Dynavox Group Aktie

All right. Good morning. It's 9:00. Welcome to this earnings call where we will cover the second quarter in 2026, summarizing our business in April, May and June. And I am Fredrik Ruben. I'm the CEO of Dynavox Group.

Hello. I'm Linda Tybring, and I'm the CFO of Dynavox Group, and I will cover the financials in more detail.

Great. So for those of you who have participated in these calls before, you will be familiar with that we will start with a quick recap about what Dynavox Group does. Then we will summarize the main takeaways from the quarter.

Linda will, as she said, dive deeper into the financials, and we'll thereafter have a Q&A session. And you can submit questions during the Q&A session in the Q&A function in Teams or you can ask them live by raising your hand in teams and unmute yourself and then we invite you to speak. And we, of course, always welcome offline questions sent by e-mail to the above e-mail address, which is [email protected].

But let's start with a brief overview of Dynavox Group. So first and most important is to reiterate our mission and our vision, which I know is very dear not only to our now over 1,000 colleagues around the world, but also to our ecosystem of partners and investors. And our vision is a world where everyone can communicate.

And we will contribute to this via focusing on our mission, which reads that we will -- We are empowering people with disabilities to do what they once did or never thought possible. And this also summarizes 2 of our main user stories. The first one, the do what you once did, that may be the person who led a normal life until a diagnosis such as ALS, which rendered her unable to control the body or communicate like before.

And the other one, the never thought possible that can refer to the child diagnosed at a very early age with a condition such as autism or cerebral palsy, where thanks to our solutions, she can do much more than the world around her ever thought possible. And on the picture here to the right, you see Linea, a 12-year-old girl from Gothenburg in Sweden. She was diagnosed with cerebral palsy, and she is a great example of this. And some may know that Linea was the keynote speaker at the Women in Tech Conference here in Stockholm earlier this spring with our colleague, Grit. And thanks to our solutions, she was able to fulfill one of her dreams was to give a lecture about assisted communication in front of thousands of people. And Linea has been a user of our products since she was about 2 years old.

The market that we serve is hugely underserved. Some 50 million people have a condition so grave, they simply cannot communicate unless they have a solution like ours. And every year, about 2 million people are being diagnosed, and yet we estimate that only some 2% of those are actually being helped and the rest literally remain silent. And the main reason for this spells lack of awareness, also among the professionals and the prescribers that are tasked to assist these users, combined with a poor health care reimbursement system. We operate with a global footprint.

Today, almost 3/4 of our business stands out of the U.S., largely because of a reasonably well-functioning funding system established some 20, 30 years ago. Our comprehensive solutions are sold in more than 65 markets around the world, of which 12 are markets where we sell directly, while the others are served by a network of some 100-plus reseller partners.

Our own staff is distributed in a similar way as the revenue, meaning some 50% of our staff are based in North America with our U.S. headquarters in Pittsburgh in Pennsylvania. And our second largest office is our headquarter here in Stockholm, but we have branch offices in several European countries as well as in Suzhou, China, Adelaide, Australia.

And as of today, we are a little bit more than 1,000 employees in total. We provide what we refer to as a comprehensive portfolio of solutions, and they range from the content and the language system such as the world's leading library of communication symbols, they're called PCS symbols and a leading solution for off-the-shelf or custom-made synthetic voices of the highest quality with a large diversity in terms of languages, ages, ethnicities and so forth.

Moving on, we also make highly sophisticated communication software that is then tailored to the type of user, which can vary greatly based on the needs of him or her. We develop and design devices, hardware with cutting-edge technology and medically certified durability, including communication aids that can be controlled via eye tracking, but also accessories such as the Rehadapt mounts. We have a services portfolio to help our users through the complexity of obtaining and getting funding for their solution. And last but not least, we are there to help our users, the therapists, the caregivers and everyone through our global teams of support resources.

We operate this model on globally, and it's important to note that each piece in this is critically important and also a significant differentiator for us, making us absolutely unique. Our go-to-market model is predominantly as prescribed aids. That means some 90% of our revenue comes from either public or private insurance providers. But this also means that we have solid paying customers, but also have been resilient towards changes in the overall economic climate.

But now we will go back to focusing on the main topic of today, namely our earnings report for the second quarter 2026.

If we look at the highlights, we delivered a solid year-on-year revenue growth in the second quarter. Revenue grew globally by 16% after adjusting for currency effect compared to the same quarter last year. And if we recall, last year's growth was an exceptional 38%. The demand for our solutions remains high, proving the solidity of our underlying business. And we see a robust underlying growth across all markets where we operate.

The revenue in North America benefited partly from delayed orders from Q1. However, this positive effect was offset by what we see as overall longer prescription processes compared to before. So the consequence of that is that it leads to longer handling times, but there's not less opportunity out there, and there is no deteriorated policies or reimbursement, just longer lead times.

And in the light of that, it is reassuring that the operating profit more than doubled compared with the same quarter last year and came in at SEK 105 million, a 137% increase to be precise.

The global rollout of our new ERP system that has been long in the making is now successfully concluded for all our main legal entities. In Europe, we continue to strengthen our local presence and our commercial execution. And on April 1, we completed the acquisition of our Italian reselling partner, SR Labs Healthcare, and we welcomed new colleagues to the team.

A new health economic study focusing on the U.S. was released, and that shows that high-tech assisted communication solutions like ours significantly improves quality of life for people with disabilities while delivering clear economic benefits to society.

In summary, quality of life for users improves by 65% and pays for itself more than 3x over. And this study confirms what previous has also been seen in similar studies conducted in Sweden and in Germany. During the quarter, we filed a lawsuit in the U.S. against AbelNet. Our objective here is to protect our intellectual property and to address alleged practices that, in our view, risks confusion around delivery, support and reimbursement of assisted communication technology.

And then last but not least, we announced in the quarter that Jacob Thordenberg has been appointed the new CFO for Dynavox Group, and Jacob will join in September this year. Linda, who you will meet soon, will remain in her role until Jacob joins and will then be available until January 2027, the latest, to ensure smooth handover and support his onboarding.

So now I hand over to Linda to make -- take us deeper into the financials.

Thank you, Fredrik. Let's take a closer look at Q2 financials. Revenue for the second quarter came in at SEK 670 million, a 16% year-on-year growth after adjusting for currency effects. Recent acquisitions contributed with 4% and the organic growth was 13%. Currency fluctuations had 5% negative impact on revenue.

Sales continue to grow across all markets. In North America, as Fredrik already mentioned, we recovered part of the delayed orders from the first quarter. However, the positive effect was offset by overall more drawn out prescription processes compared to before. This is partly driven by a higher number of users changing insurance provider at the beginning of the year, resulting in additional administration, and we continue to navigate the complexity and bureaucracy of reimbursement processes, which remain a recurring feature of our markets and a headwind during the quarter.

The gross margin ended up at 70%, an increase of 2.6 percentage points. Gross margin benefited from favorable currency effect of close to 1 percentage point and lower freight costs. This was partly offset by higher component costs. EBIT increased by 137% to SEK 105 million, corresponding to an operating margin of 15.7%. Currency adjusted EBIT growth was 145%.

Our OpEx increased by 5% organically. The OpEx increase relates mainly to continued investments in sales and marketing staff, but also within our IT organization. During the quarter, we continued to invest in our systems and tools, including our new ERP platform to strengthen scalability. And now we have successfully rolled out the new ERP in all our main legal entities.

These nonrecurring investments totaled to SEK 6 million, a decrease of SEK 12 million year-on-year. Acquisitions contributed with SEK 17 million increase of operating expenses versus prior year. We saw a decline of our long-term incentive program cost of SEK 12 million year-on-year, driven by the share price development.

Costs for research and development after capitalization and amortization decreased by SEK 17 million compared to the same quarter last year, mainly driven by higher costs in prior year related to the organizational restructuring. Higher capitalization related to launch of new product and lower amortization contributed further.

If we look at the basic earnings per share, it totaled to SEK 0.7 per share to be compared to last year's SEK 0.27 per share, which is a 150% improvement. For the quarter, cash flow after continuous investment was positive with SEK 67 million. It's encouraging to see that our work on improving processes and operations have had a positive impact on cash flow compared to last year.

We also paid a dividend of SEK 53 million during the quarter to our shareholders. Cash at hand by the end of the quarter was SEK 223 million, and net debt was SEK 882 million. The total unused credit facility at the end of the quarter was SEK 300 million. The net debt over last 12 months EBITDA was 1.6x. So Fredrik, back to you to conclude today's earnings call.

All right. Great. Thank you, Linda. So to summarize before opening up for questions, I'd like to reiterate some of the main takeaways and bring further nuance to our performance and our outlook. We continue our strong growth trajectory, a trend that started early spring of 2022, so almost 4 years ago.

We grew revenue by 16% adjusted for currency, and that should be seen in the light of a 30% -- 38% growth in the comparable quarter last year, making the comps quite challenging, and yet we beat that with quite a margin. Sales continued to grow in the quarter across all our markets. In North America, we benefited from deferred orders from Q1, but that was counted by overall longer prescription lead times.

This slows down handling times and delays revenue, but it does not deteriorate reimbursement or long-term opportunity. And these types of complexities are quite well-known characteristics of the market in which we operate. Our profitability improved notably, reflecting strong operating leverage while the prior investment-related costs continued to taper off.

And all in all, our EBIT improved by 137%. Not only was the reported earnings encouraging, we delivered a strong cash flow, further underscoring the improved operational efficiency, which we have put a lot of energy into and cash flow after continuous investment increased by 167%. We continue to expand our direct market presence by closing the acquisition of our Italian reseller partner, SR Labs Healthcare. We continue to monitor all macroeconomic and policy changes development closely.

But as of today, there have been no changes, or alternations to reimbursement or governing laws, but we, of course, see increasing administration and prescription timelines. And while currency effects and the broader macroeconomic environment can create volatility, we are well positioned to continue to deliver on long-term sustainable growth in what we see as a severely underpenetrated market while advancing our mission to provide life-changing solutions to those who need them the most.

We reiterate our long-term financial targets when it comes to growth to, on average, grow revenue by 20% per year adjusted for currency effects, including contributions from acquisitions.

In local currencies, the second quarter this year's growth was 16%, which means we continue on the growth trajectory, but also in the light of last year's exceptional growth. And the market that we serve remains hugely underserved, but also quite immature. And with the example of growth levers such as sales team expansion, adding direct markets and operational excellence, we continue to build on our growth journey and remain confident in our ability to continue delivering on our ambitious plans.

If we move over to profitability to -- where the goal is to deliver an annual EBIT margin that reaches and exceeds 15% -- we feel that we have proven to build strong growth with incremental improvement in profitability. We need to continue to invest in future growth with improvements in scale, which we have. And the recipe is rather simple, continued revenue growth, high and stable gross margins and total operating expenses that increases at a lower pace than revenue growth.

And as a consequence, we see good opportunity to further leverage how revenue growth translates to reaching and exceeding a full year EBIT margin of 15%. And this quarter is a clear evidence of our ability to deliver on this.

And then on dividends, we have an attractive cash flow profile. And given the growth opportunities, we, of course, need to maintain a capital structure that enables strategic flexibility to pursue growth investment, and that, of course, includes acquisitions.

But it's still expected to, over time, generate excess cash and our policy is, therefore, to distribute at least 40% of the available net profits to our shareholders via dividends or share repurchases or similar programs when so allows and when we deem that it's the right prioritization. And 2026 was the first year where we started to pay dividends and given our ability to translate revenue into cash flow, as was also proven in this quarter, we remain confident in our ability to deliver on this target too going forward.

Okey-dokey, with that said, we are inviting our Corporate Communications Director, Elisabeth Manzi, who will help to moderate and enable us to take questions from you.

Yes. Thank you so much, Fredrik. And we do have a couple of people who have raised their hands.

[Operator Instructions]

So first one out is Daniel Djurberg.

[Operator Instructions]

Daniel?

Congrats to solid numbers, good cash flow and gross margin, et cetera. My first question would be a little bit on this comment on the reimbursement, longer times and so on. And Linda, you talked about -- but should we expect this to ease off anything or get worst? Or is it like Linda said that it's mostly when they are changing financing that this occur? Just some more insights?

I can give some more practical flavor of what this actually means in practice. So now we're more or less only talking about the U.S. So at the beginning of every new year, that's when people change insurance providers. And we see that there is a slight increase for whichever reason this year. When you change insurance providers, it's quite often so that you also have to change therapist because your former therapist was maybe associated with a different payer and now since you shifted payer, you will have a new therapist.

And as you can then maybe understand, the lead times increase. I'm not saying that you start from scratch, but there is a little bit of a rework. This is one explanatory factor of why we see that it's not like the reimbursement is taking longer. It's the entire prescription time line that we notably see is longer this year than before.

I would say that the trend or this function is not new to us. We're quite used to handling this, but it is longer. To say -- to give some sort of outlook on when this will taper off or how fast things will go, I cannot tell.

We hear anecdotally that waiting times to get an appointment with a new prescriber or therapist, speech language pathologists, for example, in the U.S. are quite long. So it's we hear 30 or 90 days wait until you can get an appointment. And of course, if you start from 0, that will take longer time. But that is the practical consequence, but it's hard to tell exactly when or if it will taper off. But there is no fundamental change to neither number of users or reimbursement.

So in a full, it will be annualized at least Q2 '27 given that the longer the impact you saw.

Your guess is as good as mine here.

Yes, I would see. May I ask you about the cost for the AbelNet lawsuit in Q2 and also go ahead, if we should expect this to be a substantial amount in the OpEx side here. And if you will comment on that as an NRI or not?

It's not substantial at all. It will be a small part of our OpEx.

That's good to know.

I think what we said in some prior calls, this should not influence our long-term guidance. This is within, like Linda said, within our financial envelope.

Super. And now when you see net debt coming down here to 1.6x rolling EBITDA, any comments on M&A and what you have thinking there because the 20% growth target is, I guess, with some minor M&A as well included.

Yes. I still think it should be seen that our play is largely organic. We sometimes use the word that M&A is sprinkling on the cake. If you look historically, it's been low single-digit percentage points of our growth that has been related to M&A.

Also, when you make the types of acquisitions that we have made more recently, meaning that we buy our own resellers or distributors, the addition is actually quite small because in actual -- in currency or in money, the only difference when you buy a reseller is the difference from what we sold to that reseller and what that reseller sold to the market. So M&A is not a fundamental part of our kind of overall growth story. It is organic.

Perfect. And finally, I just want to thank you, Linda, so much for a great work done and good collaboration and the best wishes ahead. Have a great summer, both of you.

Yes. Thank you so much, Daniel. It's been a pleasure.

Thank you, Daniel. And we will now invite Filip Wetterqvist to ask questions.

Filip you might want to turn on your sound?

There we go. And there we have the camera as well. Perfect. All right. Just coming back on the prescription lead times. I assume this was an effect you saw in Q1 as well. I mean you talked a lot about the weather being a big effect in Q1, but I would assume this is an effect as well looking back at that quarter.

Correct. And not to kind of say an excuse, it is sometimes difficult for us to understand why a certain therapist's meeting with the user was delayed or deferred. Whether it was weather, whether it was a new therapy since we are not part of that part of the journey. But you're absolutely right.

There could have been some effects. That being said, when we interviewed both our own reps and prescribers in the market, the weather effect that we experienced in Q1 was quite extraordinary and was definitely a big contributing factor.

But should we view this as more like revenue as being deferred and not lost with these like longer lead times?

Yes. But it wouldn't be right of us to kind of try to quantify the time line for that. But since there are -- again, if you just look objectively, there is no changes to reimbursement. The laws haven't changed. There is obviously no less prescribers and no less users. This should be caught up eventually.

Yes. And then you talked in the Q1 presentation about March being back to historic growth levels, which I assume is 20% to 30% and then we see a slower growth than that here in Q2. So can we then assume that March was just like it picked up because of the lost revenue in January and February, so you got that in March. So it was an effect of that or...

I don't have an exact number, but you're probably right. There's an element of what was lost due to weather or what was lost due to changes in insurance coverage also in March because as you noted, we did see a strong momentum in March and kind of that -- I mean, we do have a slight increase in growth Q2 versus Q1, even though it's merely 1 percentage point, but there are such fluctuations.

We have -- I mean, if you recall, we have a fairly clear seasonality pattern. Q1 is our weakest, Q2 slightly better, Q3 slightly better and Q4 slightly better. Interestingly enough, we have within each quarter also a similar trend where the first month of the quarter is typically more shaky or weaker and then you have a little bit more of a push through at the end of the quarter.

And then you reiterated in the report your growth, 20% FX-adjusted growth target. Do you see that as still possible for '26, given that we are some 5 percentage points below in H1? Or do you more view it as a long-term target?

I think we should read it exactly how it's spelled out that it's a long term and that it's on average per year. We didn't say that every year or every quarter or shorter periods. That being said, we remain confident because if you go up in the helicopter a little bit, looking at the market, what we offer, how we do it to be able to deliver an annual growth of 20% is something we feel that we both have the capability and the demand is out there.

And then just one last quarter -- one last question. The number of employees increased quite a lot this quarter, about 5% quarter-over-quarter or 50 people. Do you expect to keep this hiring pace throughout the year? Or should we expect it to slow? Or how should we look at that?

Linda, you may want to answer that.

Yes. I think you should remember that we also acquired a company in the quarter as well. So that kind of brings additional people into it. So I think that's the explanation.

Other than that, the main focus areas where we add headcount is within our market-facing roles, so reps out in the field, et cetera. We expect that specifically given the investment in organization and back-end system that the rest of the organization, if you will, should scale much better.

Thank you, Filip. And next in line is Jakob Lembke.

My first question is, I guess I'm repeating the other ones, but on this drawn out prescription processes, I just want to be clear and understand that is this something that has increased compared to Q1? And also if that means then that the growth for Q2 is lower than what you ended Q1 with in March, which you said was strong.

That's a very good question. If I can dare to answer that question on gut feeling, I think you are all right. I mean we do see that the reimbursement processes have been drawn out. There is definitely so that for the people who did not change insurance provider that had their processes started, say, November or December, of course, there was no change to that.

But when you have a larger population changing insurance prescriber -- provider and then adding to that you also change therapist, I would say it's likely to say that it was longer in Q2 than it was at least before. And whether that was exclusively in Q1 or not, I don't know.

I also want to reiterate what I think I answered before is that the funding process, the process for once you say -- once the prescriber says, yes, this patient is suitable for one of the products until he or she actually receives it. That process hasn't slowed down. It's more on kind of what happens before that, that has been slower, which is also slightly more outside of our control, to be fair.

Okay. Then I'm also wondering if you have any sense of how much of the weather-related deferred sales that were recouped in the quarter and how much is left to recoup?

No.

Okay. Then I'm moving on to a question on your thoughts on, I guess, investments in sales and marketing. I guess last year, you probably took a quite a big leap in the sort of sales efficiency in the U.S.

But given the slower growth here in Q1 or in H1, I guess that has taken a step back now. So given this, I'm just wondering on your thoughts in continuing to recruit for sales and marketing. It seems like you're continuing to recruit quite fast.

We are. And then we should also know that it's not like we -- the hiring process is exactly even across the year. If we look back at last year, we did add a fairly significant amount of reps during the end of last year.

And of course, that means that those new people are not fully up to speed yet. They're not kind of up and running. And we should probably start to see efficiencies from that happening pretty much now, if you will.

But other than that, our recipe hasn't changed that the best way for us to educate and build the market is by having more people typically with a clinical background themselves, but they represent us, work for us out in the market. And so far, we see that -- what do you say, Linda, what is the average kind of how long does it take to have a rep be up and running?

Yes, we said that it's about 6 months until they are profitable. And after 12 months, they need to perform according to the set KPIs that we have.

But we see no shift in that. So -- but that -- now we're looking at kind of a global level. We are quite detailed on this. We analyze every region, every state, every market where we see that is there incremental benefit of splitting territories and adding more reps? Or should we kind of pause for now? And that's something we do on a daily basis.

Okay. And if I may follow up, given that you have recruited quite a lot of sort of salespeople here in recent quarters, do you expect to see a benefit to growth from this in the second half of the year?

Absolutely. Otherwise, we wouldn't do it.

Good. Then on the gross margin, which is quite strong here in Q2. Well, first of all, do you think that this is a level you can remain at going forward? And also, yes, if you think you will have any material impact from the price increases that Apple announced here during the quarter?

Yes. I think -- I mean, first of all, we had a positive impact on FX this quarter, almost 1 percentage point, which we cannot account for in the coming quarters.

We are seeing increase both on other components and the iPad or Apple cost. We think from a rolling 12 perspective, it's slightly below 1 percentage point going forward that we might have impact on gross margin.

Good. And then finally, I have a question. I've heard some reports that your competitors -- or you have a competitor that's being favored because they are able to get their devices out faster to the users. And I guess the question is just if you are agreeing with this and also if you have any plans to mitigate this?

This is a big topic. And I think this is partly associated with the lawsuit that we issued earlier in the year. And our focus is to, a, of course, make sure that the therapists and the prescribers that work with our patients are competent in doing what they do, that the products that we deliver are of the highest possible quality, both in terms of kind of actual quality and also how they function, ensuring that the users are successful.

And then, of course, that everything is done with a minimum of delay. We can always become better. I do see, however, that reimbursement systems are very complex material to handle and making sure that you stay within the boundaries of what is legal, what is according to the policies is critically important if you want to maintain a high-quality business.

So we believe that we can probably do things better. But when we see that there are players who take shortcuts, of course, we should see is this something we can improve on? Or is there other reasons? And I think this is actually related to the lawsuit that was announced. There is more material and quite good infographics on our website that you can click on in the press release related to the -- and then you can get more flavor on that, why this is not a super simple topic to answer. But we want to make sure that we are top notch.

And if I may follow up then on the lawsuit, what's the feedback been from users and also the therapists from the lawsuit?

I don't know. I think it is probably all over the place. This is a market with extremely high ethical and moral standards. Almost everyone that works in this space do it because they want to make a difference.

They want to make an improvement to the users and the families around them. I think doing things right is a fundamental part of how everybody in this space want to operate. And that is also the majority of the feedback that we're hearing on making sure that we also do things right also legally and procedurally.

And supporting the customers is very important for us.

Yes.

Thank you, Jakob. We do have a question from the audience in the chat as well. So from someone who hasn't posted the name, but education is your bread and butter in many ways. Can I get an estimate on how many clinicians you train every -- each year and how many sessions you conduct annually? How does that compare historically, for example, 5 years ago?

Okay. I cannot give exact numbers, but I can describe the process and also how we operate. So the model, which we -- that was a strategy, I think we implemented in 2017 or so. So that's more than 5 years ago, was minted training is the new selling, which means that our salespeople, if you will, they are not salespeople in the sense that they go up and kind of close orders.

They are typically almost exclusively clinicians themselves who have been operating for many, many years with the patient groups. And now rather than working with individual patients, they work to educate the prescribers who in their turn work with patients.

This means that the only thing our field reps do is to be out there and educate. That's what they fill 5 workdays a week with along with, of course, supporting. And we have, over the past couple of years, increased our field sales staff by, what you say, Linda, 20% or so annually?

Yes.

Which, of course, means if you have 20% more feet on the ground and they're continuing to train more, that's probably a number. In addition to that, e-learning, all types of new technologies, how we can conduct training without necessarily sitting in a car, driving for hours, et cetera, but getting scale for that has obviously improved. So the -- in real terms, number of prescribers touched every year, et cetera, is growing even faster than that. But that's what we do. answered to some degree.

I think it did. We will bring in someone who has raised their hand. So Nikola Kalanoski. If you are still on the call and would you like to unmute?

Just curious on a few things from my end. I thought maybe I would just.. follow up for a clarification on one of the previous questions. And I think in particular, one on component costs and those relating to memory-related price hikes from the likes of Apple and so on. Did I understand correctly that you now expect about a 1 percentage point impact on the margin rather than the previous tens of basis points estimate impact from such hikes? Or am I mixing it up with the FX impact on the gross margin?

Yes. I think -- no, you're right. The outlook is that we think that slightly below 1 percentage point will have an impact on the gross margin if we look kind of the coming 12 months perspective. It will come gradually over the period.

I can though maybe add some flavor. As we grow, we also continue to scale, which means that part of the tailwind we had in this quarter is that freight costs are going down. So it's not like saying that we automatically all things alike will get a 1 percentage point kind of headwind from that.

There are other things how our operations scale and potentially. There is also, if you look at a slightly longer perspective, our aim is, of course, to make sure that this is also offset by improved increases in reimbursement in markets where we control pricing, of course, making sure that, that is reflected there. But in absolute terms, if you just kind of look isolated on component costs, then of course, that calculation that was just mentioned is correct.

Yes. And I guess maybe if I follow up on that comment, I guess it's relating to the pricing power. In which markets do you get the most -- maybe sympathy is the wrong word, but where are you able to get compensated with price increases from your end when you're being pressured, which kinds of markets are you able to then compensate with price increases?

Good question. We should go back to looking at kind of where our revenue comes from. We have more than 70% or 75% of our revenue stemming out of the U.S. The U.S. is not one country. U.S. is 50 states, several hundreds of various payers. The payer that in the U.S. that sets kind of the -- what's referred to as the allowable or the reimbursement amount is Medicare.

And Medicare updates their pricing schemes every year, typically December-ish or so. And historically, they've always been related to some KPI, cost inflation, et cetera.

And of course, similar to gasoline or whatnot, component prices is in that, too. But it's less in our control and we kind of more follow. Whereas if you look at Europe, currently representing, what, 19% of our total revenue, there is more of a mixed bag of tender markets where the prices are set for 1 or 2 years versus markets where we simply -- we send out the price list.

Yes. Okay. That's I think, in line with some of the market expectations. And then maybe if we go into Europe, I think you wrote in the CEO commentary here something along the lines of there being a full underlying momentum not yet being visible in the financials. Is that something related to the ERP transition? Or does it also refer to something else in terms of business momentum?

It's much more basic. So first of all, if you just look at -- we've now had our reseller partner in Italy in our company for 3 months, the one in Germany for 9 months or so.

So this is also an integration project and has largely to do with humans. But there is also an element of prior to owning them, we sold to their inventory. And exactly if they had a good month or a bad month, we couldn't tell because we sold to the inventory and then they sold from their inventory.

Now that middle layer, that buffer, if you will, is going away. And hence, doing direct comparisons year-to-year is not entirely correct. Hence, I don't like gut feeling, but our gut feeling currently, specifically, if I talk, for example, in Germany, is that the underlying momentum and demand is very encouraging, and we should see that kind of normalize over time and then obviously also shown in our P&L. I don't know if you want to add something there, Linda?

No. And I think that when you look at our revenue, you should look at FX adjusted revenue, and that's 26% in the quarter. I think that's important because it's such a mix of how the business has looked historically versus now.

Yes, that makes a ton of sense. That's great. And then just a final one for me. This is a very basic one. In the U.S., one of your key drivers that we talk about is how many new solutions consultants are you hiring and that improves your density and so on and the efficacy per person. Should we think about it the same way for other markets in Europe like Germany, let's say, -- or should we also consider something else that is unique for European markets compared to the U.S. market?

The model is the same, but all European markets in Germany included is more immature. The density is lower. It's more of a -- we probably have an even higher task to educate the basic basics, et cetera. U.S. has a longer tradition, more sophisticated, a little bit maybe more clear legal support. But other than that, the model is the same.

And we will invite Mikael Laséen then to ask your question. We are running a little long time. So if you can be quite quick on joining. We will have time. Yes. Good. I can see you there, Mikael.

We can't hear you, Mikael. There's some mute button somewhere that needs to be clicked.

Can you hear me now?

Yes.

Okay. I want to follow up on the prescription process. Is it possible to quantify the effect? And also where you see the effect, if it's broad-based across the U.S., for example, different types of end users, different -- all types of insurance or funding sources, if you can be a bit more specific how this works.

We can't quantify it on totality. But as you know, there are fairly big discrepancies between different states and different payers. And this is not unusual. So that has almost always been the case.

So the discrepancy is quite large between certain states and certain months. So one state that could be slow because of a hiccup or because someone is trying to implement something might actually be reversed the following quarter, et cetera. But I don't have a kind of a bigger number or more gross number to share. Linda, I don't know if you have any?

No, I don't have anything else.

And it's also, like I said in the previous question that it's not the reimbursement process per se. It's actually what happens before the prescription has even been submitted.

Okay. So does that mean that you see the incoming requests sort of have slowed a bit. And when they come into your process, then it takes the same amount of time as before and the rejections are the same.

We don't see -- we don't see that incoming orders are slowing down. But the question is, since incoming means that our rep has been there, we have flagged that specific case. That process hasn't slowed down. It's what we have seen prior to that.

So new prescriber, new therapist is meeting a new patient. They're starting the assessment. A, will you benefit from a communication aid, B, if so, which communication aid and so forth. It's that part of the process that we believe is taking longer. But once they've actually come to us, to your point, we don't see that the reimbursement process is taking longer, and we don't see that denials or so is -- percentage-wise going up.

Okay. So the insurance companies, for example, are not rejecting or taking longer time to evaluate and make a decision about the remuneration that you will get.

Not on average.

Okay. Okay. Good. And I just want to double check as well. We have heard that CMS, for example, has in Q1, made some comments about making the reimbursement processes much more, well, thorough and higher quality. Has that impacted the market dynamics in any way here short term?

No. But it's actually music to our ears because we believe that making sure that there are no room for shortcut, there is deep scrutiny and that there are no attempt to kind of fuel the system. That's exactly what we -- that's what we want to stand behind. So there's an element of that, that also kind of ensures that there's high-quality players in the game.

Okay. And another thing here, topic in the market, I think, during the second quarter, the Wall Street Journal had a series of articles about autism and created quite a lot of questions around the entire process. Can you comment on this and what's your view? And how is this maybe changing or not changing the market dynamics? You mentioned that you haven't seen any fundamental changes, but could it delay any processes in the market have maybe indirect effects in any way?

No. And I think what that specific article or whatever is related to therapy of users, which is a different space, a different reimbursement, funding code, et cetera, than durable medical equipment that we provide.

So it's more -- I can help your child to get rid of her autism diagnosis, whatever through our therapy, typically very, very costly. I think in that specific article, the cost for a month of therapy was equivalent of the total cost for our device that is prescribed every 5 years. But it's a different arena, if you will. It's treatment, not product.

Yes, I understand that. But they are not at all related, those type of --

No.

okay. I just want to double check.

Because, for example, wellness therapies don't include using devices. It's other things.

Yes. Got it. I think organic growth in Europe was around 5%. Could you break down the growth rates by region or market or where you see growth in line with your targets? Is this a temporary slowdown? Or how should we view that 5% number?

You should -- as I said earlier, you should look at Europe as FX adjusted. So you should include the M&A. It's also a small part of our revenue. So you should look at 26% FX-adjusted growth. Just as Fredrik explained earlier, the timing impact when you don't own a partner and when you own a partner becomes a little bit volatile. So look at it in total instead.

All right. But I could add that as we write in the report, I don't believe that the full potential of what we're seeing in Europe is yet being reflected in our P&L and might take some time. It is encouraging what we hear and see.

Okay. Can I just ask one final thing here about seasonality going into the second half? Is there anything what you see in your processes and pipelines and sales activities that suggest that these things -- the delayed processes, drawn-out processes could improve and we can have maybe a stronger seasonality situation in the second half? Or should we expect normal seasonality to continue as always?

I think we can expect the normal seasonality patterns. But to your point, if we're talking about delays, that eventually means that once the delay is over, then that will have normalized. Whether that takes 1 or 4 quarters or whatnot, I actually don't know. But it's important to note that there is no reduction in demand or reimbursement, et cetera, which, of course, would have had a -- that would have been a different story.

Thank you so much, Mikael. We do have one question that I wanted to read out here from somebody who is -- has been working with students that use Tobii Dynavox's devices in Sweden and know that some devices end up in cupboards. I should mention these students are 16 to 18 years old.

This person has their theories, but what is your understanding as to what amount of devices do end up not getting used as they should and therefore, not gaining the benefit that is expected? And furthermore, if you can comment on the Swedish market as an example, what is the reason for devices not being used the way they should?

This is a common dilemma in our industry that people give up. And I think the reason people give up is largely not related to the device or the technology itself, it's life. You are -- you have a condition of your child, which is technically life altering, et cetera, making sure that your child stays alive, that the basic fundamental needs in your life obviously always take precedence over literacy being able to communicate, et cetera.

So the main reason, and this is universal, is that the infrastructure around the patient, meaning the therapist, the school, everything around it is not solid enough so that ends up being that the patient gives up. I think the story I'm talking about now more has to do with people with developmental delays or cognitive disabilities. Then, of course, you have areas where you have degenerative neurological conditions such as ALS, et cetera.

Then, of course, unfortunately, one of the reasons why you give up is because patients passes away and the -- or for other reasons, are no longer able to use the product.

But that's smaller. I would say that the giving up feature is the #1 problem. That is no different in Sweden versus some other countries. But I would still say that the competence among people tasked with helping our users is tragically low in almost every country and every region where we operate, and that's what we are here to change. So Sweden doesn't stand out. There's also in Sweden specifically fairly large variations from region to region, and that also has to do with competence and resources.

Good. Thank you, Fredrik, for that answer. Jakob, I see that you're back. Do you have a follow-up question before we close? Please make it short.

Yes. Just quickly on the price increases or potential for price increases in the U.S. Just wondering, are you charging the maximum you can within the reimbursement codes right now? Or are there some room that you can increase to those maximums?

We typically -- we negotiate with every payer. And mark well, we have several hundred, I don't know what the latest number that we're announcing.

More 700 [indiscernible].

700 payers or so. With those payers, we can actually negotiate. And basically, in exchange for less administration, a more smooth prescription or funding process we are actually willing to adjust our price, and that's typically a win-win situation because it costs less for us to process and it costs less for them to process. So there are fairly large variations, I would say. I don't -- but if you look at kind of the median price that we charge for equivalent product, they are quite similar across payers.

Okay. Good. And if I just very quickly may I ask also on Europe, can you elaborate on what the sort of volume growth is in the acquired units in this quarter, sort of towards the end users or customers or what have you?

I don't even have that.

I don't have that in front of me. But it's -- I mean, we are growing faster when it comes to autism, for example, even in Europe, and that means that the quantity is probably slightly higher than the total revenue growth.

Right. Because yes, those are products with slightly lower price.

But let's say just the sales growth out that sort of that's neutral for this acquisition effect and maybe inventory and so on.

That we don't know because of the fact that prior to acquiring a reseller, there was a buffer with their own inventory. And whether inventory was high or low, we don't know that.

We should also bear in mind that what Linda said that Europe specifically is 19% of our total revenue. So we don't have that number in front of us, but it's -- would you say, Linda, that it varies greatly...

Within...

Volume growth versus...

Yes.

Good. I think we need to close by that. So hopefully, everybody got their answers to their questions. So over to you, Fredrik, to close the call.

Okey-dokey. I love the fact that there is so much interest. We will continue to work. We will continue to be there. We will go back and make sure that we deliver on our plan. And on October 21, that's when we summarize our business for the third quarter, and that's when we will have a similar session like today again. Thank you so much.

Thank you. Happy summer.

Right. It's 9:00. Good morning, and welcome to this earnings call where we will cover the first quarter in 2026, summarizing our business in January, February and March. I'm Fredrik Ruben. I am the CEO of Dynavox Group.

And I'm Linda Tybring. I'm the CFO of Dynavox Group and will cover the financials.

All right. And before -- for some of those of you who have participated in this call before, you might be familiar with, but we'll start with a quick recap about what Dynavox Group does. And then we will summarize the main takeaways from the quarter. We will then dive deeper into the financials, and thereafter, there will be a Q&A session. And you can submit your questions during the Q&A session in the function here in Teams or you can ask them live by raising your hand in Teams and of course and of course unmute yourself, when we will invite you to speak. And of course, you're always welcome to offline questions sent by e-mail to the above e-mail, which is Linda's, [email protected].

So a brief overview of Dynavox Group. First and foremost, it's important to reiterate our mission and our vision, which I know is very dear not only to our now over 1,000 colleagues around the world, but also to our ecosystems of partners and investors. And our vision is a world where everyone can communicate, and we will contribute to this via focusing on our mission, which reads to empower people with disabilities to do what they once did or never thought possible.

And this also summarizes 2 of our main user stories. The first one, the do what you once did, that may refer to a person who led a normal life until a diagnosis such as ALS, which rendered her then unable to control the body or communicate like before. The other one, the never thought possible can refer to a child with a condition such as autism or cerebral palsy, where thanks to our solution, she can do much more than the world around him or her ever thought possible.

On the picture here, you have Linnea. She's a 12-year-old girl from Gothenburg here in Sweden, and she was diagnosed with cerebral palsy at early age, and she's a great example of this. And Linnea presented at the Women in Tech Conference here in Stockholm earlier this week together with our colleague, Griet, that you see on the picture. And thanks to our solution, she was able to fulfill one of her dreams to give a lecture about assistive communication in front of thousands of people, and Linnea has been a user since she was about 2 years old.

The market that we service is hugely underserved. Some 50 million people have a condition so grave, they simply cannot communicate unless they have a solution like ours. And every year, some 2 million people are being diagnosed, and yet we estimate that only 2% of those are actually being helped and the rest literally remain silent. And the main reason for this spells lack of awareness, also among the professionals and the prescribers that are tasked to assist these users and combined with poor healthcare reimbursement systems.

We operate this company on a global footprint. Today, almost 3/4 of our business stems out of the U.S., largely because of a reasonably well-functioning funding system that was established some 20, 30 years ago. And our comprehensive solutions are sold in more than 65 markets around the world, which 12 are markets where we sell directly, while the others are serviced by a network of some 100 reseller partners.

Our staff is distributed in a similar way as our revenue, meaning some 50% of our staff are based in North America with our U.S. headquarters in Pittsburgh in Pennsylvania. And then our second largest office is our headquarters here in Stockholm, but we also have branch offices in several European countries as well as in Suzhou in China, in Adelaide in Australia. And as of today, as I mentioned, we're just over 1,000 employees in total in the group. We provide a comprehensive portfolio of solutions that ranges from the content and the language system, such as the world's leading library of communication symbols, they're called PCS, and a leading solution of off-the-shelf custom-made synthetic voices of the highest quality and a large diversity, of course, of languages, ages, ethnicities and so forth.

We also make highly sophisticated communication software that's tailored to the type of user, and that can, of course, vary greatly based on the needs. Three, we develop and design devices with cutting-edge technology, and they're typically medically certified and very durable, and that includes communication aids that are controlled via eye tracking and accessories such as the Rehadapt mounting systems.

If we move on, we have a services portfolio to help our users through the complexity of obtaining and getting funding or reimbursement for their solutions. And then last but not least, we're there to help our users, the therapists, the caregivers through a global system of support resources. And we operate this model globally. And it's important to note that each piece on this picture is critically important and also a significant differentiator for us, making us absolutely unique. Our go-to-market model is predominantly as prescribed aids. So that means some 90% of our revenue comes from public or private insurance providers. And that also means that we have solid paying customers and have always been resilient towards changes in the overall economic climate.

But now we will go back and focusing on the main topic of today, namely our earnings report for the first quarter in 2026. If I just look at the highlights, we delivered a solid start to the year with continued revenue growth in the quarter. The growth compared to the same quarter previous year sums up to 15% after adjusting for currency effects. North America, our largest market, was hit, however, by unusually severe winter weather in January and in February. And that led to closures among schools and institutions. And this, of course, impacted our ability to meet with customers and deliver products.

These effects are, however, expected to normalize and the deferred business to be regained during the remainder of this year. The month of March isolated, for example, was back at historic growth levels in North America. Our business in markets outside of North America continued on the good trajectory from the previous quarters. The demand -- the underlying demand for our solutions remains high, and that's proving the solidity of our underlying business, and we see robust underlying growth across basically all markets where we operate.

EBIT came in at SEK 57 million, and that's a 35% increase compared to the same quarter last year despite continued FX headwinds and, of course, the named weather impact in the U.S. Our Product and Solutions development hub, which was formed last year here in Stockholm is now fully operational. And then the global rollout of our new ERP system is now almost concluded. And now with also our Swedish parent company successfully transitioned earlier this month here in April, leaving only a few small local entities remaining.

On 1st of April, we also completed the acquisition of our Italian reselling partner, SR Labs Healthcare, and we welcome new colleagues to the team. That's very exciting. And then last but not least, we announced a couple of changes to the executive management team. On March 1, we welcome Marie-Josée Leblond or MJ, as we refer to her as the new Chief Digitalization and Information Officer. And also, we welcome Luis Mustafa, who joined as our new Chief Operating Officer. He's replacing Tony Pavlik, who is about to enter retirement. We also announced that Linda here will leave her position as our CFO, but will remain in full capacity until the end of January, next year, 2027, hopefully boding for a smooth and structured transition after we have recruited her replacement.

And now I actually do hand over to Linda, who indeed is still here and on top of things to take us deeper into the financials. Linda?

Thank you, Fredrik. Yes, still live and kicking. Let's take a closer look at the Q1. Revenue for the first quarter, which is typically our seasonally weakest quarter, came in at SEK 588 million, a 15% year-on-year growth after adjusting for currency effects. Recent acquisition contributed with 3% and the organic growth was 11%. Currency fluctuations had a 14% negative impact on revenue. Sales continued to grow across all markets and the gross margin ended up at 69% (sic) [ 67% ], a decrease of 0.9 percentage points. Gross margin benefit from favorable currency effect, but was offset by higher component costs and higher cost base following increased staffing to support the continued growth journey.

I'll make one correction. The gross margin was 67%.

67%? Okay. Did I say something wrong?

Yes.

Okay. Sorry about that. Before we move on, I would like to take a little bit deeper dive into our typically seasonality patterns. Over the past couple of years, we have seen a recurring pattern over the quarters that is slightly connected to our access to public and private reimbursement system. We maintain some 675 contracts with private and public payers. And Fredrik mentioned before, 90% of our revenue comes out of that.

In January, many payers, specifically in U.S., are resetting their insurances, which means that the funding process slowed down in the beginning of the year, which impacts our revenue in the first quarter. The pace is then picking up, and we normally see an acceleration over the following quarter that end with the sprint in Q4, when the fiscal year closes. Hence, the fourth quarter is typically our strongest.

As you know, there is no rules without exception. And as you can see in the chart, we had an exceptionally strong Q1 last year. This was due to good business momentum and the successful product launch that we did in Q3 2024. And we then allow existing orders to be replaced. Consequently, deliver and revenue was pushed forward to the following quarter. This is a pattern that we recognize and have seen before in conjunction when we do product launches. So to sum up, we have a clear seasonality pattern impacting our revenue distribution. This is also why our financial growth target is set to annual average growth of 20%. We clearly see variations over the quarters.

So moving back to the Q1. EBIT for the quarter was SEK 57 million, and the EBIT margin was 9.8%, which is a growth of 56% FX adjusted. Our OpEx increased by 7% organically. The OpEx increase relates mainly to continued investments in sales and marketing staff, but also within our IT organization. During the quarter, we continued investing in system and tools, including a new ERP platform to strengthen scalability. These nonrecurring investments totaled to SEK 9 million, a decrease of SEK 5 million versus last year.

Acquisition contributed with SEK 14 million increase of our operating expenses versus prior year, and we saw a decline in long-term incentive cost of SEK 5 million year-on-year. Costs for research and development after capitalization and amortization decreased by SEK 24 million compared to the same quarter last year, mainly driven by higher costs in prior year related to organizational restructuring, higher capitalization related to launch of new products and lower amortization contributed further.

In addition, the currency effects both from lowering exchange rates versus prior year and together with transactional timing effect had a negative impact of SEK 7 million on our EBIT for the period. If we look at the basic earnings per share, it totaled to SEK 0.33 (sic) [ SEK 0.36 ] per share to compared with last year SEK 0.23 per share, which is close to 60% improvement. For the quarter, cash flow after continuous investment was positive with SEK 56 million, more than doubled. It's encouraging to see that our work on improving processes and operations have had positive effects on our cash flow compared to last year.

Cash at hand by the end of the quarter was SEK 243 million. Net debt was SEK 865 million. The total unused credit facility at the end of the quarter was SEK 300 million. And the net debt over last 12 months EBITDA was 1.7x. Fredrik?

Yes.

Back to you.

Thank you, Linda. Okay. So before we open up for questions, I'd like to reiterate some of the main takeaways and bring further nuance to our performance and outlook. So we continue on our strong growth trajectory, a trend that started early spring of 2022, so that's almost 4 years ago. We grew revenue by 15% adjusting for currency and despite the North America being temporarily impacted by severe weather in January and February.

And we see that sales continue to grow across all our markets. Our profitability and cash flow improved notably, reflecting strong operating leverage as investments-related to cost -- as investment-related costs continue to taper off. We also note that the currency headwinds have decreased, as we enter now into Q2 with the SEK versus the U.S. dollar fluctuations seemingly having stabilized.

We delivered a very strong cash flow, further underscoring the improved operational efficiency, which we have put a lot of energy into achieving. We continue to expand our direct market presence by closing the acquisition of our Italian reseller partner. Our overall exposure to import tariffs to the U.S. remains limited since our products are classified as medical certified assisted devices, and that exempts them from tariffs under the Nairobi Protocol. We continue to monitor, obviously, all macroeconomic and policy changes development closely. And while currency effects and the broader macro environment, I mean, can create volatility quarter-to-quarter, Dynavox Group is well positioned to continue delivering long-term sustainable growth in a severely underpenetrated market while, of course, advancing our mission to provide life-changing solutions to those who need them the most.

And we reiterate our current financial targets, which were communicated in February of 2024 with a time horizon of 3 to 4 years. And the first target reads to, on average, grow revenue by 20% per year adjusted for currency effect, including obviously then contributions from acquisitions. And in local currencies, the first quarter growth was 15%, which means we continue on the growth trajectory. And as Linda talked about earlier, we have clear seasonality variations over the years. We -- the market that we serve remains hugely underserved, but also quite immature. And with the example of growth levers such as sales teams expansion, adding direct markets and then, of course, operational excellence, we continue to build on our growth journey.

The second target reads to deliver an annual EBIT margin that reaches and exceeds 15%. So we feel that we have proven to build strong growth within -- with incremental improvements in profitability this quarter too. We need to continue to invest in future growth with improvements in scale, but the recipe for achieving this is rather simple, continued revenue growth, high and stable gross margins and then operating expenses that increase at a lower pace than the revenue growth. And as a consequence, we see good opportunity to further leverage how revenue growth translates to reaching and exceeding a full year EBIT of 15%.

And then lastly, we expressed our dividend policy, and we have an attractive cash flow profile. And given the growth opportunity, we need to maintain a capital structure that enables strategic flexibility to pursue growth investments and also, of course, acquisitions. But it's still expected to, over time, generate excess cash. And our policy is, therefore, to distribute at least 40% of available net profits to the shareholders via either dividends, share purchases or similar programs and when so allows and when we deem it's the right prioritization.

And as you could see for the Annual General Shareholders Meeting that is happening on May 8 this year, the Board of Directors earlier proposed that a cash dividend of SEK 0.5 per share shall be distributed for the shareholders.

All right. With that said, we are now inviting our Corporate Communications Director, Elisabeth Manzi, who will help to moderate and also enable us to take questions from the audience. Hi, Elisabeth.

Hello. Thank you very much. [Operator Instructions] So we do have people -- a couple of people who have raised their hands, and I will then start with the first one, who is Daniel Djurberg.

Yes, I have a question on the growth. And importantly, you said that March growth level was back at historical levels in the U.S. I was wondering, is it possible to quantify what is the historical growth level in the U.S. and/or possibly also quantify the negative effect from the winter storms in terms of deferred revenues or the impact on the organic growth level is seen in the U.S., it would be super helpful.

I understand that. I can't quantify it precisely. But what I can say, if you look at historic growth levels, I mean, we are leaving a period where we've had -- we've been actually quite well above our FX-adjusted target of 20%. And we saw obviously that in total, the revenue growth, FX adjusted for the quarter was, how should I say, only 15%. And that is a consequence of weak order growth in January and February and then to some degree, partially mitigated by a strong March, but not all the way back to kind of where we think that the business should operate at. But I don't have specific numbers in dollars or SEK to help you quantify them, I'm afraid.

Okay. And would it be fair to assume that you have deferred revenues coming from Q1 into Q2 then? Or...

Yes. Our assumption is that none of the lost revenue, if you will, that didn't happen due to weather impact, et cetera, are actually lost. They will happen later on in the year, whether it happens in Q2 or further down in the year, I cannot specify that because there are -- these are quite slow and I don't know, call it, bureaucratic systems. And of course, if you miss the first date, it might take some time before you get a second chance. But typically, we do not see that weather or these kinds of short-term impacts have lasting impact. So there will be a rebound one way or the other.

Perfect. And if I may ask you also on Europe, showing off 40% organic growth. Can you comment a little bit on the variation seen in various segments like Nordics, Germany, France, Italy, et cetera, and if needed to secure a little bit higher growth also in Europe?

I think if you take Europe as an example, it's actually quite difficult to quantify the difference between organic and acquired growth because of the fact that when we acquire companies, we acquire our own resellers. It's not like we buy a completely new business unit where there's new revenue. So in totality, if you adjust for FX in Europe, the underlying growth was 32%. But of course, part of that was us acquiring a reseller, but it's the same products being sold in the market by the same people. It just happens to be that they are now employees of ours and not owned by a third party.

So -- but if I would kind of answer your question on where do we see growth, there is still a fair amount of -- these markets differs from quarter-to-quarter and market-to-market. The market that we currently feel maybe the most excited about is for sure, Germany, where we are going direct since -- it's September 1, right, Linda?

Yes.

Yes. So that's a market where we believe there is a lot of potential in many, many ways. And that's also a market that did perform well.

Fantastic. And I will just finish off with the ERP, it was SEK 9 million in the quarter. Should we expect a similar level in Q2? Or will it be even a bit lower than this SEK 9 million? And will Q2 be the last quarter with any highlighted negative impact?

It's very much within that...

Yes. It will fall off during Q2. And our hope is that the majority of our existing entities will be over in the coming months.

Congrats to a strong ERP implementation then.

Thank you. It's a fantastic work by all the members in the team, I would say. It's a true team effort.

So thank you very much, Daniel. And I also have a question here from Mikael Laseen, who's asking, "Gross margin was 67% in Q1 versus around 69% in H2 2025. Could you break down the key drivers behind the decline and comment on how we should think about the gross margin ahead?"

A couple of things. Comparing with H2, then you have a higher revenue as part of that, which means some of the set cost is still the same going into Q1. So we're going into a new quarter. We also added more people to be able to handle the growth. I think the gross margin will continue to be stable. Of course, we also -- we wrote that in the report, seeing some challenges when it comes to components and freight. But we should remember, it's a small part of our gross margin considering that it's close to, I mean, 67% and 78% (sic) [ 68% ].

I think we sometimes try to help that what's the portion of fixed cost as part of our COGS?

About 20% is fixed cost.

And that should scale quite well, as revenue go up and then, of course, the remaining is related to how many products we ship, et cetera.

Yes.

Good. Thank you. And then we have someone else who would like to ask a question. So I do invite Jakob Lembke.

I have a few questions. I'll start maybe on North America. If you can elaborate on the weakness you saw in January and February, let's say, how much sales declined in those months?

And this is the same response as to Daniel then. No, we don't quantify exactly the weakness, and it's not -- it's actually a little bit difficult to quantify what was the consequence of that, et cetera. But we can just summarize that in totality of 2 highly impacted months of January and February and then a normal month in March didn't bring us all on top of the bar. At the same time, we don't see any changes in reimbursement. We don't see any changes in demand. So we believe that the effects are more or less temporary and exactly how temporary something is.

In a different setting earlier this morning, we also quantified the fact that if you think about our North American business, we deliver every day. We ship devices almost -- I mean, up to USD 1 million per day. And of course, if you have a day when roads and streets and institutions are closed, we will not ship anything that day. The question is how much can we kind of make up for when the business is back to normal, and that is difficult to quantify. But that's how vague I can be on that, Jakob.

Okay. Then a follow-up on that, I guess, is just the growth you're seeing now in North America, is that in line with your sort of targets or above your target sort of implying that catch-up effect? And also if you're seeing the same trends into March -- or into April from March?

I think we do a pass on commenting on the current quarter, but I just want to reiterate the fact that we believe that this is a business that should deliver an FX adjusted or in local currencies growth of 20%. U.S. is a market where we do not have resellers to acquire, et cetera. So it is kind of same-store sales also going forward. We believe in that. I think we can definitely say that 2025 was a very strong year, and we obviously then delivered way above the 20% FX-adjusted growth. We still -- we reiterate our target, and we believe in it.

Okay. And then another one, just -- I don't know, can you see that -- let's say, that in California, the growth is exactly in line with the targets or normal and that in maybe Massachusetts, it's way down. Do you see those sort of variations?

Now you're putting us on the spot here, as I actually don't have that. What we did learn was that the winter weather, that was unusually in that, was affecting 50% of the U.S. states. You had sub-zero Celsius degrees in Texas and some of our biggest states. So it was a nationwide, but I don't have a number on top of my head whether California was kind of untouched. I think we need to also understand that our operation, which is based out of Pennsylvania, that was probably in one of the epicenters of the storm. So it's not necessarily just on the client side, it's also our capabilities.

Okay. And maybe one more is that you seem quite confident that you will regain all of these sales, but on the other hand, you don't really know sort of how much you have been impacted. So just maybe some more comments on that you are confident in regaining this and how you can be that? Maybe, I don't know, can you see internally that you have a larger backlog now or more processes ongoing or something like that?

Sure. One of the reasons why we can't tell whether a specific order was not happening because of weather because there is no such kind of check in the box in our CRM systems, et cetera. So we don't know whether it was that or something else. What we can say is that nothing has changed. The reimbursement rules and laws are the same, reimbursement levels are the same. The underpenetrated market remains as underpenetrated now, as it was a year ago, et cetera. So none of the fundamental fact -- and there's no new competitor or other type of macroeconomic impact that affects us.

So all things alike, we should be able to deliver on the target. And we do indeed remain confident. But I also want to stress the fact that we express our targets on a full year basis. There will be fluctuations between quarters and months, et cetera, and that's part of the business. And we also have then the more seasonality patterns that Linda talked about. So we look at this business on a full year basis, and hence, we do reiterate the target.

Okay. Maybe just a final question...

Well, final?

Yes, sorry. Just on the R&D expense, both the sort of gross expense looks lower and then there's also higher capitalization. So just the question is, what is behind that and if that is representative going forward?

I mean mainly the big discrepancy is that we don't have the restructuring costs that we had last year, the same period. But then we also launched more products, which means that you have a higher capitalization. We launched the product in beginning of April. And then we are also rolling out there some -- not end of life, but from an amortization is actually lower amortization in the quarter as well.

I think you can read between the lines that the new R&D organization that we have here in Stockholm is not just kind of fully staffed, they're obviously also delivering and hence, there is more innovation coming out of that. And that's obviously quite reassuring.

Very good point.

Thank you very much, Jakob. And I think this was also the answer to a question that Mikael Laseen had on the capitalization of R&D. So I hope you also got that answer, Mikael. But we do have some more people that would like to ask questions. So I invite [indiscernible] to join.

Just one short one on sales. I know it's repeating, but how does like the paying pattern look like from customers? I mean, if sales accelerated in March, shouldn't trade receivables be up more?

Yes, absolutely. But you had a strong Q4 as well, and it takes a little bit longer to see that. And so we've also received payments during the quarter for our trade receivables, since Q4 is higher in that perspective.

Got you. And then you touched a little bit on the R&D being down, but I also noticed the selling and admin expenses being up quite a bit in percent of sales from previous quarters, comparing quarter-over-quarter and year-over-year. What's the reason behind that? And yes, some color on that would be really helpful.

Yes. A couple of things. When it comes -- you have to remember going into a new year, you kind of enter into -- with the same OpEx level as you had in Q4, which means that if you have lower sales, the ratio will then go up. But of course, we continue to invest in sales and marketing to be able to continue to grow. That's one of our key. And we have also invested more in our IT organization.

Can you say anything about how big part of selling expenses and admin expenses? They are fixed or variable?

Majority of our OpEx is salaries. I would say almost 80% of our OpEx is salaries.

And maybe to add on that, commissions is obviously, specifically, in North America. But then you need to kind of take it down to just the field reps, et cetera. We typically say that commission as a part of salary is in the range of 5%...

Yes, 4% or 5%.

But then if you sold less in Q1, shouldn't selling expenses have been down a little bit then?

But we have more people.

But we have more people.

Thank you, Philip. And then I would like to also invite [ Nicola Kalinowski ], who is on the line.

Yes, just a few questions of a clarifying nature from my end. Would you say that the U.S. -- or the bad weather in the U.S. in Q1 has also caused a delay in the recruitment or, say, onboarding of new U.S. solutions consultants?

What a good question...

Yes, that's a good question. I would say no. It hasn't.

Yes. Fair enough.

No, you got feeling, I agree. We have no chart to prove that, but that's...

You have to remember a lot of our -- I mean, majority of our salespeople are remote in that perspective.

Yes, true. So they don't necessarily have to come in physically for interviews, et cetera. It's a remote machine to a large degree, already from the start.

Yes. That sounds very good. And just -- this is maybe a more difficult question, but has there been any notable direct or indirect impacts from the situation in the Middle East in your case at all? Is there anything we should keep in mind going forward that you think, just so we don't miss anything?

I can look at kind of more of a macro. I think the uncertainty that we are looking at, that affects us all. We are, of course, waking up every morning to new news, et cetera, and then you start to kind of -- how will this impact us. As our infrastructure look like, the markets that we are exposed to, but of course, cost base. I think Linda covered a little bit on freight costs and inflation components that might have some impact. I don't know if you want to quantify that more, but it's nothing...

It's not material...

Major material, yes.

Yes. So there's nothing direct to keep in mind, at least?

No. And I think you should also -- if you -- just from a very practical perspective, our products are typically produced in Southeast Asia. Taiwan is a big market. They are shipped predominantly by boat to the U.S. West Coast. Hence, they don't go through any straits. I mean, they pass Hawaii. That's how exciting that trip is. So there is no kind of physical impact on our ability to produce and receive products. But of course, it's likely so that the part of our COGS that is represented by freight costs will, to some degree, go up.

Thank you so much, Nicola. and then we have a question from Erik Larson. He's asking, "How do you think about the balance sheet here, acquisitions versus giving back to shareholders?"

I mean we are -- the Board is proposing to AGM, which is in 2 weeks that we are doing a dividend of...

SEK 0.5.

SEK 0.5 per share. So we are definitely -- that's part of our dividend policy, and we have said that net available profit of 40% should be either paid back in dividend or share buybacks.

And I think we can say, if you look at the cash flow in this quarter, for example, it's very strong. It pretty much more than doubles compared to the same period last year. We have what we feel is a totally acceptable debt leverage. We have additional credit and RCFs that we can use. But more importantly, the type of acquisitions that we're doing, they are small. We don't buy massive companies, which will affect us.

It's largely these reseller acquisitions, and these are small companies, and that's a business which, a, has a very low risk in terms of acquisition. We know exactly how to do it, and it's -- we pay it more or less through our own cash flow, at least over quarters. So we feel quite confident in our ability to going forward, being able to share whatever is left or the excess cash with our shareholders in some clever way.

Good. And we also have another question on acquisitions from an anonymous user here. But the question is the acquisition of SR Labs Healthcare in Italy was completed shortly after the quarter. Given your stated strategy of increasing local presence to organically scale the business, are there other key European markets where you still rely on resellers and where we should expect similar direct acquisitions during the remainder of 2026?

Good question...

Good question.

We're probably not going to open up our M&A playbook fully. With that said, I think it's also important to us that we feel that the big markets with well-functioning reimbursement systems are still very underpenetrated. So we have very little reason to go far away and kind of try to find new money elsewhere because most of our growth for a long foreseeable future will probably happen in the established markets.

And then I think it's a function of GDP, population and the reimbursement system. And if you look at the markets where we currently operate, the Nordics, U.S., obviously, and Canada, adding now France, Italy and maybe most notably Germany, that's where we feel that there is ample opportunity to grow. So our stress levels to just for the sake of doing it, add more markets, is if there is a good opportunity, we will do it. Otherwise, we feel that we can keep ourselves busy and run both fast-growing and profitable company.

And remember that when we acquired this company, it's important of the organic growth after acquired them.

Correct. I think that's maybe one thing that should be deciphered from this report. When we acquire a company, like I mentioned, it's mainly just the difference between what we sold to that reseller and what then they sell out on the street in that specific market, that's actually what's gaining and it's quite small.

And I do believe the question was actually from Jessica at Redeye, who also has another question. You reiterate that the rules have not changed for financing. Furthermore, the weather affects the sales. What, if any, would indicate that there are more competitors taking market share?

We don't feel that. I think if there is anything, I think, that the biggest competitor that we have is lack of awareness and then bureaucracy is probably a competitor, too. But we cannot say that there is any changes to the dynamic on the players of the market, and we don't see that there is any changes in market share or anything like that. So that's as good of an answer, Jessica, that I can give at this point.

And also a question from Jessica. Last year, you communicated every quarter that the demand was constant throughout the quarter. Am I understanding it right now that this was not the case in Q1 due to weather and other?

Yes.

Yes.

100% correct. With a small nuance, demand indicates that -- I think the demand is definitely -- it's the ability to turn demand into orders that was impacted.

Yes. And Mikael Laseen has another question. Could you elaborate on how you are leveraging AI across your offering, specifically to enhance speech generation, language, personalization and user experience and whether you also see opportunities to streamline clinical workflows and the reimbursement process?

Sure. If I start with the product and et cetera, AI has been -- machine learning has been part of our DNA for decades. Obviously, we, in the same way -- specifically now with a partly brand-new organization on product and development here in Stockholm, we also see the magnificent impact of Claude Code and the likes to basically speed up the ability to increase quality, but also launch new features.

In all honesty, though, I don't think that is the biggest impact on us. The biggest impact that we currently feel and see in -- with AI is more on the administrative functions, the reimbursement systems, which is -- it's a perfect example for how to operate AI. You have complex, high volumes of bureaucracy, et cetera, where, of course, up until now, we need to have human eyes and humans sitting in phone lines, reading 50,000 pages of fax every month. The advancement that we're doing on applying AI to that, I am genuinely excited and it's -- the engineer in me is quite excited.

That being said, we can also apply it on how we operate more efficiently within the company, with a new ERP system, with a much more kind of data-driven platform. There's, of course, all kinds of operational improvements that we can do on anything from accounts receivable to financial reporting or data.

Which we already see...

Which we already see. Yes. So I would say that to summarize, AI within our products, well, that's what we do. We can just do it faster, but I think we have a high degree of -- we're quite mature and have a good understanding, whereas to me, at least the bigger impact is operating leverage on the internal processes, doing more with less.

Good. Thank you for that answer. Jakob Lembke has a follow-up question here also. When you say that growth has normalized, does that mean that we should expect you to grow in line with target in coming quarters or that you should go faster than your target to recover the lower growth in Q1?

We believe that we will meet our financial targets on a full year basis, and that is 20% in local currencies. And if you start the quarter with 15%, that obviously means that there is -- there needs to be some sort of acceleration there.

Good. And let's see, there was actually another question here, and I think it might be also from Jessica. I asked about the demand during the full quarters. If the awareness increased day-to-day, which is totally reasonable in such an area of which you operate, then the demand for new sales would increase from any given time to any given time.

Yes. I mean you're right, Jessica. I think what -- if you compare this quarter with last quarter, the underlying demand is obviously higher. We also have more people on the street to kind of educate the market, et cetera. Maybe I'm kind of a little bit stuck on the word demand because in my world, the demand is enormous. It's just our -- the market isn't really there to capture it. And that is unfortunately, to a large degree, our responsibility because this is not a market that kind of happens by itself.

We have to be out there, educate, train and to some degree, handhold the prescribers of these products, at least for the first couple of times they work with the patient. But in absolute terms, the activity level, which is maybe a better term, is higher this quarter versus the past quarter. It -- just as you note, it's higher in March than it was in January. But this is not a pattern that is different this year. This is our kind of standard operating model.

And last curiosity question here relating to the AI also from Jessica. How effective is your clone within the organization? Does it actually help solve problems and support employees?

So Jessica is referring to the fact that I have taken the leading flag of creating an AI version of myself that is available to every staff member. I think that we should read that as a conviction that AI has to happen, and I want everyone in our organization to fully embrace it. And the way for me to lead by example as the CEO is to make an AI clone of myself.

I would doubt that a huge part of our current or future revenue or profitability growth is a consequence of that. But hopefully, indirectly, by having an organization where everybody feels that automating, digitalizing and applying AI to pretty much every piece of work in this company is not optional. It's something we have to do, and it's part of us being able to meet our targets. That's how I see it. But as of today, no, it's not a magnificent revenue nor profitability driver.

Very well.

Yes.

I think that was all.

Okay. Thank you. I love that there is so much questions. Glad that technology seem to be with us today. So now we're going back and delivering -- continue to deliver every day. The next time that we will meet in this fashion will be on the 22nd of July when we will present our quarters and our earnings -- or quarterly earnings for the second quarter of this year. Thank you very much.

Thank you.

Thank you.

Good morning, and welcome to this earnings call, where we will mainly cover the fourth quarter of 2025, summarizing our business then in October, November and December and also some comments regarding the full year of 2025. I am Fredrik Ruben, I am the CEO of the Dynavox Group.

I'm Linda Tybring, and I'm the CFO of Dynavox, and I will cover the financials at the end.

Yes. So for those of you who have participated in these calls before, you will be familiar that we'll start with a quick recap about what Dynavox Group does, and then we will summarize the main takeaways from the quarter and the full year. We will dive deeper into the financials, and thereafter, there will be a Q&A session. And you can submit questions during the Q&A session in the chat function here in or you can ask them live if you have been given prior notice to our team. And of course, we always welcome offline questions sent by e-mail to the above e-mail address, which is [email protected].

All right. So a brief overview of Dynavox Group. First and foremost, it's important to reiterate our mission and our vision, which I know is very dear not only to now our over 1,000 colleagues around the world, but also to our ecosystem of partners and investors. And our vision is a world where everyone can communicate, and we will contribute to this via focusing on our mission, which reads to empower people with disabilities to do what they once did or never thought possible. And this also summarizes 2 of our main user stories, the do what you once did, that may be a person who lived a normal life until a diagnosis such as ALS, which rendered her unable to control the body or communicate like before. The other story is the never thought possible, and that can refer to the child diagnosed at an early age with a condition such as autism or cerebral palsy, where thanks to our solution, he can do much more than the world around him ever thought possible.

On the picture here, you see Lane from Lawrenceburg in Kentucky in the U.S. and she's one of our amazing users diagnosed with cerebral palsy and is using -- she's a great example of this. So the market that we serve remains hugely underserved. We estimate some 50 million people have a condition so grave, they simply cannot communicate unless they have a solution like ours. And every year, about 2 million people are being diagnosed, and yet we estimate that only some 2% of those are actually being helped and the rest remain silent. And the main reason for this spells lack of awareness also among the professionals and the prescribers task to assist these users and poor health care reimbursement systems.

We operate with a global footprint. Today, some 3/4 of our business stems out of the U.S., largely because of a reasonably well functioning funding system established some 20, 30 years ago. But our products are also sold in more than 65 markets around the world, of which 11 are markets where we sell directly, while the others are served by a network of some 100 reseller partners. Our own staff is distributed in a similar way as the revenue, meaning that some 60% or so of our staff are based in North America with our U.S. headquarters in Pittsburgh in Pennsylvania. And our second largest office is our headquarter here in Stockholm, but we have branch offices in several European countries as well as in Suzhou in China, in Adelaide in Australia. As of today, we are just north of 1,000 employees in total.

We provide a comprehensive portfolio of solutions ranging from, a, the content and the language system, such as the world's leading library of communication symbols and they're called PCS and the leading solutions for off-the-shelf or custom-made synthetic voices of the highest quality with a large diversity of languages, ages and ethnicities. Then we also do highly sophisticated communication software tailored to the type of user, which, of course, can vary greatly based on the need of that individual. Then we develop and design devices with cutting-edge technology and medically certified durability, including communication aids controlled via eye tracking and accessories such as the Rehadapt mounts.

We have a services portfolio to help our users through the complexity of obtaining and getting funding for solutions. And then last but not least, we are there to help our users, the therapies, the caregivers through a global team of support resources. Then as mentioned, we operate this model globally, and it's important to note that each piece is critically important and also a significant differentiator for us, making us absolutely unique. Our go-to-market model is predominantly as prescribed aids, that means that some 90% of our revenue comes from public or private insurance providers. And this also means that we have solid paying customers and have always been resilient towards changes in the overall economic climate. But now we will go back at focusing on the main topic of today, namely the earnings report for the fourth quarter 2025.

If I would be looking at the highlights, we had another strong quarter when it comes to revenue growth. The growth compared to the same quarter previous year sums up to 31% after adjusting for the currency effects. And this marks a further acceleration of an already strong trajectory over the past 4 years. The demand for our solutions remains high, proving the solidity of our underlying business, obviously, but we also see robust growth across all geographies and markets. We continue seeing increased growth in the touch control product portfolio, which typically then serves younger users with autism. However, in the quarter, we also continued to see good traction in the eye-gaze controlled solutions, serving users with more complex needs.

Our EBIT came in at SEK 103 million, and this includes nonrecurring costs of roughly SEK 17 million in the quarter, and that implies then, of course, an even stronger underlying profitability. In November, we moved our entire North American headquarters and logistics hub to a brand-new location from where you will see pictures during this presentation, including on this one. And then last but not least, on December 23, we entered into an agreement to acquire all the shares of our Italian reselling partner, SR Labs Healthcare, and I will come back to that in a little bit.

If we then instead look at the full year of 2025, we can conclude that it was a solid regarding our top line growth. In local currencies, the growth was 34%. Our profitability improved in the year. The EBIT grew by 11%. Earnings per share grew by 13%. And this really proves the case that our business is continuing to scale quite well. And the fundamental factor behind this is, again, the hugely underserved potential in the market that we address. The growth in profitability during 2025 should be seen in the light of the investments that hit our P&L with around SEK 100 million in total of nonrecurring nature related to 2 main projects. First, the new ERP system that was successfully launched in North America on July 1, which represents some 3/4 of our business. And this new system lays the foundation for a modern, highly digitalized and scalable backbone.

And then in November, we finalized the consolidation of the product and development organization into a central hub in Stockholm, reducing our U.S.-based team by some 50 FTE and in parallel, building up an even larger team here in Stockholm. And as a company with a clear focus on innovation, having our products and development function concentrated in one location enables further scalability and resilience. Another important way to scale and grow our business is to expand our direct market and the presence there. More than 70% of our revenue from Europe and the rest of the world comes from markets where we have direct presence.

In 2025, we completed the acquisition of former reseller partners, Cenomy in France and RehaMedia in Germany. And as mentioned, on December 23, we announced our third acquisition for the year, this time in Italy, where we agreed to acquire our reselling partner, SR Labs Healthcare. The company reported revenue of approximately EUR 3 million in 2024, and we are paying the current owner EUR 4.2 million in cash at closing. And the closing is expected during the next half year when we look forward to welcoming some 10 amazing new colleagues to our team.

But now I hand over to you, Linda, to take us deeper into the financials.

Thank you, Fredrik. So let's start with Q4. Revenue for the fourth quarter came in at SEK 677 million, a 31% year-on-year growth after adjusting for the currency effect. Recent acquisitions contributed with 3% and the organic growth was a solid 27%. And this marks another chapter in our 4-year strike of robust growth and consistent execution. Currency fluctuations had 15% negative impact on revenue, hence, the reported revenue growth was 16%. Sales continued to grow across all our markets. Also in previous quarters, we continue to see growth among younger users with autism using handheld touch control devices. At the same time, they continue to see good traction in our eye-gaze control solutions, serving users with more complex needs.

The gross margin ended up at 69%, a decrease of 1.1 percentage points and the gross margin was at the same time, negatively affected by currency fluctuation, resulting in SEK 13 million loss, but also somewhat strengthened by sales growth and the addition of new direct markets contributed an extra layer of the gross margin. So EBIT for the quarter was SEK 103 million and the EBIT margin was 15.2%. Our OpEx increased with 17% organically, and the OpEx increase was affected by factors such as staff increases, mainly within the sales and marketing organization. In total, we added 155 FTEs, including M&A versus last year.

During the quarter, as Fredrik already mentioned, we continue to invest in new systems and tools to strengthen scalability. The total nonrecurring spend related to this in the quarter was SEK 6 million, which was SEK 4 million lower than prior year. Operating expense was also affected by nonrecurring costs related to the restructuring cost in the product and development organization. The total nonrecurring spend in the quarter was SEK 8 million, which was SEK 6 million higher than prior year. Both these 2 investments are in line with the announced strategic plan. The development of the Tobii Dynavox Group share price has rendered in increased cost for employee long-term incentive programs of SEK 3 million compared to fourth quarter last year.

All in all, nonrecurring costs in the quarter sums up to SEK 17 million, but this was partly offset by operating income that was positively impacted by SEK 6 million related to adjustments of earn-out liabilities. In addition, currency effects both from lower exchange rates versus prior year and together with transactional timing effects had a negative impact of SEK 36 million on EBIT for the period. Net R&D costs decreased by SEK 3 million, and this includes nonrecurring cost of SEK 8 million related to the restructuring within research and development organization. If we look at the basic earnings per share, it totaled at SEK 0.72 per share to be compared with the last year's SEK 0.51 per share.

So to the full year 2025 financials, Revenue for the year came in at SEK 2.467 billion, a 25% year-on-year growth. Excluding currency effects, revenue grew by 34%. Acquisition contributed to 2% and the organic growth was a solid 32%. As with the quarter, we see growth across the board in not just regions, but also products and user group. We also see the trend where markets where we go direct grew stronger. The gross margin ended up at 68%, a decrease of 0.34 percentage points, and this was negatively impacted by the currency effect of about SEK 31 million, and this relates to that inventory purchase in U.S. dollar at a higher exchange rate, resulting in a loss up on sale due to the strengthening of SEK. At the same time, the margin was strengthened by additional of new markets, which contributed to an extra layer of gross margin.

EBIT for 2024 was SEK 254 million, corresponding to a margin of 10.3% versus 11.6% last year. Our OpEx increased organically with 27% versus prior year. The OpEx increase mainly relates to staff increases in the sales and marketing organization and salary adjustment that came into force in April 1. During the period, we continue to invest in systems and tools to strengthen scalability. These nonrecurring costs contributed approximately with SEK 28 million to the cost increase with a total cost of SEK 46 million in the period. Operating expenses was also affected by the nonrecurring cost of approximately SEK 41 million related to the restructuring of product and development organization. The cost of the long-term incentive program increased by SEK 18 million, driven by the share price development during the year. The amount also includes a nonrecurring cost of SEK 5 million related to historical long-term incentive costs.

To summarize, a total of nonrecurring costs amounted to SEK 106 million. We should also say that currency effect, both from the lower exchange rates versus prior year and transactional timing effects had a negative impact of SEK 78 million on EBIT for the period, an impact of 3 percentage points on EBIT. R&D expenses had a negative impact on EBIT of SEK 61 million compared with corresponding period last year. This includes nonrecurring costs of SEK 35 million related to the restructuring within the research and development organization. Of course, we are very happy with our revenue growth and how we delivered on our strategic investment. Adjusted for this, we are now seeing an EBIT in line with our financial target.

For the quarter, cash flow after continuous investment was positive with SEK 46 million and cash at hand at the end of the quarter was SEK 195 million. Net debt was SEK 909 million, and the total unused credit facility at the end of the period was SEK 300 million. The net debt over last 12 months EBITDA was 1.7x.

Those are numbers. Fredrik, back to you.

Great. Thank you, Linda. A lot of numbers. But on the other hand, we're also summarizing both the quarter and the year. So before we open up for questions, I'd like to reiterate the main takeaways and bring further nuance to our performance and outlook. We continue our strong trajectory, and that's a trend that started early in the spring of 2022. As we said, the revenue grew by 31% adjusted for currency, which, of course, is highly satisfactory. And going forward, we are clearly meeting tougher comps. As noted as well, the strengthened SEK to the U.S. dollar poses headwinds, both on revenue and earnings. But we still saw that sales continue to grow across all markets.

We continue to see the growing adoption among younger users, typically with autism. At the same time, we also see good traction in the eye-gaze control solutions, serving users with more complex needs. Our profitability was negatively affected by nonrecurring costs totaling some SEK 100 million in the year or over 4 percentage points. And that relates to the long-term investments that focus on building a more robust company and a more resilient company. And obviously, the strengthened SEK and the weaker dollar post significant headwinds.

Our operations infrastructure got a significant upgrade with the opening of our brand-new and modern offices and operating hub in Pittsburgh, Pennsylvania, serving our entire North American market, and that represents some 3/4 of our business. We continue to expand our direct market presence by agreeing to acquire our Italian reseller partner, SR Labs Healthcare. The overall exposure to import tariffs to the U.S. is limited since our products generally are classified as medically certified assisted devices and that exempts them from tariffs under the so-called Nairobi protocol.

While the recent U.S. government shutdown and general uncertainty on policies had no apparent impact on our business, we acknowledge the broader societal effects that this may cause and may cause some slowdown to the business, but the financial impacts are quite difficult to quantify at this point. It continues, obviously, to be a very fluid situation in and around the U.S., and we continue to monitor all macroeconomic and policy change developments very closely. All in all, we remain confident there is ample opportunity for growth over a long period of time given the low penetration of communication aids, and we continue our efforts in helping more users by expanding and service a market that is largely underpenetrated. As we have learned from the history, it will never ever be a straight path forward, but our past performance solidifies our long-term confidence.

Our current financial targets were communicated in February of 2024 and then expressed with a time horizon of 3 to 4 years. The first target to, on average, grow revenue by 20% per year adjusted for currency effects, but includes contributions from acquisitions. And in local currency, the fourth quarter growth for 2025 was 31%, which means that we've found a revenue growth momentum to build on. The market we serve remains hugely underserved, but also quite immature. With the example of growth levers such as sales team expansion, adding direct markets and operational excellence, we continue to build our growth journey.

The second target is to deliver an annual EBIT margin that reaches and exceeds 15%. And we have proven to build strong growth with incrementally improving profitability, and we need to continue to invest, obviously, in the future growth with improvements in scale. And the recipe for us is quite simple, continued revenue growth, high and stable gross margins and then a total operating expense that increased at a lower pace than the revenue growth. And as a consequence, we see good opportunity to further leverage our revenue growth translates to reaching and exceeding an EBIT margin of 15%. Last but not least, the dividend policy. So we do have an attractive cash flow profile. And given the growth opportunities, we need to maintain a capital structure that enables strategic flexibility to pursue growth investment, and that obviously includes acquisitions. But it's still expected that over time...

Let's try with Jakob instead. So -- do we have Jakob on the line?

Yes, I'm on the line.

Good. So please ask your question.

My first question is on the sort of growth outlook you see. Obviously, very good momentum here continuing in Q4. But given that now that from Q1, you are facing these more tougher comparables, do you still see that you can sustain a sort of 20-plus organic growth momentum?

I think you're absolutely right, Jakob. By the way, sorry for the technical issues. This is Fredrik. You're absolutely right. We are seeing tougher comps. And without kind of talking too much into the future, we also remain confident in our long-term predictions, and that is expressed as we believe in an annual growth of 20% adjusted for currencies and contributions from acquisitions. So we're making no change to the outlook. we have never been in a situation where the current growth has been something we have commented on in more detail.

Any more questions?

Yes. Another question, if you can elaborate on the development in your U.S. sales force during the last year, sort of how much it has grown from the beginning of 2025 to where you are now and also what trends you're seeing in sales force efficiency?

Sure. Can I hand over to Linda to maybe elaborate on that?

I mean we have added more feet on the street, over 20 people in the sales organization or solution consultant as we call them, are -- have been added during the year. We also see an improvement in efficiency for our sales organization on a good trajectory, which is a really good sign considering how many people we have added during the past year. So that's great.

And that equates to roughly 20% or is it?

It's about 10%.

Sorry, the growth in terms of number of FTEs.

Yes, that's about 20% increase.

Yes.

Good. Any further questions?

Yes. Then I'm also wondering a bit on your balance sheet. I mean, it's good to see the dividend here you announced today. But given the stronger profitability, I guess we will come down to quite low leverage level here towards the end of 2026. So just what are your thoughts on how you will use the balance sheet going forward?

I mean we should always prioritize and make sure that we look at future investments, it could be M&A, et cetera. So we need to make sure that we have excess cash for that. But if we -- for the future, I mean, now we have a good situation, and that's why we decided on doing a dividend this year.

I think it's also important to stress the fact that given the type of business that we're in, the type of payers that we are, as a company, we should carry a certain leverage. And we obviously feel quite confident in the ranges where we're currently operating. But that can change with market interest rates and whatnot. But obviously, we feel quite confident at the leverage rate that we're on and hence, doing the dividend.

Maybe I can just take one more and then I'll get back.

A quick one.

Yes, just if you can comment on the situation with RAM memory prices and if you see any impact on gross margin or ability to deliver.

Sure. So just for everybody to understand, the prices for high-technology memory chips has gone down dramatically, typically associated with the AI boom. We do have memory chips in our products. And yes, we have seen that the memory prices have gone up, but you should see that in the light of 2 things. First of all, we don't use the highest specs memory chips that you typically use in AI computing, et cetera. So we're not really in that market. And the other part is that the bill of material cost for the memory chip per se in our products is very, very small.

So even if you would look like a doubling of memory chip price, et cetera, it only would affect some tens of percentage points on our gross margin for our products. So we are -- with a 70% or so gross margin, the bill of material cost for a specific component doesn't actually affect us all that much.

Good. Thank you so much. I think we also have Daniel Djurberg from Handelsbanken.

Congrats on a great report, I think. And also thanks for the clarification for some analysts on the COGS side. I have a question on -- you mentioned the Nairobi Protocol. Have you seen any policy impact or changes so far? I have looked myself, I haven't found anything.

No.

No.

Good. Another question in the autumn on the close down, you were quite safe out due to prepayments. Is something changed this time and this prepayment thing that could be that it could be a larger impact directly given the close down?

We didn't see any direct impact of the close down, and that's because the system is -- there are buffers, as you alluded to in the system. But I need to stress the fact that this type of close down, and I would also say if you go up in the helicopter and look at the general uncertainty in the U.S. society, it will and have some sort of impact on us. It's affecting schools. It's affecting the life for our own staff and societies at large. It's, however, super difficult for us to quantify exactly what that meant in terms of dollars. But I would be wrong saying that we are unaffected largely. But there's nothing that we can really point out or quantify.

Super. And also in terms of ramping up sales force, can you comment a bit on the efficiency on the number of prescribers and so on that this sales force can help, i.e., your indirect sales force more or less?

So 3 factors. The first one is the number of reps that we have in the field. And as we said in the previous question, that increased by roughly 20% or so or 20 people to be exact in the U.S. last year. At the same time, we did see an improvement in kind of revenue per rep or sales rep efficiency. The third element is something that I believe we have talked about before, which is the number of prescribers in the market that prescribe 4 or more devices per year.

And here, too, we saw an uptick compared to last year. I actually don't have the number, but I would say that there were probably a double-digit percentage, perhaps low in number of prescribers that are for the lack of a better word, good at your job or et cetera. And that's, of course, a fantastic growth lever because they carry our water, and they typically have more successful patients.

Perfect. And if I may, very last question on the competitive landscape. Have you seen any larger changes for example, your U.K. competitor, Smartbox was acquired there and also you say something about PRC in the U.S., given these are private companies, it's hard to judge from the outside.

The short answer is no. I think it's largely business as usual. If you look at the acquisition of Smartbox that was announced, not yet closed, I believe. That's merely an ownership change. And that's potentially good. We have no opinion about that. And you did also see that PRC did acquire 2 small software companies typically focusing on other markets than their home market, U.S. But again, this doesn't affect our day-to-day life.

Thank you, Daniel. And then we will turn to Kevin, who has posted a question in the chat asking you increase R&D every year. Will this increase indefinitely? Or will it flatten out more and get quarterly consistent over time?

Linda?

So I mean, during 2025, we have talked about the strategic move that we have done from the U.S. to Sweden, which means in 2025, our R&D spend has been very high because of a lot of nonrecurring costs. What we see over time is that we will not increase our R&D spend in relation to revenue. So that will over time go down. And also why we did this move was to -- for the same amount of money that we spend in 2024 or in Q4 2024, we will actually hire more people. So we will get an efficiency in adding more capacity for the same amount of money. So over time, this will go up. But of course, we need to add a couple of heads every year, but it's not significant from a SEK 1 million increase perspective.

Good. And he continues also, Kevin, all the quarterly reports for 2025, you have expressed that the demand has been basically the same in Q1, Q2, Q3. What did it look like for Q4?

The same.

The same.

Yes.

Good. So let's see now if we have, Phillip.

All right. Most of my questions have been covered, but I was just wondering, has the U.S. reimbursement rate increased going into 2026?

Yes. They have communicated a 1.9% increase in December that we will start to evaluate during the year or implement during the year. But as historically, this takes some time for us because we need to update overall appendixes to our agreements with the funding bodies across the U.S.

But it's a good question because as many fear with the current political, it didn't go down. And it's typically associated with inflation. I think this just under 2% increase of reimbursement rates underscores that.

And then I was also wondering about Tobii, they reported the other day, and it was quite a disappointment. And does it have any effect on you about their performance and their ability to deliver products to you?

No.

Short answer, okay.

It's obviously a complex topic, but we are in a position where it doesn't affect us.

And we have a lot of stock when it comes to Tobii components. That's part of the prepurchase we did during the summer.

Thank you, Phillip. We also have another question from Jessica at Redeye. So adjusted for nonrecurring costs of SEK 17 million, the EBIT margin reached 18% in Q4, which sits well above your long-term target of 15%. Now that the restructuring of the R&D organization is complete, how do you view the ability to maintain this elevated margin level throughout 2026?

First of all, Jessica, is that the profitability or margin target is expressed as exceeding 15%. So our target is not 15%. It's exceeding 15%. And we remain confident that that's a level where this company should be able to deliver. With that said, we're also going to make sure that we make the appropriate investments so that we don't build a card house that could implode here. We want to build something very, very solid and resilient.

We should also remember that Q4 is our strongest quarter. So profitability grow -- both revenue and profitability can increase during -- quarter during the year.

Good. And actually, I see that Kevin had a follow-up question on the R&D that he asked. Would your EBIT margin and therefore, your results have been better next year, all are the same since they have been a onetime cost?

Yes. That's mathematics.

Good. Good to confirm. I think by that, let's see. There was one more here also from Kevin. And another question about the demand. That the demand is so consistently high, 32% excluding currency. Can I get some history regarding this, more in regards to if you have seen this demand historically and what may or may not affect this?

Sure. And it's actually quite a complex topic because we are operating in an industry where we are also not only providing the products and the solution, we're also there to create the awareness. So our long-term initiatives on educating prescribers, being active at universities, creating more and more successful use, et cetera, that is a very, very slow-moving ship. And it's quite difficult to kind of exactly calculate the impact from when one of our colleagues were out in the speak teaching a prescriber how to do their job until that translates into revenue growth.

So I would say we are responsible for the growth because we and some of our industry peers, we largely create the market. Exactly to predict which percentage points that will end up in is genuinely hard. But we feel obviously that we've found the momentum, but I expect that it will be a bumpy road. Sometimes we will have very strong growth and sometimes we will have weaker growth. But if you zoom out a little bit and look at the overall curve over longer periods of time, we are obviously quite confident in long-term growth. And when I say long term, I'm probably more talking decades than quarters.

With that, all the questions have been asked, and we concluded.

All right. Thank you, everybody, for listening in. We apologize for the technical mess up that happened. But obviously, we were able to hear the voices of some of our dear analysts and followers. So something worked. We will now continue to work. And next time we have a session like this will be on April 24. It's a Friday, and then we will conclude the first quarter of 2026 in our earnings. Thank you very much.

Thank you.

Okay. Good morning, and welcome to this earnings call, where we will cover the third quarter, summarizing our business from July, August and September of this year. And I'm Fredrik Ruben, I am the CEO of Dynavox Group.

Hello. I'm Linda Tybring. I'm the CFO of Dynavox, and I will cover the financials later on.

Great. So for those of you who have been participating in these calls before, you will be familiar with that. We will start by a quick recap about what Dynavox Group is about. And then we will summarize the main takeaways from the quarter. We will then dive deeper into the financials, and thereafter, there will be a Q&A session. And you can submit your questions during this call in the function here, in Teams, in the chat function. Or you can ask them live if you have asked -- or if you've been given prior notice to our team. We, of course, always welcome offline questions sent over e-mail to the above e-mail address [email protected].

But a brief overview of Dynavox Group. First and foremost, it's important to reiterate our mission and our vision, which I know is very dear to not only our over 1,000 colleagues around the world, but also to our ecosystem of partners and investors. And our vision is a world where everyone can communicate, and we contribute to this via focusing on our mission, which reads: To empower people with disabilities to do what they once did or never thought possible. And this also summarizes 2 of our main user stories. The first one, the do what you once did, that may refer to a person who led a normal life until a diagnosis such as ALS, which rendered her then unable to control the body and communicate like before.

And the other, the never thought possible can refer to the child diagnosed at an early age with a condition such as autism, cerebral palsy or so where thanks to our solutions, he can now do much more than the world around him ever thought possible.

On the picture here to the right, we see [ Lyn ] from Lawrenceburg in Kentucky. She is one of our amazing users diagnosed with cerebral palsy and is a great example of this. The market that we serve is hugely underserved. Some 50 million people have a condition so grave that they simply cannot communicate unless they have a solution like ours. And every year, we estimate some 2 million people are being diagnosed and yet only some 2% of those are actually being helped and the rest remain silent. And the main reason for this spells lack of awareness and also among the professionals and the prescribers who are tasked to assist these users and a poor health care reimbursement system.

We operate this with a global footprint. Today, some 3/4 of our business stems out of the U.S., and that's largely because of a reasonably well-functioning funding system established some 20, 30 years ago. But our products are sold in some 65 markets around the world, of which the U.S., Canada, U.K., Ireland, Denmark, Sweden, Norway, Australia, New Zealand and France; most recently, Germany, are markets where we sell directly; while the others are served by a network of some 100-plus resellers.

Our staff is distributed in a similar way as the revenue. That means some 60% of our staff are based in North America with our U.S. headquarters in Pittsburgh, Pennsylvania. And our second largest office is here, our headquarters in Stockholm, but we have branch offices in several European countries as well as in Suzhou, China, Adelaide, Australia. As of today, we are about 1,000 employees in total.

We provide a comprehensive portfolio of solutions that ranges from -- if you start from the left, the content and the language system, such as the world's leading library of communication symbols called PCS and the leading solutions of off-the-shelf or custom-made synthetic voices of the highest quality and with a large diversity in terms of languages, ages, ethnicities.

We then offer highly sophisticated communication software, which is tailored to the type of user, which can vary greatly based on the needs. We then develop and design devices with cutting-edge technology and medically certified durability, and that includes communication aids controlled via eye tracking and accessories such as the Rehadapt mounts. We have a services portfolio to help our users through the complexity of obtaining and getting funding for the solutions. And last but not least, we're there to help our users, the therapists and the caregivers through our global teams and support resources.

We operate this model globally, and it's important to note that each piece here is critically important and also a significant differentiator for us, making us absolutely unique. Our go-to-market model is predominantly as prescribed aids, and that means that some 90% of our revenue comes from public or private insurance providers. And this also means that we have solid paying customers and have always been resilient towards changes in the overall economic climate.

But now I will go back at focusing on the main topic of today, namely the earnings report for the third quarter 2025. So, if I look at the highlights, we had another strong quarter when it comes to revenue growth. The growth compared to the same quarter previous year sums up to over 35% after adjusting for currency effects. And this marks a further acceleration of the already strong trajectory over the past 3 years. The demand for our solutions remains high, proving the solidity of our underlying business, and we see robust growth across all markets.

In this quarter, a particular highlight is the outstanding performance in our direct presence markets outside of North America. We continue seeing increased growth in our touch control product portfolio, and they are typically serving younger users with autism. However, in this quarter, we also saw very good traction in the eye-gaze controlled solution area, serving users with more complex needs. Our investments in systems, infrastructure and organization to support our long-term ambitions continue according to plan, and I will come back to that shortly.

EBIT came in at SEK 64 million in the quarter, but this includes nonrecurring costs of some SEK 26 million in this quarter and implying then a strong underlying profitability. And on September 1, we completed the previously announced acquisition of our long-standing German reselling partner, RehaMedia.

Coming back to our investments. So strategic investments are an important part of our growth strategy and a way for us to scale and build an efficient and resilient company. So in 2025, we expect to invest some -- approximately SEK 100 million in total in of nonrecurring nature in 2 main projects that are progressing well and according to plan. The first one is the rollout of a new ERP system in North America and an establishment and a consolidated product and development hub here in Stockholm. The ERP successfully launched on July 1. And despite almost a week long freeze period, we have been able to keep up deliveries and even deliver more voices to our customers than in Q2. And during Q3, the nonrecurring spend totaled some SEK 9 million or SEK 40 million spent year-to-date on that.

The second topic, the consolidation of our product and development organization into a central hub in Stockholm continues according to plan. All managers are in place since a while back and the majority of all functions have been recruited and have started. And since April of this year, all new product releases have been handled from the Stockholm hub. During Q3, the nonrecurring spend totaled SEK 14 million on this with a SEK 33 million spent year-to-date.

But now I will hand it over to you, Linda, to take us deeper into the financials.

Thank you, Fredrik.

So let's talk Q3 financials. Revenue for the third quarter came in at SEK 606 million, a 35% year-on-year growth after adjusting for currency effects. Recent acquisition contributed with 3% and the organic growth was a solid 33%. This marks another chapter in our 3-year strike of robust growth and consistent execution. Currency fluctuations had 10% negative impact on our revenue.

Sales continued to grow across all markets. However, this quarter, our direct market outside North America delivered outstanding performance, exceeding already high expectations. As we have talked about in prior quarters, we continue to see growth among younger users with autism. At the same time, there is a good traction in eye-gaze control solutions, serving users with more complex needs.

The gross margin ended up at 70%, an increase of 0.8 percentage points. The margin was improved by increased sales, also by further strengths in addition to having more direct market contributed to an extra layer of gross margin. Gross margin also had slightly help from currency this quarter. We had some negative impact of increased cost of freight, and this is mainly related to using air freight, which has been driven by strong sales momentum, and we wanted to ensure that we are delivering on time. EBIT for the quarter was SEK 64 million, and the EBIT margin was 10.6%. It was negatively affected by nonrecurring costs totaling some SEK 26 million in the quarter, lowering the profit margin temporarily by 4.3 percentage points.

Our OpEx increased by 30% organically. The OpEx increase was affected by factors such as continued investment in staff, increases in the sales and marketing. In total, we added more than 200 FTE, including M&A, of course, also adding normal salary adjustments.

During the quarter, we continued to invest in new systems ands tools to strengthen scalability. The total nonrecurring spend related to this in the quarter was SEK 9 million. As of July 1, we are live with our new ERP in our largest market, North America.

Operating expenses was also affected by nonrecurring costs related to our restructuring cost in the product and development organization. The total nonrecurring spend in the quarter was SEK 14 million. Both these 2 investments are according to our strategic plan.

The recent strong development of the Dynavox Group share price has rendered an increased cost for employee long-term incentive program of SEK 3 million compared to the third quarter last year. All in all, nonrecurring costs in the quarter sums up to SEK 26 million. In addition, EBIT was negatively impacted by currency of SEK 6 million in the quarter.

Net R&D costs increased by SEK 23 million, SEK 10 million of this relates to nonrecurring restructuring costs within the research and development organization. If we look at the basic earnings per share, it totaled to SEK 0.36 per share to compared with last year's SEK 0.43 per share.

For the quarter, cash flow after continuous investment was positive with SEK 20 million. Cash at the end of the quarter was SEK 172 million and net debt was SEK 924 million. The total used credit facility and term loan at the end of the quarter was SEK 900 million. The net debt after last 12 months EBITDA was SEK 2.0x. And also note that during the quarter, Dynavox signed a new refinance agreement with Swedbank totaling to SEK 1.2 billion. And this is classified as a social loan as our prior agreement. And this agreement reflects our continued commitment to advancing sustainable social initiatives that a positive impact on society.

The credit facility includes a SEK 900 million term loan and a SEK 300 million revolving credit facility, which means -- which can be used for both working capital and strategic acquisitions. The facility has a 3-year term with 2 optional 1-year extensions. For end of September, we have unused revolving credit facility of SEK 300 million.

So back to you, Fredrik, to conclude the earnings call.

Thank you, Linda.

So before we open up for questions, I'd like to reiterate the main takeaways from the third quarter. So first of all, we continue our strong growth trajectory, a trend that started in the early spring of 2022 and just keeps accelerating. We grew revenue by 35% adjusted for currency. Sales continue to grow across all markets, but with direct presence markets outside of North America exceeding expectations in this quarter. We continue to see growing adoption among younger users with autism, but at the same time, we also see really good traction in the eye-gaze control solutions area that serves users with more complex needs. Our profitability was negatively affected by nonrecurring costs totaling some SEK 26 million or 4.3 percentage points related to these long-term investments focused on building a more robust company. The current uncertainties in the macroeconomic climate or policy changes has not had any direct effects on our business, but we experienced some indirect effects through elevated freight costs in the aftermath of various tariffs announcements.

The currently ongoing U.S. government shutdown poses no immediate execution risk, but we are monitoring the development here closely. Given the continued and sustainable growth, we continue to grow in term -- the team, while investing in systems and tools to enable future business growth that is much bigger than today.

Our financial targets are expressed where -- and they were communicated in February 2024 with a time horizon of 3 to 4 years. And the first target was to, on average, grow revenue by 20% per year adjusted for currency effects, and that includes contributions from acquisitions. And in local currencies, the third quarter growth was 35%, which means that we have found a revenue growth momentum to build on. The market we serve remains hugely underserved. And with the example of growth levers such as sales teams expansion, adding direct markets and operational excellence, we continue to build on our growth journey.

The second target is to deliver an annual EBIT margin that reaches and exceeds 15%. We feel that we have proven to build a strong growth with incremental improvements in profitability. We need to continue to invest in future growth with improvements in scale, but the recipe is rather simple. We want to maintain continued revenue growth, high and stable gross margins and then total operating expenses that increase at a lower pace than our revenue growth. And as a consequence, we see good opportunity to further leverage how revenue growth translates to reaching and exceeding an EBIT margin of 15%.

Lastly, we have a dividend policy. We feel that we have an attractive cash flow profile. And given the growth opportunities, we need to maintain a capital structure that enables strategic flexibility to pursue growth investments, including then acquisitions. But it's still expected to, over time, generate excess cash, and our policy is, therefore, to distribute at least 40% of the available net profits to shareholders via dividends, share repurchases or similar programs when time so allows and it's deemed the right prioritization for us.

With that said, I am taking a step to the left, and I invite Elisabeth Manzi, our Corporate Communications Director, who will help to moderate and enable us to take questions from the audience. Elisabeth?

Yes. Well, thank you. We have a lot of questions here today. So I will start with a question from Daniel Djurberg, who is asking about the nonrecurring outlook for ERP and R&D for 2026.

So I mean our goal, when it comes to our product and development organization is that it should be completed by the end of the year and that we are geared for starting to execute in 2026. When it comes to ERP, we are still in the transition of getting all our legal entity over into the new ERP. And our goal is that we will be completed somewhere during next year.

Yes. But -- and to the last point, I mean, we, North America represents some 3/4 of our business, and that's what we started with. It's obviously the most complex area and also by far the most costly area. So, we definitely see that's going to…

It will gradually, yes, decrease over the next year.

So, following up on the North America and the U.S. situation, Daniel is also asking if there are any hiccups to the funding systems or to Medicare organizations due to this shutdown? And also, is the Nairobi Protocol still valid?

The short answer to your first question, Daniel, is no. We have no current impact on our ability to get paid basically in North America. That might change, and we don't know exactly what's going to happen in the future. But as of today, no.

Our assessment on the Nairobi Protocol is that there are no suggestions or paths where the tariff-free import on our types of products will be changed just because of recent announcements. So, we -- the best guess right now is that it will remain in force.

Good. And then I do believe that we also have someone calling in. So, let's see if we have Ramil on the line.

I have a bunch of questions actually. I'll try to contain myself. But maybe if we start on like the progression you've made throughout 2025 with younger users within autism. It sounds very much like a TD Navio type of sort of use case. So, do you think that the launch of TD Navio in mid/late 2024 was sort of the driving element behind sort of the organic growth acceleration in this year?

It's a good question. And the answer is yes and no. What is actually the main product that is benefiting that customer group is a software called TD Snap, and that's a software we had in our portfolio for quite some year, but it's obviously been refined over time. That software is the software that you run on TD Navio. So, with the launch of the TD Navio, which is simply a better version of a very similar product that we had prior to that, that was what we can see that has sparked a really strong growth momentum. But as such, it's the software that actually makes the bigger difference. TD Navio is the can that holds a very good soup, if I would use that analogy.

Yes. Makes sense, Fredrik. And then on the topic of direct sales outside of North America improving, could you -- because you've acquired several distributors in the last say, 2 years. Could you elaborate a little bit on what markets you are seeing the pick up in? And if that pertains to the new acquisitions, France, Germany or older ones?

It's actually quite a strong growth across the board. So, there isn't one country that kind of stands for the majority of the growth. It's a very strong growth across many markets. But one clear trend that we see is the markets where we have no middle layer, no middleman, where we go directly. And those obviously includes the markets that we recently acquired. But we should also remember that we were already direct in a number of other markets prior to that. But those - if we see some sort of trend of the kind of across-the-board growth, it's definitely those markets that are in the lid.

Okay. Makes sense. And then I mean, I can see the notion of like margin expansion being visible ahead as per your financial targets. But if you take Q3 isolated, organic growth in OpEx is 31%, so just 1 percentage point lower than organic growth on top line. The phasing of margin expansion, how should we think of that, say, for Q4 and into 2026, perhaps?

Do you want to address that?

Yes. First of all, you need to consider the significant investments that we are doing this year. Both the restructuring cost is impacting our organic OpEx increase and that we will not see next year. Over time, that means also our R&D spend will go down in relation to revenue over time. So, you will have that kind of improvement. We will also start to see gross margin. You will slightly see some improvement when we go direct in more markets. And then over time, the more efficient we will get with the systems that we are now implementing, we will not -- we don't need to invest as significant to actually continue our growth journey.

So, you talk about the crocodile sometimes. So, we will gradually see an improvement of OpEx slowing down growth and revenue continue.

We want to spend as much money as we see reasonable in sales and marketing because that really drives growth, whereas we want to see a very moderate increase in all other OpEx areas.

And just one final one perhaps on like outlook as well. I mean, in connection with Q2, you said that the first and the last week of Q2 were really strong. Could you shed any light on how Q3 progressed throughout the quarter?

Yes. I think you're absolutely right. So just to reiterate, we said both in Q1 and Q2 that the first week of Q1 or Q2 was as good as the last week of Q1 and Q2. That was actually not the case in this quarter because we had a planned -- how should I put it, standstill in the very first week or so in North America due to the ERP change. So, there was a little bit more of a catch-up effect, which could argue that we had an accelerating growth throughout this quarter. But on the other hand, that was a little bit kind of artificial because we kind of -- we created that problem, I should say, ourselves. So good momentum is probably the short answer.

And actually, both Jessica and Daniel also had questions relating to the Q4 and if we could see any seasonality outlook for Q4?

Without being too detailed, we should just remember that we have a fairly consistent seasonality effect in our business, where Q1 is the weakest; Q2, a little bit better; Q3, a little bit better; and Q4 is our best quarter, both in terms of absolute top line revenue, but obviously, spreading out the larger top line over almost the same OpEx will hopefully have a bigger kind of drop-through. We see no difference here. The reason for this is that the -- a lot of our clients and customers have a big incentive to get their orders shipped and delivered before New Year's Eve before the so-called co-pays or deductibles in insurance systems resets on January 1. So, no change.

Good. So, let's continue with some questions -- more questions from Jessica Grunewald at Redeye.

She's asking if we could walk us through the working capital buildup and how you see it developing going forward, particularly with the increased share of direct sales.

Yes. So, what happened when we get more direct sales is, of course, then that we need to build up more inventory because we get an extra additional layer of inventory. So now we've seen in the last couple of quarters, one is related to Tobii that we have increased inventory, but also the second part is that we go direct in more markets, which means that we are building up more inventory. But over time, we will balance this and we'll be able to get more release also part of us that we have grown this year, we needed to adjust because making sure it's more important for us at the moment to make sure that we deliver on time than to build up slightly higher inventory. But over time, we will see the evidence of that.

Also in this quarter, we should also know what Fredrik mentioned that we also saw some of the sales coming in, in the later part of the quarter, which means we build up some of the accounts receivable as well.

And a last question from Jessica here. She's asking, what are your expectations regarding the RehaMedia acquisition and the market dynamics in Germany?

We should just remember that these acquisitions, when we acquire our research, they're quite small in the grand scheme of things. With that said, Germany is one of the most exciting and interesting markets, not just in terms of share size or funding system. It's also a market where we believe that there is a lot of growth potential. So having our own feet on the ground in Germany is going to be instrumental for the slightly longer run, and we feel it's off to a very good start.

And Germany is actually very -- Germany funding is actually very similar to the U.S.

Right.

Good. So Oscar from SEB is asking if you can elaborate on the increased freight cost and how many basis points that would be a pressure on the gross margin?

It's very small effect on the gross margin, but that is, of course, related to that we needed to get inventory in the warehouse as soon as possible because we saw the need from a sales perspective. Over time, that will go down, and we will be able to ship much more with both because we are able to balance the sales momentum that we'll have.

Yes. I would say it's more of an opportunity of actually improving it going forward when we are -- when we can plan a little bit more ahead. I think it's fair to say that this announcements of tariffs and the new policies that come out specifically from the U.S., have an actually profound effect on supply chains and freight chains across the world because it's quite bumpy.

Good. And a follow-up question on the performance and North America. We said that markets outside of North America was performing very well. So what about North America? Did they underperform the expectations in Q3? Any color would be helpful.

Okay. I will provide color. North America did fantastic. And some of those markets outside of North America did amazing. That's the amount of color I can provide. It's hard when everybody is performing personal best to say that someone didn't perform. It was very strong across the board, but simply even better out in those direct markets outside of North America.

But I think it's also a strength from us that it's not one country or one product. We are actually across the board growing our company.

And this was actually the same question as Mikael at DNB Carnegie had. So, we will move on to bringing in another voice. So, I'll ask [ Philip from SB ] to join.

So, you mentioned in the report that you witnessed good traction in touch control devices during the quarter. What is the sales split between touch control and eye-gaze devices?

The split.

It's around, I would say, touch is today probably slightly over 50 and eye tracking slightly below, but we should also remember the ASP. So, from a quantity perspective, touch is significantly higher than eye track.

It's almost -- it's an ASP difference of 2. So, an eye tracking device costs twice as much as a touch device.

Yes. And do you anticipate it to be kind of the similar split going forward?

I think past performance is a good predictor of future performance. That's how much we can say right now.

And I remember you mentioning -- I don't know if it was at the end of last year or beginning of this year that around 10,000 prescribers have ever prescribed a Dynavox device. Has that number increased during the year? Or how should we think about that?

I don't have that number. It's my honest answer, but we can definitely look into it. My gut feeling says that it's increased slightly. But what I do believe is that the prescribers that prescribe 4 or more that has a little bit more traction, that group has grown -- yes, quite strong.

And what measures do you use to increase like the revenue per prescriber for those people.

So, what kind of measures we take to increase that?

Yes. Why do you see that the people that prescribe several devices increase their prescribing rates?

The simple answer is because it's one of our focus areas. We believe that it's better to spend our time on taking the ones who have done something and make them become more self-sufficient and better at the jobs rather than just trying to pull more new prescribers into the loop. But it's a balancing act.

And a follow-up on that last conversation here then on the eye-gaze controlled solutions. Could you describe what's driving that momentum?

And I believe it's Daniel or was it Mikael Laseen.

Yes.

It's a very good question, Mikael. I think that there is a combination of where the market had focused quite a lot on what was then a year ago a new device, the touch devices from the Navio device. That is -- that's now yesterday's news, and we could potentially see that it's normalizing a little bit. So, it might be almost like an internal effect, but it's hard to say.

Good. And then let's see if we have another one here from [ Matt ]. Does your strategic investment currently holding back reported margins then into 2026? The market seems to focus on the lower-than-expected U.S. sales. Any worries for 2026 U.S. organic development?

No.

No.

That was short. Good. So let me just double check here. There was a little bit of a follow-up from Daniel as well on the freight cost and the impact on gross margin in Q3 and if this will turn substantially tougher ahead?

Quite the contrary.

Yes.

I think we are in a position now where there is less interruption, less uncertainty, and we obviously feel quite confident with the momentum, which will enable us to not necessarily get lower freight costs. We can choose freight by sea, for example, which is significantly cheaper. We have a better ability to plan right now.

Good. I believe that was everything.

All right. Fantastic. I'm happy to see that the technology work with some of the call ins, that's great. But also thank you, everybody, who participated and submitted questions in the chat. We are looking forward to seeing you all back again on February 5. So next year, when we will summarize the business for the full year of 2025. Thank you very much.

Thank you.