Surgical Science Sweden AB ((SE:SUS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Surgical Science Sweden AB painted a mixed picture of the company’s performance. While there were notable achievements such as record-breaking revenue and strategic partnerships, these were tempered by significant challenges including currency impacts, underwhelming U.S. sales, and struggles in the U.K. market. The call highlighted both the strengths and weaknesses faced by the company, with a particular focus on the decline in gross margins and losses from the Intelligent Ultrasound segment.
Record-Breaking Revenue
Surgical Science Sweden AB reported an all-time high in total sales, reaching SEK 264 million. This represents a 14% increase compared to the same quarter last year, and a 19% rise when adjusted for currency effects. This record-breaking revenue underscores the company’s ability to grow despite challenging market conditions.
Strong Growth in Europe
The European market emerged as a strong performer, with sales increasing by 46%. This growth was driven by robust sales in countries such as the Czech Republic, Poland, and Portugal, highlighting the region’s importance to the company’s overall strategy.
Prominent Partnerships for Certification Programs
The company launched training programs with the American Society for Gastrointestinal Endoscopy (ASGE) and the European Academy of Gynecology Surgery. These partnerships mark a significant step towards the standardization of certification using simulators, potentially opening new avenues for growth.
Industry OEM Performance
Surgical Science saw a 20% increase in Industry OEM sales, with development revenue up by an impressive 131% compared to the same quarter in 2024. The company also secured what could be the largest single deal in its history within medical device simulation.
Intuitive’s Growth
The da Vinci system reported a 19% growth in procedures during the third quarter, with the installed base growing by 13%. This growth reflects the increasing adoption of robotic surgery systems.
Cost Savings from Intelligent Ultrasound Acquisition
Following the acquisition and integration of Intelligent Ultrasound, the company achieved cost savings of approximately GBP 2.5 million annually. This acquisition is expected to contribute positively to the company’s financial health.
Currency Impact on Sales
Currency fluctuations negatively impacted sales, affecting them by 5 percentage points. This highlights the challenges posed by the global economic environment on the company’s financial performance.
Sales Challenges in the U.S.
Sales in the U.S. were lower than expected, attributed to extended sales cycles in a challenging budgetary climate for hospitals. This remains a key area of concern for the company.
Weak Performance in the U.K.
The U.K. market faced sluggishness due to NHS fund allocation issues, which particularly affected Intelligent Ultrasound’s performance, resulting in weaker sales.
Gross Margin Decline
The company’s gross margin declined to 65% from 69% last year, impacted by currency effects and a lower share of license revenue. This decline is a critical area that the company needs to address moving forward.
Intelligent Ultrasound Losses
The Intelligent Ultrasound segment reported a loss of SEK 11 million, primarily due to lower-than-expected sales in the U.K. This segment’s performance remains a concern for the company.
Decrease in Simulation Subscribers
There was a decline in simulation subscribers for older generation da Vinci systems in the U.S., as they are being replaced by newer platforms. This transition period poses challenges in maintaining subscriber numbers.
Forward-Looking Guidance
Looking ahead, CEO Tom Englund highlighted a record total sales figure of SEK 264 million, with a 14% increase from the previous year and a 19% rise when adjusted for currency effects. The educational products segment stabilized with 8% growth, and strategic collaborations with medical associations are expected to integrate simulators into certification programs. The RobotiX Express simulator is anticipated to significantly impact revenue starting Q1 2026, reflecting a positive outlook for the company’s future.
In summary, the earnings call for Surgical Science Sweden AB revealed a company navigating a complex landscape of growth and challenges. While record-breaking revenues and strategic partnerships are promising, issues such as currency impacts, U.S. sales challenges, and gross margin declines need to be addressed. The forward-looking guidance suggests optimism, with expectations of continued growth and strategic advancements.