Braincool (BRAIN) Q3 2024 earnings summary

Executive summary

• Net sales grew 144% year-over-year in Q3 2024, driven mainly by BrainCoolTM/IQoolTM System sales to ZOLL® and increased consumables volume.

• Gross margin improved to 22.5% in Q3 2024, up from 20.1% in Q2, reflecting ongoing cost reduction initiatives and automation in production.

• Clinical studies COTTIS 2 and PRINCESS 2 are progressing, with new hospitals joining and patient enrollment expanding across Europe.

• The company cancelled its EIB loan agreement, citing it as no longer appropriate.

Financial highlights

• Q3 2024 net sales: SEK 8.88 million (Q3 2023: SEK 3.64 million); Q1–Q3 2024 net sales: SEK 27.92 million (Q1–Q3 2023: SEK 13.67 million).

• EBITDA for Q3 2024: SEK -9.62 million (Q3 2023: SEK -9.26 million); EBIT: SEK -10.42 million (Q3 2023: SEK -10.45 million).

• Result after tax for Q3 2024: SEK -11.29 million (Q3 2023: SEK -10.88 million).

• Cash at period end: SEK 41.27 million (Q3 2023: SEK 42.46 million).

• Inventory increased to SEK 33.1 million (Q3 2023: SEK 16.3 million) to secure delivery capacity during cost efficiency programs.

Outlook and guidance

• Gross margin for BrainCoolTM System expected to reach around 50% by 2026 as automation and injection moulding projects progress.

• Inventory levels to normalize as cost efficiency measures are completed and production disruptions are managed.

• Long-term sales to ZOLL® anticipated to increase, supporting improved results as cost of goods sold declines.

• COTTIS 2 aims for at least 5 hospitals in the study by 2025, enabling interim analysis in H2 2025.