Devyser Diagnostics AB (publ)

Good day and welcome to Divisor Q2 2025 earnings call. I'm Fredrik Dahl and the acting CEO of Divisor and would like to thank you everyone for joining our call today. On the call today we have, in addition to myself, also our CFO Sabina Berlin and our Chief Commercial Officer Thijs Kipling. I will start with a short summary of our quarterly results and then recap our recent activities that have resulted in an improved efficiency overall for the organization. I will then give an update on the recent product launches and present some additional highlights from the quarter before handing over to Sabina for a more detailed review of our financial results in Q2 2025 and then to Thijs for an update on our recent commercial activities. We are turning the company around on a path to profitability. We had another record quarter based on revenue with 67 million second sales representing a growth of around 27% compared to Q2 last year. Gross margins came in at 84%. What we are most proud of is the EBIT that came in at record 5.5 million SEC. This includes a reclassification of non-operational FX impact that Sabina will talk more about and a 1.8 million SEC in one offs related to the reorganization. Our cash position was at the solid 100.4 million SEC. Our reorganization plan that we initiated early this year has now been completed. Along with an improved company-wide cost control process, we have managed to find a much healthier cost structure for the company going forward. Our strong EBIT result improved by 20 million SEK from the previous quarter, and we remain confident that we will reach our financial targets that we previously communicated. of 30% annual organic growth, 80% gross margin, and 20% in EBIT margin by 2026. Our updated strategy is being implemented across the organization and is further improving our focus and efficiency in way of working. Our updated strategy is also helping us focus our product development efforts to develop products that solves important clinical problems within our two main strategic customer segments, the clinical genetic labs and the transplantation labs. We have now generated a very exciting and strong product roadmap for the next three years that both better quantifies the opportunities and meets the needs communicated by our customers. As mentioned previously, we strongly believe there are significantly more unmet diagnostic needs that we can address together with our customers and scientific collaborators. We're now starting to see the effects of our recent investments in our diagnostics machinery, and we are eager to start executing our newly developed product roadmap. In addition to our reorganization, we have worked extensively with implementing tools and processes to improve efficiency across the organization. Overall, we now feel that we have an organization that is better cost balanced and is working on solving the relevant problems. And as demonstrated by this quarterly report, this has been done without compromising our growth. I would like to highlight our recent product launches in Q2 2025. As previously announced in late 2024, we achieved IVDR Class D approval from our external regulatory assessment of our divisor RHD product. We then finalized our internal quality processes and enabled us to launch and start shipping the product in early June, we have now demonstrated that we can deliver Class D products end-to-end from development to batch release and that we are well positioned to support the development of any IVD product, regardless of risk class going forward. The visor remains at the scientific forefront in transplantation research. This has further been demonstrated by the development of our latest research product in our transplantation portfolio. The product called HLA loss addresses a very important and currently unmet area of investigation related to malignant disease after stem cell transplantation. and provide researchers with a reliable method to study immune escape mechanisms and patterns that may be associated with treatment resistance. The product represents a unique and premium tool in the segment and further demonstrates our pioneering capabilities in the transplantation research field. The product was launched in late June and we are already getting positive feedback from our customers and early research collaborators. Another launch we had in late June was our genomic blood group typing product. This product represents a tool for typing blood donors in research settings and has the potential to advance the field of transfusion medicine. This next-generation sequencing-based solution enables comprehensive genetic blood typing covering red blood cells, human platelet antigen and human neutrophil antigen systems in a single and streamlined test. DEVICER genomic blood typing empowers research laboratories, transfusion centers, and transplant programs to move beyond the limitation of serology with capabilities for identifying real blood types and studying immune compatibility in research context. Finally, I would like to highlight a few additional activities from the quarter, starting with the MOL-DX submission that we just recently received feedback from. We received a very concrete and valuable feedback on our submission. It was mainly around a bigger sample size, which we already had prepared for in terms of sourcing these samples proactively. Overall, I would say we are pretty pleased with the feedback since we now have a very specific and achievable deliverable to complement the application with to obtain a positive reimbursement decision later this year. As a commercialization strategy, we are in parallel in discussions with partners with commercial capabilities in this field. And you will hear more on this from Thijs later in the presentation. As part of the transplantation strategy, we have an ongoing FDA project, as previously communicated, from the required reproducibility and accuracy studies. And moreover, we recently had a pre-submission meeting with the FDA that confirms that we are on the right track and thus moving forward with the sample collection. More details on the timeline will be communicated later this year. With that, I would like to hand over to Sabina to share more details on our financial results for the Q2 2025.

Thank you, Fredrik. So here let me give you a summary of the financials for the quarter. Revenue for the period April to June came in at 67.4 million SEK compared to a 53.2 million SEK in the quarter of last year. The growth is almost 27% in the quarter and back to historical levels. Thijs will soon go through more about the market dynamics during the quarter. Also going forward, there will always be fluctuations in individual quarters. The trend with strong growth quarter over quarter continues, and we are proud to again present the strongest quarter revenue-wise in the company's history, closing in on the next milestone of 70 million SEC in a single quarter. Our EMEA region remains our biggest market, but the US continues to take market share with a quarter over quarter growth of over 200%. Asia Pacific saw lower sales in the quarter this year compared to last year, But with such small numbers, fluctuation between quarters can be expected. And it should be noted in these tables that Thermo Fisher sales is split between EMEA and US as we shift to both US and European warehouses. Distributor sales showed the strongest growth in the quarter with a major contribution from the transplantation agreement with Thermo. While direct sales showed a softer quarter overall, it is mostly impacted by facing in the Italian market. We did see very strong growth in some of our direct markets, such as the US, UK and Spain. Thijs will cover more details on the markets and the dynamics for our channels shortly. Gross margins came in at 84.2% during the quarter, leveraging the new facility, sales growth, and savings from the reorganization and efficiency programs that we initiated earlier this year. EBIT during the quarter was 5.5 million SEC. I'm also very happy that we can present a positive quarter that shows the effect of the changes we did at the beginning of the year. With a right-sized cost base, we believe that we can fully leverage divisor strength and market potential towards a sustainable profitability within the communicated timeframe of our financial goals. While the majority of the cost for the reorganization was taken in Q1, the P&L for April to June includes 1.8 million SEC in one-offs from those initiatives, as Fredrik mentioned. We can expect to see the new run rate from our savings from Q3 and onwards. I'll also take the opportunity to briefly explain a change in reporting that we initiated in this quarter. In the Q2 report, we have reclassified the currency impact from the internal loan from Divisor AB to Divisor Inc, from operational, where it had been reported previously, to reporting it as the financial item that it is. Therefore, all historical quarters have been updated in the report for comparisons reasons, and the report includes a bridge table where we state the impact on historical quarters for transparency. We closed the quarter with 100 million SEC in cash. The cash flow for the quarter of minus 14.8 million SEC has not yet caught up to the strong EBIT development, but we expect it to do so within a reasonable time period. We will continue to carefully balance investments in our product development activities with thoughtful cash management to ensure a healthy cash position. I continue to feel comfortable with our cash flow and it will turn over the foreseeable period as our focus on profitability continues. And with that, I hand over to Thijs.

Thank you, Sabine, and good morning from Italy. I'm pleased to share several promising highlights from Q2 and why we're confidently excited about what the future holds. Q2, as you heard, was another all time high revenue quarter with 60 million SEC in revenues, which clearly distances itself from the previous all time high of Q4 of last year. As Fredrik mentioned, we launched three new products during the quarter, which all are gaining traction with interest, scheduled demonstrations and even orders already at this point. The past year's investments in infrastructure is already paying off. And since the introduction of our new CRM last year, we have gained new and unprecedented transparency across our commercial funnel, which further enhances our visibility to where our investments in creating leads pays off the most. As of June, we had doubled our leads and even further developed our customer conversion rates, which in turn has increased the number of new customers significantly. In addition to this, we are increasing the number of products sold to each customer while consistently increasing our average selling prices, which contribute to the average revenue per customer increase that we have seen across our segments. This, in combination with our launch momentum, is indeed very promising for the future. The past quarter was strong on the thermal side, but also in North America, where we are gaining momentum. All of this, while our European business remains on track, which I will go through in more detail during the coming slides. Moving on to an update on the partnership with Thermo Fisher. Q2 was good, both revenue-wise and customer-wise. We attended several large trade shows during the quarter together with Thermo Fisher, which bit by bit establishes our products as the golden standard within the community. Both we and Thermo Fisher remains confident in the continued test adoption and revenue growth, and both are expecting that the revenues will be considerably stronger in the second half of the year versus the first half of the year. The FDA pre-submission feedback has been received, as you heard from Fredrik, and we are still on track with the program. More details around this will be given later in the year. North America had a strong quarter and almost triple revenues over the same period last year, driven by sighted and the early momentum in Canada and the US, particularly driven by RHD testing. Later in Q3, we expect one of the largest service providers to commercialize our RHD test across the US, which is naturally a big thing. Partnering for channel coverage remains a preferred strategy and also something we are actively engaging in with our transplantation services related to our ClearLab. As Fredrik mentioned, we received concrete, actionable, and not least doable feedback from our Multi-X submission, which already is being addressed. We remain optimistic about resubmitting and receiving a positive confirmation which in turn will enable to sign up one or several commercialization partners within the US. Cited is following plan and volumes are increasing by the month. Something that is expected to continue throughout the year, which is also positive for the revenue momentum in general. During the quarter, we had a very well-attended webinar focused on our test for cystic fibrosis, together with the prestigious CAP today, which generated a lot of interest and leads. We still today have one of the only available tests that lives up to the updated guidelines from the American College of Medical Genetics and Genomics, the ACMG, recommending screening of 100 variants instead of the previous guideline stating 23 variants. Moving on to Europe, I'm pleased to share that despite the very strong Q1 we had in many markets, we still did well in Q2. As Sabina said, what is holding back our overall growth in direct markets is a softer than expected performance in our largest market, Italy, which grows around 3% on a year-to-date basis. They are, however, up against quite a tough compare as they grew more than 20% same period last year, so H1 of 2021. The funnel, however, for the second half of the year looks very healthy and we continue to win tenders, as you also have seen from the report, and we have no concerns about the healthy and continued growth in our largest market of Italy. We're seeing a solid onboarding of new customers within our genetic labs customer segment, which we expect will accelerate on the back of the new products that we launched just recently. On a year-to-date basis, we have increased the number of buying customers by 16% in Europe, while also increasing our average selling prices. Our position in Europe is gradually building, and I'm confident that our new one-stop-shop strategy will further strengthen this position. We stand on such a solid platform based on our regulatory strength with IBDR and recently cleared our RSD product within the highest classification, Class D. We are increasingly seeing requirements by customers and tenders to have IBDR products available already now today, which will increase further during the years ahead, making us confident that we are in a very strong position to win across various segments and markets in Europe. And with that, I give it back to you, Fredrik.