BONESUPPORT Earnings Call Highlights Growth And Margins

BONESUPPORT HOLDING AB ((SE:BONEX)) has held its Q1 earnings call. Read on for the main highlights of the call.

BONESUPPORT’s latest earnings call struck an upbeat tone as management highlighted strong underlying demand and impressive constant-currency growth despite FX noise. Executives underscored high margins, solid cash generation and tangible strategic wins in reimbursement and clinical validation, while acknowledging near-term margin pressure from tariffs, incentives and early-stage spine investments.

Strong constant-currency growth masks FX drag

Net sales reached SEK 324 million in Q1 2026, translating into 31% growth at constant exchange rates but only 14% reported due to currency headwinds. Over the last 12 months, sales rose 22% on a reported basis and 35% in constant currency, underscoring how FX translation is obscuring the company’s true operating momentum.

U.S. CERAMENT G continues to power the top line

The U.S. remained the growth engine with regional sales of SEK 267 million, up 35% at constant exchange rates. CERAMENT G alone delivered SEK 222 million in the quarter, up from SEK 178 million a year earlier, and recorded its strongest ever sequential increase with an additional USD 2.6 million in sales quarter-on-quarter.

Antibiotic-eluting portfolio outperforms as BVF plateaus

Antibiotic-eluting CERAMENT products grew 48% over the last 12 months at constant exchange rates, confirming robust adoption of the infection-focused portfolio. In contrast, CERAMENT BVF in the U.S. was flat over the same period, reflecting softer demand and some short-term cannibalization as traditional BVF users switch to CERAMENT G.

High margins underpin attractive profitability profile

BONESUPPORT posted an adjusted operating result of around SEK 85 million, corresponding to an adjusted operating margin of roughly 26%. Gross margin remained exceptionally high at 94.5%, and the FX-adjusted operating margin climbed to 25.5% from 22.6% a year earlier, adding nearly three percentage points of operating leverage.

Strong cash generation fortifies balance sheet

Operating cash flow reached SEK 75 million in the quarter, helping lift the cash position to SEK 455 million at period end. Management highlighted an average cash conversion of 81% since Q3 2024, with Q1 performance ahead of that benchmark, providing ample financial flexibility to fund ongoing commercial and R&D initiatives.

Regulatory and reimbursement momentum builds

The company reported steady progress in the De Novo pathway for CERAMENT V, with outstanding FDA questions being addressed ahead of an end-August response deadline. A proposed U.S. CMS ruling for fiscal 2027 is seen as highly favorable, promising improved payments, more specific procedure codes and potential NTAP support for CERAMENT V, which could materially ease reimbursement hurdles.

Geographic expansion and clinical evidence broaden the platform

EUROW sales reached SEK 57 million, up 16% at constant exchange rates versus an already strong Q1 2025. The company also reported its first CERAMENT sales in India and highlighted two new U.S. clinical publications in trauma and open fractures, which management believes will bolster real-world adoption and clinician confidence.

Currency volatility weighs on reported performance

Management emphasized that reported growth significantly understates operational progress due to the strengthening of the Swedish krona against the U.S. dollar. The 14% reported increase in Q1 revenues compares with 31% growth at constant exchange rates, making FX a notable headwind for headline figures despite healthy end-market demand.

Tariffs to trim U.S. margins later in 2026

Newly introduced U.S. tariffs, announced at 15%, are expected to gradually raise costs over the coming quarters. Once fully implemented later in 2026, management estimates the impact will reduce U.S. gross margins by about 0.8 percentage points, adding another modest drag on profitability that will need to be offset by volume growth and efficiency.

Commercial investments and incentives pressure near-term margins

Selling and marketing expenses climbed to SEK 128.4 million from SEK 121.6 million as commissions and fees rose to SEK 85.1 million, reflecting higher sales activity. Non-commission selling costs increased by SEK 11.6 million and long-term incentive expenses jumped 28% to SEK 12.8 million, all contributing to short-term margin pressure as the company invests in growth.

BVF softness and early-stage spine launch in the U.S.

U.S. CERAMENT BVF revenues over the last 12 months were flat at constant exchange rates, with Q1 showing particular softness as some surgeons transitioned from BVF to CERAMENT G. The U.S. spine BVF launch remains in its infancy, and management described current spine revenues as immaterial, though they view the segment as a longer-term growth opportunity.

Uncertain timetable for CERAMENT V approval

While the company remains optimistic on the probability of CERAMENT V approval, it acknowledged that the De Novo process involves multiple interactions with both CDER and CDRH. With responses to outstanding preclinical, clinical and biocompatibility questions due by end-August, management conceded that the ultimate approval timeline could slip beyond 2026.

EUROW profitability pressured by regional headwinds

EUROW’s contribution to profit declined to SEK 12.7 million from SEK 15.4 million, representing a drop of around 17.5%. The company cited geopolitical unrest in parts of the Middle East, which has created near-term market and logistics challenges for certain distributors, as a key factor behind the weaker regional profitability.

Guidance: investing today for higher margins tomorrow

Management reaffirmed its strategy of gradual commercial investment, including about 10 new U.S. hires and the EUROW Booster program, which adds roughly SEK 10 million in cost with an expected 18-month payback. They expect these initiatives, alongside a 94.5% gross margin and rising U.S. contribution, to drive continued sales growth and a progressive improvement in operating margins, even as tariffs and incentives weigh near term.

BONESUPPORT’s call painted the picture of a company with strong operational momentum, exceptionally high margins and a growing cash pile, offset by temporary FX headwinds and investment-driven cost pressure. For investors, the key watchpoints will be CERAMENT V’s regulatory path, the final CMS reimbursement decision and the pace at which new hires and geographic expansion convert into sustained top-line and margin gains.