Revenio Group Oyj

Finland and welcome to revenue group Q3 earnings call. My name is Jouni Toijala, I'm the group CEO and as always with me we have here as well Robin Pulkkinen, our CFO. I'm going to go through the highlights for the quarter. Robin is going to recap the financial performance shareholder and financial guidance for 2025. Q3, so extremely good quarter for us. Top line, 25.9 million, 8.1% growth. From the currency adjusted terms, the growth was 8.7%. Operating profit, 6 million, up 9.1%. If you look where the growth came, so really good quarter in Europe, especially Europe. France, Germany, and UK. They were growing nicely, and the growth was quite a lot dominated also by screening-related device and software sales. Also in the USA, good growth, especially on the dollar terms, but slightly muted because of the exchange rate impact. So Robin is going to cover a bit more detail the foreign exchange rates in the USA and also in the APAC. And APAC fell short of the targets, and the logic mainly was related to the strengthening Euro. So we sell in two currencies, so in USA we sell in USD, and for the remaining part of the world, Europlata and APAC, so we sell on Euro terms. Then, good news from the software solution part, so we also launched the Altius, our data management platform running on cloud in the USA during the review period. If looking the whole first three quarters, so we are currently in the middle of the guidance, so we are going to, of course, reiterate the guidance, so We are on the net sales perspective, 78.5 million reported growth, 7.5% currency adjusted, 9.1% profitability on the good level. And if we look at the other events, so as I said earlier, so we have been able to grow really well the screening-related events hardware and software sales and then also Maya Micro Premier was launched and was in sales already starting from the quarter two. So I hand it over to Robi.

Thank you. So going through the numbers a little bit more in detail. So Lucky Ownish had 8.1% growth in the third quarter and 7.5% for the whole year. Some might have thought the FX impact would have been higher in the third quarter. Actually, if you remember the second half of last year, the FX was quite of a roller coaster. So the third quarter in the comparison period had quite a bit of headwind And then vice versa on the fourth quarter, the last year, we had almost 900,000 of tailwind in the numbers. So looking at the fourth quarter, most likely the FX adjusted growth will be, there will be a bigger difference compared to the reported number. Gross margin at a very good level. There's, of course, dollars is pushing that down but then we do have some costs that used to be posted in the the the variable costs related to commissions that are now in the opex side but also we've had um quite nice good deals uh direct deals where we've gotten a better better sales price and also saved in in some of the the the um outsourced uh com kind of reps commissions um in the us and also in europe so so the sales mix has had a had an impact there um Overall profitability growth in the third quarter and as well as the whole year. So if you look at the adjusted operating profit, up 11%, 11.5%, and for the whole year, 16.1%. Basically, there's been roughly as much adjusted costs in the reporting period as well as the comparison period, so $700,000, $800,000 in both. So in a way, it doesn't really – If you look at the year-to-date number, the adjustments are pretty much as big in both lines. EPS is up this quarter. If you're kind of looking at the third quarter FX rate, so the bigger items when you look at the financial expenses for us is basically the euro against the US dollar and US against Australian dollar. Those were pretty stable throughout the third quarter. So there are... I think the basically very close to zero kind of financial expenses in the P&L. But in the first half, if you remember, there was almost 2.5 million of those. So those do pull down the EPS for the whole year or year to date. So in the third quarter, we didn't have those unrealized FXs. Sales growth in more of a graphical view. um basically um looks pretty similar to what we've seen before i think the fourth quarter always is the the strongest quarter for us that's been at least for the last 10 years or even longer there's no reason why we won't think that wouldn't be the case this year as well and of course we we're looking to to finish finish well the fourth quarter also in in in terms of the guidance to to be able to keep the guidance that requires that we do well in the last quarter as well. EBIT improved. So same thing like the sales, the last quarter of the year typically is the quarter where we make the most profits. Looking at 23, it's roughly 35% of the annual EBIT was done in Q4. Last year, 36% of the EBIT was done in the last quarter. so something similar if we can so the business model is quite scalable so it's really driven by the top line so the OPEX is rather fixed or very fixed so in a way the higher top line drives profitability as well and kind of same for the guidance so with the higher top line to keep the guidance most likely unless something very surprising happens would should mean a very good quarter also from the profitability point of view. Cash flow, so slightly higher than last year. There was some on the working capital, the payable sides went down. We haven't actually had much orders from the contract manufacturers in the third quarter, so that side pulled it down slightly. Also, the finish for the quarter was very strong, so actually the September was clearly the strongest month for the quarter and that resulted in the accounts receivable going up. So those two combined kind of had an impact on the cash flow as a whole for the quarter. The unrealized FX from the first half of the year actually that doesn't have any impact on the operating cash flow. And the balance sheet remains strong and unleveraged, the net gearing is back to negative. So it always kind of jumps up when we pay dividends and then we kind of build the cash balances again and it goes down to negative. So we're approaching again the kind of recent history record highs in the equity ratio, almost 80% of the balance sheet at the end of Q3. And on the shareholders side, William DeMont is still the biggest owner. The whole top 10 list is more or less the same. But William DeMont actually did increase their ownership in the third quarter. So at the end of the second quarter, they were below 22%. So they've bought basically 2.5% more shares during the quarter. The selling side is not really... fully cleared to us yet so the shareholder registers don't show exactly where they bought them but there are some of the bigger owners that don't have verified data for the last day of the quarter yet so probably in the next month or so we should know where those shares came from but basically the Finnish ownership versus foreign ownership is exactly the same as at the end of Q2 and on the country level the The Denmark part, of course, went up while Demand bought more shares, but the other end of that trade is still a bit open in the systems. The guidance, basically unchanged. So the exchange rate adjusted net sales are estimated to grow 6% to 15% from the previous year, and profitability excluding non-recurring items is estimated to remain at a good level.

Thank you, Robin. I think it's time for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Niko Ruokangas from SEB. Please go ahead.

Hello, this is Niko Ruokangas from SEB. Thank you for the presentation. I have a couple of questions, and I'll take them one by one. And starting with the Maya micropermeter, which you mentioned that it has been very well received in the market in your report. So how big did the contribution from that product was in Q3? Are we talking about a million euros or more?

We don't disclose exactly the sales numbers. The Maya is still selling only to the pharma, so there are not that many deals that we close, but there tend to be bigger in size, so there is monthly variation quite a bit, but I don't know, Jouni, do you want to open more?

Nothing to add too much on that front, except that we haven't started the marketing too much on the product, so we are We are delivering the orders what we have got and the new deals which we have in the pipeline. But we haven't done aggressive marketing and sales for the product yet. But also from the production side, so no production limitations. So we are able to ship the product, which is of course good because it's a new product.

Yeah, I understand. But there were some of those deliveries in Q3.

Yes, yeah, yeah.

Okay. I was just wondering kind of the volume growth on the other portfolio than the micropyramiders so that I was trying to kind of figure out that whether there is something that You mentioned the fundus imaging and the screening side was doing well, but was there something that wasn't doing as well, or can you open those a bit more?

So if you look in general, so tonometer business was growing, fundus imaging and perimetry business was growing, software business was growing. Where we had the differences was that the Europe, very strong, US strong, especially USD terms, then because the lower local currencies in APAC, so the growth in the APAC was not as high as we were expecting during the Q3. Now it looks better during the October. but the growth in APAC regions for the certain key countries, that was slightly muted, would you say so, Rob?

Yeah, or even down during the quarter. So if the APAC would have been able to reach kind of the kind of even a flat year, I think we would have had a really, really strong quarter. So I think it's really APAC-driven maybe this time, a bit softer or that kind of what was the soft part for us within the quarter.

Okay, but out of kind of product groups, so if you would exclude the price increases, so did you see growth in all the product groups as well?

Yeah, we did.

Okay, great. Thanks. Then continuing on the price increases, which you mentioned that you have already agreed on in the U.S., I guess in addition to the one you already made in the beginning of the year for the whole portfolio. So, were they already visible now in Q3 and is it still the plan that you are aiming for covering the whole tariff impact with this price increase?

So, we already did a slight increase for the probes during the Q2. So in terms of the probe prices, so the price increases have been in already during the Q3 and now we are bit by bit when we start to run out as an example imaging business or tonometry hardware. So then we are going to increase the prices.

Yeah, I think we're very close to that now with many devices. So we are now starting to ship the tariff impacted inventory, which will then of course increase the prices, but that does have kind of an impact on the percentages, of course, so we will not be able to increase the prices with a margin. So basically, it's more or less a pass-through, if that's the right word to use. So we kind of increase the prices to cover the additional tariff by product.

And if specifically, Nikko, you were after the answer to the question that, as an example, Did we have higher prices for tonometers and fundus imaging devices during the Q3 in the USA? So, no. So, we were shipping the tariff-free stock. Okay, great. Already increased.

Okay, great. Thanks. That explains. I'll leave the turn to others. Thanks. Go.

The next question comes from Jack Reynolds Clark from RBC Capital Markets. Please go ahead.

Hi there. Thank you for taking the questions. I had a couple, please. I'll take them one by one. Regarding iCare Illume, you mentioned it was a strong quarter in Q3. Could you talk about where you saw the strength? Was it more accounts using, signing up to iCare Illume, or was it greater usage in the existing accounts or a mix of both?

So if first recapping the Illum solution. So it's a combination of the hardware DRS plus Illum cloud solution plus then the IKEA REDCAT AI. And where we saw the growth, so we saw extremely strong growth in Europe what comes to the installed sites or new customer sites. There were a huge amount of new sites in general now in use during the Q3, also Q2, Q1. So the amount of the sites is increasing. For us, that means that we have been able to then also sell quite a lot of new hardware related to the Elume sales, so impact the DRS Plus sales. And then we have been also able to increase the actual AI report counts, so that's also steadily growing. So not as high speed as the new sites, but I mean, it's a really strong growth related to the new customers and new customer sites.

Fantastic. Thanks, Jani. Then my next question was on Maya. And you mentioned that it's currently quite focused on your farmer clients. What is the plan for rolling it out more broadly to a broader range of clients to really increasing the sales force efforts there? What do you need to see before you start ramping there?

There's perhaps a first two things in a way. We have been quite selective now to uh provide the devices to the customers who have been uh waiting them for for quite a long time so we have concentrated on on that and those are are going to go for pharma then we have been doing all the sales by our own so so we haven't yet trained as an example or distributors to to sell the new Maya and distribute the new Maya. So that's the plans for the next year. Then the second topic is linking to the new drugs, geographic atrophy-related drugs, as an example, in the USA. So now, if you look the next year especially, so we are We are ramping that part as well, what comes to pushing the product and marketing it more aggressively, and then also thinking the features and the user experience as well, and make that one simple in the coming year. So those are the two areas where we are especially going to focus during the 2026.

Fantastic, thanks Jani, super clear. I guess one very quick one to follow up if that's okay. Are you planning to do a capital markets day at any point soon?

I think that the time starts to be next year, I think.

We've talked about it.

Yeah, so I think, Jack, that's the plan for next year, not this year anymore. I think Christmas is coming really fast, so next year. I think it's a good point, and we have been discussing that one already.

Fantastic. Exciting stuff. Thanks for taking my questions. All the best.

Thank you, Jack.

The next question comes from Daniel Lepistow from Danske Bank. Please go ahead.

Hey, it's Daniel Levis from Danske Bank, and I also have a couple of questions. Maybe starting up with these costs related to the Illumor RedCat FDA process. So can you sort of remind us how much are you anticipating of these costs and how are these costs going to be faced when looking forward?

Yeah, I think we'll start to see something now in the fourth quarter, but I think next year there is going to be a a bigger impact on that. We haven't fully disclosed what it is, but it looks to be a seven-number cost for next year, most likely, so we're still working on the full plan. It is a quite big cost, and it's going to go through the P&L. But I think once we get clearer plans and also for guide for next year, we'll get back to that in more detail how the impact is next year. But this year, Q4, if I give a number, maybe 250, around 250.

And then I think earlier what we have been discussing, Daniel, is that the combined FDA clearance

amount perhaps we we land on somewhere around the two million yeah but we are that's now in in the in the more in the planning okay that's that's very clear um then on these uh you know red cat approvals in in the big picture i i think you know that you gained some new approvals during the quarter I mean, can you walk us through what key regions are still missing for this solution, apart from the US, what comes to the regulatory side?

The Europe is really well covered. We've got also the TGA for Australia. Then, of course, in the APAC, depending on country by country, so there might be interesting countries. But I think the main target is really to get the FDA clearance, so that would really move the needle.

All right. Okay. That's great. Maybe final question on this, still on this Maya microparameter. Can you maybe discuss a bit this addressable market and market opportunity for Maya specifically? I mean, if we look at ophthalmic parametric market, how big of a portion that is and how do you see yourself playing in that market with Maya?

I think there's two. So if you look at the overall perimetry market, we have been discussing 300 million roughly USD perimetry market. So that's a traditional perimeters, micro perimeters bundled on that one. What it doesn't include is that the micro perimetry goes to the clinical use and when the new drugs are coming. So the logic there is that how to measure the efficacy of the drug. That's not quantified. We haven't yet fully quantified that one either. I think it's a topic for the next CMD for us to come up with the number. And then, of course, the truck development and the approvals of the trucks hopefully are also a bit more further away, also in other parts than the USA. Anything, Robin, to add?

I think in the past, like when we only – the prior Maya generations, we were thinking that the – maya market was like 10 million or so so 20 10 to 20 million but if it gets into the clinical use it's clearly significantly larger okay that's that's great uh that's all from my side at this point thank you thank you daniel the next question comes from pia rosquist heinzalmi from dnb carnegie please go ahead

Hi, Joni. Hi, Robin. It's Pia from DMV Carnegie. A few questions. And if I start with your sales pipeline, do I remember correctly that you have referred to some kind of mid-sized orders for screening solutions in earlier quarters? What's the status currently?

That's a very good question. The short answer is that, according to my memory, not too much discussed specifically mid-sized orders for screening.

Maybe. I don't remember either right now. Sorry.

All right. Maybe it's me not recalling correctly. Well, anyway, let's then discuss your guidance and your outlook. Given that... that Q4 is really typically a very strong quarter and I'll try to get some hedge here. Are there any specific changes in your sales force in the US or are you fully comfortable that with your sales force you're again able to achieve this really strong Q4?

If I comment the First, the sales force. So we have slightly renewed the sales force. So we have been getting extremely good and extremely professional new sales force members in the USA. And that team has been clearly put us also on the new tables with the bigger customers. So that's going

uh that's going uh quite well and then of course the question is that when when the pipe turns to sales and and there i don't have a crystal ball to say but then yeah i think we probably be able to ask why why you didn't change the guidance at the stage also so as a result of these changes there are actually very interesting large deals quite a few we have in the pipe which are very difficult to forecast if or when those would close and that could have a big impact on the q4 numbers so we actually were ended up in the being a bit reluctant to change the upper end either or the lower end so kind of there are quite a big swing factors that we have in the pipe currently for the quarter and the next year all right good maybe these were the things uh the larger or

Yeah, larger.

No, that might be actually true. Yeah, yeah. And not related to screening.

Yeah, right. And these orders, they are in the pipeline. And just to be clear, now for Q3, there were no kind of larger orders that turned into deliveries.

No, it was a very, very typical quarter. So nothing larger in there.

Yeah. Okay. All right. And then if I continue, you booked some non-recurring items. I think you don't specify them, but do I read correctly that they possibly relate to some M&A project which have not yet turned into news?

Yeah, I will not comment on those specifically, but kind of if we have M&A costs, we would allocate those as non kind of non-operational costs because they there we have actively working on that side with the onion and then yeah that's really nothing to do with the day-to-day business so any costs like that we would categorize there yeah okay and and with regards to to mta what how is your pipeline looking like currently is it drying up or do you have

many active discussions ongoing.

Actually quite busy. There's few discussions ongoing. Very interesting opportunities. But I don't know if we can comment too much. Joni, do you have any? I think you covered it well.

Okay. And then finally two questions if I still can continue. So first of all with regards to sales in Asia-Pacific. Why did sales fall short of your expectations? So if we disregard the FX effect, is the demand more muted for these specific products or any other explanation?

So what we hear from the region, of course, depends bit quarter by quarter. So there might be certain fluctuations, of course, quarter by quarter regarding to the sales. But the main reason has been that if we go for, I mean, Australian dollar or Japanese yen or won or so forth. So we have had stronger Euro development against those currencies and that has slightly impacted in our mind the sales. Then again, as I said, so it depends month by month, quarter by quarter. So then if you look October, so now I mean really good progress in APAC countries during the October. So might be that it's for sure a bit currency related item, but also

maybe regarding also the the quarterly fluctuations but anything you would probably like to add yeah i think the currencies have an impact we have we have a number of distributors for example who have been asking about pricing and asking about payment terms and things and clearly referring to the fx so there's there's no doubt that that has an impact

Okay, that's clear. Thank you. And then finally, if I can come back to something, Jooni, I think you mentioned with regards to a new product on the data management platform, which has been launched in the US. Any assessment on the kind of market opportunity, the target market, the size of that, and yeah, any more color would be appreciated.

So if we first start the target market, so of course we have a data management platforms already existing. So I mean, CHI's forum, really high-end ophthalmology related platform around the choice ecosystem covers also the surgical workflows and and so forth so not not where we are wanting to play then of course we have a Topcon Harmony that's a quite big platform as well and and the big chains and so forth are partly covering that part where we are targeting is is a bit more smaller optometry stores at first, so there's a huge amount when we run the study already long time ago, so there's a huge and huge amount of clients that they don't have any data management solution, so how they manage the data, how they connect the devices to it, so So that's the segment where we are going to start first by integrating our devices, then case by case the others. And key also for our side is to enable also the replacement sales at the beginning. So if you want to move from DRS Plus to ADON or so forth or upgrade the fundus imaging device so we can then handle the the data import and export and all those things and then what this brings for us in a long run so we have been discussing the software assistant clinical decision making by combining the different modalities whether is it the fundus imaging whether is it the IOP data etc so now we have a platform which stores the data on top of which we are then in a long run able to develop also the AI functionalities with the REDCAT team from the Netherlands. So if you look, the strategy is that the ILUM is fully focused on retinal screening, Altius is then going to manage the data coming from the devices, and then top of the Altius we are able to as well built the software-assisted decision-making tooling and the applications in the long run. So this is the first step towards that story, starting from the USA, and the product is already FDA-cleared. So we are good to go, and we have had the product in testing for the whole almost the whole full year, but now we launched it as a wider audience during the Q3.

Super. Thank you for the additional color. I have no further questions.

Thank you, Pia.

The next question comes from Suja Goda from Infosys. Please go ahead.

Hi, my name is Erik Karlsson from Capeview Capital. I was wondering if you could maybe talk a little bit more about the business environment in the US. You touched on it, but just how is the demand environment looking? Are you seeing any change there in terms of demand? You talked about uncertainty before. Would you say it's stable or improving, or how would you describe the environment? And I had a question on the probes side as well. you should have pretty good understanding for the mechanics of the probes business. What kind of growth can we expect for the probes business over the next couple of years? Are we talking mid-single digits, high-single digits, or should we think about it?

Maybe I take the first question regarding to the US demand, and Robin takes the probe part. And thank you for the question or questions. So if we first take the US demand status show, So we were slightly bit more worried during the, of course, during the Q2 when all these tariff things came up and then we more or less decided towards the end of Q2, Q3 that this is going to be the new normal. We have to ramp up our game by getting more competence and more sales force in the USA in order to be more and more on the client's skin. And so far that has been working quite well. So we have been able to increase the amount of the leads because of doing more investment on the marketing side. And if looking at Q4, so currently, I mean, we are looking positively at Q4. Q4 and also towards the next year as well. Of course, there's a lot of fluctuation, change and so forth, but I think it's a new normal. We just have to live with it and plan accordingly and execute more efficiently. Do you, Robin, want to comment on the probe side?

Yeah, the probes, they have been always growing very well for us. Just trying to remember when I started 10 years ago, it was over 20% annual growth on the probes and Slowly, once the number of devices we have out is well over 100,000, closer to 140,000, then the size of the devices outside is not growing, of course, anymore as fast, even though we shall sell a little bit more devices. The probe growth is still actually double-digit and even high double-digit, so it's slowly coming down, but it's not hitting single-digit in the next couple of years, hopefully. But it's one of the very fast growing areas and consistently year after year. Thank you. That's very helpful.

Thank you.

The next question comes from Joni Sandvall from Nordea. Please go ahead.

Thanks, Joni from Nordea. Jooni, you were mentioning lower contract manufacturing now during Q3. Are you expecting this to ramp up now in Q4? Because you are also speaking about increasing inventories in the US. So should we expect relatively strong gas flows then in Q4?

Yeah, I think the manufacturing is not really happening like systematically every second week, the same amount. So it varies how we make the orders in. But I think typically, yeah, I would expect them to grow. But also the cash flow for Q4, I would expect it to be, again, the strongest of the year. Unless something surprising happens, I would think that that's the case normally. I think it's always been the strongest quarter for us in the cash flow as well.

Okay, okay. So nothing... you know, special to expect from that part. Maybe second question on still coming back on the tariffs and price increases. Actually, how large price increases you have to make to mitigate the tariff impact? And have you seen in the U.S. any resistance on these increases that you have announced?

Well, the good news is that nobody manufactures anything in the U.S., basically. So that's kind of helping us. Everybody is in the same boat. So the tariff is put on, of course, the transfer price, which we import to the U.S., and that's significantly lower than the selling price. So I would guess on average maybe around 5% price increases would more or less cover the tariff impact, if the tariff is 15%. So that kind of gives an idea. The import value is one-third of the sales value. Okay.

So no real resistance from there. The last question still on the marketing spend. You have been speaking about this for some time, maybe now. Can you give any early indication how much delta you are expecting for going into Z26?

On marketing. We're actually still working on a budget next week, so there's some work to be done, so we don't really have an answer for that.

Okay, thanks. That's all from me.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad.

Seems to be that we don't have any more questions. So I wish everybody a nice rest of the autumn period. We resume back on early February. Right, Robin? Yes. And thank you a lot for the participation and extremely good questions.

Thank you.

Thank you. Bye.