Earnings call transcript: ChemoMetec Q1 2025 sees revenue beat, stock dips

ChemoMetec A/S reported its first quarter earnings for 2025, exceeding revenue expectations but witnessing a decline in its stock price. The company reported earnings per share (EPS) of 3.98 and a total revenue of 125 million Danish kroner, surpassing the forecasted revenue of 124 million Danish kroner. Despite this positive financial performance, ChemoMetec's stock price fell by 4%, closing at 684 DKK.

Key Takeaways

• ChemoMetec's revenue surpassed forecasts by 0.81%.
• The company's stock dropped by 4% despite positive earnings results.
• New product launches and strategic restructuring were highlighted.
• The cell therapy market remains a key focus with ongoing trials and partnerships.

Company Performance

ChemoMetec demonstrated solid performance in Q1 2025 with an 8% increase in revenue in Danish kroner and an 11% rise at constant exchange rates. The firm's EBITDA margin improved slightly from 54% to 55% year-over-year. The company's focus on innovation and restructuring efforts appear to be paying off, although market conditions remain challenging.

Financial Highlights

• Revenue: 125 million DKK, up 8% YoY
• EBITDA: 68.8 million DKK
• EBITDA Margin: 55%, up from 54% last year
• Instrument Sales: 40 million DKK
• Consumable Sales: 55 million DKK
• Service Revenue: 4% growth

Earnings vs. Forecast

ChemoMetec's revenue exceeded expectations by 0.81%, achieving 125 million DKK against a forecast of 124 million DKK. This performance marks a positive surprise for the company, reflecting effective execution of its strategic initiatives.

Market Reaction

Despite exceeding revenue forecasts, ChemoMetec's stock fell by 4%, closing at 684 DKK. The decline could be attributed to broader market trends or investor concerns about future growth prospects. The stock remains closer to its 52-week low of 367 DKK, indicating potential investor caution.

Outlook & Guidance

ChemoMetec is preparing for larger XM platform orders by the fiscal year's end and plans a soft launch of its XM 50 software platform in 2026. The company aims to transition from its NucleoCounter to the XM platform, emphasizing a shift towards becoming a software-centric entity.

Executive Commentary

CEO Martin emphasized, "We are building a new golden standard here," reflecting confidence in the company's strategic direction. CFO Kim added, "The long-term vision is that this company is going to become a software company," highlighting the shift towards software solutions.

Risks and Challenges

• Market saturation and competition in the cell therapy sector.
• Potential macroeconomic pressures affecting funding for bioprocessing initiatives.
• Dependence on successful transition to the XM platform and software model.
• Minimal impact from U.S. tariffs, but potential future trade issues could arise.

Q&A

During the earnings call, analysts inquired about the spread of XM sales across customers and the potential for reducing customer production costs by up to 70%. The company is also exploring a software licensing model, indicating a strategic pivot in its business approach.

Full transcript - ChemoMetec A/S (CHEMM) Q1 2026:

Jesper, Moderator/Host: Okay. It is 3:00. I think let's just kick off. Might be a few more joining, but in the interest of time, I think let's just get started. Assuming you guys start up with a presentation, and then let's do Q&A afterwards.

Martin, CEO: Yes. Thank you, Jesper. Thank you, everyone, for being here. Kim will go over the numbers first, and then I will take the rest. Go ahead, Kim.

Kim, Chief Financial Officer: Yes. Thank you, Martin. Quickly on the numbers, I know that you have all probably seen them by now. We saw quite a solid quarter, we think. Revenue went up by 8% in Danish kroner, so approximately DKK 125 million. That's 11% in constant exchange rate, EBITDA of DKK 68.8 million, and the EBITDA margin of 55% compared to 54% in the same period last year. Sorry, are you seeing my screen right?

Martin, CEO: Yes.

Kim, Chief Financial Officer: Okay. Sorry about that. On the instrument sale, we saw DKK 40 million, which is quite satisfying, also considering that the XM is now approximately half of that number. On the consumable side, we saw DKK 55 million in revenue, also an okay growth there. On the services side, we also saw a growth of 4%. Please note that in constant exchange rate, the revenue growth is approximately 9% or 10% on the service parts, as most of it is in US dollars. Moving on to the geographical segments, it is pretty much, as you know from previously, North America a bit lower, primarily due to the exchange rates compared to what we saw in the last year. Consequently, Europe a bit up, and the rest of the world is also as we know it.

Looking into our financial numbers, and also especially on the EBITDA, we do luckily see a stable admin and staff cost. Right now, I think we are pretty much benefiting from the huge restructuring we did last year. So basically, we feel that we are in good control of our costs. We see on the gross margin side that the larger XM portion is actually even giving us an even stronger gross margin compared to what we saw in the previous year. Again, just to calm everyone down, the U.S. tariffs, they're not material. I think in this quarter, we paid less than $1 million in U.S. tariffs. So basically, as we talked before, we think we are in pretty good control in that respect. Oh, sorry, my screen is not following, but this is basically the slide I wanted to present. Sorry about that.

One specific thing with respect to guidance, we see from the comments we get this morning that there might be some confusion or uncertainty with respect to whether the upgrade we made was because we now have made a big XM sale that we just realized here in October. We want to be very clear that what we are stating in the upgrade we did is that we see an increased interest in our technology, especially our XM platform. I know that Martin is going to comment a lot on that later on. We are neither saying or not saying that this has anything to do with any specific issues or orders that we might or might not have had in Q2. I hope that's clear to everyone. That was very short on the numbers.

Over to you, Martin.

Martin, CEO: Yes. I don't think your screen is falling, but thank you, Kim. Can you go one slide back? One more?

Kim, Chief Financial Officer: Guidance.

Martin, CEO: Let's move on. Yeah. Sorry about that, Kim. If we look at the market conditions, and if you take one more slide, sorry, Kim, then what we're seeing is basically a pretty steady growth from our approved cell therapies. I think it's very interesting to see specifically Covykti from J&J doing very well. The overall revenue is still increasing. On that note, I think it's still a very positive outlook. Also, we do now see Breyanzi doing quite well. We are also seeing some phase three with some very positive outlooks. If we move to the next one, again, we do see a strong pipeline. As many of you know, we usually say that we have around more than 20% of the market. Of course, many of our customers are also within GMP environments.

Many of these trials are basically on our platform, mainly the NCs. For the future, again, we only had 36 approvals, almost 3,200 ongoing trials. The future, from our point of view, looks bright. If we move on to the next slide, we have the numbers here from ARM. Basically, the funding, as we also showed during our annual report, is still not great. I know we are seeing now maybe some more companies trying to do IPOs, but mainly, it's still a tough market for startups. Nothing has really changed there. If we move on to the new products, what's interesting here is, of course, the whole new excitometric platform. Again, we have received some great feedback on the product. I think many of you know by now.

I think basically realizing some sales here in Q1 is also showing that now it's not only something we say, we're actually also seeing the customers transform into this new platform. We have the 40, which is a new product for an existing market. It's for bioprocessing, which is a very, very interesting market for us. We do not have too much presence there today, 1% or 2% of the market right now. We expect to penetrate that with this new product. What I believe is very interesting, if we go back, Kim, sorry, we have the 30 and the 54 automation. Mainly, that's a new product for a new market. It's an emerging market. We do not see too much competition, but it's really exciting.

Again, longer validation periods because our customer needs to change the whole production setup, but for the better. We have a new Exciter 5 analyzer coming out and also the NC203 on the XM platform. What's also interesting to see here is basically we added the XM Octopus software, which is going to be for the whole XM platform. Really, in the future, we do see we have a lot of possibilities to do upselling on this new platform. We do have some pretty exciting news from that because we have actually been to a conference since last time we spoke. Also, we have had a user meeting with a lot of customer feedback, but I'll get back to that.

If we move on to the next slide, I have actually now tried, or we have actually tried now to explain the validations a little bit more. First, we have tried to tell you in cell therapy what is actually going on, how are we actually trying to validate these products. What you do see here is an example. It's not a specific company. What you can see is basically an average customer could have NC on all their previous products in their pipeline. What we're trying to do is actually add XM as their next technology on their platform. A lot of our work is mainly to get these customers to adapt to our new XM platform. Of course, some of them using NC today see some upside by actually swapping to XM.

I also think when we look at the software platform, it's actually also making automation even better for the customers because XM Octopus is actually helping them automate basically manual labor as well. This is a pretty good example of the validations we're trying to do. Mainly, we have customers now who say that for the future, every single new drug we are providing for the market will be on your XM platform. For our investors, of course, it's a long timeline, right? It can take five years to go from discovery until commercial. For us, we're long-term. It's also very, very important that the largest customers in the world will adapt to the XM platform. Basically, we are building a new golden standard here. That is some of the validations we're doing.

To actually validate the instruments for a new drug is easier than replacing NC on a previous. If we move on to the next slide, we have also tried to explain bioprocessing a little bit more because what's really interesting here is we do not have too many of our instruments on those products today. Here, I have basically a lot of different ways of doing bioprocessing. The idea is, and why the validations are also taking a little bit longer, is what you can see here is we're basically trying to do a global alignment. It means if we actually get our product validated, we will sell to many different departments. The upside is huge.

That is why the validations are taking longer because you can probably imagine if you were to choose a new platform for so many different products, you probably want to make sure first that you are actually taking the right choice. That is what we have been working on. We are working with some very big players to basically do global alignment projects. It looks very good. Specifically at the BPI in Boston, we had some great feedback. We hear from customers, "Yeah, we are working on the global alignment project. There is a lot of data." Actually, during our user group meeting we had in Germany, we invited many large players in the world where they actually shared their data with each other to show how well the products are working. Again, we are trying to win the largest players in the world first.

From there, of course, we hope that others will follow. If we move on to the next one, Kim, I have actually, or we have actually just again showed you an example. We're following it pretty well. Basically, again, it takes time. If we're adding a product or if we're adding XM to a new drug at a customer's side, we'll see a few sales. That's also what we saw here in Q1. We actually saw some customers buying the product to add to some new drugs. Again, when you're in phase one, if you're in preclinical, you're not buying 100 instruments. You're buying a couple of instruments. As you grow through the stages, you'll buy more. I think that's a pretty good testament to what we're doing right now. Again, this example is actually pretty good.

When we look at all our validations ongoing right now, when we're looking at the projects we're running, this is pretty accurate. Of course, we expect some sales from the early adapters, from the early validations we did one and a half. We started one and a half years ago. Of course, we're adding more and more. If we move on to the next one, Kim, we're going into product development. The first one is the 50. I will say at the BPI conference, we had the whole sample management system brought with us. We had the XM50 and also the software XM Octopus. This product was really interesting because a lot of customers see the big use of this. Again, we've had some questions. Are you building XM50 because 30 didn't make it? To be honest, no, not at all.

We do have some customers who want the 50 for specific setups. The 40, the 50, and the 30, they're all built the same way. The way of handling or actually taking the sales is just different. With this product, we basically believe that we're broadening our portfolio and the customer can customize more how they want to use the product. We had just one meeting a couple of months ago where a customer said, "Great platform. I can use whatever to the different needs I have." It is just great that they align. Overall, pretty excited about the 50. We do have a lot of demand for it. Now we need to finalize it. Then we'll start a soft launch in 2026. If we move on to the next slide.

Kim, Chief Financial Officer: Yeah, sorry.

Martin, CEO: No worries. We'll move on to the sample management system. I will say this system is pretty interesting for many customers. The thing is, you can automate in many ways. You can automate in a whole new way where you change a product or a production completely. With this product, we have actually heard from customers that since we can customize this product and it's modular, we can actually make it possible for them to automate what they're doing manually today without making big changes. This is a new end-to-end automated sample management system. It helps you get the sample from the bioregister into a cell counter. Everything is operated by our new software platform. Mainly, you actually will have a lot of automation. You'll have less error, and you will cut a lot of cost. Right now, we have showcased it in Boston.

We've showcased it at our user meeting days. We're actually working now with one specific or two specific customers where we do a solution they like, and then we try to sell it to more customers. I'm very excited about this product. It seemed like we've been hitting it pretty accurately. The customer needs it customized for their setup, but I truly believe in this product for the future. The next thing, which for me is basically automation. We have been building this product, showcasing it. I can say there's a lot of demand. I even believe in the future we won't sell any XM product without this software. The main thing is it doesn't matter if you're going to use the 40, the 30 as standalone, or if you're going to automate.

We have customers who actually want to use this program to plan their day. They actually want to use it to operate their facilities. They want to make sure that when they do a sample, QC can approve it in the cloud. You actually get rid of a lot of labor. Even if people continue to do manual for some time, this program is designed to automate manual workflows. If you go fully automated, you can basically have an overview of everything in one program. I will say we had a lot of great feedback from the customers. Even a customer said, "Can you do a planner module, which will help us be more efficient at our site?" I truly believe this product is going to be amazing.

The idea is also that, sorry, Kim, the idea is also today you have one instrument, you have one laptop. Many customers, they want to get rid of the laptop. They just want to basically see everything centralized. Just from this product, you were actually able to get rid of the laptop and just use the instrument standalone. This is a huge upside. Also, you get more efficient, and you basically get rid of paper. Believe it or not, some of these customers are still doing it very manually. They do the cell count, they put it on paper, they walk through a lab, they give it to QC, they have to manually approve it. Here, everything gets done on a phone or a tablet, and you'll cut so much cost. It's a very exciting product, and we hope to do a soft launch in 2026.

I think we're ready for Q&A.

Jesper, Moderator/Host: Yes, perfect. I think we'll do it like we have done in the past. I'll ask a participant to raise their hand, and I'll try to get people the speaking time. Maybe if I can start out, just sort of like you mentioned, Kim, in regards to the upgrade you did last week that we shouldn't necessarily read into the fact that you have gotten a big order here in October or Q2. Could you probably, or could you maybe just talk a bit about what kind of visibility you have on those orders that you highlight in that announcement, especially in the context of the lower growth you saw here in Q1? Yeah, just any flavor on the visibility of that guidance upgrade in terms of XM.

Martin, CEO: Yeah, and I think with the XM visibility, Martin, you're probably the right one to answer that based on what you're seeing in the market.

Kim, Chief Financial Officer: Yeah, sure. I think what's interesting and what I'm also trying to explain here with the bioprocessing area in the cell therapy area, with larger global alignment projects, we've been running these for many, many months. We have a pretty good sense of those. Are we actually going to get any big orders in the future or not? If you have done more than 40 validations with big players, we're looking at each one and we're saying, "How is it actually going? What are they saying to us? What do we expect from that?" Of course, we really believe in our guidance. We have a pretty good feeling of how we're doing with these customers. I think it's a pretty good testament to our product that we're already starting to see some XM sales.

Of course, we expect to ramp up on that because right now, if you ask me, we have not sold any instruments basically, right? It is so, so early days. We have a pretty good expectation of ramping up. We are looking at all the different validations, how are we doing with the larger companies? We ask them, "How quickly do you expect to ramp up?" That is how we came up with the guidance. That is also why we are pretty much stating that we believe we are seeing some sales at the end of the year. We get the question, "Can it be before?" Before that, yeah, of course, but we do really believe in our guidance. We do believe we are seeing some larger orders at the end of the year. That is basically how we are seeing it right now.

Jesper, Moderator/Host: Yeah, maybe just one follow-up before I hand over the word to Simon. Just on the XM, as we saw in Q1, the DKK 20 million, could you elaborate a bit like whether that was one big order or essentially spread across different customers? Just to understand sort of like the order pattern here to some extent.

Kim, Chief Financial Officer: Yeah, spread across basically, which is what we want because having one customer using your product is not going to be sufficient for the rest of your lifetime, right? We do see many customers now wanting to adapt to our product. That is what you want to see. You want to see customers starting buying some instruments because usually you have the lock-in effect, you have the stickiness effect. It has been spread across several customers. That is also what we hope for the future, that we see some large orders, of course, but also that we are selling to more out there.

Jesper, Moderator/Host: Great. And then just one clarification. When you say end of year, do you mean fiscal year or calendar year?

Kim, Chief Financial Officer: Physical.

Jesper, Moderator/Host: Perfect. All right. Over to you, Simon.

Okay, thanks so much. Hi, everyone on the call. We're just a bit curious on because previously you shared a number of customers currently validating the XM products. I think it was last done two quarters ago. Could you give us any sort of flavor on the development in the last two quarters? I think the number before was above 40. How has that developed basically is the question.

Kim, Chief Financial Officer: Yeah, it's a good question. We're not reporting on it specifically because what we quickly learned is when you, if you take one of the 40, quickly they had five labs who wanted to test your product, and then it just scales up quickly, right? The thing is, what we have done is basically we have tried to enter many large players, and we usually do something called launch and learn. A lot of labs will then attend. Even you can try to do a launch and learn with the cell therapy area. Suddenly you see someone from the bioprocessing. We are adding more validations. The main thing is for some companies, you only need to get validated once, and then you can do upselling from within. We have added more companies.

We're not reporting specifically on it, but we have added way more than the 40 validations we reported on last year.

Yeah, okay, makes sense. I was also a bit curious on sort of the aftermarket dynamic for the XM products that you are placing into the market right now because I guess at this point in time, there's not like a material contribution on the aftermarket portion of sales from these cytometric instruments. Could you maybe just help us understand sort of what will the sort of ramp-up phase look like? I guess when we should expect sort of the aftermarket portion of the cytometric sales to start kicking in, if you will, if that makes sense.

Yeah, of course. As you know, it's also based on install base, right? Of course, we have so many NC products. Because of that, we sell many, many cassettes. When we start selling now in this quarter, later this year, we will start to see internally at least some increase in the consumable sales and service sales from XM. Again, we are accruing revenue on service plans. The services we have sold on the XMs here in Q1, you'll start to see that being accrued into. We'll start realizing that into the next quarters. We are expecting to see an increase in XM consumables. Mainly that's because we have heard from some customers that they are actually using the XM in phase three projects, which means at some point they will actually start buying more consumables.

That's how we see it. Again, the install base is still not very big on XM. So it's going to take some time before that is actually beating NC consumables, I will say.

Okay, no, that sounds encouraging. Maybe a final one from my end. Obviously, and as you mentioned, you held this cytometric user network meeting last week, I believe, in Germany. I saw representatives from J&J, Gilead, Bayer, Novartis, Roche attending. The question, I guess, is do you expect that all these players over time will gradually implement the XM platform throughout your organizations? Maybe if you could sort of give some kind of general sort of timeline as to where these players are in terms of their validation. Two questions.

Yeah, I think the hopes from our companies, of course, when you're providing what we will call the new golden standard, we want all the big players to use your product. I will say, of course, we hope they will do that since they're also participating. It's because they're probably testing. Yes, we hope they will transform into XM. That's what we are working on specifically, yes.

Very well. Thanks so much. I'll get back in queue.

Jesper, Moderator/Host: Yes, next is Ludwig. Go ahead.

Yes, thank you. Hi, Martin and Kim and everyone else. Starting off on the guidance side, it sounds that it's quite dependent on instrument sales. I would have assumed that this is more related to aftermarket just because it's easier to predict. Just your view on that, like if some of these orders fall into the next fiscal year, do you see any risk to the guidance or yeah, just how you think about that?

Kim, Chief Financial Officer: The thing is when we make guidance, we're not relying on one customer or one order. Usually, we're looking into all the expectations we have. Basically, as I said, we have better visibility on the XM. We're not relying on one customer or one order specifically. We have looked at everything we have in pipeline, and then we have made the guidance. We are pretty certain about those guidance. That's how we usually do it. If one order is falling into next year, we might get another order earlier. That's usually how we do it. Yeah, not too nervous about that.

Okay, perfect. Very clear. I just had a question on the NucleoCounter sales, which I believe continue to decrease here. Just how we should think about the growth potential from this product group in the longer term, given that we are seeing very strong commercial patient intake for the cell therapies. I would have assumed that also these are expanding and buying more NucleoCounters. Yeah, how to think about that would be great as well.

Yeah, yeah, and it's a good question. When we're talking to the customers, it seems like what we're seeing in the market right now in cell therapy, specifically CAR-T cell therapies, first generation, right? What we're looking to is to basically have next generation flowing into the market, like you saw with electric cars, right? The first versions, how were they? Not really good. It's the same in CAR-T cell therapy. What we have heard is some are sticking to NC in phase three and also when they hit commercial. We have also heard some customers saying from now on, everything is XM. Our new products coming into commercial will only be on XM. I will say, if I could actually, I would swap every NC out immediately because we have so much more potential to do upsales on the software platform.

We have SST reagent solutions. For us, we would love to just swap everything out. We also do respect the customers saying, "We're just going to stick with NC. It's perfect for us." We do expect a lot more growth from XM in the future than NC for sure. Yeah.

Okay, very clear. Just to follow up to that, yeah, I would assume that the XM is better for a lot of applications, but then it becomes quite relevant on the aftermarket business. The revenue per sample, I guess, is a bit lower on the XM. If you could elaborate a bit on that as well.

Yeah, so on the sample specifically, the price is a little bit lower. The overall package, we expect to generate a lot more revenue per instrument in the future. Also, the margins will be better. Software and reagents alone is going to be a pretty good area for us.

Okay, perfect. That was all for me. I'll jump back to the queue. Thank you.

Jesper, Moderator/Host: Yeah, then Wei is next.

Yeah, thank you. Thank you for taking my question. I have two. Firstly, now looking at XM has been on the market for one year. So based on your dialogue with your customers, I mean, any color on how much production cost you have brought down for them?

Kim, Chief Financial Officer: It's a difficult math to do because they don't do the math on our cell counter specifically. They are looking at the overall production cost. A customer I spoke to recently said it's a way better product than the NC based on how much they're getting from it. It's both cost-related, but also precision and throughput. The throughput alone that they don't need to wait every single time they do a test. Today with a cassette, they have to do one test, press a button, and wait. Now they can just get a higher throughput, which is better for them. We've heard that they want to cut up to 70%. We believe our instrument is cutting at least 70% of their cost right now if they replace. That's the deal.

The thing is when we're talking to customers as well, when we ask them, "Will you actually replace on your commercial product?" they say the filing alone is also very expensive. If they do not believe the first generation is going to last for many years, they are just going to add our product to the next generation because they expect to basically remove the generation one when they release generation two. That is sometimes the payoff they are looking at. For you guys, you are only looking at the approved ones. I do not think they are going to be in the market for many years because I believe we believe that the customers are bringing way better cell therapies into the market in the next years. That is how we look at it. The current ones are not so crucial.

It's actually the ones in phase three right now where they have great results we're looking more at.

Perfect. A question. You mentioned that some large players close down and/or scale down the cell gen therapy. You also mentioned the name. When looking at your consumable sales and service revenue here in Q1, is it possible for you to quantify how much of those customers have impacted your sales?

It's difficult. We're not going to report on the quantity exactly. Of course, when big players in the market are shutting down from one day to another, we are getting hit because basically we have such a big percentage of the market and those were big players. Of course, we do see some short-term issues from that. That's also why we basically put it in the report saying there might be some risk here. We're also trying to be very transparent on that, basically.

Yeah, but I guess it will also not be the issue only for Q1, right? It will also be an issue for the Q2, Q3, Q4 at least?

Potentially, yes, it could be, yeah.

Okay, great. Thank you. I'll jump back to the queue.

Jesper, Moderator/Host: Maybe if I can just squeeze in a question before I hand over the word to Simon. Just coming back to the nuclear counter sales, how should we think of this financial year specifically, 2025, 2026? Can we assume any growth in that part of the business? Also just longer term, I mean, it sounds like you always prefer to sell more XM, which makes sense. Also just like how should we think of the growth potential for that platform? Like longer term and like yeah, cannibalization-wise. I mean, I guess also now we're in Boston. I mean, it's clear obviously when you are at those kind of events that you spend almost all of your time and space in those kind of conferences demonstrating the XM platform. Yeah, just if you could talk about that.

Kim, Chief Financial Officer: Yeah, so basically you're right about our resources are being spent on XM. That's mainly because we're listening to the customers. Many of them, when they choose new technology now for a new product, which they expect to maybe release in five or ten years, they want a new technology. Mainly they are talking about XM. What I believe in the future is not many new drugs which will be added to the market will be on NC specifically in five years. I think all new products hopefully will be on XM or another product. That's how we see it. The future is XM. I think if you spoke to some of the customers who are basically validating right now, they'll definitely say the same thing. Great product.

Wouldn't make sense to use the NC when you can get such a great product, which we believe XM are. That is how we see it. I think new products will be on XM. That is also what we hear.

Jesper, Moderator/Host: For 2025, 2026 specifically, can we expect any growth in the NucleoCounter?

Kim, Chief Financial Officer: We're not guiding on that.

Jesper, Moderator/Host: All right, fair enough. Over to Simon.

Yeah, thanks. Maybe following up a bit on Jesper's question here then. Do you see a scenario where the cytometric products actually outsell the nuclear counters already this year?

Kim, Chief Financial Officer: Potentially, yes. Again, we're not guiding on it specifically. As we say, XM is the future. At some point, they need to outperform NC. When it's going to happen, it's difficult to predict because we're selling what the customer wants. We're not trying to force them onto XM if they don't want it. If you look at Q1, it's pretty even right now. We'll see.

Okay, thanks. Maybe my final one then would be on software. I think you said that you're planning a soft launch of the software here during the 2026 calendar year. Any chance that you could see software sales already this fiscal year, i.e., in H1 of 2026, or is it more of a latter part of 2026, you believe?

Yeah, it's going to be next year because when we launch a new software, it's important for us that we don't launch and then we did something wrong. We want to launch to a few customers. We already have some who's going to test it. We'll give them time to test it. Hopefully we can get it also on an approved cell therapy. We are actually getting FDA approved with that product as well. We're going to launch it more broadly to the rest of the customers. It's very important when you launch a software like that, that it works well. We really hope that we can be their software for the future. It needs to be perfect before we launch.

Okay, that makes sense. Thanks a lot.

You're welcome.

Jesper, Moderator/Host: Yeah, we have a question in the chat which actually adds on quite nicely to that question. It says, "You outlined the vision to attaching a software license to each new XM instrument structured like a service plan. Could you clarify how you plan to balance reoccurring software pricing with consumables revenue so customers do not perceive it as double charging? And when do you expect to disclose software AIR as a standalone KPI to provide visibility on the progress?

Kim, Chief Financial Officer: Yes, so the long-term vision is that this company, that our company, is going to become a software company. I think that is the future. What we see right now is a lot of manual procedures, which is pretty easy to automate with software. We hope to basically penetrate the market with software by selling it onto our XM platform. The idea will be that if you just buy one instrument, you might get the first license for free. We do not force them to basically buy the license. If you want then the second instrument, instead of getting a laptop number two, we will try to upsell the service because it is way better for them. The idea is, and hopefully one day we will have a huge retention rate on software as well.

Pricing is still difficult because we have to figure out how much we can save the customer for. If they can cut a lot of cost, they'll be more open to a higher price. It is going to be a yearly fee for sure, like you saw with service. How much it's going to be, we don't know yet. We still have to figure out. If we cut a lot of cost for them, of course we can take a bigger price. We can charge a bigger price, sorry. Yeah.

Jesper, Moderator/Host: Okay, follow-up question, I see. Transitioning from a hardware and consumable business to a software-centric model requires different capabilities. From product development to sales and customer success, what concrete steps are you taking to build a dedicated software organization? Do you anticipate strategic hires or acquisitions to accelerate this transition?

Kim, Chief Financial Officer: Right now we have a consulting company helping us building the software. I do agree. We need to do a transformation somehow. We also mentioned it in our annual report that we're looking for different skills. Right now when we hire, we're trying to find someone who knows biology. We're also trying to find someone who actually knows integration, IT, software, and etc. I think people also need to remember that we have been selling software for many years actually on our previous platforms. Software is not so new to us. Actually investing more in software and actually saying we're going to become a software company is something which will happen over years. Of course we need to adjust to that. Mainly for now, it's going to be the hardware which will sell the software.

Hopefully one day when the transformation has happened, we will actually sell software and then have great hardware we can offer as well. It will take time and we are looking into actually hiring. We are hiring different types of employees this year, last year compared to five years ago when I was here as well. Yeah, that's how we're going to do that.

Jesper, Moderator/Host: All right, maybe just one more question from my side before handing over the microphone to Ludwig. Maybe a question for Kim to some extent. He's not getting a lot of speaking time here.

Kim, Chief Financial Officer: Sorry, Kim.

Jesper, Moderator/Host: No, that's fine. In the guidance last week that you upgraded, I mean, you're also kind of alluding to a nice improvement in the profitability this financial year. How should we think of that? Also longer term to some extent. What is kind of the ambition in terms of profitability? And also, yeah, to some extent, what kind of investments are needed to sustain the growth that you want to achieve? Martin talked about software to some extent, which might come with some investments. But just generally sort of like how should we think about the profitability outlook?

Martin, CEO: Yeah, and thanks for the question. I think from our side, as you know, we try to keep a very, very stable business admin-wise. We have great operating leverage. Of course, we're going to protect that. That doesn't mean that we don't want to invest and that we don't want to spend the money in the right ways. As Martin is saying, when we do hires today, we hire primarily either software people or people who can help us out in the field with sales. That's our main focus. Again, we are really, really lucky that the margins that we're having are so great that they are. So basically for us to destroy that, so to speak, would require us to hire like a lot of people. That's not what we are looking into.

I think that everyone can be quite comfortable that the margins we see now will improve also going forward.

Kim, Chief Financial Officer: To add to that, Kim, I also think what's important here is with our margins, we can actually invest in the best people. We want the best people. We're trying to hire the best people for the organization. It is specific types you need when you're growing like we are and the expansion we need here. The thing is, instead of having a lot of, it sounds tough, average people, we just want the best. Mainly that has been working pretty well for us the last couple of years. We're going to continue that way because we know if you have the best people, you have the best product, then it's going to be quite an interesting company. That's how we're going to do it.

Jesper, Moderator/Host: Great. Ludwig, go ahead.

Yes, thank you. Just a few follow-ups. First, a clarification. You mentioned that XM is able to cut a lot of cost for customers. That explains some of this strong growth. Just what you mean by this, because cost is in some ways also the revenue from your side.

Kim, Chief Financial Officer: Yeah, so the thing is, today when you use the NC product or another product, you will need a lot of labor. Basically, imagine you need people to use a cassette. You need to put it into the machine. You have to wait 35, 60 seconds, sometimes two minutes depending on the product. Then you can do another cell count. Here, you get completely rid of labor. Labor is expensive. You can automate the pipetting into our product, for example, the 30. By that, you actually cut a lot of labor cost. If you look into all the CAR-T cell therapy companies today, they're saying, yeah, labor is a massive cost for us. What we're trying to do is actually cut a lot of labor, basically, and also automate some of the manual flows. If you can imagine, they're still carrying around the paper, right?

This is something we still see. It is very manual in this industry right now. We just want to automate that, make it cheaper. Actually, they will need less labor, which is good for the whole industry and also the patients, basically.

Okay, yeah, very clear. Thanks. Then another follow-up just on the cytometric instruments that you've placed this far. Is it mainly to customers for use in cell therapy projects? Because you also sell this, of course, to other bioprocessing needs. Just a split or kind of a rough estimate on this would be nice.

Kind of a 50-50. Some replacements in bioprocessing, some in cell therapy. Also some in R&D. That can be for everything, basically. That's been the split. Yeah, broader range of customers and industries.

Jesper, Moderator/Host: Perfect. Thank you very much. Great. I think that also answered the last question in the chat. I'm not sure if there's any other questions amongst the audience. Maybe just one last one from my side. I mean, I think Martin, you started out by saying the XM sales you saw here in Q1 was based on small orders to some extent. I wonder what you think is large orders and when we could see those types of orders coming through.

Kim, Chief Financial Officer: That's a good question. I think, of course, we know our current install base from NC, right? And we're in the late thousands, right? We're still early stage. We know that some customers, they have a couple of hundred instruments. Some of them also need to replace those. I'll say 100 instruments is a big order. 50 is also a big order. If you're below 10, that's still minor orders in our world. Yeah.

Jesper, Moderator/Host: And timing?

Kim, Chief Financial Officer: Still difficult. I think if you look at the guidance, that's the best estimate we can give. We have some expectations. You can probably figure that from our Q1. The next nine months, of course, we expect to see some orders.

Jesper, Moderator/Host: Right, perfect. I think we are out of questions amongst the participants. I guess this, oh, Ludwig, one last one?

Yeah, sorry. Just a final, just a follow-up to that. Would you say that since you have 1,000 NucleoCounter instruments out or something like that, a customer that would replace a NucleoCounter with a cytometric instrument, would not they need fewer cytometric instruments for that because it is more efficient, so to say? What is the translation, yeah, the potential from cytometric on just the current base, basically?

Kim, Chief Financial Officer: Yeah, so in cell therapy, we've heard someone saying they will swap three NCs for two XMs. Also, we've heard someone saying we hope to replace three NCs to one XM in bioprocessing. I think it's more one-to-one. Or since we are more high throughput, sometimes they will replace two of their current instruments with one of ours. That's basically the split we have heard. You are right. We cannot expect to replace our current install base one-to-one with XMs. No, that is right.

Jesper, Moderator/Host: Just to clarify, sorry.

Yeah, thanks. That's good for, yeah, a rough estimate at least. Thanks.

I guess the 1,000 that Ludwig mentioned in terms of install base has been on the low side. You have somewhat more install, right, in terms of the NucleoCounter?

Kim, Chief Financial Officer: Yeah, we have at the later end of the last end of 10,000, sorry, the 1,000. So we are above 5,000 NCs out there. Yeah.

Jesper, Moderator/Host: Yeah, all right. One last question in the chat. What percentage of instruments sold over the last decade are still in active use? And of those, what percentage are used under recurring service or support contract? Trying to understand the durability of your instruments and predictability nature of your service revenue stream.

Kim, Chief Financial Officer: Yeah, you can say some of our issues is that we produce a very solid instrument. So they basically don't break. What we usually see is we see a lot of instruments going into the pre-owned market. We have been buying some of them back. Also, we have actually implemented a service plan called pre-owned instrument where they actually almost have to pay the same price as buying a new one to get back on service plans. Mainly how many active we have, yeah, 50% of our install base are pretty much in service plans. How many of the rest are still active is difficult to estimate. They last basically for 15 years. We expect many of them to still be active. Yeah.

Jesper, Moderator/Host: Perfect. All right, I think that'll conclude the meeting.

Kim, Chief Financial Officer: Thank you so much for taking the time.

Martin, CEO: Thank you.

Kim, Chief Financial Officer: Take care.

Martin, CEO: Bye.

Kim, Chief Financial Officer: Thank you. Bye-bye.

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