Hello and welcome to the presentation of RaySearch Interim Report for the Second Quarter of 2025. My name is Henrik Preifors, and I will be the moderator today. Joining us in today's call is Johan Löf, RaySearch founder and CEO, and Nina Grönberg, our CFO. Johan and Nina will give you a brief summary of the quarter, including the financials, and after that, we open up for questions. I also want to remind you that this session is recorded, and you will be able to find our recording on the website in the upcoming days. With that said, I hand over to you, Johan. Please go ahead.
Thank you, Henrik. I would also like to welcome all of you to today's webcast. Sales for the second quarter was SEK 305 million. That is a decrease of 4% compared to the same period in 2024. The weakest sales were partly due to the delay of several orders. Therefore, the order intake in July was unusually high: SEK 56 million, higher than in July last year, and more than SEK 50 million above the average order intake for the last three years. I'd also like to point out that the revenue for the second quarter of 2024 included a one-time item of SEK 37 million from a previously prepaid license sale to MedAustron, which made the year-on-year comparison more difficult. Operating profit for the quarter came in at SEK 36 million, translating to an operating margin of 12%.
Profit in the second quarter was negatively affected by a declining dollar and also some non-recurring costs. If we exclude those effects, the operating profit would have been SEK 51 million with an operating margin of 17%. Order intake for the second quarter landed at SEK 241 million. As we noted before, order intake can fluctuate significantly between quarters, and that was especially clear this quarter. Still, we're seeing strong momentum across our markets. Customer interest remains high, demand is solid, and this supports our confidence in continued growth going forward. Overall, RaySearch has a strong financial position. As of the 30th of June, our cash and cash equivalents were SEK 403 million, and we have stable cash flow and no loans. We're proud to report that RaySearch was used in the first European treatments with Neutron Therapeutics Accelerator-based BNCT, boron neutron capture therapy.
These groundbreaking treatments were performed at Helsinki University Hospital in Finland, and they were part of a clinical trial. RaySearch advanced BNCT capabilities, now clinically validated in both Japan and Finland, are critical in supporting high-precision individualized treatment planning, which is vital for successful BNCT. The fact that RaySearch was selected for this pioneering work once again reinforces our leading position in the clinical development of BNCT. At the end of the quarter, we released RayCare version 2025, the latest version of our oncology information system. This version delivers important functionality upgrades to streamline clinical workflows, improve data management, and enhance interoperability across the treatment chain. With integrated intelligence solutions and updated treatment support, this version of RayCare empowers clinical teams to deliver more coordinated and efficient care throughout the entire treatment process.
On July 21st, we announced that AKSM Oncology has placed orders for both RayCare and RayStation to be used at Advanced Radiation Therapeutics, which is a new center in California that's expected to open in March next year. The center will use RayStation and RayCare together with their TrueBeam linear accelerators. Now, let's take a look at the financials. Kristina, go ahead.
Thank you, Johan. Yes, the second quarter in 2025 indeed emphasized the importance of taking a longer than quarter-to-quarter perspective when looking at RaySearch . The momentum and favorable market condition for RaySearch is still there, but with orders delayed to July and strong comparisons, we get a weaker outcome than we've been used to. Therefore, I will start with the rolling 12 development of net sales, EBIT, and EBIT margin. It is visible that quarter two outcome caused a downturn in an otherwise straight upward trend. However, the annual growth rate over the last two years is still 15% and the rolling 12 EBIT margin 20%. Moving on to the quarter two overview, order intake in the second quarter decreased by 17% from SEK 290 million to SEK 241 million.
The order intake for licenses was down 20%, ending at SEK 107 million, while the order intake for support decreased 19% to SEK 96 million. RaySearch order intake fluctuates between the quarters, but also it is important to remember that it does only include contracted amounts. Since our churn is close to zero, there is also an essential amount of captured future support income that's not included in the order intake nor in the order backlog. Order backlog at the end of June amounted to SEK 1,665,000,000, of which SEK 550 million is expected to generate net sales in the next coming 12 months and the rest over the four years after that. Net sales in total, including currency effects with a weaker U.S. dollar, decreased by 4% from SEK 319 million to SEK 305 million. Currency adjusted growth was zero.
The sales of licenses amounted to SEK 131 million, corresponding to a decrease of 20%. Last year's license sales amounted to SEK 164 million, powered by the SEK 37 million revenue from the MedAustron deal that we had last year. The support revenue amounted to SEK 131 million, which is an increase of 14% compared to last year. The operating profits for the quarter were SEK 36 million, and that is corresponding to an operating margin of 12%. This was negatively affected by the former weaker US dollar and also a temporarily higher cost, as Johan also mentioned. Adjusted for the reporting currency losses, the operating profit was SEK 43 million and the operating margin 14%. Operating profit in the second quarter last year was SEK 79 million, including a full drop-through of the MedAustron deal of SEK 37 million.
Cash flow from operations amounted to SEK 71 million in the quarter compared to SEK 155 million last year, and the decrease is mainly related to the lower profit, but also an increase in the operating capital and higher preliminary tax payments. The net cash flow for the period was - SEK 104 million, affected by the SEK 103 million dividend that we paid out in May. The free cash flow was - SEK 1 million, second quarter. Moving forward and summarizing the first six months, order intake has increased with 23% from SEK 529 million to SEK 651 million. Order intake for licenses increased 8% to SEK 266 million, and order intake for support increased 50% to SEK 298 million.
Net sales for the first six months were up 11% from SEK 576 million to SEK 637 million, where license sales stood for an increase of 5% to SEK 297 million, and support sales increased 16% to SEK 256 million. The six-month operating profit amounts to SEK 111 million and the operating margin to 18%. Last year's operating profit for the first half year was SEK 125 million with a margin of 22%. Cash flow from operations amounted to SEK 217 million for the first six months compared to SEK 322 million last year, and almost SEK 60 million of those is related to higher tax payments in 2025, and where SEK 46 million of those is related to the 2024 year profits. Last year also included positive effects from big improvements in the operating capital.
The net cash flow for the period was -SEK 38 million compared to + SEK 83 million last year. We had a higher dividend in 2025 that stood for SEK 37 million of that difference. Moving on to the overview of the quarter-by-quarter development, it is clearly visible that quarter two, 2025, stands out as an exception to strong previous performance. Last, moving back to the long-term perspective and the development all the way back from 2008, RaySearch continues the growth journey with the increased robustness from 40% recurring support revenue. With this said, I hand over to you again, Johan.
Thank you, Nina. To summarize, after 11 consecutive quarters of record sales, we now have a quarter with slightly lower sales compared to last year. However, we don't see this as a trend change, but rather as a consequence of temporary effects that I described earlier. We're maintaining our target of an operating margin of at least 25% by 2026. In conclusion, the outlook for growth remains strong, and I'm optimistic about the future. Thank you.
Thank you, Johan and Nina. We will now open up for questions. You may either ask your question verbally by raising your hand, by pressing the raise button at the top bar in Teams, and wait to be invited to speak. You can also write your question in the chat section. Please don't forget to unmute yourself after being announced. I think we have someone who's been waiting for a little while. Please go ahead and don't forget to unmute.
Thank you. Can you hear me?
Yes.
Yes. It's Christopher from DNB Carnegie. Two questions. First, it's interesting to hear the reason why support revenues were up quite a bit quarter over quarter, i.e., versus the first quarter, despite I think the U.S. dollar should have dropped 10%, and you also have the euro dropped 5% versus the krona, so that was a bit surprising. Also, is it possible to say anything about how you expect working capital to evolve here in the second half of the year? That's all for me. Thank you.
Yeah, we have. Maybe I need to repeat the question a little bit. You asked about the support revenue that was up.
I guess, yeah, if you take support revenues, all else equal, I think it should have dropped maybe 7% versus the first quarter just because of currency effects. It was up quite a bit, so it seems, I don't know if you have been able to increase prices or if there's something else extraordinary in the numbers. Thank you.
Yeah. No, there are no, I mean, we have no specific price increases, but we raise prices, I mean, along the way with the customers. I mean, we will increase our support revenue going forward since we have more and more support contracts. If you need a more detailed question or answer to that question, I need to look further into it.
I mean, just to confirm, we could use this second quarter number as a starting point for the rest of the year.
Yeah, I would say so. Do you have anything to add, Johan?
No, I agree.
Let me look further into that and see if we have something special in quarter two. I don't think so. That's not what we have looked at.
Okay, I think we're heading over to the chat.
There was one more question from Christopher. How is the working capital going? How will we work with the working capital?
Yeah. Okay. Yeah. How will it develop going forward? Working capital is something that I look upon, I mean, all the way through the month. It is a little bit special with the working capital in RaySearch , I would say, because it depends a lot on the contracts that we have in the balance sheet at the moment. Some of them can be pretty large, and if we have negotiated payment terms with the customers where we get paid upfront, then we have a good process in the working capital, otherwise, not. It fluctuates a lot dependent on the customers. We are working on that, and I think that we will be able to improve the working capital going forward. In the end, it depends on the negotiations with each customer.
Okay, thank you very much.
Thank you. Thank you.
In the chat, we have a question, or three questions actually. We'll take them one by one from Mats.
I can take those and answer them at the same time.
Okay.
Yeah. The first question is, when will Ortega revenues start to appear and over how many quarters will we see them? We received some revenues from Ortega in Q4 this year from the first center. This will span over a 3-4 year period until they have built all the nine proton centers in Spain. These revenues will be spread over quite a long time period. Second question is, what percentage of the licensing revenue will come from customers replacing Pinnacle during this quarter? I don't have that number calculated yet, but it's probably north of 60% is my guess. I don't have it in front of me. It's a big focus now on replacing as many Pinnacles as we can before Pinnacle becomes end of life, which is end of 2026. The third question is, what does the one-time cost consist of and what is the amount?
The amount is SEK 7 million, and it's two things. One is a dispute regarding adaptation of our facilities here in our headquarters, a dispute with our landlord that's settled. The second part is an internal global conference that will not recur next year. Those are the two items. Okay. Those were the answers to Mats Andersson's three questions. Maybe we should take the chat and maybe we should take every other question from the people raising hands.
Yes, let's move over to Oscar Bergman, who has been raising his hand for a while. Oscar, please unmute.
Can you hear me now?
Yes.
Great. Okay. Yes, I have three questions before I can head back into the queue. The first one is, the delayed orders that were pushed to July, if they would have been recognized in Q2, can you say what sales would have been in this quarter?
Not exactly, but the majority of those orders will be recognized quickly. I don't know exactly the mix, but the vast majority of the order value will be recognized in Q3. Would it be recognized in Q2 had they come in when they showed up?
Would you categorize them as small or a bit larger?
There are a few. I think the largest is SEK 12 million. There are a couple of SEK 10 million orders. In total, 20 orders are part of this delay. It's a mixture of small add-ons and a few larger or, no, medium-sized, like around SEK 10 million.
Okay. Can you elaborate shortly on the reasons for the delays?
Just administrative hiccups that happen from time to time.
Right. I see. I expect we could see a pretty strong Q3. I mean, we're still in it, of course, but should we assume that maybe we will be back at record sales in Q3?
We cannot predict that. I mean, theoretically, the same thing can happen in Q3, right? The orders can be delayed into Q4. Of course, we will not predict now Q3, but it's nice to have a strong start of a quarter. I mean, it's painful to lose the orders from Q2, but now when we're in Q3, it can be regarded as a positive thing.
Are there any signs of potential delays from Q3 to Q4 as well?
No, we don't see those delays until they actually happen.
Right. Just a final question. Sorry, Nina.
No, but I just wanted to add there that, I mean, our customers, I mean, the hospitals and the cancer clinics, they don't work with the same clock as we do because, of course, we want to get the orders and the sales into a specific quarter. They don't care. They work according to another schedule. Sometimes we just have to accept the customer's schedule here.
Right. Just a final question before I head back into the queue. Do you focus more on increasing the number of RayStation licenses per existing customer sites going forward? I suspect this hasn't really been a huge focus area for your operations historically.
We're preparing that as we speak. That will be a very important topic for the second half of 2025.
Okay. If you were to compare this sort of, say, optionality to increasing the modules per license, which would you say has the most potential?
Which of the modules?
Yeah, I mean, that's also a question, but increasing the number of licenses per center or increasing the number of modules.
I see. For me, they're all licenses. It's RayStation licenses and then it's module licenses. There is huge potential in both. As we have said before, if we have sold 4,600 RayStation licenses or something like that so far, we could send to our current install base at least another 4,000. That's like a theoretical maximum, I would say. You still have that. The potential is probably even larger for the modules. Just in sheer numbers, it's much less saturated. The module that has sold the most out of these, we say 13 modules now that are viable options that are relevant for all the entire customer base. The module that has sold the most has only sold 1,000, now 700, almost 1,700 copies, and it's a falling scale from there. The modules are, from just sheer number perspective, much less saturated.
We can't assume that we would have 8,000 modules sold for every module to the entire customer base. It shouldn't be higher than it is currently. That's what we will be working on more actively now, to have our customers realize what they have under the hood, so to say, because they have all these modules physically on their computers in the clinic. If they purchase them, they can release a lot more power from RayStation than they currently have. It's very hard to predict what this would result in, but it's a potential that we will try to extract going forward from now.
All right. Thanks. I'll step back and see if someone else has a question. Thanks.
Thank you.
Thank you very much. Heading back to the chat, we have Ivan with a few questions. I'll read them. In Q1, you mentioned the idea of opening up all licenses to the install base for a limited period of time in the hopes of then making the customers buy the licenses. Has there been any progress to this idea, and could this theoretically add 5x-10x license revenue?
I think I partly answered this question. This is a work in progress right now. This will be activated during the fall. Also, as I answered to Oscar previously, it's very hard to predict what this will mean in terms of license revenue. For sure, we will be able to sell more licenses to our install base if we actively pursue this. To say 5x-10x , we can't predict that.
Thank you. How is the competition looking within the area of chemotherapy? Does Elekta or Varian have software for chemo, or are there other competitors in this field? Also, how large is the potential for chemotherapy in regards to the total clinics globally?
Yeah, there is some competition. I would point out that Epic, for example, has the most common hospital information system, has a chemotherapy module. There are several smaller players with quite very simple software solutions for chemo. I don't think there is any, there is no software that takes chemotherapy as seriously as RayStation and RayCare will do. I think we'll have a very competitive, on a different level, competitive solution on the market next year. There's also a question about the potential for chemotherapy globally. I cannot answer that today.
Can you provide an update on RayCare? How is this developing? Is this a significant driver for order intake in 2025 or 2026? How many customers do you have now?
Yes. We see a lot of activity on the RayCare side. One big enabler was, of course, the TrueBeam interoperability that is now in clinical use, and so it's available. Many discussions are going on, and I mentioned in my presentation also one order from the U.S. that was exactly this type of combination with RayStation, RayCare, and TrueBeam. So far this year, we have four new RayCare orders, and I think we see a few more. I hope for a few more during the second half of 2025. If that happens, and it should happen, then we're selling RayCare at a much higher level than in the past. There is another question here, how many customers do you have now? It is actually, I don't, it's 29, 30, somewhere around there. For these four additional orders, now we are maybe at 33 or 34.
Those 30 previous orders have been accumulated over several years. If we can get, I'm just guessing here, another five orders this year, and we have maybe 10 orders for the full year, that's a trend shift. That would be sort of the beginning of a ramp-up. RayCare is a lot of activity on the RayCare side and very positive feedback on the system.
Thank you. We have a question from Nadim. Can you please detail non-recurring costs?
I did that before. That's already answered.
We have.
Maybe you can skip the questions that have already been.
Sure.
I guess.
I think we might have answered the reason for the delay in orders.
Yes.
If we want to answer it just to make sure this is not a sign of a slower market, I think the conclusion was that it isn't.
No, it is.
Exactly. Absolutely true. It's not science of a slower market. The second question, will you still say that full-year 2025 sales is tracking in line with expectations? The answer is yes. We have not made any changes to our full-year sales because of the, yeah, the temporary, let's say, slowdown in Q2. We stick to the same target as we had before.
We're moving on to you, Joachim, question. How many Pinnacle licenses are going end of life in total 2026? How many of these have you captured already, and what is your goal to achieve during 2025 and 2026 of the total?
It's hard to know the exact number. We estimate that there are somewhere between 400 and 500 Pinnacle clinics still unconverted to something else around the world. It's very hard to get the exact number, but somewhere in that ballpark. How many of those have you captured already? I cannot answer that right now, but we have captured a lot over the years. This has been a constant. If we say 400, 500 currently, when it was at its peak, it was installing 2,500 clinics. Quite a lot have been captured. We have not captured 100%, obviously, but we have captured a significant amount of the previous Pinnacle clinics. We don't have, you know, exactly. We want to capture as many as we can of the remaining clinics during 2025 and 2026.
On the same topic, we have another question from Aryan. If 60% of sales comes from customers that have Pinnacle, does that mean that sales from other customers are structurally lower now, or is there just a focus at RaySearch on getting these customers now?
Yeah, that's a good question. Since this is a time window where a very specific amount of time when we can grab these Pinnacle customers, we have to focus on those because otherwise, someone else will take these customers instead. There is a very strong focus in the salesforce on this conversion, Pinnacle conversion. With that said, in some regions where the conversion has already happened, let's say Japan, then there is almost no Pinnacle left to convert. There we instead convert Monaco sites and the CHIPS sites, that is Elekta sites and Varian sites. That happens in those markets where when the Pinnacle conversion has already happened, we can focus on all the other customers. In some regions, like France and the U.S., we can focus on both Pinnacle and the CHIPS at the same time and so on.
If we had unlimited bandwidth, we would in every market focus as much on every conversion. Since we don't have unlimited bandwidth, we need to grab the Pinnacle sites as quickly as we can right now. Maybe some other opportunities have to wait.
Thank you. Here's a question from Sylvain. Hello, thanks for the presentation. I saw that headcount is progressing modestly, but progressing still. I would like to know to which function they are allocated to. Wondering if this is to push the marketing effort. Isn't it a bit contradictory with the optionality of selling more modules to the existing customer base?
Okay. There are two questions. Yeah, we do recruit. For instance, it's across the board, I would say. We have recruited, for example, quite a lot to the finance department, replacing consultants. That's one thing. We increase our service staff to service more customers. There has been some increase in R&D. We have added application specialists that train people and also are part of the sales effort. We add salespeople and marketing people. Across the board, I would say, but it's not, as you can tell, it's not a huge increase. It's quite a moderate increase. The last question I need to read again, isn't it a bit contradictory with the optionality of selling more modules to the existing customer base? I don't understand that question. Can you, what's the contradiction here? Can you clarify it?
Sylvain, you can either raise your hand and I can unmute you, or if you reply to the chat. Thanks. Now you should be able to unmute yourself.
Okay. Sorry, I was looking for the unmute button. No, my question is related to the operating level. Contradiction is maybe too strong a word for that, but for me, you are almost fully equipped. As you got already that installed customer base, the cost of selling the marginal module shall be close to zero. Do we need, in fact, to increase the payroll again? It's just about that. As we said, it's modest, but I would like to know to which extent we are close, in fact, to the good size.
It is in this context with adding. Okay, I see. You're right that the sales effort is quite limited when we sell more licenses to an existing customer. That's a very high margin enterprise. We need these new people to add more RayStation customers because we have around 1,100 RayStation customers today. We want that to be a completely different number. Over time, we want that to be at least 3,000. That's where we have to do the very hard work of actively selling RayStation to existing clinics and also to new clinics. That's where we need to have bandwidth. If we would have been happy with 1,100 customers, then, of course, it would be a contradiction that we add more salespeople. That's not the case.
No, clear in this.
Is that okay?
Yeah, thank you. Very useful.
Thank you.
Thank you. Moving over back to Oscar.
Yes, thanks. It's Oscar from Redeye again. I was just wondering also about the growth base because you increase roughly 90 - 100 customers per year, and you've done it for a pretty long time. What must be done for you to increase to, let's say, 150 or 200 per year? Can you say how Elekta and Varian is progressing compared to you?
I cannot say how Varian and Elekta are progressing compared to us. I think our recipe for because we really want to bump this number up, the number of new clinics per year. The way forward is to team up with all the new machine vendors. I think that can be very powerful to sell together with VO Cancer Care, together with BAB. We have already sold quite a lot together with Accuray and IBA, for example. With these new machines coming out, Oxtray from Hitachi, etc., all of these new machines are almost all of them are unique. It's only RayStation that can be used together with these machines. For every machine, for example, every Oxtray that Hitachi will sell will come with at least two, maybe three, or four RayStations. That will be completely new channels to the market.
We hope that this will be our way to accelerate the growth of the install base. We don't keep these 90 - 100 new customers per year, but that we can have a larger number of new clinics per year in our customer base. I think the key here is to continue what we're already doing and intensify that, but also in addition, work together with these treatment machine vendors.
Okay. Interesting. I have a few more questions if that's okay. The next one is a pretty basic level one, but what's the reason for centers to not commit only to one TPS across all machines instead of having like they have today, maybe six to nine different TPS at the centers? Do you see any sort of trend that is indicating that they are turning to fewer TPS?
That's news to me that they will have. I don't think there are eight to nine TPSs or different brands even. That's complete, I would say, nonsense.
Maybe you misunderstood the question. Maybe I did.
Sorry.
No worries. Previously, you mentioned that at the center, there are maybe six to nine different TPS systems at the center, right?
No, not different. Usually, the most common thing is that you have one treatment planning system. You may have machines from a number of different vendors, but the ideal solution is to have one treatment planning system. In many cases, when larger clinics transition from one treatment planning system to another, there will be a period of time, a couple of years, when they have two treatment planning systems, the old one and the new one running in parallel. There are some other exceptions as well. For example, if you have Pinnacle, Eclipse, or Monaco together with your Elekta, Varian, or ordinary linacs, and then you also have a Radixact and the CyberKnife from Accuray, then you need to have two different treatment planning systems because the three systems I mentioned, they don't work together with Radixact and CyberKnife.
That's another instance when you have to have different, another reason for having different treatment planning systems. You would never see, I'd never, but I mean, first of all, there aren't eight different treatment planning systems around on this planet. It's very seldom that you see a mix of, let's say, three different treatment planning systems. There is some bad reason for that because it's very inconvenient to have different treatment planning systems for your machines.
Okay, yeah.
Did I clarify? Was I clear?
Yeah, clarified. Thanks. Here's the final question again. Are you looking into perhaps tilting your model to a software as a service, or will you remain with the licensing strategy?
Okay, you mean subscription, because.
Yeah, exactly.
Software as a service is the deployment, and then it can be mixed. You can have software as a service, but still pay a one-time fee or subscription. I think what you're looking for is subscription models. We do have some, we do offer a subscription. It's not that many customers. I got a number.
Yeah, I think it was 12.
Okay, so we have 12. There are some customers coming on board from time to time that want to go with subscription. In general, they choose, they prefer to have the old model. I think it can be interesting with all this, going back to the previous discussion about selling the optional modules to install base. There, you could maybe, subscription fits there. You buy the treatment planning platform, RayStation, in the usual way. The functionality on top of that platform could be suitable for a subscription model. That's something that we're looking into as well.
Okay, thanks.
Thank you, Oscar.
Thank you.
Going back to the chat, we have a question from Aryan. In the first half of 2025, we saw around 9% reported sales growth compared to the same period in 2024, but only a modest increase in EBIT margin adjusted for currency fluctuations. Can we see similar margin expansions we saw in 2024 and 2023, or will margin expansion be modest going forward?
No, the simple answer to this is that by the end of next year, we will have 25%, at least a 25% EBIT margin. It has to expand to achieve that.
Thank you. If we're looking at the other question, I think I'll show you that question as well here. There's a lot of numbers.
That may be a question we take offline.
Yeah, I think we have to.
Yeah, it's a bit complicated, I guess.
Can I say one thing quickly? It's too easy to just say that we can add those SEK 50 million directly into the quarter two revenue. As Johan said, the big portion of it will be revenue in quarter three, but not all of it.
Orders could slip into three.
Orders could slip into three and so on.
Thank you. Is there any other question? I don't think we have any unanswered questions in the chat, and there are no raised hands. Anyone?
It doesn't seem like anyone is.
We want to thank you for your participation. This concludes today's session, and we look forward to continuing the dialogue with you. If not before, at the presentation of the interim report for the third quarter on the 7th of November. Lastly, I'd like to remind you that you can find this presentation through the same link as you used for this meeting and on RaySearch's website. Thank you very much and have a wonderful day.
Thank you.
Thank you.