RaySearch Laboratories Earnings Call Highlights Growth And FX Drag

RaySearch Laboratories AB Class B (($SE:RAY.B)) has held its Q4 earnings call. Read on for the main highlights of the call.

RaySearch Laboratories’ latest earnings call painted a largely upbeat picture, with record revenues, strong organic growth and expanding profitability offset by currency headwinds and a soft book‑to‑bill ratio. Management highlighted accelerating AI adoption and major clinical milestones, but also acknowledged slower RayCare traction and regulatory uncertainty as key execution risks.

Record sales momentum despite FX drag

RaySearch delivered all‑time‑high net sales in Q4, reaching SEK 375 million, up 16% year on year. For full‑year 2025, revenue climbed 13% to SEK 1.344 billion, and the company stressed that organic growth was a robust 19% once currency effects are stripped out.

Organic growth stronger beneath the surface

Management underlined that reported figures understate underlying demand because of the stronger Swedish krona. Q4 organic growth would have been 28% without FX, while support revenue growth adjusted for currency reached 16% versus a reported 6%, underscoring solid operational traction.

Margin expansion and cash fortress

Operating profit in Q4 jumped 25% to SEK 92 million, giving an EBIT margin of 24% or 27% on a currency‑adjusted basis. For 2025, EBIT reached SEK 292 million with a 22% margin, rising to an adjusted 26%, while Q4 cash flow strengthened to SEK 91 million and year‑end cash stood at SEK 407 million with no debt.

Recurring revenue strengthens resilience

The support and maintenance business continued to deepen RaySearch’s earnings base, with recurring support revenue of SEK 524 million in 2025, equal to 39% of total sales. In Q4 alone, support revenues were SEK 139 million, or 37% of quarterly sales, providing greater visibility and cushioning against order volatility.

Strategic wins broaden global footprint

Q4 brought several high‑profile customer wins that expand RaySearch’s installed base in advanced radiation therapy. The Greater Poland Cancer Center moved into proton planning, the University of Pennsylvania chose RayStation for proton therapy at three clinics, and a major German hospital replaced Philips Pinnacle with RayStation.

Clinical breakthroughs enhance credibility

The company showcased several cutting‑edge clinical milestones that reinforce its technological edge in oncology. Highlights included the first online adaptive treatment on a standard Elekta linac using RayStation, initial patient treatments at Southwest Florida Proton Center with RayStation and RayCare, and the world’s first clinical proton arc treatments, recognized as a top physics breakthrough.

AI drives productivity for customers and developers

RaySearch’s AI tools are seeing rapid adoption, with deep learning segmentation used in about 270,000 patients during 2025. Deep learning planning has generated roughly 7,000 clinical treatment plans, and customer data from Iridium in Belgium showed nearly halved times for patient modeling and plan generation, while AI is also being used internally to accelerate development.

Dividend uplift and new shareholder return policy

Shareholders are set to benefit from a higher proposed dividend of SEK 4.00 per share, up from SEK 3.00. From 2026 onward, the board aims to distribute 50% of profit after tax, subject to investment needs, and management also signaled an intention to explore potential share buybacks as cash generation improves.

FX headwinds dent reported performance

A stronger Swedish krona weighed on reported growth and profitability, masking some of the operational progress. In Q4, currency revaluation alone shaved just over SEK 10 million off EBIT, and full‑year currency losses totaled SEK 37 million, depressing margins relative to underlying performance.

Order intake and backlog under scrutiny

Order intake growth lagged revenue, rising 8% in Q4 and 17% for the year, leaving the order backlog at SEK 1.528 billion. The book‑to‑bill ratio of 0.9 for both Q4 and the full year signals orders running below current revenue levels, a trend management linked partly to FX effects but which investors will watch closely.

RayCare adoption slower than hoped

The company acknowledged that RayCare, its oncology information system, is ramping more slowly than anticipated, with only four orders in 2025. Progress is constrained by regulatory timelines and the need for fully integrated online adaptive workflows, particularly in the U.S., delaying what management still sees as a substantial long‑term opportunity.

Regulatory clocks shape product rollout

Several growth drivers hinge on regulatory approvals, adding timing uncertainty to the outlook. Management expects European clearance for online adaptive capabilities in the spring, while U.S. approvals for various modules remain pending, with the chemotherapy module not expected to be cleared before around 2027 and surgical functionality further out.

Nonrecurring costs and admin spending weigh on margins

Full‑year results included SEK 23 million in items treated as nonrecurring, which weighed on reported profitability. Administration expenses also remained elevated in Q4, and while management flagged them as an issue, it gave limited detail on specific drivers, leaving some open questions on cost discipline.

Cash flow solid but potentially volatile

Despite a strong Q4 cash inflow, RaySearch cautioned that cash generation can swing from quarter to quarter. Long payment terms tied to large tenders and framework agreements, as well as deliberate choices to accept later invoicing on profitable deals, can create volatility even when underlying profitability is healthy.

Pinnacle conversion opportunity remains opaque

The migration from Philips Pinnacle platforms continues but at a measured pace, with Pinnacle conversions accounting for only 11% of license revenue in Q4 and 23% for the full year. Management estimates that a few hundred centers remain in transition globally but cannot be more precise, making the timing and size of this revenue stream harder to forecast.

Guidance points to higher margins and disciplined capital return

Looking ahead, RaySearch is targeting an EBIT margin of at least 25% in 2026 and plans to unveil a new three‑year financial target during the year. Management emphasized a stronger focus on cash flow, expects RayCare to ramp as regulatory hurdles clear, and will pair its higher dividend and 50% payout policy with the option of future buybacks, signaling confidence in sustained earnings power.

RaySearch’s earnings call blended strong operational execution with a candid acknowledgment of currency and order‑intake challenges, leaving investors with a cautiously optimistic outlook. The company’s growing recurring revenues, AI‑driven clinical leadership and net‑cash balance underpin its story, while delivery on margin targets, RayCare ramp‑up and regulatory milestones will be the key catalysts to watch.