Photocure ASA

All right. Well, good afternoon. Good morning to everyone. This is PhotoCare ASA fourth quarter and full year 2025 results. I'm Dan Schneider, President and CEO. Today with me is Eric Dahl, CFO, and Priyam Shah, our Vice President of IR. Just a reminder, the usual disclaimers are in effect for today's presentation. So I'd like to start off with the strategic priorities and initiatives of PhotoCare. Our strategic priorities guide how we execute and allocate resources across a company. At a high level, our strategy is centered around three key pillars. Strengthen the core Hexafix-SysFu business. Advance blue light cystoscopy as a definitive standard of care in bladder cancer. And third, expand our reach into a broader uro-oncology and precision diagnostic space. Taking a deeper dive in the first pillar, accelerate and expand, we need to deliver on our financial guidance for disciplined growth in revenue and EBITDA in our core business and continue generating operating leverage. We also need to drive the BLC mobile strategy for tech in the U.S., that hits the hospital markets or the hospitals who otherwise wouldn't have access to blue light cystoscopy. And in the EU, it's important we increase our penetration in our high-priority growth markets through BLC expansion and additional image quality upgrades throughout the continent, and also expand our geographic footprint, for example, most recently Spain last year, and leverage our distribution partnerships throughout the globe. In the second pillar, positioning and access, we are building the foundations for BLC as a primary precision diagnostic tool to facilitate early and appropriate use of new NMIBC therapeutics, detection, surveillance, and therapeutic monitoring. We also need to support high-depth BLC technologies that are entering the market, upgrades of key OEM partners, and support the efforts to allow other manufacturers into the U.S. market, whether it be reclass or other processes. And finally, partnering with Richard Wolff on building adoption in Europe for the flexible blue light cystoscopy interim solution while we continue to advance the development of the high-def 4K state-of-the-art and the world's only BLC Flex system for global use. These efforts will not only drive near-term growth, but also will solidify our long-term competitive positioning. The third pillar is acquire, and transform. We're looking ahead and actively assessing opportunities within non-muscle invasive bladder cancer and other uro-oncology indications with a focus on the rapidly growing interest in precision diagnostics indications, things such as biomarkers, artificial intelligence, and new technologies, diversifying our portfolio and building upon our commercial footprint and bladder cancer expertise. Two real-time examples of this are collaborations with Richard Wolff and Fortech to bring 4K flex and mobile solutions by leveraging our existing global commercial infrastructure in the broader uro-oncology segment. And secondly, furthering the lifecycle management as demonstrated by our recent strategic collaboration with Claritas ICS to develop the world's first and only BLC AI system. M&A is a focus in 2026 in an effort to expand our uro-oncology footprint, grow faster, and increase our ability to generate strong cash flow. So Q4 highlights. Product growth. Overall, we had 9% product growth revenue, 10% on the total year, XFX. In North America, we delivered 13% unit growth and 17% product revenue growth, for an exchange, all saying the continued flex unit decline. Flex currently is less than 5% of our total U.S. business. The installed basis of FIRA blue light equipment continued to increase with one tower placement and six upgrades in the U.S. in Q4. And I'd like to make a comment that the Fourth quarter of last year, Carl Storrs was running a promotion, and we believe that some of the sales will flow into first quarter of this year as the POs have been cut. We had a fantastic 19% unit growth in the rigid surgical market, inclusive of Fortec Medical's mobile solution. As a reminder, Fortec added six more rigid Sapphira to their national fleet in September and began deploying them, this all underscoring the growing demand for BLC. And the number of active accounts has now increased by 22% year-over-year to 384 active accounts, setting the stage for continued momentum into the future. In Europe, revenue was up 4%, units up 4%. We continue to execute in the EU with strong growth from the DAC and Nordic countries driven by Olympus upgrades and continued execution focus. The launch early in 2025 of the Olympus Viscera III equipment continues to gain momentum with now 60 new installs in the field. Upgrades throughout the world have proven to increase the uses of BLC with HexFix and SysView and remains a very important part of our strategy. We also generated positive EBITDA, 1.9 million NOC, 8.4 million NOC commercial EBITDA. It's our 11th quarter in a row of positive EBITDA, which continues building operating leverage throughout 2025 and we believe into 2026. A strong balance sheet with 238.9 million NOC cash, and no term debt. And as a reminder, we also completed our 500,000 share buyback program last year in quarter two. Later in today's presentation, I will share several key performance metrics underscoring the growing business of scaling and operational leverage. Important news flow in Q4, Data, publications, presentations, and abstracts. On November 19th, we published the new budget impact model study in four European countries concludes that BLC use offers a clinically meaningful and economically rational approach to non-Muslim invasive bladder cancer. On December 8th, the impact of avoiding recurrence. The new Bravo study abstract at SUO 2025 demonstrated cost neutrality in blue light versus white light cystoscopy comparison. In industry news, on November 28th, we received a prestigious 2025 Innovation Prize from the Norwegian Cancer Society. The prize is recognition of our commitment to advancing cancer diagnostics and improving patient outcomes in bladder care. In partner news, on October 15th, as previously announced in the Q3 earnings call in October, We formed a partnership with Intelligent Scopes Corporation, signed an agreement for a strategic partnership to develop artificial intelligence to couple with blue light cystoscopy. And on January 12th, post-period, new publication of HEX-6 trial data from China, pivotal trial by OSIRIS, showed that BLC significantly improves the detection of bladder cancer using modern High-def equipment. The data shows proportion of patients with additional bladder cancer lesions detected by BLC was 43.3% during the rigorous trial and the updated equipment. So let's go to segment trends. Strong unit growth in both regions. Both North America and Europe delivered continued growth. In North America, the business was significantly overcome the continued decline of flex surveillance market, while the rigid surgical market delivered a 19% unit growth in Q4, an all-time high. In Europe, Q4 units surpassed previous Q4 high watermark as momentum continues to build throughout the region. Europe is beginning to see the impact of the Olympus Vizera 3 upgrade rollout, particularly in the DAC, France, and Nordic countries. 60 installs through Q4 with more in the pipeline, especially in that regions of Europe. Upgrades continue to deliver positive double-digit Reminder on the impact of these upgrades, 40% of the Europe is dominated by Olympus, so it's very important that this remains an important part of our strategy throughout the European continent. Turning specifically to North America, we see adjusted rigid growth increasing 19% with the addition of Fortec mobile solution, while flex units are now less than 5% of total sales, which is 17% to 20% of the total North American business. There were seven new Sapphira installs, six upgrades, one new. As I mentioned, a promotional program did run in the fourth quarter and is continued into this first quarter of this year. And account growth of roughly 22% year over year. This bodes very well for quarters ahead. Fortech Mobile Solutions is now reaching 134 accounts as of the start of the service. That's plus 13 from the end of Q3. And over 230 different physicians are now trained since launch, demonstrating growing momentum and demand. The Fortech mobile solutions to FHIR upgrades are key drivers to the U.S. business. Access to BLC in the U.S. remains a top priority as demonstrated by our ongoing efforts in the FDA reclassification and reimbursement initiatives. I want to repeat, supporting the growth are many discussions, presentations at U.S. medical congresses, such as SUO recently in December, where there is a growing belief that that BLC's ability to see more assures physicians of their ability to perform a more complete TRBT, which leads to more accurate pathology, staging, and risk stratification, and ultimately helps urologists make an informed precision medicine decision. Europe also remains strong with solid growth in the DACA and Nordic countries, which make up as a majority of the revenue. The Friday markets continue increasing. France, Italy, and U.K. were seeing double-digit growth. And as I mentioned earlier, there have already been 60 Olympus upgrades in Europe through Q4 of last year. Taking a look at the U.S. specifically, significant growth of 22% in active accounts. And remind you, the definition of active accounts are accounts that have ordered in the last 12 months. I get often asked what inactivates an account, and a lot of times it is old standard definition equipment that has gone down, and the account is waiting to either upgrade or go to the mobile solution. So we do have ebb and flow within the active accounts, but we are up on a total net of 22%. This includes four tech mobile accounts that are building momentum. The program already is exceeding everyone's expectations, as well as accounts due to BLC upgrades. We believe the balance of the old store's standard definition blue light machines will be upgraded over the next two years. This is an important initiative as upgrades provide double-digit uplift in sales in those accounts. We see continued momentum in the overall interest in adoption of blue light cytoscopy with SysView in the U.S. So the U.S. is a highly underpenetrated market for BLC with potential for exponential upside growth. This is an illustrative representation. Despite the progress we are making, we are still in the very early stages in the U.S. as the U.S. remains the single largest opportunity for photo cure and is still significantly underpenetrated with less than 10% market share today. We have a long runway for growth as awareness, access, and equipment availability expand. Bladder cancer represents a major unmet need in the U.S. Each year there are approximately 85,000 new cases and more than 730,000 patients living with the disease. We have the total number of TRVTs and surveillance testosterone in the U.S. here on the upper right. And in the U.S. and Europe, there are over 700,000 surgical procedures with 1.6 million surveillance cystoscopies done in offices annually. The total addressable market for flexible cystoscopy alone exceeds 1.3 billion USD globally. The blue light cystoscopy is uniquely positioned to capture a meaningful portion of that opportunity. Add another $700,000 for rigid, and the total TAM for BLC is $2 billion, with the majority in the untapped U.S. market. We expect several catalysts, and that's what's depicted in this representation, to drive the next wave of growth in the U.S. market. First, we continue to work towards improved CMS reimbursement, which we're pursuing through direct conversations with CMS and through legislative efforts in Washington, D.C., both with further support the adoption of BLC across academic and community settings. We also see the return of FlexSystem to the market that will enable broader access for outpatient and office-based procedures. We also see the entry of additional OEM partners, what would expand the installed base dramatically and provide more choice to urologists in all types of institutions. And finally, FDA reclassification of blue lysosophia equipment, for which there is an ongoing citizen's petition, could be a potential milestone that would significantly lower the barriers and accelerate uptake nationwide. And finally, and probably one of the most dramatic things going on, is a momentum in the macro environment. As reinforced in major medical congresses and increasing publications, the expensive precision therapeutics that are hitting the market are turning to precision diagnostics, like blue light cystoscopy and bladder care, as necessary to find the right patients who can benefit. Taken together, these drivers support the long-term growth trajectory for the U.S. business that is both scalable and and sustainable. The bottom line is we have a proven product of growing clinical endorsement in a traded market, giving us potential for exponential upside as these catalysts materialize in the near term. Growth initiatives. As I mentioned, first let me talk about our organic growth initiatives. We now have 134 Fortec using accounts with over 230 different users gaining experience. These are physicians and patients who otherwise would not have access to BLC. Our development partnership with Richard Wolff is progressing well, while a flexible PLC interim solution has been made available in advance of the future launch of this state-of-the-art system that has both high-depth 4K. This is a $1.3 billion TAM market between the U.S. and the EU five. The third box, and the trends are clearly blowing in the favor of BLC, the momentum and pressure continues to build behind the notion of accurate diagnosis and complete resections in line with precision pathway for bladder cancer patient care. We believe BLC can play its central part in discerning determining the precision pathway. As previously announced in the last earnings call, our recent partnership with Intelligent Scopes Corporation, a U.S.-based subsidiary of Claritas HealthTech, is to develop AI software for real-time tumor detection using BLC. Through this collaboration, PhotoCure and ISC are combining complementary strengths. PhotoCure's leadership in bladder cancer detection and ISC's deep artificial intelligence expertise to build an intelligent diagnostic platform designed to improve accuracy and consistency in tumor detection. The pilot program that we underwent analyzed data from over 200 BLC procedures with over 80,000 images, demonstrating early performance and very strong performance in detecting high risk and early stage lesions that otherwise would not be detected. Joint development work is underway, and the ENABLE clinical study has been initiated in both the U.S. and Europe, following which we plan to pursue both FDA and CE submissions, with Photocare holding the exclusive global commercialization rights once the software receives clearance. This initiative extends Photocare's technology moat towards data-driven precision care, paving the way for For our future AI-enabled diagnostics in uro-oncology, importantly, it adds high-margin, scalable software component to our business model, creating durable value beyond current consumable base. And why do we feel strongly about organic BLC adoption? The environment for adoption for BLC is stronger than ever. The guidelines from AUA, EAU, and various other bodies now recommend BLC and the newer guidelines are only getting stronger. The Italian Society of Urology was the most recent addition in the third quarter, which now recommends BLC for the first TRBT, the second resection, and recurrence of non-muscle-invasive bladder cancer in populations of high risk. The science itself, from over 300 publications and multiple well-powered randomized studies, provides a wealth of clinical evidence. Over 40 independent studies have confirmed improved detection and reduced recurrence, and we have the world's largest bladder cancer registry. And again, our OEM partners are investing. on anticipated volume growth and rising ties in bladder cancer diagnostics. By upgrading their systems with rollouts of 4K and high-def capabilities, the new OEMs are increasingly wanting to enter the U.S. market to offer BLC. As mentioned earlier, publications are now providing evidence that BLC significantly improves the detection of bladder cancer using modern high-def equipment. Data shows proportion of patients with additional bladder cancer lesions detected by BLC was 43.3% during a rigorous Chinese trial by OSIRIS with the updated 4K high-def equipment. And there's a rapidly evolving therapeutic landscape of bladder cancer care. Another major source of tailwinds behind the interest in bladder cancer diagnostics is a rapidly evolving therapeutic landscape. Bladder cancer remains a prevalent malignancy with high recurrence despite the standard therapies. BCG is a cornerstone of treatment for non-muscle-invasive bladder cancer. However, nearly half of the patients experience relapse or develop resistance, highlighting the need for alternative strategies. Recent advancements in immunotherapy have reshaped the therapeutic landscape in bladder cancer. Immune checkpoint inhibitors restore T cell function and show clinical activity in BCG unresponsive disease. Viral vector-based approaches provide localized immune activation, while cellular platforms such as CAR-T or CAR-NK therapies offer precision targeting of tumor antigens. Currently, other novel delivery systems and antibody drug conjugates enhance efficacy and safety by improving tumor-specific cytotoxicity. Collectively, these strategies significantly signify a paradigm shift from traditional intravascular therapy towards a personalized and durable immunotherapeutic intervention. After decades of little advancements, there are now six FDA-approved drugs on the U.S. market. Three were approved in the second half of last year, and there are 26 totally unique therapy-focused NMIBC trials ongoing currently. That's a positive development. What it also does is raise the bar for diagnosis. As these therapies are becoming more advanced, they are also becoming more expensive, and missing disease becomes even more costly. Every NMIBC case will become more complex with all the new personalized treatments and combo immunotherapies and bladder sparring options. Improving outcomes and guiding the future of management of bladder cancer will depend on precision pathways, starting with precision diagnostic like BLC along with monitoring to offer more comprehensive approach to risk assessment, surveillance, and treatment planning in the complex NMIBC cases. Hence, our ambition goes beyond single product and organic BLC equipment enhancements. The future of bladder cancer. is precision diagnostics. And combining high-resolution imaging, both rigid and flexible, BLC, along with the potential expansion to various other advanced cytologies, computational histology, biomarkers, artificial intelligence, and longitudinal monitoring will be critical in bladder cancer patient care continuum. Blue light cystoscopy is the foundation of that ecosystem, and PhotoCure is building towards an integrated future of molecular digital framework. We have spent significant time and effort in evaluating the right areas of focus to expand our portfolio offerings, and we believe these are the targeted areas that will truly allow us to further our additional aspects of the continuum of care in bladder cancer diagnostics and management. We anticipate having more granular updates for you throughout 2026. And finally, we'll talk about OSIRIS, a value-generating program. Our partnership with OSIRIS continues to progress favorably. We have now taken in over 18 million U.S. dollars in milestones across both HEXFIX and ZEVYRA programs, with the potential for additional milestones and royalties as the program's advanced through regulatory and commercial goalposts. As a reminder, key points about HEXFIX commercial partnership with Aceris. HEXFIX has already received marketing authorization in China. What they're waiting for is the Chinese approval for the Richard Wolff system for blue light cystoscopy. We expect the commercial launch following device approval this year. The timing of that is unknown, but we believe it's imminent. The key points about the survivor out-license approach to OSIRIS, so the survivor NDA remains under regulatory review as we await clearance. We are in regular dialogue with OSIRIS. We are aware that survivor is still under regulatory review, and it is following the normal information exchanges between the applicant, OSIRIS, and the NMPA. Any additional questions should be submitted to OSIRIS as this is their product. If and when it's approved, it would be one of the first products approved in China and before the rest of the world. Osiris has had pre-submission meetings with the EU and U.S. regulators to determine a way forward in both of these large markets. And Osiris has also disclosed they have interest in pursuing a secondary indication for Survivra, which brings additional milestone payments upon approval. I'd now like to turn it over to Eric and the financials. Eric, to you.

Thank you, Dan. Please stay on slide 16, please. You got it. In this section, the financial section, we will review the consolidated income statement, segment reports for our two main segments, and finally headlines from the cash flow and the balance sheet. A couple of words about foreign exchange before we get started. US dollar, as I guess everybody know, weakened in the quarter resulting in about 5.6 million and favorable impact on revenue from foreign exchange. In Europe on the other hand, the revenues were not materially impacted by foreign exchange. Final comment before we start on the analysis. I will always use Norwegian Kroner and please Bear that in mind. If there is another currency, I will mention that. Moving on to slide 17, the consolidated income statement. Looking at consolidated HXVC product revenue for the quarter, 135 million. It's highest ever, and 9% above Q4 2024 in constant currency. Including FX impact, the year-over-year growth was 5% in the quarter. Full-year HEXX issue revenue was 530 million, growing 10% year-over-year in constant currencies and at the top end of our guidance for the year. The revenue growth was driven by volume growth as well as price increases in both regions. X-ray system market unit sales, in-market unit sales, increased 13% in North America and 4% in Europe in Q4. For the full year, the increase in volume was 9% in North America and 4% in Europe. The sales have, to some extent, been negatively impacted by the face-down of system usage in the flexible BLC setting in the U.S., On the positive side, we have seen strong development in the sale and distribution by our partner Fortech. Total revenue, including milestones, was 136 million in Q4, and the decline from 2024 is due to a 12.1 million milestone in 2024, and we have no milestone revenues in 2025. Full year total revenue was 532.6 million year-over-year, an increase of 1% impacted by milestone revenues, so 34 million in 2024 and none in 2025. Cost of goods sold in Q4 2025 was 10 million NOC, compared to 7.5 million in 2024. The increase in COGS was driven by sales volume increase, as well as one-time IFRS inventory value adjustments, and FX movements, as well as activities to increase production capacity. We expect COGS to move back to normal levels throughout this year and next year. Total operating expenses, excluding business development expenses, was 119.9 million in Q4, a year-over-year reduction of 2%. Full-year operating expenses, excluding business development expenses, was 444 million, an increase of 2% year-over-year. The increase included investments in medical programs, merit, and inflation, partly offset by FX. Business development expenses were $4 million in Q4 compared to $5.2 million in Q4 2024. Operating expenses within business development are related to cycle management for HexFix, lifecycle management for HexFix SysU, our cooperation with Richard Wolff on the flexible BLC system, as well as business development efforts that can diversify our business and significantly increase our growth rate. The expense level obviously may vary from quarter to quarter given the one-off nature of these expenses. EBITDA in Q4, excluding milestones and business development expenses, was 5.9 million compared to 1.6 million in 2024. Full-year EBITDA, excluding milestones and business development, was 46.2 million compared to 24 million full-year 2024. Depreciation and amortization, 7.4 million in Q4. Main cost item is amortization of the intangible assets related to the return of the European business from Ibsen in 2020. Net financial items was a net cost of 3.9 million in Q4, driven by Ibsen earn-out payment, partly offset by interest income and FX gain. And tax expenses is a net income of 1.5 million for the quarter. After tax, we have for Q4 a net loss of $8 million, and for the full year, a net loss of $1.5 million. Now to the segment performance. Next slide, please. Slide 18. For the segment reporting, we will focus on the two main segments, North America and Europe. The North America segment includes U.S. and Canada. And revenue for the North America increased 17% in Q4 in constant currencies. The main drivers are volume increases of 13% and increased average prices of 4%. FX impact was negative 10%. Revenues were negatively impacted by the face-down of SysV usage in the flexible VLC setting, however, to a lesser extent than previous quarters. On the positive side, we have seen strong development within the sale and distribution of our partners for tech. Q4 direct costs decreased 1% driven by FX impact, which was offsetting increases driven mainly by project expenses, merit, and inflation. Q4 contribution was 10.8 million compared to 7.8 million in 2024. Full year contribution was 31.8 million, an improvement of 10.8 million from 2024. Full year EBITDA negative 14.5 million, a year-over-year improvement of 6.6 million. Looking at the European business, We had year-over-year a revenue increase of 4% in Q4, mainly driven by volume in the DAF region and high-priority growth markets. Direct cost decreased year-over-year 5% in Q4, driven by FTE adjustments, partly offset by merit and inflation. And we ended Q4 with a contribution of $34 million, compared to $31 million in 2024. Full-year EBITDA. 76 million, and year-over-year improvement of 12.4 million. As a conclusion on the segment reporting, what we see is significant growth and improved profitability in both regions. Now to the cash flow and balance sheet. Next slide. 19, please. So, first, cash flow from operations in Q4, negative 0.5 million. For the full year, cash flow from operations was 26 million compared to 76 million in Q4 2024. The full year change was mainly driven by milestones from Osiris in 2024 and negative working capital movement in 2025 due to increased product revenue year over year. Cash flow from investments in Q4 and full year include interest received and paid, as well as investments in tangible and intangible assets, including production capacity. Cash flow from financing in Q4 and full year was negative, driven by earn-out payments to Ipsen, and for the full year also the share buyback program. In total, we paid $29.6 million for the 500,000 shares we acquired in the year. This total gives a net cash flow in Q4 negative 8.9 million compared to positive 2.8 million in 2024. And full year net cash flow was negative 55 million and in 2024 positive 4.4 million. No, 34.4 million, sorry. And with this net cash flow, we ended 2025 with a cash balance of 238.9 million. Moving on to the balance sheet, we ended the year with total assets of 707 million. Non-current assets was $321 million at the end of 2025, and this includes its customer relationship with $79 million, and customer relationship is the intangible assets identified in the purchase price allocation for the Ipsen transaction. Non-current assets also include goodwill from the Ipsen transaction of $144 million and a tax asset of $56 million. Inventory and released receivables were $146 million at the end of 2025, and the increase from 2024 is $16.8 million and driven by increased revenue as well as inventory. Long-term liabilities was $116.9 million and include the liability related to Epson transaction totaling $100 million. Finally, equity at the end of the year was $484 million, which is 68% of total assets. This concludes the financial section. Thank you. Dan, it's back to you.

Thank you, Eric. All right. For this section, we thought it would be important to share with you two slides on key performance metrics, underscoring the fast-developing scale and leveraging within the core business. This graphic is on the second page of the earnings report. Over the last three years, we have delivered consistent profitable growth across all key operating metrics while keeping headcount flat. Product revenues increased 42%, unit volumes grew 18%, while North America rigid and mobile volumes grew 40%. The gross profit expanded 39%, while OPEX has remained relatively flat. The most notable development over this period has been operating leverage. Commercial EBITDA improved from negative $35 million NOC to a positive $56 million NOC, with margins improving from 7% to 11%. and continuing. This reflects sustained procedure adoption, growing utilization, and the durability of our commercial model, which is shown in the graphical format on the next page. Taken together, these trends demonstrate that we are not just growing, we are scaling. We have shown that incremental revenue increasing drops through to the EBITDA. These performance trends clearly demonstrate our ability to scale the business all while maintaining a focused commercial footprint. So let's go into summary. So fourth quarter revenue in EBITDA overall solid quarter was 9% product revenue growth in Q4, 10% on the year. We now have had 11 quarters in a row of positive EBITDA. The commercial EBITDA at 8.4 million, Expedia Milestones 5.9 million NOC. But we continue to invest in key growth initiatives that we believe will, one, position us for long-term success, two, generate future revenue growth, and three, increase our operating leverage. The flex and surveillance market now and in the future, Richard Wolff and PhotoCure's joint development program is well on track and will bring flex back to the surveillance market. We are now 15 months into development, which is going quite well, and we estimate a market readiness in 2027. In the interim, we are beginning to reintroduce interim flex by Richard Wolff in Europe. The first cases took place in late June and early July in the U.K., and the purpose of this interim solution is to keep interest high and collect data. North American account growth of installs and upgrades in mobile. North American unit sales grew 19%. We grew our active U.S. accounts by 22% year over year. New and reactive dated accounts by upgrades, for example, and we believe this is a great indicator of our performance. We continue to work with Carl Storrs to grow the installed base of BLC equipment in the U.S., a key priority for Carl Storrs, and we expect this to continue to expand. Carl Storrs initiated the promo program last year, and I believe it had a little bit of a lag time in purchase orders that will fulfill here in the first quarter of this year. The 4Tech national mobile rollout continues to gain traction and contribute to our growth, creating a new business by expanding access to otherwise inaccessible accounts with a novel mobile business model. There are now over 120 accounts that have tried the solution with nearly 200 users, and the momentum continues to build, bringing BLC access to so many desperate bladder cancer patients throughout the United States. In the EU, revenue was up 4%, 3% unit growth, particularly driven by dock and double-digit growth in the priority markets. We continue to facilitate the image quality upgrades in our nearly 600 targeted accounts, and we believe that the Olympus Blue Light upgrade will help strengthen this initiative. So far, 60 Viscera III upgrades have been installed since January 1st, primarily in Germany, France, Nordic, and Austria, and a strong pipeline and aligned interest with Olympus exists. We have a strong cash balance of $239. Million Knock. And finally, we continue to advance several business development initiatives in next generation precision diagnostics, including the partnership with Intelligent Scope Corporation and slash Caritas, which is the artificial intelligence software that we're developing in real time to help in blue light procedures. So the anticipated milestones, we're guiding 7% to 11% top-line growth, all while continuing to show operating leverage on our commercial business. We will continue increasing SISU and HEXAC's account utilization through upgrades, installs, and a mobile solution in particular in the U.S. the advanced development of the next-generation, state-of-the-art 4K high-def flex system to access and unlock the potential within the next 1.2 million surveillance procedures done in the U.S. and EU5. In addition, we want to expedite the strategic partnership with ICS to develop the Blue Light AI system, which we believe will be a game-changer in bladder cancer prevention. precision diagnostics. We'll continue to generate data and present, in particular, data on health economics, positioning blue light cystoscopy as the go-to precision diagnostic in bladder care. We also want to increase access to BLC in the U.S. vis-a-vis the Citizens Petition, or the alternative pathways to U.S. approvals. And finally, we'll continue to support OSIRIS progress across both HEXFIX and SAVIRA with potential to receive significant milestones. And with that, I think we can open up to questions.

The first question is if you could put some flavor on the tower development in the fourth quarter.

Yeah, as I mentioned, last half of 2025, Carl Storrs initiated a promotional program. We believe or what we're hearing is that some of the installs they expect in the fourth quarter will flow into first quarter this year. But one thing I do want to remind everyone, we are highly focused on throughput of existing towers right now. The swell of interest in precision diagnostics and blue light cystoscopy being the foundation, bladder cancer care is extremely important that we're there supporting it. The second part is Carl Storrs in the U.S. has roughly a third of the market. So when you think about installs and then also mobile coming in with it, we take a look at it more in terms of account growth rather than installs. And the account growth was 22% in the fourth quarter. So we're very pleased with that.

The next question is about Ipsen and if there have been any discussion with them to pay a one-time amount and remove the earn-out.

Yes, Erik. Yes, there have been discussions. We have approached them. However, we didn't agree on the amount and the yield. So, well, it takes two hands to clap.

Then there are questions about guidance. Note that there are several similar questions being submitted, which also some have been thoroughly outlined by the management in the presentation. But the first question on guidance is, in your guidance, can you clarify what continued operating leverage flow-through means?

Sure, I can take that one. So the Hex 6 issue commercial business has strong operating leverage. What that means is that a significant portion of incremental revenue flows straight through to the commercial EBITDA because most of the costs are fixed. We demonstrated that in 2025 with the commercial EBITDA margins going up from 7% to 11%. So every additional procedure unit sales sold contributes disproportionately to profit growth. That's what that implies.

On your 2026 guidance, how do you see growth rate in North America versus Europe should be expected to be similar to 2025?

Yeah, I think you can expect to be fairly similar. We expect growth rates in the high teens in North America, primarily driven through rigid and mobile solutions. Flex still remains a very small drag on the businesses. It represents less than 5% of the business, but it's still 5% of the business, and it could drop out completely, but we overcome that. In Europe, we expect, again, same sort of mid-single digit, reminding everyone that The DAC, Germany, and Austria are fairly mature markets, but the priority growth markets are expected to grow at double digits, and when I say significant, double digits in 2026. So that blended growth rate ends up being sort of in the mid-single-digit growth rate.

When do you expect FLEX approval?

We've got to get through the development first, and that's well on track. We've seen the prototype. It's a slick system. We're super excited about it. When we announced this, we said it would be a two-year development. We're 15 months into it. So I think the development and then hopefully we have a submission maybe later this year with hopefully approval in Europe for sure. And if we can find our pathway through the U.S., which we believe we can, we get a U.S. approval as well as we look into 2027. We'll get more updates as we go. The development piece is well on track, and it's super exciting. The system is very, very good, 4K high def. But when we get to the regulatory, we'll get some more updates as we submit and move forward through the process. But we're super excited about it. And let me add one more thing to that, Gary. You know, the market is really starting to mature for the Flex. I think, you know, seven, eight years ago when they launched, the only option out there was BCG. Now with these precision therapeutics coming out, the payer world is demanding proper surveillance and monitoring of these medications that can cost up to a million U.S. dollars. So we think we're hitting the market just perfectly right, and we're super excited about that. And we're going to have the world's only blue light flexible system and have exclusive rights to that.

We are heading towards the end of the Q&A section, but has any new OLM scope manufacturer filed with FDA for clearance? If not, any input as of when that will happen?

We're not aware of any yet, but we do expect it this year.

Last question, and could you comment some more about the CMS reimbursement discussion and potential impact?

Yeah, so this is a situation in the U.S. CMS has us in a bundled procedure payment, meaning meaning basically if the procedure is reimbursed, call it $5,000 U.S. If they do a white light procedure, they get $5,000. If they do a blue light procedure, they get $5,000. But in the blue light procedure, part of the cost of that procedure is the medicine itself. So the net profit is a little bit less. Now, it still covers it. It's not a negative economic situation, but it is a negative profit situation. What we want to do is, is use the analog of the radiopharma business, which a year and a half ago was decoupled. So radiopharma procedures and the product they use get separate reimbursements. We want blue light cystoscopy with SISU to be decoupled. They would reimburse SISU separately with a profit margin, and then the procedure would be the same procedure, procedural reimbursement, whether it's white light or blue light, it's economically neutral. So that's what we're going for. We're doing this in concert with a couple other companies who have similar situations. We're the ones sort of orchestrating this. I remain optimistic. The goal is to get this through and get a decision potentially – by late summer, and then if we're successful, this would implement in 2027. And I will tell you that it had a dramatic impact on the radiopharma business. So we believe this is a very much an impactful effort on our part.

That concludes the Q&A segment, Mr. Schneider.

Thank you, Geyer. All right. Well, thank you, everyone. Thank you, Priya and Eric, for joining. Thank you, Eric, for consolidating questions. We look forward to seeing everyone at Q2. Have a great day.