RaySearch Laboratories (RAY) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw net sales decline to SEK 290 million, down 20% year-over-year, mainly due to currency effects and a tough comparison with a large prior-year order from China, but profitability remained robust with an operating profit of SEK 68 million and a 23% margin.

• Recurring support revenue provided stability, accounting for 42% of total revenue.

• Several strategically important deals were secured, including first RayCare orders in China and France, and continued conversions in Germany; RayStation began treating patients in Ukraine.

• Demand for integrated and automated cancer care workflows remains strong, with a solid sales pipeline and growing interest in online adaptive solutions.

• The company is preparing for the first online adaptive treatments with RayStation, RayCare, and TrueBeam.

Financial highlights

• Net sales declined 20% year-over-year to SEK 290 million, with organic growth at -5%.

• Order intake dropped 13% compared to last year, affected by currency and a strong prior-year quarter.

• Book-to-bill ratio was 1.2; order backlog at end of March was SEK 1,615 million, with SEK 624 million expected to convert to sales in the next 12 months.

• License sales decreased 24% and support sales by 1% year-over-year; support revenue would have grown 8% excluding currency effects.

• Cash balance at quarter-end was SEK 439 million; cash flow was stable despite inventory pre-purchasing to mitigate hardware price increases.

Outlook and guidance

• Several delayed orders are expected to be recognized in Q2 or Q3, supporting a return to growth.

• Confident in achieving at least a 25% operating margin for full year 2026 and a new long-term target of at least 30% by 2028.

• No concerns about growth fading in 2027 despite Pinnacle³ conversion window closing.

• Management expects continued strong demand for integrated and automated cancer care workflows, with a robust sales pipeline.

• Revenues may fluctuate quarterly, but the long-term growth trend is positive.