, we did see an improvement in kind of revenue per rep or sales sales rep efficiency. The third element is something that I believe we have talked about before, which is the number of prescribers in the market that prescribe four or more devices per year. And here, too, we saw an uptick compared to last year.
I actually don't have the number, but I would say that there were, you know, probably a double-digit percentage, perhaps low, in number of prescribers that are, for the lack of a better word, good at their job or etc. And that's, of course, a fantastic growth level because they carry our water, and they typically have more successful patients.
Perfect. And if I may, very last question on the competitive landscape. Have you seen any larger changes for some of the U.K. competitor, Smartbox was acquired and also to say something about PRC-Saltillo in the U.S., given these are private companies, it's hard to judge from the outside.
The short answer is no. I think it's largely business as usual. If you look at the acquisition of Smartbox, that was announced, not yet closed, I believe. That's merely an ownership change, and that's potentially good. We have no opinion about that. And you did also say that PRC-Saltillo did acquire two small software companies, typically focusing on other markets than their home market, U.S.. But again, this doesn't affect, you know, our day-to-day life.
Super. Thank you so much, and good luck in Q1.
Thank you, Daniel.
Thank you, Daniel. And then we will turn to Kevin, who has posted a question in the chat, asking: You increase R&D every year. Will this increase indefinitely, or will it flatten out more and get quarterly consistent over time?
Linda?
Yeah. So I mean, during 2025, we have talked about the strategic move that we have done from the U.S. to Sweden, which means in 2025, our R&D spend has been very high because a lot of non-recurring cost. What we see over time is that we will not increase our R&D spend in relation to revenue, so that will, over time, go down. And also why we did this move was to, for the same amount of money that we spend in 2024 or in Q4 2024, we will actually hire more people. So we will get an efficiency in adding more capacity for the same amount of money. So over time, this will go up, but of course, we need to add a couple of heads every year, but it's not significant from a SEK 1 million increase perspective.
Good. And he continues also, Kevin, all the quarterly reports for 2025, you have expressed that the demand has been basically the same in Q1, Q2, Q3. What did it look like for Q4?
The same.
The same?
Yes.
Good. So let's see now if we do have Philip, and if you can unmute, press star six. We try again.
Yes.
Perfect.
Good morning. All right, most of my questions have been covered, but I was just wondering, has the U.S. reimbursement rate increased going into 2026?
Yes, they have communicated a 1.9% increase in December that we will start to evaluate during the year or implement during the year. But as historically, this takes some time for us because we need to update all our appendixes to our agreements with the funding bodies across the U.S.
But it's a good question because as many fear, you know, with the current political climate, it didn't go down, and it's typically associated with inflation. I think this just under 2% increase of reimbursement rates underscores that.
And then I was also wondering about Tobii, Tobii. They reported the other day, and it was quite a disappointment. And does it have any effect on you, or about their performance and their ability to deliver products to you?
No.
Short answer. Okay. Thank you very much.
It's obviously a complex topic, but we are in a position where it doesn't affect us.
Yeah, and we have a lot of stock when it comes to Tobii components.
Yeah.
That's part of the pre-purchase we did during the summer.
Yeah. All right. That was all from me. Thank you.
Thank you.
Thank you, Philip. We also have another question from Jessica at Red eye. "So adjusted for non-recurring costs of SEK 17 million, the EBIT margin reached 18% in Q4, which sits well above your long-term target of 15%. Now that the restructuring of the R&D organization is complete, how do you view the ability to maintain this elevated margin level throughout 2026?
First of all, hi, Jessica, is that the profitability or margin target is expressed as exceeding 15%. So our target is not 15% full stop, it's exceeding 15%. And I, we remain confident that that's a level where this company should be able to deliver. With that said, we're also gonna make sure that we make the appropriate investments so that we don't build a card house that could implode here. We wanna build something very, very solid and resilient.
We should also remember that Q4 is our strongest quarter, so profitability during both both revenue and profitability can increase during.
During the year.
Quarter, during the year.
Good. And actually, I see that Kevin had a follow-up question on the R&D that he asked, "Would you EBIT margin and therefore your result have been better next year, all other the same, since they have been a one-time cost?
Yes.
Yes.
That's mathematics.
Good. Good to confirm. I think by that, let's see, there was one more here also from Kevin, and another question about the demand. That the demand is so consistently high, 35.2%, excluding currency. Can I get some history regarding this, more in regards to if you have seen this demand historically, and what may or may not affect this?
Sure, it's actually a quite complex topic, because we are operating in an industry where we are also not only providing the product and the solution, we're also there to create the awareness. So our long-term initiatives on educating prescribers, being active at universities, creating more and more successful users, etc, that is a very, very slow moving ship, and it's quite difficult to kind of exactly calculate the impact from when one of our colleagues were out in the street teaching a prescriber how to do their job until that translate into revenue growth. So I would say we are responsible for the growth, because we, and some of our industry peers, we largely create the market. Exactly to predict which percentage points that we'll end up in is genuinely hard.
But we feel, obviously, that we've found the momentum, but I expect that it will be a bumpy road. Sometimes we will have very strong growth, and sometimes we will have weaker growth. But if you zoom out a little bit and look at the overall curve over longer periods of time, we are obviously quite confident in long-term growth. And when I say long-term, I'm probably more talking decades than quarters.
Good.
All right.
With that, all the questions have been asked, and we hand over to you.
We conclude it.
Yeah, conclude it.
All right. Thank you everybody for listening in. We apologize for the technical mishaps that happened, but obviously we were able to hear the voices of some of our dear analysts and followers, so something worked. We will now continue to work, and next time we have a session like this will be on April 24th, it's a Friday, and then we will conclude the first quarter of 2026 in our earnings. Thank you very much.
Thank you!