Welcome to RaySearch presentation of our results for the third quarter of 2026. My name is Carolina Strömlid, and I am Head of Investor Relations. Our CEO and Founder, Johan Löf, and CFO, Nina Grönberg, will take you through the key highlights and financial results for the quarter. After the presentation, we will open up for questions. Simply raise your hand in Teams if you would like to ask a question. Johan, over to you.
Thank you, Carolina, and welcome again, everyone. I will start with a brief introduction and an overview of Q3. Then Nina will go through the financial development a bit deeper, and I will end with a summary and outlook. After that, we will take questions. This is a summary of RaySearch as of today. We have four different software platforms, RayStation, RayCare, RayIntelligence, and RayCommand, all dedicated to improving cancer treatments. 480 employees of 31 different nationalities. We collaborate with 26 industrial partners, and we have 1,248 clinics in 54 countries that use the RayStation treatment planning system. Most importantly, our software has been used to treat over 11 million cancer patients. As we see in this graph, we have had a solid performance over time.
There has been steady growth last 12 months. Q3, there is a slight decline, but we expect the growth to continue for the full year of 2026. In this graph, you can also see that over time, we have had steady growth in terms of revenue in the magenta-colored line, but there has been a lot of fluctuations between quarters. The Q3 revenue stands out here, and we expect also a very strong end of 2026. A few words about Q3. We had a record-high sales, SEK 394 million, with 18% organic growth. 35% of the total revenues were due to recurring support, and we achieved a 21% EBIT margin. Looking at some of the key drivers behind this performance, we continue to see strong demand across both proton and photon therapy, particularly in the U.S.
One important highlight of the quarter was the expansion of our collaboration with Accuray in online adaptive. The agreement included a significant RayStation order worth $8 million. SEK 33 million were recognized as revenue in the third quarter, but the remaining revenue is expected in the fourth quarter. We also received several orders from proton therapy centers in the U.S. The University of North Carolina School of Medicine expanded its RayStation installation with additional licenses, while Sylvester Comprehensive Cancer Center in Miami selected RayStation to replace Eclipse for its Varian ProBeam system. At the same time, demand in photon therapy remains strong, as several clinics replaced Eclipse, Monaco, Pinnacle, and Precision with RayStation.
An important milestone during the quarter was that Advanced Radiation Therapeutics, or ART, in the U.S. began treating patients using RayCare and RayStation together with a Varian TrueBeam, one of the world's most widely used treatment machines. This makes ART another important reference clinic for RayCare and a step toward broadening the adoption of RayCare in the U.S. In late September, we showcased our latest innovations in automation, speed, and advanced analytics at the yearly ASTRO conference in Boston, where we saw strong interest in our solutions. We also carried out additional share buybacks of SEK 58 million , reducing the number of outstanding shares and creating value for our shareholders. Another highlight during the quarter was a new multi-year partnership with the International Atomic Energy Agency, or IAEA, as part of its Rays of Hope initiative.
The aim is to expand access to cancer care in low- and middle-income countries. We will contribute software training and technical expertise to IAEA anchor centers, regional centers that strengthen radiotherapy expertise and support other clinics in the region. We are proud to support this initiative. Access to advanced radiotherapy is still very limited in some parts of the world, and together we hope to help healthcare professionals deliver safe and effective treatments to more patients. The partnership also gives us an opportunity to establish a presence in new markets and may open doors to future business. I will now hand over to Nina to go through the financial development in more detail.
Thank you, Johan. We are glad to say the order intake was strong in the quarter as license orders increased by 65% and order intake in total with 30%. Americas were back on track, and we had a good contribution from the strategically important RayStation order from Accuray. The book-to-bill ratio amounted to one in the quarter, and order backlog end of September amounted to SEK 1,722,000,000 , of which SEK 665 million is expected to turn into net sales in the next 12 months. Looking at the line showing the order intake for the last 12 months in this slide, it is visible that we are now trending upwards towards a higher level again. Moving on to quarterly net sales and EBIT margin. The net sales of SEK 394 million in the quarter represented a growth of 19%.
The growth was driven by a temporary increase in hardware sales, while license sales were down 10%. Here I want to point out for you that this is in comparison to a relatively strong quarter last year, when we recognized revenue from a number of backlog proton deals in APAC. It has been some time ago since we could say that the exchange rates worked in our favor, but in this quarter, we had some tailwind, especially from stronger U.S. dollar, and the organic growth was therefore 18%. The high hardware volumes in the quarter impacted gross margin, that ended at 84% compared to 96% last year, when we had unusually low volumes. The gross margin is normally around 92%. EBIT, affected by the high hardware volumes, was SEK 85 million in the quarter, and the EBIT margin was 21% compared to last year's SEK 89 million and 27%.
We had investments in sales and marketing and commercial strategy, and that lies behind the increase in operating expenses. We have also had our yearly global conference for our employees here in Stockholm in September. Currency gains from revaluations of working capital gave us a positive SEK 7 million effect in the third quarter. Looking at the revenue split, the support revenue accounted for 35% of total revenue in the quarter, which has to be seen in relation to the strong total sales. For the last 12 months, recurring support revenue stood for 40%. The growth in support sales was 6% in the quarter, and if we adjust for currency, the growth was 7%. Here we have a lagging effect from currency fluctuations in the revenue recognition when it comes to the support contracts. Moving to the next slide with the development of cash flow.
Free cash flow in the third quarter ended at a SEK -68 million, and this was affected by increase in customer receivables and also fluctuations in our supplier liabilities. Timing effects is one factor in this, but our strong financial position also allows us to prioritize profitable deals, and sometimes this is at the expense of longer payment terms. Despite returning SEK 337 million to the shareholders, which we have done through share buybacks and also dividends during 2026, we ended the quarter with a net cash position of SEK 92 million, and this is excluding office and car lease liabilities. On top of that, we have SEK 234 million in undrawn credit facilities, and this gives us significant financial flexibility going forward. With this, I hand over to Johan again.
Thank you, Nina. To sum up the quarter, we saw strong net sales development. We continue good momentum in the U.S., both in sales and productivity. The U.S. remains an important driver of our growth. Looking ahead, we have a robust pipeline in the growing proton market, while we continue to increase our market share in the much larger photon market. At the same time, we see significant potential within our existing customer base, with further opportunities to drive growth through additional modules and solutions. Over the longer term, we are also gradually broadening our offering beyond radiation therapy. Our ambition is to provide a more integrated software solution that can also support other cancer treatment methods, such as surgery and chemotherapy. Finally, we see good prospects for a strong finish to the year.
Despite a relatively weak first half of the year, we believe our full-year EBIT margin target of at least 25% remains within reach. This target excludes the costs related to the long-term incentive program introduced in the second quarter this year. Overall, we remain confident in our long-term growth opportunities. With that, let us open up for questions.
Yes, and we will start with live questions. Please raise your hand in Teams if you would like to ask a question. We will let Oscar Bergman from Redeye start with the first question. Oscar, please go ahead and unmute yourself.
Hello. Hello, Johan and Nina. Can you hear me?
Yes.
Yes.
Great. My first question is going to be a bit of a repetition of what you finished off with, Johan, because, I mean, at nine months in, you are at 19% EBIT margin. For you to reach this target of at least 25%, Q4 has to be, I mean, extraordinarily strong in terms of EBIT margin. If you can just elaborate a bit more on what gives you this confidence, and perhaps even, if you can, what you have seen so far in Q4.
Okay. Yeah, Q4 is traditionally our strongest quarter. We had a, from a sales perspective, quite strong Q3. It is quite common that we beat the Q3. It always happens, except for some maybe exception that we beat Q3 with Q4. With that said, we also look at the pipeline, of course, and we have a strong pipeline. It is going to be, as you say, a stellar Q4 to achieve the 25% EBIT margin. We estimate, I mean, it is not a given, it is reachable, and we believe that we can reach it, given where we are today and looking at the pipeline.
Okay, great. This is maybe more of an IR communications question, but if you see that you fall out of reach for this target, are you obliged to, I mean, in regards to MAR, to communicate this to the market?
Yes, of course, we will communicate in accordance with MAR.
Okay, great. My second question is about the Pinnacle conversions, always a topic for discussion. Just wondering if you can share sort of the share of total license sales and sales to new customers that came from Pinnacle in Q3.
That was a quite low contribution, a small contribution from Pinnacle this particular quarter, only 3%. That is in line with, yeah, we pretty much, there is not much left in terms of Pinnacle conversion going forward. Maybe a few more sites in Q4. But the main photon licenses was the main contribution in licenses this quarter. 43% came from particle orders, and the rest was photons. That means that we converted other systems, like Eclipse and Monaco, as well as Precision.
Okay. That's a very affirming figure for the business opportunity outside of Pinnacle, so thank you. Then just my final question. In the Q2 conference call, you talked about around 10 new machines getting RayCare interoperability within 12 months from May, where you had the ASTRO conference. Is this still something you expect to see until May 2027? Can you maybe give some comment on how you expect RayCare orders to develop for the rest of this year?
Yeah, let's start with, I think we'll see a few more RayCare orders this year. The machine integration is ongoing on many different fronts. That will also Did I say 10 different machines within 12 months, you said?
I think so. I can check the transcript later.
Yeah. There's a large number of machines that we are connecting to right now. That work is ongoing.
Okay. Thank you very much.
Thank you.
We will now let Kristofer Liljeberg from DNB Carnegie ask a few questions. Kristofer, please go ahead and unmute yourself.
Yeah. Thank you very much. I have four or five questions, hope that is okay. First, follow-up on the Pinnacle, you said 3% in the third quarter. What is the figure year to date? And maybe as a comparison, what it was the first nine months last year?
I do not have that in front of me, but I can tell you that in Q1, it was 22%, and in Q2, 13%, and full year 2025, 23%.
Okay. Great. It would be good if you could maybe explain the very unusually high hardware sales in the quarter. I think you have never had, typically it is half of what you had this quarter.
Yeah, it is just a coincidence. There are two drivers. We, of course, in terms of volume, it just happened that more customers prefer to have us deliver the hardware. You know it is optional. They can buy it themselves if they want to from Dell or others, or they can buy it through us. There are some advantages for the customer to buy through us because we configure and manage the whole deal. The other contribution factor is that the hardware prices have gone up significantly. They are driven, of course, by the AI development and the graphical cards, the GPU cards from NVIDIA are the same that we need for our calculations. The prices for those are just skyrocketing, so that has contributed also to the larger number. But it is a, I think—
What would you say price? How much higher is average price for your hardware versus a year ago?
I don't know. I have heard maybe doubled. I mean, the prices have really increased a lot.
Okay.
I am not sure about that number, but it could be around those, that increase. I do not think this will not It was just a coincidence that so many customers wanted to have hardware from us this particular quarter. I do not think we will see that going forward.
My next question is on the improved U.S. order you saw this quarter, of course, helped by Accuray. Would you say it also reflects stronger underlying demand or more normal variation plus the big Accuray order?
No, there has also been several other customers from, and not only Accuray, but on the photon side, there have been other conversions in the U.S.
But—
From Varian and Elekta.
Okay. Given that you saw the delays in the second quarter, there have been negative reimbursement for this year, maybe making customers a bit reluctant to place orders. Are you seeing that becoming better or is that not a factor here?
I think it is a factor, but the pipeline is just big enough for Q4, so there can still be delays. There is also, I think, some light in the end of the tunnel in terms of an expectation that the levels will go up again in 2027, and that may have a positive effect. But the main driver for our hope that we can achieve the 25% EBIT margin is the overall pipeline, the activity that we see and the number of deals that we expect to close during Q4.
Okay. On RayCare, do you see any accelerating momentum outside proton therapy? I know that you have talked about some excitements for using it for adaptive treatments with TrueBeam, but do you see that also turning into real deals happening?
Yeah, it hasn't turned into so many deals yet, but there is a lot of good discussions and a lot of interest. We're talking to many different customers about RayCare, and this excitement is still there. It will be eventually converted into real deals.
What do you think is the reason it hasn't turned into deals yet?
It just takes time. All of this is just the normal time delays that we have in our business.
But do you see this being a growth driver for license sales in 2027?
Yes, it will contribute in 2027. I believe that.
Okay. Sorry, just two more questions, if that's okay.
Sure. No problem.
Let me know. Given the higher unbilled revenues in the quarter, high working capital, how should we think about that for the full year? Could you say anything on that?
Yeah, you mean in cash flow terms? I think we will cover a bit of the cash flow in quarter four, but I expect that we will still see the same high numbers when it comes to customer receivables also in the next quarter.
Okay, but we shouldn't expect it to increase further, or?
No. That's not my expectation, at least.
Okay, thanks. Then final question. Selling cost in Q4, last year they were rather flat third quarter versus fourth quarter. Historically, the selling cost tends to be higher in the fourth quarter. Could you say anything about that for this upcoming fourth quarter and the seasonal pattern?
Yeah. I mean, my expectation is that sales and marketing costs will be on about the same level in the next quarter as in this.
Thank you very much.
Thank you.
Thank you. Now we will let Mattias Vadsten from SEB ask a few questions. Mattias, please go ahead and unmute yourself.
Hi. Thanks for taking my questions. First one, zooming out and looking at the year-to-date here, would you say the Eclipse and Monaco conversion for RayStation has improved this year versus the pace of conversion you had last year? If so, what is the key driver for that?
I do not have the number in front of me, but it has increased. I do not know the percentage, but there are several factors. I think one factor is the very hot topic of online adaptive that you can do with a combination of RayStation, RayCare, and the Varian TrueBeam. There is a lot of interest drawn from that. Then there is also that we have shifted our focus gradually, as we really wanted to pick off the low-hanging fruit of the Pinnacle conversions when they were available. The sales force focused on that because it was a time-limited opportunity. As I said, gradually, we have focused on converting the other competing systems. That has also contributed to increased contributions from these other types of conversions.
Thanks. Next question on proton or particle license sales. Would you say proton license sales has been higher during those nine months, 2026, versus the corresponding nine months, 2025?
I think it has been on a similar level—
Okay.
—compared to the last nine months.
Yes.
Okay. Good. Then on the cost side, would you say in the presentation, you alluded to a normalized 92% gross margin for the company. Would you say with those comments on higher costs on the hardware side that we should expect a lower structurally motivated gross margin, or are you still confident with the normalized mix that you go back to the gross margin that we are used to in the company?
Yes. We will go back to that.
Perfect. That was all for me. Thank you very much.
Thank you.
We have one written question from Mats Andersson. He is wondering about the license revenue from sites three and four for the Accuray order. This was expected to fall within second half. Will any revenue be recognized in Q3, or will it all come in Q4? Will the installations for RayCare and RayStation take place simultaneously?
Yeah. Okay. In quarter three, the only revenue we had from the Accuray deals was related to hardware sales, and that was additional hardware sales that was not included in the original order. For quarter two, it is a little bit early to say. We do not know yet, but we think we will deliver-
I am sorry, for quarter two, you said?
Oh, quarter four.
Yeah, you said quarter two.
Oh, sorry. Sorry, my mistake. Quarter four. But we do expect to deliver RayCare to an additional site also in quarter four, but I don't have a straight answer to that.
Potentially both. We don't—
Potentially both.
—know this one, but potentially both.
Yes. Those were the questions we received, and that concludes our Q&A. Thank you all for joining us today and for your questions. If you have any follow-up question, please don't hesitate to reach out to us. And we look forward to welcoming you back on February the 10th for our year-end results. Have a great day.
Thank you.
Thank you.