C-Rad AB Aktie

Welcome to the C-RAD Q3 2026 Report Presentation [Operator Instructions] Now I will hand the conference over to CEO, Tomas Blomquist; and CFO, Linda Frölén. Please go ahead.

Good morning, everyone, and welcome to C-RAD's Third Quarter 2026 Presentation, and thank you all for joining us today. My name is Tomas Blomquist, CEO of C-RAD. I'm joined today by Linda Frölén, our CFO, but also our Chief Product and Technology Officer, Eeva-Liisa Karjalainen. We will take you through the financial performance for the quarter, our operational and technological progress and the priorities guiding C-RAD into the next phase of our transformation. Let me now start with the key takeaways. Q3 was a weaker quarter financially than we had expected.

Order intake amounted to SEK 76 million, down 29% year-on-year, while revenue was SEK 85 million, down 24% compared with Q3 2025. The regional development shown on the slide highlights the main reason for this outcome. Order intake varied significantly across our markets. The Americas increased by more than 20% year-on-year, while EMEA was the key driver of the overall weakness and declined by 40%. APAC declined by 34%. The same regional pattern is visible in revenue. Revenue declined by 33% in APAC and by 23% in EMEA, reflecting weaker product deliveries in both regions. The Americas declined by 6% year-on-year despite the positive development in order intake. This difference between order intake and revenue also reflects the timing essential in our business, where orders convert into revenue over time and larger product deliveries can shift between quarters.

We're not satisfied with this performance, improving commercial conversion, strengthening product deliveries and restoring growth in order intake and revenue are clear priorities for us. At the same time, the quarter demonstrates important strength in our underlying business and continued building the capabilities we need for the future. Our service business reached a record quarterly revenue of SEK 30 million. Gross margin remained very strong at 76% and EBIT margin was 12%, demonstrating resilience despite lower volumes. The positive year-on-year development in order intake in the Americas is encouraging, particularly in contrast to the declines in EMEA and APAC. However, we need to convert this momentum into revenue and demonstrate sustained performance over several quarters. Let me now put this into the broader context of our transformation. We're building a stronger, more customer-focused and more scalable C-RAD. We're still in the early stages of our 3-year transformation, which began earlier this year.

The first phase is about establishing a stronger foundation, sharpening priorities, strengthening commercial execution, clarifying accountability and directing resources towards partnerships, software innovation and selected markets. That work is progressing according to plan. However, transformation is not an end in itself. It must translate into stronger commercial performance, profitable growth and long-term value creation, and that is where our focus remains. Turning to the market. We saw clear regional differences during the quarter.

Europe experienced a more cautious investment environment with fewer tenders and delayed purchasing decisions, particularly in Germany. This was reflected in the 40% decline in EMEA order intake and the 23% decline in revenue with weaker product deliveries contributing to the revenue development. APAC was also weaker with order intake down 34% and revenue down 33%. Developments in China and India contributed to the weaker performance and product deliveries were also lower in the region. The Americas developed more favorably on the order side with order intake increasing by more than 20% year-on-year. Revenue was nevertheless down 6%, illustrating the timing difference between order intake and delivery.

This is an important distinction. The order intake development provides an encouraging signal, but it must translate into deliveries and revenue in the coming quarters. Our industry continues to be characterized by long sales cycles, significant investment decisions and quarter-to-quarter variability. We, therefore, assess performance across several periods while remaining clear that our commercial conversion, regional execution and revenue development need to improve. A particularly strong signal this quarter came from our service business. Record service revenue reflects the value of our global installed base of more than 2,200 systems.

This installed base is much more than a historical achievement. It is a strategic asset that creates opportunities to grow recurring revenue through service upgrades, service licenses and new solutions. Increasing the value we generate from this installed base is central to making C-RAD a more resilient and scalable business. Let me now turn to our strategic direction. Our ambition is to build on our leading SGRT position and develop C-RAD into an open workflow platform for radiation oncology. We're not moving away from what has made C-RAD successful. We're building on our technology, installed base, clinical relationships and global presence to address a broader opportunity.

At ASTRO in Boston, we presented an early preview of our next-generation software platform and advanced our automated patient verification solution. Together, these developments represent important building blocks towards more integrated and automated workflows. Our collaboration with SeeTreat in adaptive radiotherapy is another concrete example of this approach, connecting C-RAD's patient positioning and motion monitoring capabilities with adaptive treatment workflows. It illustrates how partnerships can extend the value we deliver without requiring us to build every component independently. Commercially, our work with larger cancer organizations and network remains important. Our business with Ron-Ergea in Germany builds on successes with customers such as GenesisCare in U.K. and Elsan in France. We want to translate these relationships into repeatable opportunities across multiple clinics and markets.

Looking ahead, our priorities are clear: improve commercial conversion in our priority markets, grow recurring revenue and continue investing selectively in software innovation and strategic partnerships. We will remain disciplined in our allocation of capital and resources. Our objective is not growth at any cost, but sustainable, profitable growth and a stronger competitive position over time. So let me conclude with a few comments.

Q3 was weaker than we expected, and we need to improve our financial performance. But our strategic direction remains clear and the work to build a stronger C-RAD is progressing, but there is still a significant work ahead. Our ambition is to become not only a leading provider of SGRT technology, but also an open and trusted partner connecting technologies data and workflows across radiation oncology. With that, I will hand over to Linda Frölén, our CFO, to take you through the financial Q3 performance in more detail; Eeva-Liisa Karjalainen will then provide an update on our technology, product development, the ASTRO exhibition and our first ecosystem partner SeeTreat. Linda, over to you.

Thank you, Tomas. So as Tomas has already given you the flavor of our order intake and revenue for the quarter, I will rather focus on the journey towards earnings and cash flow. In the following slides, I will go through our gross margin, cost levels, earnings, cash flow and investments. I would also like to comment on our revised backlog. As part of our ongoing efforts to ensure a high-quality business, we conducted a thorough review across all regions during the quarter. This has resulted in a write-down of SEK 93 million of our order stock. Important to highlight is that this adjustment does not change our expectations for revenue development in the coming periods, and it has not affected the earnings for the quarter or the interim period. Gross profit for the quarter was SEK 65 million compared to SEK 83 million a year ago. The gross margin for the quarter was 76% versus 74% last year. The increase year-on-year is explained by the higher share of service revenue in this quarter, which was 35%. We also had proton revenues in this quarter, which we did not have in the third quarter of last year.

Looking at our operating expenses after capitalization, you see to the left of this chart that they decreased 7% year-on-year from SEK 58 million last year to SEK 54 million in this quarter. The decrease in year-on-year OpEx is related to lower personnel costs due to average number of employees, which are down from 106 in Q3 of last year to 100 now in this quarter. Also, commission expenses are lower following the lower order intake and revenue for the quarter. To the right of the slide, you see that quarter-on-quarter OpEx is down from SEK 60 million in Q2 to SEK 54 million in this quarter.

The decrease is related to lower personnel expenses in Q3 due to summer holidays. As we increase our focus on innovation and product development our underlying OpEx are expected to increase somewhat. But as these initiatives approaches commercialization phase, the capitalization rate is also expected to increase. EBIT for the third quarter was SEK 10 million compared to SEK 21 million a year ago. The decrease in EBIT for this quarter is mainly explained by fewer product deliveries. However, profitability showed signs of resilience, supported by a strong gross margin and continued cost discipline. The restructuring measures implemented earlier this year have also helped to mitigate the impact from lower volumes and demonstrate in organization that is operating more efficiently.

While there is still a gap to our EBIT margin target of 25%, we believe the foundation for margin expansion is strong. With a high gross margin profile, a more efficient cost base and a focus on innovation, we see a clear path to our target over time.

The profitability level achieved in recent periods confirms the operational leverage in the business model and the earnings potential as growth returns. Our cash balances increased by SEK 6 million during Q3 and stood at SEK 144 million at quarter end compared to SEK 138 million at the beginning of the quarter. Cash flow from working capital was SEK 4 million in the quarter compared to just below 0 a year ago. Working capital was positively affected by payments from customers, which was partly offset by increased inventory levels and restructuring payments. Our focus on our balance sheet and our cash flow will continue. As the last slide from me before I hand over to Eeva-Liisa is one showing our increased level of investments.

Looking back, we believe the pace of innovation has not been where it needed to be to support the growth ambitions of the company. While we have continued to develop our existing portfolio, the rate of new product development has been too low. To address this, we have significantly increased our investments in product development as illustrated by this chart. Over the past 2 years, annual investments have increased by approximately SEK 16 million, enabling us to strengthen our development organization and accelerate innovation. We firmly believe that increasing the pace of innovation is essential to returning to sustainable growth.

We have already communicated our next product, patient verification, and we are actively working on additional products that we expect to launch during next year. In summary, we are making a conscious investment today to build a stronger innovation engine for tomorrow. We believe this will be a key driver of growth and value creation in the years ahead. And with that, I'd like to hand over to Eeva-Liisa, who will walk you through our innovation agenda and how we transform these investments into future products and customer value.

Thank you, Linda. I will spend the next few minutes on adding some more detail regarding our recent product developments as well as our next phase of product innovation and portfolio expansion. So C-RAD is on an important mission. Together with clinicians, we combine technology and clinical insights to make every patient journey safer and better. Our products play an important role in radiotherapy treatment of cancer. Overall, surface-guided radiotherapy solutions bring an essential layer of precision, patient safety and efficiency to safety critical clinical procedure that can save lives. In our portfolio today, we support radiotherapy treatment workflow from patient simulation onto treatment delivery with our flagship products, Sentinel and Catalyst, both to enhance safety and efficiency in treatments. And with an installed base of approximately 2,200 systems, our SGRT technology has a global presence in a market where workflows, automation and interoperability are becoming increasingly important.

One of C-RAD's most important competitive advantages is really our position with the hardware and software in the treatment room and providing a great base for expanding our business going forward. At the end of September of this year, C-RAD participated in one of the key industry congresses of the year, the ASTRO Congress in Boston, U.S.A. We have a very successful congress demonstrating our new developments to prospects and existing customers, showcasing many of our new features for the next release. And in addition to showcasing our flagship Catalyst+ HD, we also demonstrated our latest addition to the Catalyst family, which is the Catalyst+ LITE, which makes advanced SGRT and motion management more accessible to all clinics. During the ASTRO Congress, we also announced an expanded interoperability for our Sentinel product, which is now compatible with the United Imaging CT scanners, which is an important step in making the Sentinel technology accessible to all clinics globally.

Looking ahead, our strong position with a large installed base at the heart of the radiotherapy clinic gives us really a unique starting point for our next step. Our ambition is to transform C-RAD from a leading product supplier in SGRT to becoming a leading open workflow platform for cancer care, starting with radiation therapy. And this position is considerably larger than SGRT and one we believe that will become increasingly important as radiation therapy becomes more advanced and more personalized, while at the same time, having to become more efficient to support the growing aging population and rising cancer incidence. The ecosystem that we're on a journey to build consists of 3 strategic layers.

Starting at the very core, we will keep evolving and enhancing our proven SGRT solutions to ensure that we maintain and enhance our market position and competitiveness. While the second layer, the innovation layer expands from the SGRT, connects SGRT deeper into the radiotherapy workflow and provides new software innovations that support the clinicians workflows to bring both automation, efficiency and safety to the clinical workflow.

And this is really a key layer in our strategy that will bring a unified experience to the clinical teams while leveraging their existing investments in their hospital information systems.

And finally, as a third layer to build out the ecosystem with products relevant to the wider ecosystem to support further workflows. The ecosystem as such will be built on C-RAD's new open workflow platform that will unify the clinical workflows across products. And to achieve the goal of the platform and ecosystem, we will combine the different capabilities through a structured build, partner and buy model. What we choose to develop in-house, what we build ourselves is what we have unique expertise in and where we can create a clear competitive advantage for us.

This means SGRT, a modern software platform workflow, automation and integration, whereas we partner with the companies where we complement the clinical workflow and bring value-adding synergies to the end users at the clinics. And lastly, we intend to make selective acquisitions in situations where we can accelerate our strategic position. And we have already started this journey and made good progress on it. At ASTRO in September, we presented and demonstrated already the first building blocks of the platform and showcased our new solution for patient identity verification.

Patient identity verification manages and automate a manual and error-prone step in the treatment workflow and helps to ensure that a clinic does not mix up patients to be treated. This new solution and future products will be delivered on the new C-RAD software platform, which is really the foundation for all future C-RAD software and will bring a more integrated automated workflow throughout the clinics in combination with our partner products. The platform will also serve as a hub for analytics and interoperability in the ecosystem. From the ASTRO Congress, we can see that the new products and platform were very well received and confirmed C-RAD's strategic direction overall.

The market is moving rapidly towards a more automated and integrated workflows in which really products and data flows are linked throughout the entire patient treatment to support the best possible patient care. So as the landscape has changed over the past years, the new decisive strategic question is no longer which technology is best in isolation, but how technologies, systems and data flows can really be integrated into a safe and efficient workflow for the patients.

A key cornerstone of C-RAD's approach through the years are long-standing partnerships with the industry. And these already bring a fantastic basis, enhanced value safety and efficiency into the radiotherapy workflows that we support. However, they are also one of the standing key foundations to building the open oncology platform, and I want to take the opportunity to highlight our first announced partner in this model is SeeTreat. At ASTRO, we communicated that we have entered the next phase with this Australian med tech company that develops innovative solutions for adaptive radiotherapy.

Within this partnership, we will combine the strength of our respective products, the Catalyst and Sentinel from C-RAD and the SeeTreat ART.1 to co-develop more connected, personalized and patient-centric radiotherapy workflows for the future. And this really also brings us to illustrate the ideas behind the platform, connecting technologies into one integrated clinical workflow rather than adding yet another isolated product. And our shared goal is to bring advanced radiotherapy departments of all sizes independent treatment machine and to support the need of precision, efficiency and personalized care for the future. And with that, I will hand over back to the moderator for Q&A.

[Operator Instructions] the next question comes from Christian Lee from Pareto Securities.

I have a couple of questions, and I will take them one by one. The first is regarding the order intake in [indiscernible] by 42% year-over-year on challenging market conditions. Do you expect this to persist for some time? Or are you seeing signs of procurement activities returning in the near term?

Christian, thanks for your question. It's probably too early to tell. I mean, since we started to see some strong signals related to this during Q3, which was not at all evident in Q2. So too early to say, but it's -- we certainly felt it during Q3 that there is tremendous slowdown in order pushing coming through. So more on that for the future, but we remain optimistic.

Right. And Q3 was clearly below your own ambitions in terms of order intake and revenue. Are there any internal actions you can take to improve momentum? Or will external factors continue to dominate the development?

Well, I mean, yes, we're always focusing on what's in our control. So we're always reflecting and looking into what we can execute and perform better with. And yes, we do have some regional dedicated plans because the landscape across the globe looks very differently from EMEA to Americas to the APAC region. So...

Okay. Great. And on the write-off of SEK 93 million of the order backlog due to long delivery lead times, how much of that relates to the canceled U.S. order? And what lead times are we talking about here for what remains in the backlog?

Yes. Christian, I can answer that one. The write-down is mainly related to older orders. So nothing that we expect will affect the revenue in the coming periods. We do not disclose particularly the amount from the specific American customer that was mentioned, but we can say that the write-down is across all regions.

So again, Christian, also as a phenomenon of how we're operating. And this is also one of the signs of trying to build a more scalable and over time, a more profitable company. So we're focused on quality efforts, and this was the outcome of in-depth exercise we did.

All right. How often will you carry out a comprehensive review of the entire order backlog? And do you see any further orders at risk of cancellation or write-off?

Not at no point now.

No. And we do this repeatedly. I mean, yes, there are a few KPIs that are in particular interest, and this is, of course, one of the indicating factors that we, yes, address and look into with high frequency.

Right. And lastly, given the current market headwinds, do you still expect to achieve your financial target of at least revenue growth already next year?

Well, yes, Christian, thanks for your question. We're not a guidance company. All I can say is that I'm proud to represent a very energized, capable team that is out there to serve the customers and take the company to the next level. And we are proud also to be linked to these targets that has been set there to achieve in the midterm, and we're not shying away from that fact.

[Operator Instructions] the next question comes from Christian Lee from Pareto Securities.

Okay. I think I have a couple of more questions. I was thinking about the gross margin that improved to 76%. There were, of course, a positive mix effect here. And beyond the significant proton deliveries in the quarter, were there any other factors that had a positive impact?

Well, I mean, certainly, service is the [indiscernible] main and key driver of the excellent 76% GPM we achieved during the quarter.

Yes, it's mainly the service effect.

Okay. And you talked about accelerating product development through increased investments. So how much do you expect to increase them? And when do you expect the platform to generate meaningful revenue?

Well, yes, this is part of the plan. So what we can say is that we were clear that this is a key priority for us to keep on investing in innovation and software and to eventually come up with the ultimate oncology workflow platform that we intend to do. This is a 3-year plan that we have just started with. And -- but yes, this is a priority area for us that we will keep on investing until we will be happy. But you will already see during 2027 some revenue and order intake coming into the group, which will be pretty also for the margins in the company going forward. So very pleased with the current development happening at the company level.

Okay. Great. You have SEK 177 million in cash, and you recently announced a buyback of up to SEK 20 million. How do you view capital allocation between buybacks, platform investments and acquisitions under your build partner buy strategy?

Yes. Well, I mean, just a simplistic response to that. I mean we're a company building and our focus in -- primarily into the organic growth where we prioritize the innovation software development that was prescribed together with selective partnerships and selected markets. So -- and then eventually, you will drop down. We're also proud to be a dividend providing party, but that also depends on the results of the company. So we're very focused on putting together a stronger financial performance delivery company. And everything runs according to plan, even though we have hiccups. And I think that's also fair to say if we go back to Q2, there were some maybe crosses in and sometimes the crosses out because that's the lumpiness of our business with, again, the long sales cycles and CapEx-related investments. And then you sometimes have these up and downs. We're long-term focused and remain very solid and confident into the direction of the company.

Okay. Perfect. And my last question. You said that selective M&A could accelerate your strategic position. Do you see a meaningful number of companies out there that could contribute to the platform?

Well, actually, we've been clear on that piece since we started. And that's, of course, also part of the allocation of the resources of the company, and we wish to utilize the cash in the most appropriate way. And yes, we have a solid balance sheet with cash assets. So acquisition is certainly on our radar. And I'm also very pleased with the partnership we're having with also partners working alongside us on mapping out some appropriate companies. And all I can say, and this is also related a lot to our build, partner and buy strategy that Eeva-Liisa was alluding to. And there, we have prospects both lined up partnerships and potential acquisitions. So we are already in talks related to both those last components.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Okay. Thank you, and thank you for the questions and for your continued interest in C-RAD. So as we close today's presentation, I just want to reinforce one key message. We are in the early process of transforming C-RAD to build a stronger, more scalable and more valuable company for the long term. Q3 was a challenging quarter, and we recognize that our financial performance needs to improve. At the same time, we're making the structural changes required to strengthen commercial execution, accelerate our innovation, expand our service offering and grow recurring revenues from our global installed base. Our ambition goes beyond improving short-term performance.

We're building on our leading SGRT positions to develop C-RAD into an open workflow platform for radiation oncology, which Eeva-Liisa described so clearly and nicely earlier, connecting technologies and enabling more integrated and efficient clinical workflows. This transformation requires focus, discipline and consistent execution. We're clear about our priorities, committed to delivering tangible progress and determined to translate our strategic ambitions into sustainable, profitable growth and long-term shareholder value.

Thank you to our global C-RAD team members, our customers and our partners for their continued commitment, and thanks to all of you for your time and your attention today. We look forward to updating you on our progress when we present our fourth quarter and the full year 2026 results, the 11th of February 2027. Thank you very much, and have a great day.

Welcome to the C-RAD Q4 2025 Report Presentation.

[Operator Instructions]

Now I will hand the conference over to CEO, Tomas Blomquist, and CFO, Linda Frolen. Please go ahead.

Thank you, and good morning, everyone. Welcome to C-RAD's presentation of our results for the fourth quarter and full year 2025. I'm Tomas Blomquist, CEO of C-RAD, and joining me today is our CFO, Linda Frolen.

I will begin with a brief introduction and perspective. After that, Linda will walk through the financial and regional performance, and we will then open up the call for a Q&A session. This is my ninth day and first quarterly webcast as CEO of C-RAD, and I would like to begin by saying that I'm very happy and humbled to take on this role. I also would like to thank the Board for its confidence and I want to express my sincere appreciation to our interim leadership team, Linda Frolen, Johan Danielsson and Board member, Peter Simonsbacka for their disciplined and professional leadership during the transition. Their work ensures stability and continuity and provides a strong foundation as we move into the next phase of C-RAD development.

For those of you who do not know me, I have spent more than 30 years in Life Science, Diagnostics and Medtech, including over 2 decades in global leadership grows and 5 years as the CEO of a NASDAQ-listed large cap company. Throughout my career, my focus has been on building profitable growth companies with exceptional people through clear priorities strong execution and high-performance cultures. What attracted me to C-RAD was the combination of clinically relevant technology, a growing end market and solid fundamentals including a strong balance sheet, stable gross margins and a committed organization and Board. My leadership philosophy is pragmatic and execution driven. I believe in clarity, accountability and teamwork built on trust. High-performing organizations are created when expectations are clear, responsibilities are owned and teams are empowered to challenge constructively, always with a shared focus on delivery and outcomes and on our customers.

As I step into this role, my initial priority is to listen and learn, to deeply understand our organization customers, products and markets. At the same time, it is clear to me that the next phase of C-RAD will be defined less by ambition statements and more by consistent execution converting our strength into measurable and repeatable results. C-RAD is well positioned in an attractive niche, but we are not yet realizing our full potential. Going forward, our focus will be on strengthening commercial execution, simplifying and strengthening our organization where needed and ensuring that our organization processes and decision-making structures support scalable and sustainable growth. With that, I will now hand over to our CFO, Linda Frolen, who will review the financial performance for the quarter.

Thank you, Tomas. The performance in the quarter varied across regions. In constant currencies, order intake for the group declined in Q4 by 4% year-on-year. The Americas showed growth and was a positive contributor. The decrease was mainly driven by fewer product orders in APAC, reflecting a more difficult market environment in the region. In EMEA, we saw growth in product orders, which could not fully compensate for the decline in services. Revenue for the group was down 6% year-on-year in constant currencies. Americas showed strong growth versus last year with increased revenues in both products and services. The decline was primarily related to slower product deliveries in APAC. As the service business is a smaller part in APAC, delays in project deliveries have a more pronounced impact on total revenue in the region with a lower share of recurring revenues.

In summary, regional development in Q4 was uneven, with strength in the Americas, stability in EMEA and continued headwinds in APAC. While we continue to see some uncertainty in America still with some slow decision-making, the quarter marked an important milestone with the first deliveries of our entry-level system, Catalyst+LITE. In addition, reimbursement codes supporting active motion management are helping to underpin demand. As a result, order intake for the region increased by 7% year-on-year, and revenue grew strongly compared to last year. EMEA delivered a solid performance despite tough year-on-year comparisons. Momentum remained good, supported by continued end user engagement, including customer meetings and ongoing reference building. Order intake declined slightly versus last year, while revenue was broadly stable and slightly up. Finally, APAC, a region with strong comparison figures for '24. The region was weak in Q3 and continued to face challenging conditions with longer sales cycles and increased competition. This is reflected in a sharp decline in order intake for the quarter and a significant decline in revenue in the region.

Gross profit for the quarter was SEK 75 million compared to SEK 80 million a year ago. Gross margin development continued to be positive with an increase from 66% in Q4 last year to 71% in this quarter. The increase year-on-year is explained by the higher share of service revenue in this quarter, and a favorable market mix as we have a higher share of our total revenue in Americas this quarter and a lower share from APAC. We also had some proton revenues in this quarter, which we did not have in the fourth quarter of last year. But the main driver behind the increased margin is the increase in services and the geographical mix. Looking at our operating expenses after capitalized expenses and adjusted for one-off items. You see to the left of this chart that they increased 8% year-on-year from SEK 56 million last year to SEK 60 million in this quarter. The increase year-on-year is mainly due to increased number of employees. These are mainly within sales, product development and services where we have gradually exchanged consultants with own employees.

The additions are deliberate and support our strategic priorities and growth ambitions. We also have somewhat increased other OpEx, which relate to increased travels and higher costs for freight and customs. To the right of the slide, you see that quarter-on-quarter OpEx is up from SEK 58 million in Q3 to SEK 60 million in this quarter. The increase is related to lower personnel expenses in Q3 due to summer holidays. We have reduced our annualized cost base by SEK 23 million from the peak level of SEK 253 million in Q3 of '24. Importantly, despite the recent increases, we will remain a sharp focus on running the organization as efficiently as possible. At the same time, as we increase our focus on innovation and product development, underlying OpEx may increase slightly. These increases are targeted and strategic. And as initiatives approach the commercialization phase, the capitalization rate is expected to increase, partly offsetting the OpEx impact.

EBIT for the fourth quarter adjusted for unrealized FX and one-off items was SEK 11 million compared to SEK 21 million a year ago, and the margin reached 11% versus 17% a year ago. The decrease for this quarter is mainly explained by fewer product deliveries that put pressure on margins, coupled by somewhat higher expenses. As already said, we remain focused on running our operations as efficiently as possible. At the same time, we need to balance this with initiatives that support future growth. Our cash balances increased by SEK 20 million during 25 million and stood at SEK 171 million at year-end, compared to SEK 151 million at the beginning of the year. Repurchase of shares were made during Q4 of SEK 12 million. Cash flow from working capital was SEK 16 million in the quarter, which is a great improvement from last year when it was SEK 3 million. Altogether, our operating cash flow remained solid and positive, amounting to SEK 21 million in Q4 SEK 71 million for the full year, reflecting continued focus on cash discipline.

And as you know, we have had orders on our balance sheet that have been awaiting final acceptance test and that have, therefore, been waiting to be invoiced. These are down 19% since last year and will continue to be in focus going forward, as well as our overall focus on our balance sheet and our cash flow. I would also like to remind you that C-RAD is a company with a strong balance sheet with no long-term debt. And with that, we will hand over back to the moderator for Q&A.

[Operator Instructions]

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. To conclude, I would like to briefly outline how I view the coming months and my approach. My first 100 days as CEO are centered around 3 priorities. First, building a deep fact-based understanding of the business and strengthening relationships across the organization and with key external stakeholders. Second, working closely with the management team and the Board to sharpen priorities and ensure alignment. Third, establishing the structure, pace and accountability required to support disciplined organic growth and efficient organization and over time, selective inorganic opportunities.

C-RAD has a clear strategic direction, a relevant product offering and a strong position in a growing market. Our task now is execution, reducing complexity where appropriate, strengthening ownership and ensuring that we consistently deliver on our commitments. I approach this role with humility, energy and ambition. Humility in respect of the complexity of the business and the work already done. Energy to engage fully with the organization, our customers and our partners. And ambition to help C-RAD realize its full potential. As an ending note, I really would like to thank our global team, customers, partners and shareholders for your continued support. I look forward to working together as we take the next steps in C-RAD's development. Thank you for joining us today. We look forward to sharing our initial 100-day observations and reporting our Q1 2026 results on May 6. Take care.

Welcome to the C-RAD Q3 2025 Report Presentation. [Operator Instructions]

Now I will hand the conference over to CFO and Acting CEO, Linda Frölén; and Deputy CEO, Johan Danielsson. Please go ahead.

Thank you, and welcome to our Q3 presentation. This time, the presentation will be somewhat different compared to what you have seen before. The agenda will be key takeaways from the quarter, followed by some comments on the regional performance. After that, Johan will present the service business, and then we will conclude with the financials.

And with that short introduction, let's look into the takeaway Q3. The performance in the quarter varied across regions. Order intake grew 11% and revenue grew 16% in constant currencies. The increase in both order intake and revenue were driven by the performance in EMEA together with our services business. We saw a positive EBIT development and the operating margin increased to 19% in the quarter. Important drivers behind the increase are favorable market mix, coupled with a strong contribution from services, which Johan will talk more about in just a minute. And we also have some onetime adjustments affecting our cost of goods, which will be explained in the financial section. As you know, cash has been a focus area, and we had a strong operating cash flow in the quarter, which amounted to SEK 24 million.

And with that, let's look into the regional performance. Starting off with the Americas. Both order intake and revenue declined. Order intake was down 40% and revenue followed with a 15% drop. This reflects market uncertainty and slower decision-making, and we are not satisfied with the performance in the quarter.

Moving over to EMEA, which clearly stands out, showing continued good momentum. Order intake increased by 112% and revenue grew 52%. Our position in Central Eastern Europe was further strengthened by the SEK 10 million Czech Republic multisite product and services contract. Finally, in APAC, a region with strong comparison figures for '24, order intake declined 16% and revenue had a 3% decline. The lower order intake was mainly related to Japan and Hong Kong, while other markets in the region were more stable.

And with that, I will hand over to Johan for a closer look at services.

Thank you, Linda. So we want to take this opportunity to speak more in detail about services compared to what we have done before as it is a key offering, and we are very focused on growing this part of the business.

So as you can see here on the figures and on this slide, our results demonstrate a continuously growing service business with increasing revenues from service contracts over the last 2.5-year period. The figure on the left shows the quarterly service percentage of C-RAD total revenues, again, increasing trend over the years. And on the right-hand side, you have a rolling 12-month service revenue contribution, which in this quarter generates about SEK 90 million plus. And as mentioned before, our contracts are typically in the range of 3 to 5 years and renewed on expiration unless systems are upgraded into latest generation of technology.

With that said, we can move to the next slide, where to give you a better view of what we deem as services. So the mission of scope for global services is that once a commercial agreement is made with the customer and we have confirmed the order, the service organization takes on the project management and supervise order fulfillment process, including technical installation of the products in the customer clinics, but we also perform application training for the end users so that they are able to actively use and apply the system to their patients.

So we have taken over the last 2 years to optimize both phases, both the technical installation part, but also the application training part to reduce the time we need in the field to complete an installation and finally perform an acceptance test, which is the final system handover to the customer and also the start of the warranty period. The application training in itself, we have revamped over the last year to provide much level access of -- and to our technical trainers and our clinical specialists so that the customers really become very enabled and long-term successful in their use of our systems.

So that said, one key driver for the business and for the customer success is to have long-term service contracts. So if we go forward, this gives you an overview of the services life cycle. So as mentioned before, once the acceptance test is and system is hand over, the warranty period starts and then it is followed typically by a 3- to 5-year contract. And we have multiple options here for the different customer demands and needs, what is included in each contract. But typically, we supply a premium contract, which has a very extensive coverage in both technical and clinical support.

Once these contracts expire, then the contracts are normally renewed unless the systems are upgraded to the latest generation technology. And if that happens, obviously, the warranty period starts all over with the service contract and renewal phase following. So this is the general life cycle, and this is how the business is running over a typical contract period. And in the end, we want our customers to be very enabled and also very successful able to share their knowledge with their peers in the industry.

Thank you, Johan. So I will now take you through some of the main financials for our third quarter with focus on gross margin, cost levels, earnings and cash flow. Gross profit for the quarter was SEK 83 million compared to SEK 73 million a year ago. The gross margin for the quarter was 74% versus 73% last year. The margin in this quarter is considered to be temporarily high. The increase year-on-year is explained by the higher share of service revenue in the quarter and a favorable market mix. The gross margin was also affected by positive onetime adjustments primarily related to repayments of license fees in the cost of goods. Our assessment is that the underlying gross margin for the quarter is in the high 60s compared to 67% in the previous quarter, meaning Q2 of this year. We had no proton revenues in the quarter, which we did have in the third quarter of last year.

Looking at our main operating expenses, you see to the left of the chart that they increased 12% year-on-year from SEK 54 million last year to SEK 60 million in this quarter. The increase in year-on-year OpEx is mainly due to 2 factors. The first one is the ASTRO Congress, which took place in Q3 this year, but Q4 last year. And we also lowered our full year bonus provision in Q3 last year. To the right of the slide, you see that quarter-on-quarter OpEx is down from SEK 61 million in Q2 to SEK 60 million in this quarter. The decrease is related to lower personnel expenses in the quarter due to summer holidays, which were partly offset by higher costs for marketing, meaning ASTRO.

We are monitoring our cost levels closely, and we are happy to see that our efficiency measures are showing results. Our yearly OpEx levels are down by SEK 25 million from the peak in Q3 last year, and we have now reached a more stable level. Worth noting regarding the higher figure in this quarter is, as I already mentioned regarding ASTRO, that it includes costs from 2 conferences, both Q4 of last year and Q3 of this year. EBIT for the third quarter was SEK 21 million compared to SEK 17 million a year ago. The increase in EBIT for this quarter is explained by several factors pointing in the right direction. We have higher revenue, higher gross margin and stable operating expenses. I can also mention that unrealized currency effects in this quarter were only minor. And as I said last quarter, our increased focus on smart spending is moving us in the right direction.

Looking back a few quarters, C-RAD shows continuous improved earnings and an increased profitability over time. With this development as a foundation, we are well equipped to continue to grow as we believe we can increase the EBIT margin even more over time according to our medium-term financial targets, even if we may have short-term deviations. Our cash balances increased by SEK 15 million during the quarter and stood at SEK 173 million at quarter end compared to SEK 158 million at the beginning of the quarter. Cash flow from working capital was flat in the quarter, which is a great improvement from last year when it was SEK 37 million negative. Total operating cash flow was with this improvement, SEK 24 million positive compared to negative SEK 17 million last year.

A few orders on our balance sheet that have been awaiting final acceptance tests have been paid during the quarter and many have also been invoiced after completed acceptance tests. Some of these are expected to be paid during Q4. I would also like to remind you that C-RAD is a company with a strong balance sheet with no long-term debt. And as you know, we communicated yesterday that the Board have decided on a share repurchase program in order to optimize C-RAD's capital structure.

So the next steps. As you also know, we have communicated management changes, and we now have a smaller executive management team to complement C-RAD's current leadership team. This smaller group consists of Johan and myself, but also Peter Simonsbacka, who is a Board member and previously had the position as Chief Commercial Officer at AddLife. I would like also to remind you of our strategy. This newly formed executive management team will, as stated in the press release, focus on accelerating the level of activity supporting our strategy and our financial targets. Meaning, increased sales growth, focus on product innovation and growing the service offering.

And with that, over to the moderator for the Q&A session.

[Operator Instructions] The next question comes from Christian Lee from Pareto Securities.

Linda, you mentioned that the gross margin adjusted for the one-off items would have been high 60s. And you also mentioned that you had 67% in Q2. So does this imply that the adjusted gross margin in the third quarter was higher than what you had in Q2?

Yes.

Okay. And your overall ambition is to grow faster than the market. And could you please clarify which specific market you are referring to? And given that the product order intake has declined year-over-year for 6 consecutive quarters, do you still believe that the 10% growth in 2026 is achievable?

We are working towards the external targets that we have communicated. The details in your questions, it's still early days for Johan and me in this new team formation. So we would like to come back to that one.

Okay. Fair enough. The U.S. market appears to be constrained due to limited budgets for capital equipment. Could you please provide an update on your retrofit strategy and traction to date in this environment?

Can you repeat? I didn't hear the first part of the question.

Yes. I mean the constrained budgets is limiting the investments in capital equipment in the U.S., obviously. So could you please provide an update on your retrofit strategy? Given that your solutions is accounting for around 5% of total registered therapy equipment investments. So my question is basically, why do the budget constraints create meaningful headwinds in your offering?

But I would say this is also something that might be a bit early for me and Johan to answer. But I would say that mainly it's creating uncertainties on how much money the clinics have to have in their pockets, so to say. And that creates -- that uncertainty means that the decision takes more time.

But does this also affect the retrofit strategy?

I wouldn't say so.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you all for listening to our Q3 presentation. And Johan and I both wish you all a very nice day.