Welcome to XVIVO Q3 report for 2026. For the first part of the conference call, the 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. Now, I will hand the conference over to CEO Christoffer Rosenblad and CFO Kristoffer Nordström. Please go ahead.
Thank you so much. Good morning and good afternoon, everyone, and welcome to XVIVO's earnings call for the third quarter of 2026. We can go to slide number two. Joining me today are Kristoffer Nordström, our CFO, calling in from Denver in Colorado, and myself, Christoffer Rosenblad, CEO, joining from Stockholm, Sweden today. With that, we can go to slide number three, which is the Q3 financials at a glance. We delivered another solid quarter, we say it's in line with the first half of the year, and organic growth of 32% compared with the third quarter of 2025. EBITDA remained strong, supporting healthy operating cash flow. For the fourth consecutive quarter, total cash flow was close to neutral, resulting in a stable cash position. Our CFO will later in this call provide more details on sales, gross margin, and EBITDA later in the presentation.
Looking at the business, thoracic continued to perform very well across both North America and Europe. The positive market trends we saw towards the end of last year continued through the quarter, supported by strong growth in the lung market and our expanding commercial presence. Kidney also delivered strong growth, driven by increased commercial coverage in Europe and growing interest in the U.S. market. Against this backdrop, sales developed this quarter and over the coming quarters will be impacted by the transition to updated core components. While this creates a temporary headwind, it does not change our positive view on the underlying market opportunity and business momentum. Turning to slide four, which is the year-to-date performance. The first nine months of the year show a similar picture to the quarter. We continue to deliver strong and consistent growth, driven by robust performance at thoracic and healthy growth in abdominal.
Throughout the year, we have continued to invest in our commercial organization, scalable production capabilities, and regulatory approvals to support future growth. Sales amount to SEK 730 million, corresponding to an organic growth of 30%. A key takeaway from the past two years is that we have demonstrated the scalability of our business model. With only a few months remaining of 2026, we are now increasingly focused on the opportunities ahead. The next two years will be important for XVIVO as we continue building the company toward our ambition of becoming the preferred partner in the transplant process. Among the most exciting commercial opportunities are the launch of XVIVO Heart Assist Transport in Europe and our planned expansion into Canada and Australia. In Australia, XVIVO Heart Assist Transport has already established a strong position through compassionate use and has already now become standard care, which took only three years.
With that, we move over to the next slide five, and the key business highlights from the quarter on the following slide six and slide seven. Turning to slide six and the key highlights from the quarter. Q3 was an important quarter for XVIVO, marked by several milestones across our business. First, with EU approval of XVIVO Heart Assist Transport, we can now begin supplying this life-saving technology to patients across Europe. The approval covers all heart donated and all heart transplant recipients, including all age groups, as well as both DBD and DCD donors. Clinical data demonstrated a 76% risk reduction in severe PDD, the leading cause of early mortality following heart transplantation. As a result, six additional patients per 100 survived to their one-year follow-up date. This represents a significant benefit for this vulnerable patient population.
In addition, XVIVO Heart Assist also has demonstrated the ability to safely extend preservation and transportation times. This gives transplant teams greater flexibility in planning procedure, enabling surgery to be performed under more controlled conditions with rested transplant teams, while also having the potential to reduce the overall cost of the transplant process. Second, we reached another important milestone with the submission of the PMA application for XVIVO Heart Assist Transport in the U.S. We are equally committed to patients with end-stage heart failure in the U.S. and to enabling heart transplant teams to perform surgery with rested teams and in a less stressful and more controlled environment. By extending transportation capabilities, XVIVO Heart Assist has the potential to make more donor hearts available for transplantation while reducing transportation costs, ultimately lowering the overall cost of the transplant procedure.
Third, our OPO EVLP hub pilot is now successfully up and running, contributing to the strong lung sales development we have seen this year. We are now seeing three distinct EVLP models emerge in the U.S. market, advanced transplant centers, centralized EVLP providers, and OPO-based programs. Our strategy is to support all three models, helping more donor lungs reach transplantation and ultimately ensure that nobody dies waiting for a lung. To support this development, we continue to invest in our commercial organization and strengthen relationships with an expanding network of EVLP partners across the United States. Finally, four, despite making significant investments in scalable manufacturing, regulatory initiatives, and commercial expansion, we continue to maintain a healthy financial position. We believe this is the right time to invest in long-term growth opportunity ahead of us and continue building the next XVIVO for the future.
With that, we turn into slide seven, an update on the European heart launch of XVIVO Heart Assist Transport. During the quarter, our primary focus was on preparing the market launch country by country and clinic by clinic across Europe. We are executing a structured three-tier launch strategy. The first phase is now in place, enabling active transplant centers to begin using the XHAT under derogation or compassionate use while local listing processes are completed. We now turn to Tier 2, and our current focus is targeting 33 transplant centers across four priority markets where reimbursement is already established. These centers, together with the first eight, represent almost 40% of all heart transplant clinics in Europe.
In parallel, in Tier 3, our commercial and market access teams are working closely together to identify patient segments where the clinical value proposition is particularly strong, including DCD hearts, long-distance organ transportation, pediatric transplantation, and complex patients with prior LVAD support. With a very strong clinical evidence base already established, the focus is increasingly shifting towards health economics and reimbursement in Europe. From our perspective, the question is no longer whether the XVIVO Heart Assist can become the gold standard of future heart transplantation. The key question is how quickly reimbursement can be established to ensure broader patient access across Europe. Ultimately, our ambition is clear: to make this technology available to more patients, enabling more heart transplants and bringing us one step closer to the future where nobody actually dies waiting for a heart. That was the key milestone of this quarter.
As customer, we turn to slide eight and the regulatory and clinical update. As more products receive approval and enter the market, the list of ongoing regulatory milestone continues to get shorter. With that, we can turn to slide nine to show that picture. The CE mark for XVIVO Heart Assist in Europe serves as a foundation for our regulatory application in both Australia and Canada. In addition to the clinical data generated in Australia, the European clinical trial provides strong supporting evidence. It was the first randomized controlled trial with a superiority endpoint conducted in the field of heart transplantation. Beyond the strong clinical outcome, the trial was also the first to establish a link between preservation method, which is the XHAT, the risk reduction of severe PDD, which was 76%, and the improved one-year survival of 6 percentage points.
For heart in the U.S. and liver in the U.S., I will return to the more deep dive into the following slides. With that, we turn to slide 10, which is the regulatory status of XVIVO Heart Assist Transport in the United States. The U.S. heart trial was fully enrolled in record time, completing enrollment in 13 months compared to the original plan of 30 months, and delivering results consistent with those we've seen in Europe. The study met its predefined safety and efficacy endpoint, while the analysis of secondary endpoint showed a severe PDD rate of only 7.9%. We also reached an important milestone with submission of the PMA application for XVIVO Heart Assist Transport. The submission has been accepted by the FDA in September and the review process is now ongoing.
During the quarter, the extension of the continued access protocol, or the CAP, was also approved, providing access to this really innovative and life-saving technology for an additional 60 patients at the participating trial centers in the United States. The breakthrough device designation support an efficient PMA review process, and we are targeting a commercial launch in late 2027. This is subject to FDA review process time as well as an approval. It should be mentioned that the breakthrough device designation allow us to have a dialogue with the FDA during the process. That should facilitate the process. Though I have to mention, as always, FDA review timelines are determined by the agency themselves and remain difficult to predict. We will continue to provide regular updates to the invested community on the progress of the XVIVO HAT review process during quarterly calls.
And with that, we turn to slide 11 and the U.S. Liver Assist regulatory opportunity. But before I go in there, let me start with an overview of the clinical evidence supporting XVIVO Liver Assist. XVIVO Liver Assist is approaching standard of care for liver transplantation in several European markets and is supported by one of the largest body of clinical evidence in the transplant field, if not the largest body of evidence we have seen in the transplant field so far. The evidence base includes more than 100 peer-reviewed publications and covers a broad range of outcomes, from improved patient outcome in both DCD and DBD liver transplantation to meaningful operation economic benefits for transplant teams. Clinical studies have demonstrated improved utilization of donor livers, improved post-transplant outcome, and reduced complication.
At the same time, machine perfusion has enabled transplant centers to work with greater flexibility and predictability, supporting both the teams and the hospital operations. Taken together, we believe XVIVO Liver Assist has established one of the strongest clinical health economic evidence bases in transplantation and provides a solid foundation for our regulatory and commercial ambitions in the United States. And with that, we go to slide 12 and a more specific update on the U.S. regulatory pathway for the Liver Assist. Following a reevaluation of our U.S. regulatory strategy last year, interest in the Liver Assist has continued to grow among transplant centers in the United States. We are increasingly being approached by centers and clinics that would like to get access to Liver Assist, recognizing both its clinical benefits and its potential to improve workflow and quality of life for transplant teams.
There is a clear demand in the United States for cost-efficient solutions that can improve outcomes while supporting a more sustainable transplant practice. Against this backdrop, our regulatory team is actively preparing the submission package for the FDA. We are targeting a 510(k) submission in the first half of 2027 and, subject again to regulatory timelines, a commercial launch in early 2028. We believe the U.S. represents a significant long-term opportunity for Liver Assist, supported by both the strong clinical evidence base we just showed you and the growing market interest. And with that, I turn over to slide 13 and hand over to our CFO, Kristoffer Nordström, for the next segment of this quarterly call.
Thank you, Christoffer. So, turning to the financial performance of the third quarter, this was another stable quarter for XVIVO, as Kristoffer already mentioned. Net sales reached SEK 253 million, corresponding to an organic growth of 32% in local currencies. Growth was led by thoracic, our largest business area, while also abdominal continued to show positive momentum. EBITDA amounted to SEK 52 million, corresponding to a margin of 21% compared with 19% last year, and this improvement was supported primarily by the strong sales, but also somewhat seasonally lower activity levels on the cost side over the summer months. Gross margin, worth a comment. So gross margin was 70% compared with 75% last year. The year-on-year decrease reflects the lower margins in services primarily as well as product mix and some inventory write-down within thoracic.
Excluding services, where we have made deliberate investments over P&L for some time now, the product gross margin was 75%, both in the quarter and year to date. Moving over to our largest business area, thoracic. Thoracic delivered a very strong quarter with net sales of SEK 177 million and organic growth of 51%. Lung sales amounted to SEK 155 million , and EVLP disposable growth was 67% in the quarter, reflecting the continued adoption that we see and the strong activity amongst our larger customers. We mentioned it in the report, so thoracic also benefited from approximately SEK 19 million of tailwinds towards the end of the quarter. We had an SEK 8.5 million adjustment, you can say, based on IFRS and the treatment of lease contracts, and that refers to the three OPOs where we delivered XPSs earlier in the year.
Now when you do that, you need to take the revenue and the costs up front, and that lesson we learned here in the quarter. That's why you see that, a bit of a one-time effect in this quarter isolated, and that's how we're going to treat those contracts going forward as well when we onboard new OPOs. There was also approximately SEK 10 million of inventory built up by our largest customer in the U.S. Heart sales, positive, amounted to SEK 22 million compared with SEK 10 million last year. The CAP study has started. I think we had three patients included in Q3, so it contributed with SEK 1 million , which means that the rest, the SEK 21 million , comes from Europe, and it comes from Australia, where we continue to see a very strong interest and good adoption of the technology.
Gross margin was 80% compared with 89% last year, and as I mentioned, the decrease is mainly explained by the product mix, hence a larger portion of this XPS revenue, and also the inventory write-downs. Excluding these events, the gross margin would have been 85% for thoracic, which that's another level we recognize from earlier quarters as well. Moving over to abdominal. Net sales of SEK 62 million , corresponding to an organic growth of 12%. Liver sales were SEK 40 million and grew 9% in local currencies. Growth was somewhat lower than last year, reflecting temporary implications from the manufacturing transfer that has been going on, and somewhat softer activity in a few European markets over the summer. We remain encouraged by the long-term opportunity, supported by continued adoption in our core markets and the broader DCD utilization that continues, but also more long-term reimbursement developments and those opportunities.
Kidney sales amounted to SEK 22 million and grew 19% in local currencies. Growth in the quarter was affected by seasonality and implications from the manufacturing transfer as well, and we believe that will continue into Q4. We do expect growth at current customers and with the current design to continue to return to higher levels of growth from the beginning of 2027. Gross margin was 61% compared with 60% last year. Turning to services, our final business area. Net sales were SEK 14 million . That means a negative growth of 28%. The decline was again primarily explained by lower organ recovery volumes. We remain optimistic about the pipeline of prospective customers. We have several contract processes currently underway, so that's very encouraging. However, these processes continue to take longer time than we anticipated to convert into revenue. Gross margin was negative 19% compared with 37% last year.
The decrease reflects the lower recovery volumes, combined with our investment in expanding the surgical team to position us for winning new contracts in new geographies and for building capacity ahead of the U.S. Heart launch later on. As recovery volumes increase and the new capacity is utilized, we expect the gross margins to recover significantly. EBITDA. Looking at SEK 52 million in EBITDA in Q3, compared with 36 last year, the EBITDA margin improved to 21% from 19%. Year-to-date, EBITDA was SEK 148 million , and the margin was 20% compared to 17% last year. So an improvement there. Rolling 12, we are at 21%. The margin improvement in the quarter was supported by the strong sales, but also the seasonal little lower summer activity while we continue to invest in commercial expansion, as we talked about, regulatory activities and also the infrastructure to support the future growth.
Final slide, cash flow. Cash flow from operating activities was strong, SEK 53 million positive in the quarter compared with 21 last year. The improvement was primarily driven by the strong sales development. For the first nine months, our operating cash flow amounted to SEK 182 million , compared with only 14 last year. So a significant improvement on the cash flow this year, which I am very proud of. Cash flow from investing activities was -SEK 49 million , and SEK 39 million of those were invested into our regulatory approval processes and clinical trials, primarily related to Heart. Over the past three quarters, we have generated positive operating cash flows that has been sufficient to fund both our operating and our investing activities. We ended the quarter with a cash position of SEK 313 million .
In addition, we have an unutilized part of our credit facility of EUR 12 million. We believe that we will enter next year with a solid cash position. With those comments, Christoffer, I will hand over to you again. Thank you.
Thank you for that. We are now at the last section of the presentation, the outlook session, looking into the next couple of years. We can turn to slide 21, our outlook for the remainder of 2026 and the next two years. Over the past four years, we have invested heavily in building XVIVO into the company we are today. Today, we are number one, second to none in innovation. We are number one in customer support and clinical evidence within transplantation. So we built a strong position. Combining those with the close partnership with transplant teams around the world, this has created a strong foundation for very high continued growth into the future. All of our major product platforms are now approved in Europe, and we are making good progress toward achieving the same in the U.S.
As we look ahead, our focus increasingly shifts from building capabilities to expand access and driving adoption of our product. Our ambition is to become the preferred partner in the transplant process. To achieve that, we have identified four key pillars or four key priorities. Number one is to secure market access for heart and liver in the U.S. through regulatory approval, reimbursement, continued generation of U.S. clinical evidence, and further development of decision support parameters for both heart and livers with the HOPE method. Number two, the exciting XVIVO Heart launch in Europe. Our aim is to establish the XVIVO Heart Assist Transport as a standard of care for modern transplantation. Third, we will continue to strengthen our leadership position in EVLP for lungs. We will continue to work closely with transplant centers to advance the science of lung transplantation.
We will continue to support pump centers, and we will continue to support OPOs and centralized evaluation hubs in increasing access to donor lungs for transplant programs across the United States. Finally, we will continue to invest in the robust and scalable supply chain, maintaining the highest standards of quality across our products and processes. We are growing very fast, and we have to make sure that our supply chain runs equally fast. In addition, to maintain our number one position in perceived quality of customer support, we will continue investing in our commercial capability and in the partnerships that are critical to the success of transplant programs across the world. The opportunities we see ahead of us are significant. We have a strong product portfolio, growing clinical evidence, and dedicated teams around the world. We believe that XVIVO is well-positioned for the next phase of our growth journey.
With that, we can turn to slide 22 and our longer-term outlook. Because if we look at the longer term, the fundamental picture remains unchanged. In many ways, this is also the reason we are all here today. According to WHO, the demand for organ transplantation remains approximately 10x greater than the available supply of donor organs. At the same time, the value created through machine perfusion is significantly higher than with traditional static cold storage. Clinical evidence and real-world experience have demonstrated that machine perfusion as service model can increase organ utilization, particularly within the rapidly growing DCD donor pool. The key drivers are superior clinical outcome, increased utilization of donor organs, and simplified workflows for the transplant center. As a result, we believe machine perfusion, a service-based model for both DBD and DCD organs, will continue to drive growth in transplantations for many years to come.
At XVIVO, our ambition is to change the paradigm of transplantation through innovation. We are committed to improving life after transplantation, making more organs available for patients in need, and providing transplant teams with technology that enables surgery to perform under the best possible conditions. Therefore, our vision remains unchanged that nobody should die waiting for an organ. With that, we can turn to slide 23. Before we open up for questions, I just want to touch base on our dream and what we have been working the last 10 years to achieve is for transplantation to become a standard procedure, and that organ transportation can be performed using ordinary mode of transportation, and that it should be done by rested transplant teams with the best possible patient outcome.
So again, next time when you are out flying, I hope that you are seated to one of our devices on a flight. Remember then, it is not just a device being transported, it is a donor heart going to a patient whose life is about to change. I want to thank you all for supporting this journey with us. With that, I want to also thank you for listening today, and we will now open up the line for questioning.
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. The next question comes from Simon Larsson from Danske Bank. Please go ahead. The next question comes from Jakob Lembke from SEB. Please go ahead.
Yes, hi, and good afternoon. My first question is on heart, and then maybe shortly if you could share the split between Europe and Australia for the Q3 sales, and then also if you could comment if you are already now starting to drive adoption among the sort of Tier 1 compassionate centers, and also when you will start to onboard new customers in that sort of Tier 2 category.
Thank you. I will start with the second question. We are listing the product, so we are targeting to onboard new customers in December of this year. We know the listing process is three to four months. So right now, the sales we see on heart is still coming from derogation, compassionate use, et cetera.
Okay.
I can follow up with Christoffer on the first question. In Q3, heart sales was as following: Australia, New Zealand, SEK 9 million , Europe, SEK 11 million , and U.S. CAP study, SEK 1 million . Thank you.
Okay, good. If I understand, are you growing your volumes with these existing customers right now, or are those sort of stable right now?
That's a good question. The majority of centers are growing, but we still believe that the real growth from both new centers and existing centers will come with the listing of the product and selling under CE mark and with reimbursement kicking in as of December.
Good. Very clear. Then on Liver Assist in the U.S., very good that you are targeting a faster launch here. I'm wondering how you see the long-term prospects in the U.S. market. On the one hand, you're very strong in Europe, but the U.S. market is also more crowded, and there are already two warm perfusion players and one cold perfusion. It would be interesting to hear what you think about the long term in the U.S.
That is a great question. From customer feedback, it has been very clear that they need an alternative in the U.S. When they all meet, or transplant surgeons and transplant coordinators all meet on the larger global conference, it is clear that when they see Europe, it is clear that they see extremely good product, very stable product with the best clinical result in the world. Of course, they want to get their hands on that one. We are realizing it is a more crowded field, and I think the success rate of it will depend partly on how fast we can afford to scale up sales and support function to deliver Assist, which will be key to be successful in the United States. As well as partnership within the, let us call it logistic/perfusionist area, so we can support OPOs in pumping the greatest number of livers as possible.
There will be some investment needed, and some partnership discussions needed to have the greatest possible success.
Okay, do you think that will you mainly sort of convert customers that today are on the warm perfusion solutions, or will it be those that do not use perfusion at all, or converting those now maybe on cold perfusion? Do you have any sense of that, which will be your main opportunity there?
We are doing that job right now to look in what will be the main opportunity. I think that we will see opportunities in all of the above. Then depending on how fast we can change current behavior, that will be the leading cause to where we will get the highest uptake of our technology. But as always, when you launch a product, I think the majority of sales in the beginning will come from KOLs, the visionaries, the ones who want to change, and over time, that will trickle down to the majority market.
Good. Then I also have a question on this stocking you mentioned to your large customer in the U.S. Just to understand, is this an order you otherwise could have expected in Q4 that now came in in Q3? Or is it that sales stands out as unusually high to the customer? Just some more color on that please.
Yeah. Given our insight into the volumes, this was more of a top-up as we see it. We are afraid that it could mean that the sales in Q4 to this specific customer might be slightly less than expected, but still solid and contribute to growth in Q4.
Short comment on that one. Sometimes when we get order, it can fall on the last day in one quarter or the first day in one quarter. This fell in the last day. It happens. It is not unusual. We just want to be very transparent.
Okay, good. That is very helpful. Then final question from my end is on kidney, and if you can elaborate a bit on what you mean by more moderate growth. Let us say, do you still see some growth? Will you go with existing accounts, or will you also take some new accounts, or just how should you look at that?
No, that is a good question. That needs some clarification. We see high growth opportunity in the U.S. coming from both existing but primarily new accounts in the United States as well as Europe. We are talking about moderate growth, probably around 30%, but the opportunity is much higher if I look into the pipeline of new kidney customers, especially in the U.S. market, but also in Europe, where we had so far, I think we had far above 60% growth here in Europe. But due to some component changes where there are a shortage situation, we need to allocate them wisely and we will not be able to fulfill the full demand of the market next year in kidney. That is our best estimation. But it will still be a solid growth, still okay. But unfortunately not to its true potential, which we would have helped.
Okay. That is very helpful. Thank you very much for taking my questions.
Thank you.
The next question comes from Simon Larsson from Danske Bank. Please go ahead.
Hopefully you can hear me better now.
Yes.
I would like to start on this big U.S. lung customer, and you are of course mentioning again in the report that they are planning to switch to at least partly to their own EVLP platform here in 2027. Just for our benefit, to help us think about the dynamics in that switch, will this be from one day to another? Will it be more a gradual shift? Because I'm thinking that some of the customers stick maybe to your platform, given that they have experience working with it. Any color on that dynamic would be helpful.
Thank you. We will try our best. But you have a point that there is an end customer who has a say in this one, and it's very clear that the end customer decides. Just to be very clear, we've been partners for more than 10 years, and we are in constant dialogue around how to increase the lung utilization rate in the United States. Today it's around 20%, it should be 50%. The jump between 20 %- 50%, that's clear.
Maybe a bit of a conceptual question, but when we are looking into next year on lung specifically, okay, we have this, let's call it a headwind potentially from this customer, but you had a very strong placement here last year, of XPS systems. The OPO model is starting to bear fruit. Is it sort of plausible for those initiatives to counteract to a full extent and the potential headwind from the biggest customer, or is the magnitude too big to counteract, do you think? Or how we should think about the whole lung franchise next year in terms of growth rates? Just maybe high level takes from your end.
Great. You will get a high level answer to that one, and we need to come back with a more detailed answer. But we do see fast growth in our new customers, and we do believe that that will hopefully cover any shortfall. That is our strategy, and we need to of course come back and update you regularly every quarter next year of the case. But that is the working hypothesis right now.
Lovely. Maybe my final one. On services, are you evaluating any type of restructuring of that business or any similar initiatives? Do you think it will be, or is it crucial for XVIVO to have an in-house service capability over time? Will it maybe be better and more cost-effective to work with a partner instead? What is your thinking about that business area right now?
If I answer more general, we are continuously evaluating our strategy and go-to-market strategy for all our products. As we have mentioned many times, this was bought as an option for the U.S. Heart launch, and we are now nearing U.S. Heart launch. So of course, we are looking into what is the best possible way. We have the, I would say the best quality organ recovery service, and it is a great asset that we will use in the Heart launch in either way. But of course, we are looking into any strategic opportunities constantly to see what is the best way forward.
Perfect.
I also want to comment that-
Yep
On the restructuring, as you said, that is what has happened. That is also why we see that we have invested into this business and that is currently what is weighing down the margins of that business. But it has been a deliberate decision, and the restructuring has been attracting very talented surgeons in strategic geographies to position us for winning new contracts and to be in a good spot when we launch the Heart launch. So I am very excited about the contracting discussions we have at the moment. I just wish it went faster, so to say, but we will get there.
Understood. Perfect. Thank you very much.
The next question comes from Filip Wiberg, from Pareto Securities. Please go ahead.
Hi, good afternoon. I have got a few questions today. I think I will start on Liver Assist. I am a bit curious on the submission now in the U.S. What exactly it takes before you can submit it. You have targeted now on 2027, so what are you going to do until that? Is it mostly just writing it up, or will you need to get any sort of clinical data? I think you had it in a slide that you are only going to submit it based on data outside the U.S. Do you have everything you need currently or?
Thank you for that question. There will, of course, setting up the file and the application will take some time, and that we will spend the time on. Our current strategy is that we will have outside data. Still, the usability validation needs to be done in the United States, but that is not a clinical trial. It is more of a usability trial. So that also takes some time. So that is what we will spend the majority of time until submission.
Okay. I think you've spoken before because the predicate device you're relying on now is just HOPE, but you have most of your data in DHOPE, but you have sufficient data for submission, it seems like that.
Yes. We believe that. We have data both on HOPE and DHOPE.
Okay, good. Very simple answer then. On service, you've spoken about that you've anticipated some kind of turnaround, but it hasn't turned up yet, and it seems to be contracts taking longer time. But are there any reason to be more optimistic now in 2027? You said you have some in the pipe, but how reasonable is it to show growth 2027, would you say?
It's very reasonable to expect growth in 2027. Not necessarily in Q4, because it takes some time with the contracting, with legal and IT, and all that stuff. But we're very far on very interesting opportunities. So I'm confident we will see growth in 2027.
Okay. Thank you. Perhaps last question from me, just around the cost next year. Now you will have the U.S. Heart launch toward the end of next year, and then you also have Liver in the U.S., and you are continuing ramping up Heart. How should we think about costs ramping up next year? Do you think you will be able to defend the margin that you have this year, or how should we think about it?
That is a great question, and it is slightly depending on timing of approvals. We will invest in especially larger sales force prior to approval. Through the study and through the continued access protocol, we have already customers up and running, so to say, in the United States. We believe that over time, over quite short period of time, we will regain that one. But we would need to invest a little bit before approval so everybody is up and running, and we can do a great launch. But fast recovery of those costs. How we invest that will depend on timing of approval.
Okay. But if the current plan then plays out as you believe with Heart launch and Liver launch beginning of 2028, I suppose you will have to invest next year. But do you think you can defend the margin that you have this year then?
I think that we will see a slight margin dip during the second half of the year for the investment in increased sales force for both Heart and Liver.
Okay, good. I will take that answer. Thanks very much. That was all from me.
The next question comes from Ludwig Germunder from Handelsbanken. Please go ahead.
Yes, good afternoon. Thanks for taking my questions. I want to start with another one on Heart, similar to one that has already been asked, but I guess a little bit different. So about Tier 1 and Tier 2 centers that you were talking about. If I got it correctly before, you are currently, as of today, still running on the compassionate use. But as I understood it, you still are fully up and running with the Tier 1 centers. So the first question is around the Tier 1 centers. Do you view them to be fully up and running in terms of what their capacity is, or do you see more growth on each center going forward? Second question on this topic would be, how long you expect the initial Tier 2 rollout to take?
So basically from the day you start with the Tier 2 to the day you reached the first group.
Thank you for that question. If we look at the Tier 1, no, they are not fully up and running. There is a lot of potential in each account, in each of the eight still. If I parallel that to the Australian launch where we had year one, at the end of year one after launch, I think we had 30% penetration going into year two, 40%, then year three up to 50% and above. We actually up to, in a few centers, more than 60%. So we will see a similar development in each account in Europe as well. The question of how fast it will be at this point, we are modeling this one, but it will be quite center dependent on how they will approach it and how fast the reimbursements kick in.
As I said in the call, we at XVIVO believe that this will become the gold standard. This is how you transport hearts. But it will depend on reimbursement in every country. So we are more looking into how fast we can establish reimbursement. We have not heard any customer so far who said, "We do not want to use this product." It is more that when it is reimbursed, I will use it for half of my hearts or all of my hearts. That is the conversations we have.
Yeah. Got it. Thank you. One more on lung. You have been talking about and mentioning the inventory build-up from your large customer, but I am just thinking, bridging into Q4 here, if we assume a sort of underlying lung pace and just adjusting for this inventory build-up in Q3, should that take us close to what is reasonable to expect for Q4? Or are there other moving parts to be aware of when it comes to the sequential development here?
To my knowledge, there are no other moving parts for Q4.
Great. Then my final question. On this leasing effect that we saw in the quarter, could you just give us some more color about the timing here? Because I thought that OPO had been up for a few quarters before this. Basically, what is the reason for the timing to hit now? Or is this something that has been in the numbers before, but you are just mentioning it for the first time now?
Yes. Valid question. This relates to the OPO model, where we are not selling a device, but we are placing a device with a lease contract over two years to our perfusion partner. I think we placed the first OPO in Q4 last year, and since it was a very small business then, we took the revenue on a monthly basis in connection with our invoicing. But now, when this business has grown, we have looked into it further with our auditors, and it has been clear that this qualifies as a lease agreement, a financial lease agreement where you should take the full value of the contract on day one. Since we did not do that, retroactively now, we needed to take revenue for these three OPO placements in one quarter retrospectively, with the associated COGS as well.
That is the reason. So it is a catch-up, so to say. In the future, I should say when we have a new OPO placement, you will see a full revenue of, I think it is around SEK 4 million in that quarter. Is that clear?
Yeah, it is clear. Just to make sure we get the full picture. Is this contract and the value that you account for, is that for the machine?
Yes.
When they continue to use the machine, that will be sales then?
Oh, yeah. It is a razor-razorblade model as always. This is only for the machine. This was the leftover revenue for three machines that we placed earlier in the year.
To be clear, we try to communicate the underlying revenue, so even kits or Kidney kits, et cetera. This is IFRS, and if it is an operational financial lease, I honestly do not care. It is every time we use the machine, we save another life, and we take away somebody from the waiting list. That is what we communicate around. For transparency reason, we want to be very transparent around this change from operation to financial lease, but it is more of an IFRS thing and has nothing to do with underlying business.
No, of course. I appreciate the transparency, and it is very clear now. Thank you. That was all for me.
Thank you.
The next question comes from Elvin Rolder from DNB Carnegie. Please go ahead.
Good afternoon, Christoffer and Kristoffer. I have just two questions. There's been a lot already, but perhaps leaning into more on the OPO model. You said you have three OPOs online now, and I believe you in Q2 talked about additional OPOs that you have line of sight in regarding this model. Can you just maybe elaborate a little bit on how that pipeline is developing and how we should expect the kind of number of OPOs to progress the coming quarters?
Thank you. That's a great question. We have identified five further or more OPOs in the pipeline that we will gradually introduce to this concept. The interest is very high. It simplifies the process, it reduces the overall cost, and it helps the OPOs to improve their metrics, which is usage rates of lungs. It's a great method. The key here is to do the implementation flawlessly so you can be up and running as soon as possible. It will be, if you call it a controlled build-up of the pipeline in the next couple of quarters to make sure we have the best success we possibly can.
Great. Thank you. Maybe you touched upon it previously. We have talked a lot about Liver during the call, but I guess I want to hear more on your rationale behind going for 510(k) with the more narrow HOPE label compared to DHOPE, given the fact that you also have the XVIVO Heart launch in the U.S. up and running. How should we think on the degree to which you invest in Liver on a HOPE label basis in the U.S., also coupled with the fact that there is an approved HOPE product there and that competitors raised money recently and will probably invest into their commercialization. How should we view those competitive dynamics for Liver?
We acknowledge that Liver is definitely a competitive market. We believe the body of evidence we have is second to none for Liver. We believe we have a bit of a head start there. We also have an abdominal team up and running already with Kidney kits. We do think that there are investments, but compared to the investments we have seen other parties done, we do not think we are even close to needing that type of investment to be very successful in this market.
Okay, great. Maybe just a final one from me. Apart from your largest U.S. Lung customer having their model approved, there is also another company that had their device for EVLP approved. It has been a couple of months now. I guess it is still early days for that company, but can you comment a little bit on whether or not that has affected competitive dynamics within Lung in the U.S.?
So far, we have not seen that the competitive dynamics have changed in a large way. Still early days. We do expect if we look at the numbers, approximately 20% of all lungs are used, and today 2%-3% of those come from EVLP. We know we are going to grow from 20%- 50%. The market opportunity is another 30 percentage points, and they will all come from EVLP because they need evaluation. There is a lot of work to be done. Having more interest into the market has two effects. There is some competition, but there is also more people or more companies talking about the ability to evaluate more lungs for transportation. We do believe that the market growth will increase over time due to more players in this field.
Okay, great. Thank you. I think that was all from my side. Thank you for taking my questions.
Thank you so much. We are nearing the end of this meeting. Are there any questions left?
The next question comes from Ed Hall from Stifel. Please go ahead.
Hi there. Thanks for taking my questions. I will keep it short. Just on the, I think I missed out on the quantifying the largest U.S. customer share. If you could break that down, that would be helpful. Then looking forward, excluding that customer, how should we think about the disposable growth, the contribution from OPOs versus existing accounts? Thanks.
Great, thank you. To start with, I will answer the second question, and [inaudible], you can answer the first one. We see very solid growth from, let's say, all the customers. I think YTD, we are at 92% on, and now we are talking about disposables and not IFRS effects or anything else or stocking. We see a solid growth. We think that will continue with addition of more accounts and with growth within existing accounts. We do see both a solid pipeline, a great interest, and that is converted into high sales growth.
Yeah, looking in the annual report from last year as we speak, we disclosed there under revenue that the largest customer last year was totaled SEK 132.6 million in 2025. I think that's a good measure stock for the magnitude.
Okay, perfect. Thank you very much.
Thank you, Ed. Did you have any more questions?
I guess maybe just one more on sort of the static cold storage growth. I know we talked a lot about EVLP, but sort of your expectations for this going forward.
Yeah. We have a dominant market share in static cold storage for lungs. It is the gold standard. It is used by more or less every account in the world today, except where we choose to not sell it for ethical reasons. So we expect to grow with market growth. That, if I remember correctly, we have in our plans right now is roughly 5% for next year.
Very clear. Thank you very much.
Thank you so much. With that, we unfortunately have to end this call. We are inviting you back for the year-end report 2026, and that call will be held on January 28, 2027. So until then, I wish you a very good time and hope to see you back for the Q4 or year-end report. Thank you, everyone.