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Introduction & Market Context
Boule Diagnostics (STO:BOUL) presented its Q2 2025 results on July 18, 2025, revealing a mixed performance characterized by continued sales pressure but improved cash flow. The diagnostic equipment manufacturer’s shares plunged 21.36% following the presentation, with investors reacting to margin compression and lower-than-expected overall performance despite some bright spots in specific product segments.
The company’s Q2 results show some stabilization compared to Q1 2025, which saw a steeper 23.6% year-over-year sales decline. However, the continued revenue challenges and margin pressure suggest Boule’s strategic restructuring efforts are still a work in progress.
Quarterly Performance Highlights
Boule reported Q2 2025 sales of SEK 129 million, representing a 5.6% decrease from SEK 137 million in the same period last year. This decline consisted of a 3.3% organic decrease and a 2.3% negative currency impact. Despite the overall sales dip, the company highlighted a 17% growth in instrument sales, with 5-part analyzer sales doubling year-to-date.
As shown in the following chart of quarterly sales growth trends, the company has experienced volatile performance over recent quarters:
A key positive development was the return to positive operating cash flow of SEK 2.9 million, compared to negative SEK 4.4 million in Q2 2024. This achievement aligns with the company’s previously stated goal of generating positive cash flow in the second half of 2025.
The company’s regional performance varied significantly, with some markets showing strong growth while others experienced substantial declines:
Detailed Financial Analysis
Boule’s financial results revealed significant margin pressure in Q2 2025. Gross profit declined 15.4% to SEK 50.0 million, with gross margin falling to 38.7% from 43.1% in Q2 2024. This represents a substantial deterioration from the 47.4% gross margin reported in Q1 2025. The company attributed this compression to an unfavorable sales mix and lower instrument pricing.
The following financial summary table provides a comprehensive view of the company’s performance metrics:
Despite the margin challenges, Boule made significant progress in cost control, reducing operating expenses by 47% year-over-year. Adjusted EBIT came in at SEK 5.8 million, down from SEK 9.9 million in Q2 2024, resulting in an adjusted operating margin of 4.5% compared to 7.2% in the prior year period.
The breakdown of costs as a percentage of sales reveals how the company has restructured its operations:
Liquidity remains a concern, with available cash and cash equivalents declining to SEK 39 million from SEK 82 million a year earlier:
Strategic Initiatives
Boule continues to execute on its portfolio strategy, emphasizing partnerships to access new technologies with reduced investment requirements. The company has successfully validated a new Veterinary Hematology analyzer and commercialized a Clinical Chemistry distribution agreement in the US during Q2.
The following slide illustrates the company’s instrument portfolio strategy across both human and veterinary diagnostics:
Hematology sales showed mixed results, with instrument unit sales growing 17% to 1,029 units, but overall sales declining 6% due to lower average selling prices and delayed reagent payments:
OEM sales, which represent 25% of total revenue, declined 3% in Q2, primarily due to order timing and a weaker USD:
Forward-Looking Statements
Boule outlined three strategic priorities for 2025, providing updates on progress made during Q2:
The company emphasized its focus on expanding operating margins through disciplined execution and structural cost reductions, which has already resulted in a 47% reduction in operating expenses compared to last year. Management also highlighted accelerated growth through strategic organic investments, including strengthening the leadership team and implementing a new growth strategy that has contributed to the 17% increase in instrument sales.
Looking ahead, Boule appears focused on stabilizing its financial performance while continuing to invest in portfolio expansion. The successful validation of a new veterinary hematology instrument and the commercialization of clinical chemistry sales in the US represent steps toward building what the company describes as "a better, stronger, growth-oriented portfolio."
However, investors should note the significant gap between the company’s Q1 2025 adjusted EBIT margin of 15.1% and the Q2 figure of just 4.5%, suggesting continued volatility in operational performance as the restructuring efforts progress.
Full presentation:
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