Good morning. This is Mark Waugh, and I am the CEO of OssDsign. If you are new to our quarterly calls, I am going to mention that I joined the company in January. Also with me today is OssDsign's Chief Financial Officer, Anders Svensson, and today we are going to discuss our third quarter 2026 results. As always, when we do these presentations, the normal disclaimers. For today's call, I am briefly going to cover some highlights. Then Anders will walk you through some financial results for the quarter in a bit more detail. Finally, I will share some additional information about the transformation OssDsign has undertaken, as well as some good news we issued via a release this morning. For the quarter, OssDsign sales were SEK 35.7 million, or approximately $3.7 million. Those were less than our Q2 sales performance, but in line with our expectations.
Some of you might recall that we communicated an expected seasonal holidays impact for the quarter during our Q2 release. We are not quite large enough to be unaffected sales performance-wise when a number of customers simultaneously take time off from performing elective surgeries. On a year-over-year comparables basis, Q3 translated to a 19.8% year-over-year decline in constant currency terms. Gross margin and EBIT both improved for the quarter versus Q2, and I will let Anders cover those details after these highlights. Catalyst and our supporting evidence for its use remain strong. We recently communicated that our PROPEL registry achieved a major milestone of over 400 patients enrolled. During the quarter, we utilized PROPEL's high-quality observational data to prepare and submit a significant labeling change. We also finalized our level 1 study protocol and made progress vetting a number of potential interested sites.
Our team continued to promote and share Catalyst performance with customers during seven surgeon society meetings within Q3. Just after the close of the quarter, we exhibited at the North American Spine Society meeting in San Antonio. We not only sponsored an excellent talk from the podium by two key opinion surgeon leaders, but also made strides in generating awareness of Catalyst and its performance. I will share some additional details on that later. As you might recall, on June 25th, we announced Adam McCollister as OssDsign's new VP of Sales. Also regarding teams, I believe I may have mentioned this during our Q2 release call, but our new area sales director for our east territories started on August 10th.
I know I have said before that building the right culture is just as important as having sufficient boots on the ground, and I am happy with the changes I have witnessed and the direction we are headed in team-wise. Finally, before we move to financial details, I think it is important to clarify that I still believe we can achieve the sales growth within OssDsign's previously communicated scale-to-profit strategy. We are making good progress on both our next product release, MIS Catalyst, and the subsequent launch of our Catalyst Strip. Now Anders is going to share some more details on our financial results from the quarter.
Thank you, Mark. Yes, as Mark mentioned, Q3 we saw a decrease in sales compared to the third quarter of 2025. So in SEK 35.7 million compared to last year's SEK 44 million. That translates to an 18.8% decrease in SEK. As you can see in the growth charts to the right, the U.S. dollar rate effect has now turned around, and it's actually currently providing some minor tailwinds, 1%. We commented on this year's summer vacation effect during our Q2 release and highlighted that it would likely be more pronounced than in previous years, which, as you can see from the numbers, that's exactly how it played out. On a positive note though, we saw an improved sales trajectory throughout the quarter. Sales quarter-over-quarter, as mentioned, summer vacation effect, we've already commented on that.
What we implied was basically that the Q3 sales were expected to come in soft compared to previous quarters. Now, as Q3 is also, as I'm sure you all know, a seasonally smaller quarter in general, we pay more attention to the intra-quarter trend, which was decidedly positive in the quarter. The quarter-over-quarter decrease is clearly depicted in the growth chart here, so not much more to say about that. Just to comment on the U.S. dollar SEK rate development, which is even stronger when you compare to the previous quarter than when you compare to previous year. We see a bit more tailwind there, which is not something we've been used to of late. Last 12 months figures. Given the sales decrease in the quarter, the negative LTM development comes as no surprise.
We're currently 5% down from the 12-month period leading up to end September in the previous year. Needless to say, this is not a development we are happy or satisfied with. As stated earlier, our sales reorganization, which is still ongoing by the way, has been quite extensive, even more extensive than we had first imagined it would be. However, we still expect those efforts to start delivering improved commercial momentum, albeit later than first envisioned, given the sheer size and scale of the reorganization. Over to gross margin then, 93.2% for the quarter. That was an improvement over 92.1% in the second quarter, and is now back above our guided level of 93%.
We are still below the very high levels observed in the previous year, but as we commented back then, those levels were boosted by both positive production results and a very positive U.S. dollar SEK exchange rate effect. So, I think the 93% level is the one to keep in mind. There are several factors that impact this gross margin, and without going into detail on those, suffice to say that we saw some improvement in product and customer mix in the quarter, and that was actually the main driver of the margin increase. With that, I'll hand you back to Mark.
Thanks, Anders. Just my usual summary for those of you new to our calls, that while OssDsign Catalyst has been participating in this market for about four years, we have built a great body of evidence around the product. This includes 19 preclinical and clinical publications and white papers, as well as our PROPEL registry I mentioned previously. We continue to show both high fusion rates and fast bone formation. The well-established bone model showed 100% fusion for Catalyst. Our TOP FUSION study also showed 100% fusion in two years. Our registry showed Catalyst with an 88.4% fusion in a highly complex real-world patient population. In fact, nearly half of the patients in the PROPEL registry's first published cohort had three or more comorbidities that are widely associated with a higher risk of non-unions. There are a number of comorbidities known to hinder successful fusion in spine surgery.
Because PROPEL is an observational registry, we do not instruct surgeons to exclude those challenging patient factors. You will continue to hear us say, "Real-world results, real-world data, real-world results," because we are seeing strong performance in an unfiltered patient cohort. Before we wrap things up and take questions, I am going to quickly reiterate our scale-to-profit strategy, which we shared in Q3 of 2025. Then, as promised, I am going to share a bit more detail on our transformation, plus our additional news release today. There are four key pillars in our strategy. First, accelerating access and coverage within the U.S. market. The good news is we have achieved our goal of having the ability for coverage in 35 states. We are, however, still working to double our sales force versus when this strategy was communicated in 2025. I am going to show you some more details on that in just a bit.
I mentioned this last quarter, but we continue to see new business in the foot and ankle segment of the market as well. Second, expanding our product portfolio and indications. I mentioned the MIS upcoming launch and the Catalyst Strip project earlier, as well as that we have recently submitted for a labeling change. Third, we will continue to invest in clinical evidence. I covered our PROPEL registry and commented on our level 1 status in my opening remarks. Our goal here is really to differentiate Catalyst via ongoing compelling clinical evidence. And finally, our fourth pillar is to scale and add a U.S. production footprint. I mentioned last quarter that we identified a way to do this in a very cost-efficient manner, and I am proud of the progress the teams are making on this.
I used the term levers in our Q3 release comments, and given the types of questions I receive from our shareholders, I want to take a moment to explain some of those levers so that you might better understand the changes that our dedicated team members and I are enacting. First, there were some foundational issues that needed shoring up. We have moved from inconsistent selling and communications as far as our messaging to a stronger, more consistent approach. We have also taken steps to move certain investments forward, which are key to our long-term growth. Another part of shoring up the company's foundation was the dual-source supply chain that I mentioned during the prior slide. We have also taken deliberate steps to increase awareness of Catalyst and its performance. This includes more comparative marketing, ensuring we are responsive to competitor attacks, and continuing to produce and leverage real-world data.
Finally, we've made needed changes to our team. We've strengthened our commercial leadership and our surgeon-facing presence, we've aligned incentive structures with shareholder expectations, and we've implemented funnel and execution discipline. All of this has been occurring while recruiting and onboarding new talent, and I'm going to share the magnitude of this change with you in just a few moments. This is just a bit more on what I mean by awareness and our recent participation at the North American Spine Society meeting. I still don't believe we've saturated the market with targeted marketing and messaging enough to where the majority of our potential customers recognize OssDsign Catalyst, and more importantly, understand its world-class performance.
We don't usually go into this level of tactical detail in results calls, but I want to share that we revamped things quite a bit this year from a branding perspective, and we've also taken deliberate steps to increase that level of awareness. The left is more how we visually represent the product, while the two tiles on the right are examples of a very large message we had throughout the recent meeting in San Antonio. I'm confident that nearly all of the attendees saw those, given we had them at registration, entrances to the exhibit hall, and in multiple locations throughout the hall. We also leaned into promotional efforts leading up to that meeting, both to highlight our own talks from the key opinion leaders I mentioned on OssDsign Catalyst, and to continue driving the important awareness.
We partnered with Orthopedics This Week on that promo campaign, and the good news is we achieved nearly 60,000 impressions alongside a solid response or click-through rate for the various Catalyst content across website ads, direct email to 13,000 subscribers, social channels, and placement in newsletters. The bottom line here is we've stepped up these efforts to better position our sellers for success, and of course, to generate leads. Finally, I promised to provide you some additional details on the team transformation we've undertaken. First, I want to be clear that these changes are not a personal indictment of anybody who has left OssDsign, either by their own choosing or because we needed to make a change. You will note at the start of this year, we had 16 people in our sales organization. Of those 16, we've replaced 10 with new people throughout this year.
That is a huge change to make within a commercial channel, especially one of this size. It absolutely had to happen, though. Among the 10 who are no longer with us, there was simply no growth. Their sales were either declining or, at best, were flat year-over-year. When I consider the strength of Catalyst, the opportunities we have for conversations with new customers, the dedicated and hardworking people we have remaining on our sales team, and those that truly seek to support our sales managers and distributors every day. I refuse to accept that there are not avenues of growth for OssDsign in every territory. These changes have repositioned us for execution going forward. I mentioned on prior calls that we will continue to add commercial team members, but we're going to do this responsibly.
I still personally interview potential commercial team members because it is important to me that we get both high levels of talent and cultural fit with the OssDsign team. I feel good about our team and our funnel of opportunities. I realize our shareholders are waiting to see a return to growth, and OssDsign is as well. I do acknowledge that the scale of change needed to accomplish that was larger than I anticipated when I assumed the role, but I am happy where we are. It has just taken a bit longer than what I would like to see, and I still expect to see everything we have done flow through to results. Speaking of opportunities for conversations, I also want to mention that today we communicated the first nanosynthetic fusion warranty in spine orthobiologics. In the U.S., as bundled payments and episode-based care models expand, proven performance in real-world, high-risk patients matter.
For those of you listening who are unfamiliar with what is happening in the U.S. market, a trend is occurring in spine that is already a bit more established in other orthopedic procedures, such as hip and knee replacements. There are many complex details to this, but if I were to summarize it, I would explain it as hospitals basically receive one payment for something like a spine fusion surgery, and that payment covers an episode over a number of set days. If complications, extended hospital stays, or emergency readmissions drive total costs above that target price, the providers or hospital may have to absorb the financial loss. This is often referred to as downside risk. I am sure you can understand that within this framework, it is more important than ever to have an option like Catalyst that has been shown to produce strong fusion results in complex patients.
In fact, our confidence in offering this warranty stems from real-world data we have published from our PROPEL registry alongside other published results. I mentioned this before, but I am going to say it again. Nearly half of the patients in our first published cohort had three or more comorbidities that are widely associated with a higher risk of non-unions. We communicated this today, and the rollout from our team starts this week. I will close today by reiterating what I said during my first call with you regarding transparency. I hope that we have shared some details today that allow you to better evaluate what we are addressing to reignite OssDsign's growth trajectory. I appreciate your time to join our call today, and now I am going to hand it back to Anders, who will handle any questions on the line. Thank you.
I cannot see that we have received any questions as yet.
Okay. Well, since there are no questions, we are going to wrap up the call today. Again, I appreciate you taking time to join us, and we look forward to meeting with you again next quarter.