Earnings call transcript: Embla Medical Q3 2025 sees revenue rise, stock gains

Embla Medical hf (EMBLA) reported robust financial results for Q3 2025, showcasing a 7% organic sales growth with total revenue hitting $237 million. The company’s earnings per share (EPS) exceeded expectations, leading to a stock price increase of 3.17% to $32.50 in pre-market trading. This performance reflects Embla’s strategic focus on innovation and market expansion. According to InvestingPro analysis, Embla is currently trading slightly below its Fair Value, with analysts projecting 19% upside potential.

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Key Takeaways

• Embla Medical’s Q3 revenue reached $237 million, marking an 11% increase year-over-year.
• The company’s stock rose by 3.17% in pre-market trading following the earnings announcement.
• New product launches and strategic investments fueled growth in the prosthetics and orthotics segments.
• Embla reiterated its full-year guidance, projecting 5-6% organic growth.
• The company is monitoring potential U.S. trade restrictions that could impact future earnings.

Company Performance

Embla Medical demonstrated strong performance in Q3 2025, driven by significant growth in its prosthetics and orthotics segments. The company reported a 13% organic growth in these areas, supported by successful product launches such as ArtiseiQ and ICON. Embla’s international presence also expanded, with notable sales increases in the APAC and EMEA regions.

Financial Highlights

• Revenue: $237 million, up 11% from Q3 2024
• Gross profit margin: 63%, consistent with the previous year
• EBITDA margin: 22%
• Net profit: 17% growth in Q3 and the first nine months
• Free cash flow: $38 million, compared to $33 million last year

Earnings vs. Forecast

Embla Medical’s Q3 EPS surpassed the forecast of $0.0535, reflecting strong operational execution and cost management. The revenue of $237 million exceeded the forecast of $233.5 million, indicating robust market demand and effective sales strategies.

Market Reaction

Following the earnings release, Embla’s stock price increased by 3.17%, reaching $32.50 in pre-market trading. The stock has shown resilience with a low beta of 0.58 and has gained 17% over the past six months. Currently trading at a P/E ratio of 29.6x, the stock maintains a PEG ratio of 1.38, suggesting reasonable valuation relative to its growth rate. This movement positions the stock closer to its 52-week high of $38, reflecting investor confidence in the company’s growth trajectory and strategic initiatives.

Outlook & Guidance

Embla Medical reiterated its full-year guidance of 5-6% organic growth, with an EBITDA margin target of 20-21%. The company anticipates stronger performance in the second half of the year, driven by continued innovation and market expansion efforts. Embla is also exploring potential U.S. production options to mitigate tariff impacts.

Executive Commentary

CEO Sveinn Sölvason emphasized the company’s commitment to its core markets, stating, "Our main channel has always been and will continue to be the O&P market or the Patient Care." He also expressed confidence in the company’s long-term strategy, noting, "We firmly believe and have a strong plan for how we will get back on track."

Risks and Challenges

• Potential U.S. trade restrictions could impact future earnings.
• Operational changes in the patient care business may cause temporary disruptions.
• The bracing and supports segment showed no growth, indicating potential market saturation.
• Macroeconomic pressures could affect consumer spending on medical devices.

Q&A

During the earnings call, analysts inquired about the impact of tariffs, which amounted to approximately $2 million in Q3. Embla’s management addressed concerns regarding operational changes in the patient care business and reiterated their confidence in returning to market growth rates by 2026.

Full transcript - Embla Medical hf (EMBLA) Q3 2025:

Conference Call Operator: At this time, I would like to welcome everyone to this Q3 2025 conference call. Today’s call is being recorded. If you have any objections, please disconnect at this time. All participants will be on listen-only mode throughout the presentation, and afterwards, there will be a question and answer session. I would now like to introduce President and CEO Sveinn Sölvason and CFO Arna Sveinsdóttir. I will now turn the call over to your speakers. You may now begin your presentation.

Sveinn Sölvason, President and CEO, Embla Medical: Thank you, operator. Good morning and welcome to the Embla Medical conference call, where we will review the third quarter of 2025. I am Sveinn Sölvason, President and CEO of Embla Medical. Joining me on today’s call from Copenhagen is our Chief Financial Officer, Arna Sveinsdóttir, and Embla Medical’s Head of Investor Relations, Klaus Linda. The presentation should take approximately 15 minutes, after which there will be an opportunity to ask questions during a Q&A session. Please go to the next slide. Sales in the third quarter amounted to $237 million, representing 7% organic growth. Our reported growth was 11% for the quarter, including 3 percentage points impact from FX and 1 percentage point from M&A.

As expected, and as we had communicated, our growth picked up here in the third quarter, driven principally by double-digit growth in prosthetics and new orthotics, while sales growth in Patient Care remains modest, and sales in Bracing & Supports segment came in flat for the quarter. The EBITDA margin was strong at 22% here in the quarter and on par with the third quarter last year, while our margin increased by a full percentage point to 21% for the first nine months compared to the same period last year. The margin increase was driven by robust sales in our prosthetics and new orthotics business area, solid efficiency gains in manufacturing, and continued cost discipline in SG&A. In line with our performance recorded here in the first nine months of 2025, our guidance for the full year has been already reiterated.

On our strategic initiatives, we are pleased with the progress we are making. In late August, we announced the closing of the majority investment in Streifeneder ortho.production. We are very excited about this investment, which is a strong strategic fit with our GOAL27 strategy and will enable Embla Medical to reach more patients as a full-range provider in the broader O&P space. We are also pleased here in the quarter to announce the successful launch of ArtiseiQ, which is a new hydraulic microprocessor foot solution by College Park. The ArtiseiQ is a lightweight and low-profile foot solution suitable for various environments and activity levels, offering long-lasting battery and fast response time. We have seen good reception of this product in the Americas market since the introduction during the summer. In new orthotics, we are tracking in line with expectations.

Since last year, our focus and strategy has been to expand into new international markets while maintaining the growth of the main existing German business. Fior & Gentz was recently also awarded a new reimbursement code in the U.S. for their microprocessor-controlled knee joint, which is a significant milestone for the introduction of new orthotics in the important U.S. market. We continue to monitor the external environment closely as dynamics remain volatile, whether it relates to tariffs or other trade restrictions potentially impacting our business. In the third quarter, we experienced some impacts from tariffs in the U.S. and continue to assume some absorption in our guidance. We are as well taking short-term mitigation initiatives, including initiatives on the cost side, to mitigate the impact of these tariffs. Lastly, the U.S.

Department of Commerce published a notice for public consultation on a possible Section 232 investigation concerning medical consumables and medical equipment, including prosthetics and orthopedic appliances, with the objective to determine the effects on the U.S. national supply security. We are currently assessing the scope and potential implications and the potential trade restrictions that might result from this investigation. However, as several factors remain uncertain at this stage, we still deem it too premature to discuss potential impact until more clarity has been revealed. If you turn to the next slide, please, we had solid growth across all our regions in the third quarter, mainly again driven by prosthetics and new orthotics. Our sales growth was especially strong in the APAC region, with 18% growth, while our EMEA region and Americas delivered 7% and 5% growth, respectively. If you turn to the next slide, please.

If we look at our prosthetics and new orthotic segment, organic growth was 13% in the third quarter. The strong momentum in EMEA continues across markets, and growth was driven by strong, both volume growth and solid uptake across all our key product categories, especially in categories such as bionics and bionic solutions, where we saw strong growth supported by our innovation, namely Navi and the ProFlexTerra. We’re also encouraged by the strong sales growth or sales growth recovery in Americas following a soft start to the year. The growth in Americas was led by key product categories in both upper and lower limb prosthetics and supported by our recently launched innovation. Also, our College Park portfolio showed very good sales growth in this quarter following the launch of our new bionic foot solution, ArtiseiQ, among others.

Lastly, our performance in APAC was very strong, with growth across markets driven here in the quarter three by China, Japan, and very good performance in Australia. In new orthotics, the business is moving ahead according to plan. During quarter three, we saw a good ramp-up in select new markets, albeit from a low base. If you turn to the next slide, please. Sales in bracing and supports were flat in the third quarter. In EMEA, sales ended soft despite good performance in some markets. In Americas, sales were flat. Continued headwind in the U.S. market, but we see solid growth in our Canada bracing business. Lastly, APAC demonstrated some scattered performance with solid growth in Australia and New Zealand, but partially offset by softer performance in most other markets. If you turn to the next slide, please. Sales in patient care grew modestly at 1% for the quarter.

We saw mixed performance by key regions in both EMEA and Americas, while our APAC region demonstrated very strong performance across our clinics in Australia. As a reminder, Australia is the only market in APAC where we operate in patient care. If we go back to the big picture in patient care, the market is estimated to grow in the range of 3% to 5%, with also healthy operating margins. Our patient care business has over the last few quarters experienced lower than expected growth, mainly in EMEA and Americas regions. This performance can partly be ascribed to softness and timing in patient volumes, particularly in the first half of the year. However, our patient care business has also been delivering below-market growth in this period.

This recent weakness can be ascribed to internal change initiatives, including the promotion rebrand rollout, platform-wide integrations of new ERP and operating systems, and other change management initiatives impacting ways of operating. It’s a top priority for management to get back on track in patient care. We have an extensive focus on performance management and other key initiatives that will strengthen our execution in this part of our business. This concludes our performance overview for the quarter. I would like to hand it over to Arna to go through the financials in more detail. Arna, please.

Arna Sveinsdóttir, Chief Financial Officer, Embla Medical: Thank you, Sveinn. Please turn to the next slide for an overview of our financials. In the third quarter, the gross profit margin was 63%, on par with Q3 2024. The gross profit margin was positively impacted by the strong performance in prosthetics and new orthotics, coupled with manufacturing efficiency. The margin was, however, negatively impacted by modest sales growth in patient care and bracing and supports, in addition to some impact from U.S. tariffs. For the first nine months in 2025, our gross profit was 63% versus 62% in the same period last year, and on par when excluding special items. OpEx growth was 5% organic in the third quarter, or 2 percentage points below our organic sales growth, and in line with continued focus on cost management on the SG&A side. Consequently, we delivered an EBITDA margin of 22% for the quarter, on par with Q3 2024.

The third quarter EBITDA margin was negatively affected by around 30 basis points from FX. In line with our plans to expand EBITDA margin, the EBITDA margin for the first nine months was 21% compared to 19% reported for the same period last year, or 20% before special items. Net profit grew 17% in both Q3 and for the first nine months. Growth in net profit was driven by strong operating results. Please turn to the next slide for a status on our cash flow and leverage. During the third quarter, CapEx was $8 million, or 3% of sales, and within the guided range of 3% to 4% of sales. CapEx decreased slightly in comparison to Q2 and the comparable quarter last year, partly due to timing of investment and CapEx returning to normalized levels.

Our free cash flow was strong for the quarter, as we generated $38 million in the quarter compared to $33 million for the same period last year. Our free cash flow benefited from strong operating results, as well as positive impact from net working capital and normalized CapEx levels. It should be noted that the second half of each year is seasonally higher than the first six months in terms of cash flow generation. Net debt/EBITDA corresponded to 2.5 times at the end of the quarter and within the range of 2 to 3 times. That is the target range. Lastly, we issued around 2.8 million new shares in early September in support of the majority investment in Streifeneder ortho.production. We also bought back roughly 525,000 shares in the third quarter as part of our ongoing share buyback program, at a market value of $2.7 million.

With this overview on financials, I will hand over to Sveinn for his closing remarks and comments around our guidance.

Sveinn Sölvason, President and CEO, Embla Medical: Thank you, Arna. Please turn to the next slide. In the third quarter, growth picked up as expected, driven by double-digit growth in prosthetics and new orthotics, with the solid momentum in EMEA continuing and growth in Americas picking up following a soft start to the year. In line with our performance to date, our full-year guidance is reiterated with 5% to 6% organic growth and 20% to 21% EBITDA margin. As previously communicated, the guidance assumes some absorption of tariffs, although uncertainty around the exact impact remains. With this overview, our presentation is now concluded, and we would like to open the call for questions. Operator, please move to the last slide, and the Q&A can begin.

Conference Call Operator: Thank you. If you wish to ask a question, you will need to press five star on your telephone keypad. To withdraw a question, press five star again. Our first question comes from the line of Jesper Ingelsen from Carnegie. Please go ahead. Your line is now unmuted.

Yeah, hi. Congrats on a strong quarter. I have a couple of questions. Maybe firstly, if we can start out on the strong performance within prosthetics and new orthotics. Could you share a bit of thoughts around sort of like what we should anticipate going into Q4 and beyond? Is there anything we should consider here in terms of timing or anything similar? I also guess you have somewhat tougher comps in Q4. Maybe moving on to your patient care business, as you’re alluding to, it’s an area where you have been underperforming the market, which I also think is clear in the light of one of your competitors recently going public. Could you talk a bit to what initiatives you are doing here to improve the growth and how soon we can expect the growth to improve? Thanks.

Sveinn Sölvason, President and CEO, Embla Medical: Yeah, hi, Jesper, and thanks for the questions. On prosthetics and new orthotics, this was one of those quarters where we had tailwind across all our major regions, and we saw solid performance across all our major product categories. It’s also fair to remember that we are also comparing to a fairly strong comparable quarter last year, where we generated 9% organic growth in Q3 2024. I would not like to comment or give very specific items by segment for the next quarter, but how should I put it? We’ve been consistent in our performance in prosthetics and new orthotics over the last many, many quarters, and there’s no reason for us to expect that that shouldn’t continue. Obviously, also mention that we can see quarterly fluctuations.

With regard to your question on patient care, I would like to sort of take the opportunity to take a step back and back to the big picture in patient care. We have, over the last decade, built up a very strong platform in patient care. We’ve made acquisitions in key markets of high-quality companies or have operated these entities with limited integration, maintaining separate brands, et cetera. Over the last 12 months, we have taken significant steps in order to move to the next maturity stage in patient care, to operate a global business, a truly global business, benefit from scale. In order to do that, we have rolled out a new brand here over the last 12 months and will complete mostly on that here during 2025.

We’ve also made significant investments in processes and systems alignment, rolling out a new clinical management system, for example, in our whole U.S. platform here over the last 18 months and making a moving the most of the platform now is operating on the same ERP backbone system. This has caused some disruption in the business, we have to acknowledge, and has impacted our performance here over the last, yeah, especially here the last four quarters. The big picture is that the patient care market is very healthy, growing mid-single digit with solid operating margins. We have full urgency on getting back on track in patient care, and we will. That’s a little bit where we are today.

Great. Thank you.

Thanks.

Conference Call Operator: The next question will be from the line of Tobias Nissen from Danske Bank. Please go ahead. Your line is open.

Good morning. Congrats on the quarter. Just to build on Jesper’s question on the patient care platform, we had some headwinds, also external headwinds with lower patient volumes. Now you’re taking the step to focus more on improving this segment. When should we expect some meaningful improvement in this? Is it the second half of next year? What are your expectations here? In terms of M&A and buying some more clinics, does this mean that you’re taking more of a pause now to do this and more focus on driving this incremental performance improvement for your clinic network? Let’s just start with that. I have another question afterwards.

Sveinn Sölvason, President and CEO, Embla Medical: Hi, Tobias. On the patient care side, if I start with the M&A questions, we are still building a pipeline in patient care. Our first and top priority is to make sure we are growing at least in line with market. Our top priority is to make sure we execute on these changes such that we run a healthy patient care business. We do see lots of opportunities both for organic as well as external growth going forward. With respect to timing, I would not like to comment too in detail on that. We will provide more detail as we report our quarter four numbers and provide guidance for 2026. I will still expect that during 2026, we will be operating in line with market growth rates at least.

Okay, perfect. That’s perfectly clear. Just this quarter, you had the 7% organic growth, quite strong. I was just looking at your guidance of these 5% to 6%. Should we expect you to reach the higher end of this range, giving this better performance than what was expected here with the Q3? What are like the downside risks to this and you achieving this? Also, because you normally have a pretty strong Q4, especially for the Patient Care segment, if I remember correctly.

I would like to just go back to a previous communication in terms of that we have been consistent here in around our both quarter two and quarter three reporting that we expect the second half to be stronger than the first half, and are now just reiterating this 5% to 6% guidance. We do expect the average growth to be higher here for the second half than the first half. I wouldn’t want to be more specific than that.

Okay, thanks. I will jump back in the queue.

Thanks. Yeah, appreciate it.

Conference Call Operator: Our next question will be from the line of Martin Brene from Nordea. Your line is open.

Hi. Thank you very much for taking my questions, Sveinn and Arna. I got a few questions, but I can maybe start with three, and then I’ll jump back in the queue. Maybe just first of all, completely appreciate that you cannot quantify the tariff impact on a longer horizon with all of the moving parts that we’re seeing. Can you maybe just quantify the impact that you had in this quarter and whether or not you expect the impact from tariffs to increase or decrease going forward, at least you know just at face value and maybe a bit wording around what you do in terms of mitigations, also in terms of potential price increases? I’ll start with that question, then jump to the next two questions.

Sveinn Sölvason, President and CEO, Embla Medical: Yeah. Hi, Martin. Thanks for your question. I mean, I can say that the tariffs that we are absorbing here in quarter three are close to $2 million, and that, from what we know today, we will expect something similar in quarter four, perhaps a little bit higher. That is based on what we know today. There is, as you all know, some uncertainty around these tariffs. Our ability to mitigate depends on our ability to pass on some price increases to our customers. We have not done that to date. We can work with our suppliers and are also actively evaluating the different scenarios that we have in terms of, let’s say, once there is more clarity that in terms of long-term situation, we will take action.

We have decided to hold off on major changes in our supply chain until we have more visibility in terms of what assumptions we’re working with. This is a topic that has higher urgency and consumes time and energy to monitor the situation and also plan for different scenarios. That is just where we are.

Very clear. Thank you, Sveinn. Maybe just as a follow-up to that, are you having any considerations on moving production at least partly to the U.S.?

I think we will, as all companies, just need to evaluate the feasibility of having a larger footprint in the U.S. I mean, we do have some operations in the U.S. We do have a small manufacturing platform with our College Park business in the United States. We also have our central fabrication service in Orlando. This will just be one of the scenarios that companies in our position will need to evaluate once there is more clarity in terms of what the medium-long-term landscape looks like when it comes to trade restrictions and tariffs.

Very clear. That makes sense. I was actually just wondering a little bit whether you could put some color on the patient care mix because, you know, prosthetics is clearly growing very fast, but there are other products that are not growing as fast. Just wondering if the patient care is mirroring the mix that you have in terms of prosthetics versus low-margin products or whether you have a bigger component in the patient care business that is bracing and supports and that type of products, just to understand a little bit better what’s driving the patient care.

Yeah, that’s a good question, Martin. If we look at the business mix in patient care, that does vary by geography. The reason it varies is that the different healthcare systems have taken different choices in terms of how they deliver some of these mobility devices. Almost equally, you can say that, for example, our U.S. patient care business is very focused on prosthetics and new orthotics or other custom orthotics. That is the main business for patient care in the United States with a little bit of off-the-shelf bracing, but very limited. However, if you look at the typical patient care provider in continental Europe or in Europe, there you would typically see a broader range of services, both prosthetics, new orthotics, and a fairly broad range of other mobility type of solutions. It is different.

However, I can tell you that our recent weakness in patient care is not because we are seeing some erosion of some sort in categories outside of our core product categories. That is not what is the reason behind the short-term weakness we are seeing in our patient care business. Almost equally, we see healthy development across the vast majority of these product categories that we are focused on in our patient care franchise.

Makes sense. Just a final and follow-up question to that is that your prosthetics business is obviously growing very fast. It’s not really reflected in your retail. I’m just wondering, which channels are you selling your prosthetics and new orthotics products through then? Is there anything to point out in terms of a changing distribution landscape or any specific channels that you are growing much faster in compared to earlier?

There are two points I’d like to make in relation to this question. First of all, it’s important to remember that our geographic footprint is not the same in our Patient Care business and our Product business. Almost equally, you can’t, you’re not, or we should not always expect the performance to correlate. The other point I would like to make is that the health of the industry is reflected in the underlying performance in our core Product business, which again underlines the fact that the reason for our underperformance in Patient Care is principally related to these substantial change initiatives that we are executing on. Maybe the third point is that only a small part or a very small part of our Product business goes through our promotion clinics, and all of that is very transparent in our reporting.

Our main channel has always been and will continue to be the O&P market or the Patient Care, our independent clinical customers. That remains our core channel for where we focus and how we grow our core Product business.

Thank you for the elaborate answers to these questions, Sveinn. I’ll jump back in the queue. I got a couple of follow-ups. Thank you.

Thanks, Martin.

Conference Call Operator: As a reminder, press five star to ask a question. Our next question will be from the line of Iwe Jo from ACB. Please go ahead. Your line is now unmuted.

Hi, Arna Sveinsdóttir. Thank you for taking my questions. I have two. Firstly, in the U.S., do you expect any disruptions from the U.S. government shutdown in Q4?

Sveinn Sölvason, President and CEO, Embla Medical: No, we have not recorded any major disruption in any way. We are monitoring the situation, and we have not received any concrete feedback on that.

Okay. Thank you. Thank you for confirmation. Secondly, you have explained the short-term disruption on the growth and also the margin in the patient care business. I was just wondering, if you are looking at it a bit longer term, and all those operational initiatives you have done on your business, the patient care business, do you expect to improve the long-term profitability? If you can elaborate a bit.

I can say maybe comment high level on that. The reasons we are doing these changes is because we believe in the benefit of operating a truly global patient care business, where we build a business where we have scalability around certain systems and processes that we are better enabled to benefit from technology in terms of how we fabricate, in terms of how we operate with our patients. That is the core, I guess, assumption behind our actions in patient care. What is also a fact is that this is a business where we have, it’s a capacity-driven business, and our profitability will be dependent on our ability to serve patients and utilize our capacity costs. In a year like now, we were going through the fourth quarter where we are flat on top line.

That means that it has a negative impact on profitability because the vast majority affects cost. Yes, our profitability in patient care has taken a temporary step back while we go through these changes. We firmly believe and have a strong plan for how we will get back on track. I think that should also be looked at in light of our performance on the profitability side that is still, despite going through these changes and absorbing cost in relation to, for example, the brand change that we are absorbing. This is all cost we’re taking through the P&L here, but still we are protecting and increasing our baseline margins. If you’re hoping for some more details, the forward-looking guidance, I’m disappointing in a way, but this at least gives you some color.

No, it was good. It was good. In this context, I was wondering if you can give an update on your CRM and also the used to call EmblaLeg, but now I guess it’s now EmblaLeg solution. I remember a few years back you highlighted as sort of a new marketing tool and trying to convince the clinics to push the leg solution. Could you give an update on this?

Yeah.

Have you seen any progress?

Yeah, it’s a good question. When it goes back to how we think about our competitive position and our value proposition towards our independent clinical customers, generally, independent clinics are struggling to sometimes find CPOs, and some are struggling with maintaining adequate capacity in terms of fabrication. We have our success with it going forward will depend on our ability to, one, bring the right product to the right patients, but also have our independent customers around aspects such as fabrication. That is what the complete leg concept was all about, that we offer our independent customers an ability to outsource fabrication to us. This is a service we offer both in the U.S. and in Europe.

This is also one of the areas where we gain some scale and some efficiencies in operating both as a patient care provider as well as a traditional product business where we can build more scale around some of these activities like fabrication. That remains part of our core strategy to do that.

We record that it used to be one of the main regions that the clinics were very sort of giving some pushback and slow adoption. Have you seen that improving over the recent quarters?

We’ve seen a gradual increase in adoption, and we’re also using this as a central fabrication for our own clinics. This is a core part of our business, for sure.

Okay. Thank you. I’ll jump back to the queue.

Thank you.

Conference Call Operator: Next up is Martin with a follow-up. Please go ahead. Your line is now unmuted.

Thank you. Just two follow-up questions. It’s already been touched a bit upon, but I would just want to be sure whether there on prosthetics and new orthotics is anything to flag in terms of any sort of one-off items in any way on revenue or anything to flag in terms of big contracts or big orders, anything that is disturbing the picture a little bit, just to be sure.

Sveinn Sölvason, President and CEO, Embla Medical: No, there is nothing like that. It is, like I mentioned in the beginning, it is one of those quarters where we just do have tailwind across all our regions and markets. You also have, just to name one example, we have high growth in the APAC region this quarter where we are growing again in China after five quarters of decline. There is no big boss quarters or anything like that in these numbers. It’s simply strong execution across the board. We’re obviously also getting benefits from having recently launched products that are well received in the markets like the Navi, like also the ArtiseiQ here in the quarter, the ProFlexTerra, and the ICON by College Park. These are all strong products that are being well received by our customers.

Very clear. Maybe that’s a good lead to the next question because the thing that I would like to understand a bit better is maybe, and maybe you already said that by the wording you used, what is the key delta here in this quarter? Is it the product launches that you have in the broader portfolio that is sort of expanding your total addressable market, and now you are firing on more cylinders than you used to? Is there any customer types that you have increased your sort of exposure to, or is there any regional sales that is just doing better than you expected?

I attribute a lot of this growth, and I think it’s fair to say that this is above what we would expect. I mean, we do expect the prosthetics and new orthotics to deliver strong organic growth rates. What we see here in quarter three is above what we expect on a normalized basis. I do attribute that mainly to the new product launches that are giving us this tailwind. What has been different than what we had, for example, on the Navi launch has been a good one. It has not cannibalized our Rio sales as we expected. That’s one aspect that I think is relevant to mention. Otherwise, I would go back to my previous comment in terms of just like the nature of this quarter being a quarter where we just have tailwind across all regions.

Again, pointing towards APAC, where our Australia business is also benefiting from the reimbursement slowness we had in 2024, getting some extraordinary benefit here in 2025. There are a lot of these things that come together that push our growth rate above what we would consider a normalized growth of this part of our business. Still reminding everyone that we do expect almost equal this part of our business to generate good growth rates as the structural growth drivers are there.

Very clear. Just final question for me. I think Fior & Gentz serves a question, just wondering what, you know, if you can specify a bit more what the growth is. I know it’s in line with the expectations, but they just want to be sure that I know what the expectation was.

Yeah. I mean, I think we, if I go back to our early communication around Fior & Gentz, we expect, we said the business had grown organically around 13%, 14%. We expect at least those types of growth rates, and that’s what we’re delivering on. Fior & Gentz is a top priority for our company to make sure we take the right trade dust in terms of prioritizing building this business as it is very strategic for us in terms of building products and services towards a patient population that is vastly underserved when it comes to access to good mobility devices. You see the exact same health economics that provide the strong rationale for healthcare systems to fund good prosthetics, the exact same dynamic is on the new orthotic side. It’s a market that is less mature than prosthetics in terms of reimbursement and access and awareness.

That’s our goal, to really focus on this and be disciplined in terms of where we focus our efforts because this is a, yeah, this is top priority for our organization.

Completely agree. Just on Fior & Gentz in the U.S., you got the L code, which is great. I guess that it’s not really starting to contribute yet. Can you put a few words on when you expect to hit the ground running in the U.S.?

We will be more specific around that when we set guidance for 2026. There’s lots of work going on to support our U.S. execution, and this is a big milestone for us, this recognition that we can operate and build this specific code. We will be more specific around our estimates for the U.S. and new orthotics when we set guidance for 2026.

I’m hearing you’re saying that it’s going to be big enough to impact the group guidance for next year. That sounds great. Happy to hear that. Thank you for taking my question.

We’re obviously starting from a very low base in the U.S., so all growth moves the needle. We’ll be more specific around this as year ends. Martin, thank you.

Thank you very much.

Appreciate it.

Conference Call Operator: Next up is Tobias Nissen from Danske Bank. Your line is open.

Hello again. Just on bracing and supports, it remains flat year over year. I’m just wondering what the strategy is here, also since it continues to grow below your estimated market growth, and what are you seeing underlying? Are you seeing any improvement here in Q3? How do you also balance this with the tariff impact, et cetera? Are you pulling products from the market, do them being unprofitable? I’m just wondering what should we expect from bracing and supports going forward? Thanks.

Sveinn Sölvason, President and CEO, Embla Medical: Our goal is to grow the bracing business at least in line with market. This has been a tough year in our bracing business, mainly in the U.S., which is a market which again has been impacted by these tariffs. That is also a market where the channel structure is different. We also see more, let’s say, some movement between channels, bracing business moving to fewer bigger customers. We still maintain our goal to grow at least in line with market. Our ability to achieve that will depend on some moderate expansion of our product portfolio, tapping into a few opportunities where we can use our existing channel access to bring a broader set of product services to our customers. It will also depend on our ability to execute on volume opportunities.

Thirdly, to continue to have or to, let’s say, be a good partner for our customers in terms of ease of doing business because we do offer a broad, complete portfolio in bracing of high-quality products. These products all remain fundamental to each and every healthcare system. These are products that we all know and all use if needed, if need to. We are working hard to take the right choices such that we are able to generate that market growth in bracing. It’s been a tough year, especially with all the turbulence that these tariffs have created in our biggest bracing market, which is the U.S.

Okay, that’s clear. Do you have any timeline for when you expect to expand this portfolio? I know you have a lot to see with the patient care and driving the performance back there, but any comments would be appreciated.

Again, I would like to push further details out on that to our quarter four and guidance discussion, which we’ll be having in three months.

Thanks.

Thanks.

Conference Call Operator: The next question will be from the line of Pieter from Berenberg. Please go ahead. Your line will be unmuted.

Hi. Thank you so much for taking my question. Just looking at the PA and NO segment, could you possibly give some more color on the regional demand for the Navi and the ICON product launches and possibly give some kind of commentary on whether there’s been much adoption of these solutions by kind of K2 entities? I know you noted that there hasn’t been kind of a legislation in the real need, but if you could give some more color there, that would be fantastic. I’ve got a follow-up question as well.

Sveinn Sölvason, President and CEO, Embla Medical: Thanks a lot for your question. When we look at the Navi, we’ve seen good adoption across all our major markets, both in the U.S. and in Europe. The ICON has principally been, we’ve principally been focused on the ICON in the U.S. market. I think it’s also fair to say that our growth in the U.S., we do see some impact from the coverage expansion. We obviously don’t have full transparency on the ultimate, let’s say, profile of the patients that are receiving these bionic devices with our independent customers in the U.S. However, we have those strong indications that this coverage expansion is part of the growth story in the U.S. That’s a bit where we are on that. What I mentioned also earlier, we’ve still seen our Rio business, which has historically been our kind of flagship bionic product, continue to do well in selected markets.

If we look at bionics, we just have a much stronger portfolio that addresses a bigger part of the underlying patient population. We have the Navi, obviously. We have the Rio. We have the ICON. We also have the high-end power knee as well. A much stronger bionic portfolio. I hope that gives you a little color.

Yeah, that’s fantastic. Just on patient care, apologies if I missed that earlier, but I think I read that you’re more than halfway through kind of rebranding. I suppose my question was just about when is this expected to complete?

We expect to be through most of the rebranding this year and have taken also some costs in relation to this initiative. We’ll be mostly through it already this year. We are also through a big part of the systems piece as well, which is key to our operating model going forward. Lots of work here over the last 18 months on building the foundation for our patient care business, which we are confident will deliver at least in line with market going forward.

That’s fantastic. Thank you very much. That was my question.

Thanks for your questions.

Conference Call Operator: As no one else has lined up for questions in this call, I will now hand it back to speakers for any closing remarks.

Sveinn Sölvason, President and CEO, Embla Medical: Thank you, operator, and thank you, everyone, for calling in this morning. Please, if you have any follow-up questions, don’t hesitate to reach out to our investor relations function. I wish you all a pleasant day. Thank you very much.

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