Welcome to Vitrolife Q3 2026 earnings call. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Please start by asking one question, followed by a follow-up question. It is then fine to queue up again for more questions. Now I will hand the conference over to CEO, Bronwyn Brophy, and CFO, Pär Ihrskog. Please go ahead.
Good morning, everyone, and welcome to the Vitrolife Group Q3 earnings call. I would like to start, as I usually do, with the Q3 highlights. The first highlight I would like to bring to your attention is our growth in Technologies. 21% organic growth in the quarter, driven by all regions. I have to say the team is doing an excellent job driving both penetration and utilization of EmbryoScope. The second highlight is that our restructuring program is on plan and on time. In fact, we have an 8% gross reduction in headcount, so we have been both efficient and effective at taking out cost. Finally, the third point I would like to highlight is our strong earnings per share, SEK 0.94, and this is driven by improved net income and the share repurchase program.
I would like to take you on now to the next slide and provide you with a market overview broken down by regions. Starting with the EMEA region. In Europe, we saw IVF cycle activity picking up in the quarter. In the Middle East, demand remained subdued, but there are signs of improvement. We saw capital sales were strong in the region and orders on longer shelf life items started to pick up. We see this as a green shoot. Reimbursement is improving. We see in Sweden the number of cycles has increased from three to six. We see improvements in the reimbursement in Denmark, also in Poland, and there have been some positive announcements from NICE in terms of coverage in the U.K., or at least the need for improved coverage in the U.K.
Next, if we look at the APAC region in terms of China, which is the largest IVF market in the region, IVF cycles are down versus last year. However, other major APAC markets are trending positively, including some that had been flat, excuse me, for quite some time. Reimbursement is also improving in this region for married couples. I would like to highlight that. In most parts of the APAC region, coverage typically only supports married couples. There have been some announcements recently, as recent as September, in fact, in Taiwan, announcing new measures to stimulate IVF activity. Finally, to the Americas. The Americas has the highest cycle growth of the three regions. We can clearly see that the U.S. market is moving towards an insurance-paid system. As more states mandate coverage, employers are providing insurance cover for IVF for their employees.
The final point I'd like to make in Americas is that clinic chains continue to expand their footprint, buying up independent clinics. Well, I'll move us on now, and we will take a look at the performance of EMEA, our largest region in terms of revenue, now accounting for 38% of the total. In the EMEA region, we delivered revenue of SEK 333 million , a strong performance with 11% organic growth. Europe is growing strongly and signs that the Middle East expects a return of cycles with capital sales increasing in the region. This is the point I was making on the previous slide. While we don't see a pickup in the day-to-day activity, we do see clinics starting to reinvest. Consumables, +2% in local currencies, with high growth in Europe impacted by lower demand in the Middle East.
Technologies, +22% in local currencies as clinics invest in EmbryoScope to increase workflow efficiency. I have to say that we're delighted with this performance. EMEA has the highest penetration of time-lapse globally, so the team did a really great job and beat certainly our internal expectations. Genetics grew 15%, driven by the regain of genomic kit accounts. The services part also performed well. In relation to gross margin, as you can see from the chart, gross margin is down 0.8%, and this is due to product mix. We will move on now and take a look at the Americas region. So we delivered SEK 292 million , an organic growth of 5%. As you can see from the donut, Americas now accounts for 34% of our revenue. Yet again, double-digit growth in North America with a good performance across the entire portfolio.
In South America, the strategic exit from low-profit Genetics accounts reduced sales but improved profitability for the region as a whole. Consumables delivered +8% in local currencies driven by share gains in media. In fact, we grew double digit in media in both North and South America. Technologies +48% in local currencies driven by strong capital sales in North America. We now have some good traction and clinics are looking for every opportunity to improve efficiency. Genetics -1% with South America offsetting growth in North America. As I've explained, this is a strategic decision to exit low-profit genetic accounts in South America. Gross margin increased 1.1 percentage points to 55.1, and the market contribution rose to 29.3 from 26. Finally, we move to the APAC region where we delivered revenue of SEK 260 million and organic growth of 2%.
As you can see from the chart, this is our highest revenue quarter in quite a while. A softer quarter for Consumables with -5% organic growth and this is due to weak demand in China and the phasing of distributor and large chain orders in the APAC region. Technologies performed strongly, increasing by 11%, primarily driven by China. So despite the soft market conditions in China, we do see clinics continuing to invest in EmbryoScope. Genetics grew 8% driven by genomic kits and a soft comparable quarter last year in this region. Gross margin here also increased 0.7 percentage points to 61.1, up from 60.4. I'll move on to my final slide before I hand over to Pär. So you all know, or at least you should know at this stage, that the Vitrolife Group has a mission to be the leading global partner.
We don't want to be two, we don't want to be three, we want to be the leading global partner in reproductive health, striving for better outcomes for patients. We have five key strategic pillars which can be grouped into the following three areas, growth, profitable growth, innovation, and operational excellence. How are we doing? How are we performing in terms of advancing our strategy and advancing our mission? When it comes to profitable growth, it's very clear from the results this quarter that we are increasing the penetration and utilization of EmbryoScope across all of our regions. Our key focus market, we explicitly stated that we would double down in North America. We have, and this region is delivering double-digit growth. In Genetics, our focus on key tests and profitable markets is improving our profitability. When it comes to innovation, I really want to thank the team.
I want to thank our commercial team, but I also want to give a shout-out to our innovation team. The Freshness Index in the Vitrolife Group, which is a measure of the percentage of revenue coming from products launched in the past three years, is at an all-time high. Again, three years ago we decided we were going to double down on innovation. It's paying off. In fact, 2027 is set to be our best year on record in terms of new product launches. We have significantly reduced the amount of time to achieve regulatory approvals. As we all know in medical devices, you can have the best R&D funnel in the world, but if you cannot navigate the regulatory processes and boards across the globe, you won't launch anything. We're really happy at the improvements that we've made in terms of our regulatory pathways.
When it comes to operational excellence, our restructuring program is on plan and on time. We see the benefits starting to materialize. We are protecting our EBITDA while making investments in digital capabilities. As an example, we launched a new patient portal in the U.S., which is doing really well. Finally, I want to give a shout-out, of course, to the Gothenburg folks. We are developing a state-of-the-art manufacturing facility in Högsbo in Gothenburg. It's progressing really well, and I have to say the operations team there are doing an outstanding job at building this state-of-the-art facility. In terms of our strategy, advancing very well, doing what we said we would do, and striving ever more forward towards that mission of becoming the leading partner in IVF. With that, I'll hand you over to Pär.
Thank you, Bronwyn. I will cover then the financial highlights for Q3, starting with some more information about the geographical segments. Bronwyn already covered the sales and gross margin, so I will not repeat that. On the market contribution, starting with Americas, we ended up with SEK 86 million , which is a margin improvement, reaching 29.3% versus 26%. In EMEA, SEK 126 million , 38.0% contributing margin compared to 39.9%. Finally then APAC, SEK 111 million , which represent an contributing margin of 42.8% versus 42.1% last year. Moving on to just highlights of the numbers then. We had a net sales of SEK 884 million , which is a 6% growth both in SEK and organic growth. Gross income reaching SEK 523 million , which represent a margin of 59.2% compared to 58.9%.
Our EBITDA was SEK 279 million, an improvement from SEK 253 million in Q3 last year, and representing a margin of 31.6% compared to 30.3%. The margin increase was driven by higher sales, but also somewhat improved gross margins. If you look at the quarterly sales and the EBITDA in percent of net sales, we have, as I said, SEK 884 million compared to SEK 835 million. The last three quarters, we have seen a gradual increase. Also, if you look at the EBITDA margin, we have a gradual improvement quarter by quarter. As some of you might remember, Q2, we had some one-off positive items hitting the result. That is why the 34.4% was temporarily a little bit higher than normal. Then move to the next to explain the journey from last year to this year's sales.
Starting with SEK 835 million last year, we saw an organic growth, excluding exited businesses, of 6%. Then we had this negative impact from the exited businesses, NACE and GPDx, that we announced in December last year that had a negative impact of 2% on the top line. Also in this quarter, we had a positive currency impact representing 2%, which all in all in SEK gives us a growth of 6%. If you look at the gross margin development the last five quarters, we ended up at 59.2%, a slight improvement from Q3 last year. In this quarter, we had a positive impact from the U.S. tariff refund of SEK 9 million. We also had a small positive mix effect from a somewhat smaller share of genetic services.
On the negative side, we had higher material cost, which is a combination of USD purchased materials and also general cost inflation on our raw material. Q3, we always see this seasonal effect from a fixed cost absorption related to manufacturing. This is a comparison Q3 to Q2. This effect is approximately 0.7 points. On the operational expenses, we had a small decrease, SEK 3 million. We do see savings from the restructuring program, both in OpEx but also in cost of goods sold. For the OpEx part, the benefits from the savings is offset this quarter by somewhat higher bad debt provision, but also the inflation-driven salary increases. We also had a positive effect from currency hitting OpEx of SEK 3 million in the quarter. I would like to give you an update where we are.
Bronwyn already mentioned this, but some more details on the restructuring program. It is on plan and on time with most of the plan activities by end of Q3 this year, as we communicated in December 2025. As you know, the target scope was to exit GPDx and NACE and some low-profit markets. We also said that this will give us an annual savings of SEK 65 million. So where are we now then? We have delivered most of the identified actions, and that has resulted in a gross headcount reduction of 8%. Over the same period, we have invested in headcount in sales and marketing and IT and other roles, representing an addition of 2.5% headcount. All in all, we have a net headcount reduction of 5.5% compared to December last year when we announced the program.
The 8% headcount reduction generates savings of SEK 20 million in the quarter, showing up both in the cost of goods sold, but also OpEx. These savings have been offset with a higher material cost that we are facing, salary increase driven inflation, and the bad debt provision above normal levels, and the cost associated with the new hires. The restructuring reserve that we put aside of SEK 55 million in Q3, we have used SEK 43 million by end of Q3. A quick update on the cash flow then. SEK 224 million in operating cash flow compared to SEK 255 million. The working capital contributed -5 . Q3 last year was positive 37 contribution, so it was a net effect or a swing effect of 42 million decline. We also had somewhat higher tax paid in the quarter compared to Q3 last year.
That explains SEK 16 million negative impact on the cash flow. We also had a better starting point this quarter with a higher profit, so that had a positive impact of SEK 34 million. All in all, the best cash flow quarter the last four quarters. I would also like to give you an update on the status on the share repurchase program that we announced in July. The board approved to launch a share repurchase program up to SEK 500 million. Up to end of September, we have purchased shares for SEK 246 million, representing 2,695,000 shares, which we hold, and that is approximately 2% of the outstanding shares by end of September. The program continues under the rules, and also the limits provided by the AGM up to the end, or until the next AGM.
Good progress on the program in line with our expectations. A final recap on the financial numbers then. Sales SEK 884 million, 6% organic growth compared to Q3 last year. A slight improvement on gross margin. EBITDA of SEK 279 million, versus SEK 253 million. Slightly improved EBITDA margin. Same goes with the EBITDA margin, 28.9% versus 27.6%. Net income SEK 124 million compared to SEK 102 million. The earnings per share that Bronwyn mentioned, SEK 0.94 Compared to SEK 0.75 . In the end, operating cash flow SEK 224 million compared to SEK 255 million. Our leverage net debt/EBITDA ended up at 0.8 compared to 0.7. By that, we leave the room for Q&A.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. Please start by asking one question, followed by a follow-up question. It is then fine to queue up again for more questions. The next question comes from Filip Wiberg from Pareto Securities. Please go ahead.
Hi. Good morning. I have got a couple of technologies, I believe. Just in general, quite strong growth now in this quarter. I was just wondering how much of a temporary effect is this with large orders that is coming in Q3, and what do you see as the pipeline now for Q4 and beyond?
Yeah, good morning, Filip. Thank you for your question. We have really been focusing heavily on technologies, on funnel management using Salesforce. We see it as a great opportunity. It is a fantastic quarter, and as I mentioned, we did beat our expectations, but it is a strategic double-down. We see it as a great opportunity for the Vitrolife Group. If you combine the EmbryoScope with our eWitness solution, we are the only player that can offer something of this level of technological advancement. The goal is certainly to continue to drive forward very strongly in technologies. Now, I consider 21% growth very high. Can we maintain those levels? That is challenging, but we have a fantastic commercial team who are definitely going to try. I think the funnel looks very good.
We did have a very big technologies quarter in Q4 last year, so it is a mountain to climb in terms of the comps, but our funnel looks good. Maybe one other highlight to point out is that in this quarter, we also manufactured and shipped our highest number of EmbryoScopes ever. The other good thing that we are seeing is we are able to scale the manufacturing of the EmbryoScopes to meet the demand. Maintaining these type of growth levels, I think will be tough, but we do see a strong and a good pipeline. Look, ultimately, EmbryoScope really helps the workflow efficiency in the lab. Not all time-lapse systems are created equally. They are not, and I say that with all humility. I think what clinic chains are really starting to realize is that EmbryoScope does provide workflow advantages and efficiencies that other time-lapse systems do not.
We feel pretty good about technologies. This level of growth, I think would be tough. But the commercial team are doing a fantastic job at converting leads into sales. The thing is, Filip, if you ask every director of every IVF clinic chain in the world, Would you buy an EmbryoScope if you had the money? I can guarantee you, most of them would say yes. But of course, it is the affordability piece, and of course, we do not just want to sell capital, we want to drive the utilization as well. A long-winded answer, but hopefully that gives some color and context to your question.
Yes, thanks. It definitely does. The second one that I have was around China, but I suppose you might have answered it a bit already. You are still talking about China in terms of cycle growth being down year-on-year now. Still, Technologies did quite well there. I was wondering what is driving EmbryoScope adoption there in the soft market. Is that at all any sign that the market is improving, or is it just that they are trying to improve their efficiency?
Yeah, I would see it as more the latter, Filip. I think cycles remain soft. I have spent some time in China, visited a lot of customers, and the feedback was very consistent in terms of cycle growth. There is, of course, as there is in all clinics around the world, a drive for improved efficiency. China is an area where we doubled down again. We placed capital sales specialists in the region to do exactly what we are doing today, to drive penetration and adoption of EmbryoScope. Tactically, this is what we decided to do in China, knowing that the market was soft. Here, the Chinese clinics really like working with EmbryoScope. Also, the combination of EmbryoScope with our media. So we have a very strong media position in China, even with the softer conditions.
The clinics in China really like the combination of EmbryoScope and the Vitrolife Group media. I think our strong, dominant media position also helps time-lapse. In certain parts of the world, we use time-lapse to pull through Consumables revenue. I think what happens in China is our strong media position happens to help time-lapse. Yep.
Okay. Thank you. I will get back into the queue.
Thank you very much, Filip.
The next question comes from Jakob Lembke from SEB. Please go ahead.
Yes. Hi, and good morning. My question is on Genetics. When you look at it, if you disregard Latin America, it seems like you are growing volumes and it is across most regions here. If you just could elaborate on what is really behind this and if this is durable going forward.
Yeah. Good morning, Jakob. Thank you for your question. Yeah. Maybe I will break it down by region. North America is doing very well. It has been for quite a while, and it continues to do well. South America is definitely a drag, a significant drag on the total performance of that region. But again, strategically, we decided to exit those low-profit accounts, and it is improving our profitability. We believe it is the right thing to do. If you look at the EMEA region, most of our markets are doing very well. Some growing slightly above market, but their performance across the board is pretty good in EMEA. APAC, I do not like to pat ourselves on the back because the base is pretty small. But APAC is doing well in Genetics.
Obviously, we do not break down by markets, but I am just looking at the breakdown here, and it is doing well in most markets, almost all, actually, in fact, in APAC. Kits is performing well. Kits has been very challenging for many quarters for me as the CEO, but we take the good times when they come, and it is performing well at the moment. We need to continue that momentum, but of course, by far, the biggest part of the Genetics revenue is genetic services. So it is a good quarter. It is 5% growth across the board. Pretty consistent and good performance across most of the markets. Good performance on kits. Now the challenge is we have to keep that momentum going. That is what it is all about and accelerate in certain areas where we can.
We do not break down by markets, Jakob, but hopefully that has answered your question and given you some more context.
Yeah, that is very helpful. Just on Latin America, when will the impact or headwind from you exiting this low profitability market be completed and we can see the Americas region returning to growth?
Yeah. So, maybe Pär, I will take first part, and you might help me with the second part. So already we see the declines slowing, actually. Bit early to call. I suppose in terms of exact quarters, it would probably be end of Q1 before we start.
Yeah.
Would you say, Pär? I would say, Jakob, end of Q1. Don't hold me to that, but that would be my best.
Yeah. We see the trend flattening out.
Yeah, it's flattening out. Yeah.
I think you're right on the Q1 estimate.
Yeah. I would say, Jakob, probably end of Q1. But it is definitely slowing versus the previous quarter. For sure.
Good. I will get back into the queue.
Okay. Thank you very much, Jakob.
The next question comes from Ludwig Germunder from Handelsbanken. Please go ahead.
Yes, good morning. Thank you for taking my questions. I have one and then a follow-up. First, I just want to zoom in on China and hear your thoughts. I just jumped off another call and they mentioned China, that they were seeing slowing economy and slowing consumer spending there. Is that part of what you are seeing as the reasons behind the slowing cycle growth, or is it just demographics? If you could expand a bit on that would be good, thanks.
Yeah. Ludwig, it is demographics. China has almost a perfect storm in terms of demographics. You have 150 million one-child families in China, so people are accustomed to having one child. As a result of the one-child policy, which was there for close to 40 years, the ratio of males to females is off. Males were favored over females, so you have more males of, let us say, reproductive age than you have females. Even if those males want to get married and have children, they cannot find a partner. It is very much demographic and it is going to be a significant challenge for the Chinese government to turn that around. That is why they have been increasing reimbursement, paying people to have children, encouraging people to get married. They need the people of reproductive age to be having more than one child. It is demographic.
Of course, there is an affordability component because IVF is not free in China, but the state aid is improving all of the time. Yeah, I would say it is definitely more. It is influenced by economics, but demographic is the biggest lever here.
Okay. Yeah. Thank you. That makes sense. Just a quick follow-up. First of all, I would be interested if you see any end to this, and then I was also wondering, you mentioned the reimbursements.
You also talked about that in the beginning of your presentation. Looking at history, how has increased reimbursements affected your sales and the demand you are seeing? If you could add some timing after the improved reimbursements, it would be helpful as well.
Yeah. Maybe I answer the second part of your question first. It takes time. When reimbursement improves, there is definitely a time lag. Let's take our own backyard here, if we take Sweden. We see reimbursement has improved. It's improved quite significantly, statistically speaking. We do see the Nordic region doing well. It's doing pretty well this quarter. But for the reimbursement to feed through the system takes time. Because capacity in clinics is not unlimited. There are two big factors to consider here. One is access, the other is affordability. If we improve the affordability piece, we also, as a society, have to work on the access part. There is definitely a time lag. I think another example of that is the state of California, actually. If you look at the state of California, it became a mandated state.
Employers need to provide IVF coverage for their employees. But it's taken a bit of time to see an uptick in the cycles in California. It does take time. Then I think the first part of your question, if I get this correctly, and if I don't, please interject and correct me. Do I see an end in sight for China as in a pickup in cycles for China? Well, things are going to be very gloomy and doomy for China if they don't start producing more babies. By the way, this is the same globally. If the world does not start having more children, who's going to pay the pensions of the aging societies? We have inverted population pyramids in most major countries around the world.
If you look at the G20, less than a handful of the G20 countries have a birth rate at 2.1 or above, which is what you need to sustain your population. It's not good news for China, but it's clear that the government is taking stronger measures to try to stimulate the birth rate. This is a global phenomenon. The Americans are doing it, the Swedish are doing it. It's happening all over the world. The Koreans are doing it, the Taiwanese are doing it, the Japanese are doing it. Economics don't look good for any of us if people don't start having children. Is it likely to pick up very quickly? Personally, I don't think so, but it has to pick up, or economically, we're not going to be in a good place.
I don't know if you read The Economist, but if you read The Economist every week, which I do, I'm an Economist junkie, it is extremely rare that there isn't an article in The Economist on the problems that we are going to have as a society if we don't start having more babies.
All right. Thank you for your questions.
Yeah.
Yeah.
Thank you, Bronwyn.
The next question comes from Elvin Rolder from DNB Carnegie. Please go ahead.
Yes, good morning, Bronwyn and Pär. I hope you are well and hope you can hear me. Perhaps beginning a little bit on the commentary surrounding the order phasing to larger chains and distributors, which you state are or seem to be mainly tied to APAC. But EMEA consumables growth was only 2%, I believe, in the quarter. Does this lower growth rate primarily reflect still the kind of negative effect you see from the Middle East? What is the underlying growth rate you're seeing in the Western Europe markets for consumables, for your part and for cycles?
Yeah. Most of the distributor and the clinic chain phasing is coming from APAC. Just to be clear on that one. Western Europe. Western Europe's doing well. We have good growth across all of our major markets in Western Europe, which is really nice to see. Europe had been a little bit sluggish, so it's good to see some rebound. The Middle East. What we see in the Middle East is good growth on the Technologies side. We do see investment in capital equipment. But the Consumables piece, or more specifically media, is still down. media has a short shelf life. Clinics are not stocking up on media in anticipation of IVF cycles coming. Nobody's going to do that. But we do see green shoots in terms of other parts of the portfolio in the Middle East.
As I said, good investment in time-lapse, which is nice to see. Then on some of the, I guess what I would call longer shelf life items, there's also a pickup there. I guess the thing you have to remember with IVF is, sadly for patients, whether there's a war or whether there's not a war, or if we want to use the polite term geopolitical situation. Irrespective of the geopolitical situation, a patient's window for IVF is very small. This geopolitical situation has been going on since the first quarter of the year. The clock starts to tick for patients. You can only delay your IVF treatment for so long. Your window really starts to close. I guess patients start to become anxious and need to get going.
I think that's what we're starting to see now in the Middle East, despite the fact that the situation is still very difficult there. The IVF window is short, it starts to close, and patients need to get going with their cycles. That's the reality on the ground. Does that help to answer your question, Elvin?
Yes. But maybe—
Yeah.
—If you look at Western Europe Consumables growth, is it reasonable to assume then that is more towards a double-digit organic figure, or considering that the Middle East skews the picture? And then another one before I get back in the queue is, the adjusted growth within Genetics. I believe it ties to Jakob's question earlier, was really strong. I think it was 15% here in Q2. Can you give us some more commentary on what is driving that higher growth rate in EMEA for Genetics?
Yeah. I will start with your Consumables question. I am not going to break it down by percentages. We do not divulge that. But I would say high single digits in Consumables across Western Europe. So that is good. But it is pulled down, as I said, by the Middle East, and media being the culprit there. And then your question on Genetics. Yes, we do have good growth in Genetics also in Europe. A couple of markets in particular doing strongly. But we have also regained some genomic kit business that we lost. So we lost some genomic kit business, I believe around kind of midway through last year. We have regained that kit business. So that is also driving the total Genetics part performance in the region.
So you have good performance on the genetic services side, nice performance in Western Europe, and then you have the extra driver of the regained genomic kit business.
[crosstalk] Okay. Great. Thank you so much.
Yeah.
I think that answers everything. Thank you so much. I will get back in line.
Okay. Thank you, Elvin.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Jakob Lembke from SEB. Please go ahead.
Hi. I have a few more questions. I will run through them. First, on the outlook you give for APAC. It seems like you seem a bit more upbeat on most other markets than China. So when 2027 and sort of blended cycle growth across your exposure. Do you see that—
[inaudible]
—we can grow or that your market volumes will grow in China, and that sort of positivity across the other regions will offset potential declines in China?
Yeah. China is the largest IVF market in APAC, and the cycles are down. It is likely to stay that way in 2027. Most of the other markets in APAC are growing, and that includes markets, Jakob, that we haven't seen grow for many years. I am not going to point to our competitors, who I am sure are eagerly tuned in to where the pots of gold are. But we do see established APAC markets starting to return to growth. It is not very impressive growth. It is lower growth than we see in Americas or lower growth than we see in Western Europe. But they are growing. Parts of Southeast Asia growing nicely. So one would feel better about APAC in 2027 based on the current trends. Yeah. Does that answer your question, Jakob? I do not want to be too specific on which markets.
Yeah, no, it was very clear.
Yeah.
I also have a question around product launches. I know you have launched a few products this year, and also you commented that for 2027.
Yeah.
The question, these launches this year had any meaningful impact to sales growth? How should we think about the launches you're doing forward? When will they have an impact?
Yeah. Back to my point around the Freshness Index. Our launches are having a positive impact. The percentage of revenue that we have coming from products launched in the past three years, it's high. I know exactly what the percentage is. I've spent 30 years working in MedTech, and I can tell you it's the highest percentage Freshness Index I've seen. We are doing really well at driving growth of new products. That's a fact. Faktiskt, as you would say in Swedish. 2027 is going to be a big year. When I say a big year, I don't just mean in terms of the number of launches, I mean in terms of the specific products, tests, and services and Technologies that we're going to launch. It's going to be a really exciting year. We doubled down on R&D three years ago.
We rationalized the number of R&D programs. We decided to focus on some big bets, and 2027 is the year when those big bets come out of the gates. It takes time for that revenue to filter through. Okay? Do not expect if a launch happens in Q1 that the revenue starts blowing up. That's not going to happen. It takes a little bit of time. Of course, these launches roll out regionally. It depends on where we launch first. It's very difficult to do a global launch, so you tend to pick your geographies where you want to launch. 2027 is set to be our best ever year in terms of the number and the size of the launches that we get through the gates. The team are very excited about that.
I'd like to thank all of the innovation team, but specifically Rickard Ericsson, who's our Senior Vice President of Innovation. He's been leading the R&D team, the market access team, product life cycle management. They've done a terrific job. The other very important point there, as I mentioned in my voiceover, is on the regulatory approvals. From previous quarters, we have halved the amount of time that it takes from when we get to toll gate four to launch. Our regulatory paths, they've shortened significantly. We have a fantastic leader of our market access group who joined Vitrolife a couple of years ago. She's done great work there. Innovation's in a really good place, Jakob.
Sounds promising. If I just may ask also, are these mainly sort of upgrades of existing products or existing product lines, or are they also some sort of completely new products?
Oh, I don't want to do a spoiler now, Jakob. If I tell you that, I might have to kidnap you afterwards. They're exciting launches. They're launches that the market is really yearning for. Some are iterative, and some are a little bit more transformative. There. How about that for some R&D language? Iterative and transformative. You're getting very good—
[inaudible]
—at extracting information from me, Jakob.
Okay. Then also just on how you're planning to increase sales headcounts going forward, if it's going to continue to be in a high pace, or if you're going to slow down a bit.
Okay, I think this will be our last question. Jakob, you asked me on sales headcount. I would say, Pär, do you want to take this one?
Yeah, we have done a small shift. As I explained when I talked about the restructuring program, we have reduced headcount quite a lot based on the NACE and GPDx exit and some of the exit of the small markets. At the same time, we have invested in sales and marketing, but also in IT and in other functions. So we have done the shift. There are maybe a little bit more to do. But no major changes in headcount additions. But still some more to do, I would say.
Yeah. I think what we've done really well is we've managed, particularly this year, I would say, to really make sure that we have people on the ground in the markets where we can drive profitable growth. So we had people on the ground in markets where we could drive growth before. Was it the type of growth that we wanted? No. I think what we have now, Jakob, is where we have our feet on the street is in the markets where we have the greatest opportunity to drive nice growth, but it's growth with higher profits. I'm sure our chief commercial officer is listening in. They always want more headcount. Okay? That's the nature of commercial people. They want more. But if they want more, we need to drive faster growth in order to pay for it.
But I would say, Pär, that we're in pretty good shape—
Yeah.
—on the sales and marketing side.
Yeah.
I don't see a big need for further investment there.
Good. Can I also just ask very fast if you can say anything on this new CEO recruitment, if there's any update there?
I can cover that. The process is ongoing. First of all, I just want to say that I spend a lot of time with Bronwyn every day, and she is fully dedicated to run this company. She's doing a great job. The board is working very actively to find a new CEO, and to my knowledge, the plan is going well. When they have a candidate, they will present it as soon as they have it. But it's good progress on that recruitment.
Okay, thanks.
Okay, I think that was the last question.
Yeah.
There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
On behalf of myself and Pär, we would like to thank you most sincerely for dialing into today's call. Thank you for your great questions. You certainly kept me on my toes. I would also like to thank Cecilia Möllerstrandh, who did an outstanding job preparing both Pär and I for first earnings call here with us, Cecilia. Tack så jättemycket. I wish you all a wonderful day, and thank you very much. Goodbye.