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Investing.com -- Shares of Revenio Group Oyj (HEL:REG1V) fell 11% following the release of their fourth-quarter earnings, which showed sales had dropped by 1.0% compared to the company-compiled consensus.
The company’s constant exchange rate (CER) growth of -1.1% also fell short of the Visible Alpha consensus, which had anticipated a growth of +5.3%.
Despite the overall decline, the company reported strong growth in its tonometer segment, driven primarily by sales of probes and the recently launched slit lamp mounted device. Other products such as the HOME2 device, IC200, and veterinary devices also saw robust sales performance.
The fundus segment, particularly the EIDON ultra-wide field product, also experienced good sales, and the number of sites using the iCare ILLUME screening solution quadrupled in 2024.
Revenio Group emphasized the growth in recurring revenue, which includes software licenses, service contracts, and probe sales, accounting for nearly one-third of total net sales. The company expects this revenue stream to expand in the future.
However, the company’s profitability took a hit, with adjusted EBIT falling 4.1% below expectations, likely due to higher-than-anticipated employee benefits. There were no significant costs from the US clinical trials for iCare ILLUME in the fourth quarter, but the lower profitability impacted net income, resulting in earnings per share (EPS) being 8.5% below consensus.
The company reiterated its guidance for 2025, projecting 6-15% growth with "underlying profitability to remain at a good level." The current consensus forecasts a 14.5% organic growth with a 28.5% adjusted operating margin.
An analyst commented on the results stating, "We expect investors to be disappointed by the miss on profitability vs consensus, and the likely re-adjustment of consensus expectations for 2025. However, we highlight the strong commercial execution through 2024 and into 2025, which we see as supporting strong revenue growth through 2025. We hope for a tightening of the broad guidance range at subsequent quarterly results."
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