• Revenue: SEK323 million for Q4, an 8% increase from the previous year.
• Operating Profit: SEK74 million for Q4, with an operating margin of 23%.
• License Revenue: SEK160 million, a 16% growth.
• Order Intake: SEK293 million, a 4% decrease from last year.
• Cash Position: SEK463 million, with stable cash flow and no loans.
• Dividend Proposal: Increase from SEK2 to SEK3 per share.
• Full-Year Net Sales: SEK1,192 million, a 17% increase from 2023.
• Full-Year Operating Profit: SEK260 million, with an operating margin of 22%.
• Cash Flow from Operations: SEK485 million for 2024.
• Recurring Revenue from Support Sales: 40% of total revenue in 2024.
• End-of-Year Backlog: SEK1,813 million, with SEK552 million expected to generate net sales in the next 12 months.

• Warning! GuruFocus has detected 4 Warning Sign with RSLBF.

Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RaySearch Laboratories AB (RSLBF) achieved record sales for the fourth quarter, reaching SEK323 million, an 8% increase compared to the same period in 2023.
• The company reported an operating profit of SEK74 million, corresponding to an operating margin of 23%, driven by increased license revenue.
• RaySearch Laboratories AB (RSLBF) has a strong cash position of SEK463 million, stable cash flow, and no loans, allowing for a proposed dividend increase from SEK2 to SEK3 per share.
• The company has been a pioneer in proton arc therapy, with the Trento Proton Therapy Center in Italy becoming the first in the world to introduce discrete proton-arc treatments.
• RaySearch Laboratories AB (RSLBF) expanded its product offering by acquiring DrugLog, a quality assurance system for chemotherapy, complementing its existing portfolio.

Negative Points

• Order intake for the fourth quarter decreased by 4% from the previous year, with license order intake down 1% and support order intake down 5%.
• The cash flow from operations decreased to SEK103 million in the quarter compared to SEK116 million last year, affected by fluctuations in contract assets and liabilities.
• The company experienced a 26.5% downturn in sales in Europe and Africa for Q4 2024, attributed to fluctuations in order volumes across regions.
• RaySearch Laboratories AB (RSLBF) faces challenges in converting order intake to revenue, as seen with the Ortega order, which has yet to generate revenue.
• There is a weak correlation between order intake and sales growth, as order intake and revenue often occur in the same quarter, complicating revenue forecasting.

Q & A Highlights

Q: How much of the revenue during the quarter comes from the large Spanish order, the Ortega order? A: There is no revenue in this quarter from that order. We expect to see the first revenue towards the end of 2025, with revenue generation continuing over the next three years. - Johan Lof, CEO

Q: Can you elaborate on what made Varian open up to interoperability with RayCare? A: Varian has a strategy to open up their systems to industry vendors, driven by customer demand for interoperability with RayStation and Varian equipment. This is a combination of Varian's policy and customer pressure. - Johan Lof, CEO

Q: What is the current market share of RaySearch in the proton therapy field, and how does it compare to the photon field? A: We have about 85% market share in the proton therapy field, with 127 particle centers using our systems. In the photon field, our market share is approximately 12%, but we expect this to grow over time. - Johan Lof, CEO

Q: How does the consolidation of RT centers in the US affect RaySearch? A: Consolidation can be positive as it allows us to reach more clinics by negotiating with fewer business partners. Many of our customers are chains of clinics, which simplifies the sales process. - Johan Lof, CEO

Q: What are the switching costs for customers moving to RaySearch's treatment planning system? A: While we aim to make the transition as smooth as possible, there are costs associated with changing systems, including training and commissioning. This contributes to the stickiness of our product, resulting in very low churn rates. - Johan Lof, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.