Earnings call transcript: Photocure’s Q2 2025 revenue beats expectations, stock surges

Photocure (market cap: $2.2 billion), a leader in blue light cystoscopy, announced impressive financial results for the second quarter of 2025, surpassing revenue expectations. The company’s revenue reached NOK 135.6 million, representing an 11% growth, which exceeded the forecast of NOK 130.7 million. Following the earnings announcement, Photocure’s stock price surged by 12.01%, reflecting investor confidence in the company’s strategic direction and financial health. According to InvestingPro, the company maintains an EXCELLENT financial health score of 4.28, indicating robust operational stability.

Key Takeaways

• Photocure’s Q2 revenue of NOK 135.6 million outperformed forecasts, marking an 11% year-over-year growth.
• The company reported a positive EBITDA of NOK 14.8 million, continuing its streak of nine consecutive quarters.
• Photocure’s stock price rose by 12.01% in response to the earnings report.
• Strategic partnerships and product innovations are driving growth, particularly in North America and Europe.
• The company maintained its financial guidance of 7-11% product revenue growth.

Company Performance

Photocure demonstrated robust performance in Q2 2025, with significant revenue growth driven by strong market penetration in North America and Europe. The company reported a 14% unit growth in North America and 15% revenue growth, while Europe saw an 8% increase in both revenue and unit growth. Photocure’s strategic focus on innovation and partnerships, such as the development of a 4K high-definition flexible blue light cystoscopy system, has positioned it as a leader in its field.

Financial Highlights

• Revenue: NOK 135.6 million (11% growth year-over-year)
• Positive EBITDA: NOK 14.8 million
• Cash Balance: NOK 239.1 million
• North America revenue growth: 15%
• Europe revenue growth: 8%

Earnings vs. Forecast

Photocure’s actual revenue of NOK 135.6 million exceeded the forecast of NOK 130.7 million, resulting in a positive surprise of approximately 3.7%. This performance indicates the company’s ability to consistently surpass market expectations and continue its growth trajectory.

Market Reaction

Following the earnings announcement, Photocure’s stock price increased by 12.01%, closing at NOK 69. The stock trades just 0.98% below its 52-week high of $72.59, with an impressive year-to-date return of 8.05%. This positive market reaction reflects strong investor sentiment and confidence in the company’s strategic initiatives and financial health. InvestingPro data reveals 12 additional key insights about Photocure’s valuation and growth prospects, available to subscribers.

Outlook & Guidance

Photocure maintained its financial guidance of 7-11% product revenue growth. The company plans to continue expanding its market presence, particularly in the US and Europe, and is advancing efforts for FDA reclassification. Photocure also aims to increase the Fortech partnership’s contribution to 20% of its business. With impressive gross profit margins and a strong balance sheet showing more cash than debt, the company is well-positioned for expansion. A comprehensive analysis of Photocure’s growth strategy and financial outlook is available in the InvestingPro Research Report, part of the platform’s coverage of over 1,400 US equities.

Executive Commentary

• "Blue light cystoscopy remains the godfather in this space," said Dan Schneider, CEO, highlighting the company’s leadership in diagnostic precision.
• "We want accessibility to blue light in every hospital in The United States," Schneider emphasized, underlining Photocure’s expansion goals.
• Eric Dahl, CFO, stated, "This company is a growth company, and we gotta ensure that we have cash required to do the growth and to do the investments needed," pointing to the company’s focus on strategic investment.

Risks and Challenges

• Supply chain disruptions could impact product availability and delivery timelines.
• Market saturation in key regions may limit further growth opportunities.
• Regulatory hurdles, particularly in the US, could delay product approvals and market entry.
• Competitive pressures from other diagnostic technologies could affect market share.
• Economic uncertainties and currency fluctuations may impact financial performance.

Q&A

During the earnings call, analysts inquired about the progress of the FDA reclassification process and the potential of the Fortech partnership. Executives reaffirmed their commitment to these initiatives, emphasizing their strategic importance for future growth. Additionally, questions about dividend plans were addressed, with the company indicating a focus on reinvestment over immediate dividend payouts.

Full transcript - Photocure (PHO) Q2 2025:

Dan Schneider, President and CEO, PhotoCure: Alright. Well, good afternoon, and good morning, depending on where you are in the world. My name is Dan Schneider, president and CEO of PhotoCure, and you’re here for the PhotoCure second quarter twenty twenty five results. With me today is Eric Dahl. Just a reminder, the usual disclaimers are in effect for today’s presentation.

I thought I’d start just kind of reiterating our strategic priorities and initiatives before I get into what I think was a very, very good quarter for PhotoCare. So first block, accelerate and expand. I think what’s important to keep all this in the background of what we’ve been focused on over the past couple of years, Delivering on our financial growth, both revenue and EBITDA this year and continued generating operating leverage. I believe this is our ninth quarter in a row of positive EBITDA, and that leverage continues to build. Driving the BLC mobile strategy in Foretech is doing quite well for The US.

It has increasingly become an important part of our our opportunities there. And then for Europe, increasing our penetration in the priority growth Italy, France, U. K. And expand our geographic footprint, which we mentioned in Q2, we now have expanded into Spain. I’ll go into that in more detail, but it is one of the larger markets in all of Europe, and it was a market that we were in, many years ago when GE had launched, back in 02/2006, 02/2007.

Second block, positioning and access. You know, BLC is positioning to be the primary, diagnostic used in precision medicine. That’s the way we see it. We see it as the godfather. We wanna maintain that positioning.

It’s key to the detection, surveillance, and therapeutic monitoring of these expensive therapeutics coming onto the market. The high def technologies are entering the market. We’ve had upgrades now in all three of the major manufacturers, the most recent one being Olympus in Europe. That has already had an impact, particularly in Germany, Austria, and now The Nordics as we move through the second quarter. So we’re very pleased with that development.

And, of course, we partnered with Richard Wolff, for the blue light flex development for the world’s only four k high def system that we are currently think is or we currently is on track. But in the interim, we do have and figured out a interim solution, that is being implemented and has already had cases go off in the second quarter. We’ll talk more about that in The UK. And then the third block, the acquire and transform. Looking across non muscle invasive bladder cancer and uro oncology in general, There’s some really fast moving, rapidly growing interest in precision diagnostics.

And as I mentioned, blue light cystoscopy remains the godfather in this space. And we believe that, you know, coordinating, it has synergistic effects with a lot of the other things going on in this space and opens up some real opportunities for PhotoCare to expand, our offerings. And real time examples of that are, you know, even the Richard Wolff high def four k flex development that we’re developing on a worldwide basis, and, of course, leveraging the mobile solution with VorTeq. And we continue to look for these, strategic partnerships and opportunities. So let’s go into the second quarter.

So, obviously, I start off today by saying I’m very pleased with the overall results. Overall, we had 11% revenue growth at an all time high of NOK 135,600,000.0. It was a 9% increase in units globally. In North America, we delivered a 14% unit growth and a 15% revenue growth, offsetting the continued flex decline, which we estimate to be minus 46% in the second quarter and minus 60% overall in the first half of the year. So we see this, continuing to bleed out to the end of this year.

The installed base of Survivor blue light equipment continued to increase with three tower placements and nine upgrades in quarter two. I’ll talk about this a little bit more. But importantly, you should understand that Carlstor signaled that they’re doing a Saphira promotional program that begins on July 1 and typical of customers. They tend not to buy before they get the sale price. So we believe the pipeline is set for the second half of this year.

It’ll materialize throughout the rest of the year. We had a fantastic 21% unit growth in the rigid surgical market, and this is inclusive of the Foretech medical mobile solution. Very important. Foretech now represents over 10% of our total business, and it continues to build the momentum. It is outpacing our expectations of those of Foretech as well.

So we’re very pleased with the demand that continues to build for the mobile solution. And the number of active accounts increased by 24% year over year to 359. This sets the stage for the continued momentum into the future. In EU, revenue was up 8%, units up 8%. Very solid growth in the EU fueled by, Germany, Austria, and France with support from Nordics.

All the other countries are kicking in. We’re we see positive momentum in all of them. We continue to execute across the board. And as I mentioned, Olympus upgrade is key to this execution and has a significant impact for Austria, Germany, and now The Nordics kicking in. A total of 36, new Olympus upgrades, and there’s more in the pipeline.

So we’re very pleased with the developments there. And as I mentioned, key is The Nordics where Olympus has a very strong presence, and they’ve begun their upgrades as well as the second quarter, a little bit behind, Austria and Germany. Second block, we we, generated positive EBITDA of 14,800,000.0. If you take out the BD and milestone, it’s 22,600,000.0 NOK. It’s our ninth quarter in a row, and we continue building operating leverage through 2025.

The balance sheet balance sheet remains strong with 239,100,000.0 NOK, no long term no long term return debt. And, course, we bought back half a million shares for treasury stock. Important news flow, we launched into the Spanish market starting in late June. I’ll talk about that when we get to EU segment. Regarding two major congresses, AUA and EAU, there were significant presentations and discussions of the growing importance of BLC as a precision diagnostic for the diagnosis, resection, and stratification, and ultimately monitoring leading to better informed treatment decisions.

And it continues to build underneath our blue light cystoscopy offerings. The Richard Wolff interim solution, the first cases took off in The UK in this in late, second quarter. They went off well. There’s more, institutions that are interested in in trying the interim solution. The key here, just to remind everyone, we ultimately wanna bring out the four k high def solution, at a very sharp price point on a worldwide basis.

We’re working on the development with Richard Wolff. It’s gonna take us a couple years to get it through its approvals. But in the interim, we want to try to keep flex surveillance alive, collecting the data, making sure the user experience continues forward. We do not want the market to go cold. So it’s important, support coming out of at least starting with The UK.

We’ll have other centers throughout Europe that will hopefully implement the interim solution and at least try the surveillance blue light cystoscopy, perhaps with lasers, etcetera, in the outpatient setting. And then partner news, I know there’s been a lot of noise on Osiris, particularly with, Savira. There is no real update here. They continue through their interactions with the NMPA. That’s a Chinese FDA.

There is no statutory requirement on them in terms of timelines. Historical average has been somewhere in the eighteen month plus range. Again, it could be the end of this year, early next year when they get an answer from the NMPA. But I will say that their interactions, at least to date, have been active and ongoing. They’re a public company.

Therefore, any statements outside of what they’ve already stated publicly, we cannot say. So, you know, that’s as much as we know. But I will remind everyone, should they get the approval for Survivra, that triggers $11,000,000 milestone payment and the launch in the Chinese market. And then data presentations and abstracts, etcetera. The Danish population study concluded higher levels of BLC use improves in bladder cancer, patient outcomes.

Basically, the more blue light cystoscopy used, the better the outcomes will be for your patients. So that was great, great data coming out of the population study. All right. Let’s get into the segment trends. So strong unit sales in both regions, both North America and Europe delivered their highest quarter of revenue in history.

In North America, it overcomes the decline of the flex surveillance market. First half, like I said, was minus 60%. It was minus 71 or 70% in the first quarter, minus 46% flex, in the second quarter, averaging out to minus 60% on the half. As we move through the year, the the the percentage decrease probably will start waning, and then we get into next year. It’s basically now been relegated to a few sites, in in The US where it’s still alive and active and supported, and we’re trying to keep them going as long as we can to collect the data.

Meanwhile, the rigid surgical market delivered a 21% unit growth in q two, which was fantastic. Europe’s q two results surpassed previous high watermarks as the momentum continues to build throughout the region with the upgrades of Olympus to the Viscera three. And also, we also have the yeah. Obviously, Richard Wolff and Carl Storrs. And the Viscera three upgrade obviously, particularly impacted DOC, France, and The Nordics.

And so far, 36 have been upgraded, and there’s more in the pipeline for the rest of the year. Moving specifically to North America. Just you know, even though the downturn in flex at minus 46% for the quarter, Flex units are now, as a total, roughly 4% of our total sales, from a onetime high of 17 to 20%, and it was the highest, fastest growing segment for us. We lost it when Carl Storrs withdrew the flexible system. This is why it gives us great, excitement and anticipation of the new four k high def flexible cystoscope that we’re working on with Richard Wolff because that market was growing at 3040%, and it was a high percentage.

And it is a $1,300,000,000 TAM worldwide. So we wanna get back into this space. We wanna keep it as as live as we can. But at least, you know, for now, our flex units in The US are roughly 4%. We we see that really going near zero by by the time we’re, this time next year.

Despite all this, the rigid growth was 21%. VorTeq has added in a lot. Like I said, it’s over 10% of our of our total revenues, our units, and it continues to grow. 12 new Sapphire installed. Reminding everyone, upgrades are important.

When the upgrades happen, we’re seeing on average double digit growth, out of these upgrades and sustainable. So we’re we’re excited about that on both sides, US and Europe. And the account growth of roughly 24% in the base. So this is, again, more institutions, more physicians using it bodes well for quarters ahead. Mobile Vortech now has reached 70 accounts by the June.

There’s more already. That’s plus 13 from q four. It’s actually plus 13 over the last couple quarters. So it seems to be they’re on a trend of adding, you know, roughly 13 to 15 accounts each quarter, but that that could accelerate. They anticipated too.

That’s reaching over 150 different users, physician users. And that demand is growing. The awareness is up. And we see this is a key growth driver for our business in The U. S.

Access to PLC remains our top priority. Ongoing efforts with the FDA for reclassification, and reimbursement. We are also working with the other manufacturers to support their initiatives to try to make it into The U. S. Market.

And I’ll repeat one thing, just for The U. S, but also it’s across Europe as well. Post AUA and EAU, there were a lot of discussions around blue light cystoscopy. There is a growing belief that blue light cystoscopy ability, so with cysto and hexics, its ability to see more assures a physician the ability to perform a more complete TURBT, which leads to more accurate pathology, staging, risk stratification. And ultimately, we see this as potentially helping monitor these expensive therapeutics, giving, physicians a more informed precision medicine diagnostic.

So this is an important trend that’s kind of a macro to everything that we’re doing here at PhotoCare. And then going final to one more, chart, active accounts. As I mentioned, they’re up 24% for the to date, we have three fifty nine accounts that currently have active use of blue light cystoscopy. We include the VorTeq, and we include anyone who is using blue light cystoscopy in a twelve month period. And this includes reactivated accounts that the US team has worked hard on where they had old standard definition.

They stopped using blue light. We’ve got the upgrade support from Karl Storrs, and now those accounts are back doing blue light cystoscopy. So we see a continued momentum in the overall interest in adoption of blue light cystoscopy in SISVU in The US. And finally, turning to Europe. Q1 marks the highest revenue quarter ever supported by solid growth in the Dock Nordics and France.

France has growing momentum, and we had a really strong June, double digit growth in June. So we’re really excited about where France is going. And and the rest of the countries are are are coming on as well as they’re moving through the year. The Vistra three upgrades are going extremely well. 36, as I mentioned, have been installed, 25 in dock, five in Nordics, but good pipelines behind them.

It has a significant impact on the business, so we wanna support that as much as we can. The picture to the right of the page actually marks our third bladder cancer tour through Germany. This time we did it in combination with, Merck and Olympus. So all three of us came together. If you recall, if you go back five years ago, we did this, I believe it was with, Wolf or Stores.

I can’t remember which one. The The next year, we did it with the op the other one, and then this year, now it’s with Olympus. So it’s really exciting that they’re coming to us wanting to be part of this tour. They had over 18 stops and reached over 500 different health care professionals. So very exciting.

There’s a lot of energy behind it as they toured around, the DACH region. As I mentioned in my opening, we did start operations in Spain. We installed a, account manager there, country manager in late mid June, focused on the large metros of Barcelona and Madrid. We have a collaboration with all three of the manufacturers, but I will say that we are leveraging the Olympus launch of Viscera three in Spain, sort of the excitement of that and us coming back into the market. There is favorable reimbursement in Spain.

It is the largest of the big five in terms of bladder cancer incidents at nineteen thousand three hundred cases per year. They do over 58,000 TRBTs, just opposed to Germany doing about 105,000. So Spain is really basically the second largest market in Europe and certainly the second largest of the big five. It’s reimbursed, as I mentioned. On the guidelines, it has been abandoned since the GE days, and I’ll explain that a little bit.

So the guidelines need to be updated. The medical team’s working hard on that. We wanted to get those up to the EU level guidelines. But to this point, with no focus, no effort in Spain, everyone’s sort of it’s sort of gone, you know, quiet, but we’re gonna bring it back. But I will remind you, GE launched in 02/2007.

The very first year they did over a thousand units, it was a it was the fastest growing market they had. Then the financial crisis hit Spain, and not only did, you know, we find it a challenge or GE found it a challenge, but that was across the entire med tech and life science space. So a lot of people abandoned it. As you recall, GE then transferred the business over to Ipsen. Ipsen never put a sales force in there.

Even when the economy came back, Ipsen didn’t go after it. We wanted to establish ourselves in Europe and then as we plan, get into Spain. So we’re in a solid place. We expect, Spain to start growing, as we get towards the end of this year and into next year. One of the challenges in Spain is the equipment is old, so we need a lot of upgrades, particularly the Karl Storrs’ old equipment and the, of course, the Olympus.

But, again, we’re leveraging the Viscera three launch with Olympus. So we we we think that’ll really help, put some jet fuel in our efforts. And we’re also engaged with the top, six KOLs in Spain. So we we feel like we’re a really good place medically, I guess, and scientifically. So roughly 270 hospitals perform TRVTs in Spain, the 326 that have urology, clinics.

So, you know, again, it’s a manageable market. So let’s go, to slide 10 with growth initiatives. And just to remind everything, some of the key elements and accelerators are in the business if you haven’t picked up on it yet. Two things, four tech, 70 new accounts. They have both our Salesforce and their Salesforce are incentivized to push the mobile solution.

They try to stack cases. So if they go into a hospital, they wanna hire throughput. I think this is a really key thing to understand that VorTeq makes money the more the machines are being used. So there is a lot of effort put into their sales force, their technicians, their incentive comps, and also their offerings, their price offerings to customers to stack cases and increase volumes per per, per machine that goes into those hospitals. Currently, over a 150 different users of the machine that continues to grow.

It is outpacing both our expectations. I said when we launched into this, strategic partnership with Fortech that they have, they are quite open to expanding. So what I mean by that is they have 18 towers out there. All 18 weren’t operational till the first quarter of this year. As they reach capacity, they are very willing to buy additional machines and build on top of that.

So this could be an exciting development as things continue to progress with the flex I mean, with the mobile solution. Everything is on in terms of flex, everything is on track. The interim solution has been tried in The UK. It’s it’s gone the cases have gone well. We look to expand it.

There’s other accounts interested. And then in terms of development of the high def four k system, it’s on track, reminding you that is a 1,300,000,000 total addressable market in The US and EU five, and we see that as a real opportunity. And we will be the first and only to market with this high def flex, blue light system. And as you think about the macro environment and what’s going on with all these therapeutics, having, you know, the best way of you know, the press best precision diagnostic to monitor these therapeutics is actually a a real benefit for for us as we look forward. So that’s the that final comment.

We’ll go to slide, 12, on our partnership with Osiris, reminding you it’s two different products. HexFix has been approved, but they’re awaiting approval of the Richard Wolff blue light system. That has had some challenges, but they expect it to be approved, hopefully, you know, by the end of this year, and they’ll be able to launch in 2026. And, you know, of course, we have, some revenue streams coming off of the sales of HEX VI over time. And then on Savira, you know, just to be as I mentioned, to be clear, you know, the everything seems to be more or less on track.

They’re interacting with the NMPA, and we’ll hear more from them as as things develop and and they get a decision out of that. And then I think the other kind of development that you could pick up on the public airways from them is they are possibly looking at a second indication. We believe it to be low grade. And if that’s the case, that also would trigger, the opportunity for additional milestones and regulatory approvals and, of course, ultimately, in sales, revenue shares. So, exciting.

Looking forward to it, and we’ll see more as, as they progress. So with that, I guess I’ll turn it over to Eric on the financials.

Eric Dahl, CFO, PhotoCure: Thank you, Dan. Well, I will give an overview of the second quarter financials, which includes the consolidated income statement. It’s a segment report I will present as well headlines from the cash flow and the balance sheet. But first, covers about foreign exchange year over year and measured by unweighted monthly averages. The kroner in Q2 appreciated 4.1% against US dollars and depreciated 1% against euro.

Year to date, the kroner depreciated, point 6% against US dollars and depreciated 1.5% against euro. If you look at this in terms of Norwegian kroner, the FX impact for Q2 revenue was negative approximately SEK 1,300,000.0 and for OpEx positive approximately SEK 1,300,000.0 as well. So the consolidated impact on foreign exchange on EBITDA was not material. Final remark, as always, all financials in this presentation are in Norwegian kroner, unless another currency has been specified. Next slide, please.

I’m now looking at the consolidated income statement. Hexwix’s history of revenues in the second quarter increased 11% to million, which is all time high. The sales increase was mainly driven by a combination of volume increase of 9% and higher average pricing in both regions. Partially, this was offset by an expected decline in flexible kit sales in The U. S.

And the impact of foreign exchange. The volume growth in U. S, to some extent driven by customers’ orders moved from Q1 to Q2. Not all of the you will remember Q1 that we had customers that had postponed their ordering, and not all of that came in Q2. Actually, a significant amount of orders is expected to take place the rest of this year.

Total revenues in the second quarter decreased 7% The decline was driven by milestone payments received from Osiris second last from Osiris in Q2 last year related to the development of Seviro. The impact of foreign exchange on total revenues was approximately SEK 1,300,000.0 negative in the quarter. Q2 total operating expenses, excluding depreciation and amortization, but including business development, were SEK 110,800,000.0 and at level with Q2 last year of SEK 110,000,000. Operating expenses, excluding business development expenses, SEK 103,000,000 compared to SEK 108,600,000.0 Q2 last year, a decrease of SEK 5,600,000.0 year over year.

The expense decrease was mainly driven by timing of expenses related to congresses and business meetings as well as expenses related to FTE adjustments. The decrease was partially offset by merit and inflation. The impact of foreign exchange was positive approximately SEK 1,300,000.0 in the quarter. As previous quarters, personnel expenses were relatively stable year over year, except for merit increase. However, project driven expenses, particularly within business development, may vary significantly year over year as well as sequentially between quarters.

Business development expenses in Q2 was SEK 7,800,000.0 compared to SEK 1,300,000.0 Q2 last year, and the increase is mainly driven by market research activities and legal fees related to partnership contract support. EBITDA in Q2, including business development expenses and milestones, was 14,800,000.0 compared to last year, 27,800,000.0. However, last year Q2 included a milestone of NOK 21,600,000.0 from Osiris. EBITDA including milestone revenue sorry, EBITDA excluding milestone revenue and business development expenses for second quarter was 22,600,000.0, which is an improvement of SEK 15,100,000.0 from Q2 last year, reflecting improved operating leverage for our core business. Depreciation and amortization was SEK 7,300,000.0 in Q2.

Main cost item was the amortization of the intangible assets related to the return of the European business from Ipsen. Net financial items in Q2 were a net cost of SEK 4,900,000.0 compared to a net cost of SEK 4,500,000.0 in Q2 last year. Net financial costs were driven by foreign exchange losses as well as accrued interest costs included for the deferred earn out liability due to Ipsen. Tax expenses were an income of SEK 2,400,000.0 for the quarter. The net tax expense is mainly driven by group results but also intercompany items in the parent company.

And after net financial items and tax, we have for Q2 a net profit of SEK 4,900,000.0 compared to a net profit of SEK 12,300,000.0 same period last year. Now to the segment performance. Next slide, please. So as usual, I will focus on the two main segments, North America and Europe. And I’m starting with North America segment, which includes U.

S. And Canada. And revenue from North America increased 14% in q two, and overall volume increased 15%. This was driven by an increase in volume for the region market, including in Fortech mobile solution as well as an increase in average sales price. This is partly offset by the impact of the face down of Sisviu usage in the Flex segment and a negative FX impact.

Furthermore, Q2 revenue growth was positively impacted by the delay of orders from Q1 to Q2 and later this year. Q2 direct costs were level with Q2 last year at SEK 45,000,000. And cost containment and revenue growth have resulted in significant improvements in financial results for the North America region. The contribution has more than doubled to SEK 9,200,000.0, and we have secured a positive EBITDA for the quarter. Looking at Europe, the European business had a positive development in the second quarter with year over year revenue growth of 8%, mainly driven by Germany, Austria, France and Nordic.

Volume growth was also 8% for the quarter. Q2 direct costs decreased 4% year over year, driven by the timing of expenses related to congresses, partially offset by merit, inflation and FX. And we ended Q2 via a contribution of 42,000,000, which is 54% of revenue. And EBITDA for Q2 was SEK 25,600,000.0, reflecting an EBITDA margin of 33%. Now let’s look at the cash flow and balance sheet.

Next slide, please. So as usual, I’m looking at year to date cash flow and ending balance. So year to date cash flow from operations was negative SEK 2,800,000.0 compared to positive SEK 27,900,000.0 year to date last year. And the difference is mainly due to the milestone of SEK 21,600,000.0 received from Osiris Q2 last year. Cash flow from investments of SEK 1,300,000.0 year to date includes interest received and paid on investments in tangibles and intangible assets.

Cash from financing year to date was negative SEK 53,300,000.0 and compared to negative SEK 21,100,000.0 year to date last year. The amount is driven by the Ipsen earn out payment for both years as well as a share buyback programs current year. In total, we paid SEK 29,600,000.0 for the 500,000 shares we acquired this year. Year to date net cash flow was negative SEK 54,700,000.0 compared to positive SEK 7,500,000.0 year to date last year. And the two main drivers for the decline is the Osiris milestone last year and the share buyback program this year.

And with this net cash flow, we ended second quarter with a cash balance of NOK $239,000,000. Looking at the balance sheet. We ended the quarter with total assets of SEK $685,000,000. Noncurrent assets were SEK $314,000,000 at the end of Q2, and this included customer relationship with SEK 87,500,000.0. The customer relationship is the intangible asset identified in the purchase price allocation for the Ipsen transaction.

Noncurrent assets also include goodwill from the Ipsen transaction of SEK 144,000,000 and a tax asset of SEK 49,000,000. Inventory and receivables were SEK 131,800,000.0 at the end of Q2 compared to SEK 132,600,000.0 at Q1 this year, so flat in spite of increasing revenue. Long term liabilities of SEK 128,000,000 include the earn out liability related to the Ipsen transaction totaling SEK 109,000,000 at the end of the quarter. And finally, equity at the end of the quarter was SEK $479,000,000, which 70% of total assets. This concludes the financial section.

Thank you. Dan, it’s back to you.

Dan Schneider, President and CEO, PhotoCure: Alright. Thank you, Eric. Alright. Moving to the summary of q two results. So obviously, extremely pleased, very happy with the teams both in, US and EU and across the entire organization, all the support work.

Overall, very solid quarter with 11% top line growth, 9% unit growth, and that despite flex decline and perhaps some foreign exchange headwinds. We had positive EBITDA at 14,800,000.0, and that was our ninth quarter in a row for positive EBITDA. We continue to build on operating leverage as Eric, clearly articulated in his presentation. And, you know, x by look by virtue of the x milestones, x BD expenses were 22,600,000. But I think what’s key here is we continue to invest in key growth initiatives that we believe will generate revenue growth and increase operating leverage in the business.

On flex surveillance market now and in the future, Richard Wolf PhotoCure joint development program to bring Flex back to the surveillance market is a big big opportunity at a $1,300,000,000 total addressable market, and we look forward to that happening in the course of the next couple of years. It’s on track, as I mentioned in my presentation. And we look, in the meantime, we have the interim solution. It has been, already implemented in The UK. It went off very well.

And we want to keep the interest high, collect the data same as in The US with what flex machines are out there. The users that are using them, we wanna continue to stay engaged. On the account growth, installs, upgrades, and mobile, we grew our active accounts, which is both new, reactivated, and upgrades by 24%. We believe this is a great indicator of our performance. This is up from 17 growth in q one twenty twenty five and eleven percent growth in in 2024.

So you can see the momentum building quarter over quarter in terms of increased accounts. Again, mobile is a key driver in there as well, but these upgrades are also significant. In fact, on an upgrade level, we have now upgraded 60% of the old standard definition. We expect the remainders, which were probably purchased in 2022 and 2021, those will convert over the next couple years. So we will have all high def equipment in The The US at that point.

And as I mentioned, there is a there is a positive impact when you use the high grade equipment versus the old standard definition that was two decades old. Remind you also, Carl Storrs is running a promo program for the second half of this year, began in July 1. Certainly, the reps are equally incentivized, so we expect that to help out on the pipeline, which we’re looking at today as we look through the rest of the year and into 2026. The Fortech National mobile rollout continues to gain traction. Like I said, 150 users so far, 70 new accounts.

They added on another 13 in the quarter. It continues to build momentum. It’s outperforming both our expectations and VorTeq. And I think, you know, watch this space. It does hit a market that otherwise we would not be able to hit.

These are hospitals that either don’t have the capital budgets to afford to purchase these high priced Carlstor’s blue light systems, or they wanna try it first. Try before they buy. And this is a nice way to get them used to it. And Foretech and us are obviously driving utilization at the local level. So this is a it’s a really nice partnership, and we appreciate their hard work.

And in revenue, and units were up 8% in quarter two for Europe. We continue to facilitate the image quality upgrades of our nearly 600 target accounts. We believe Olympus Blue Light upgrade will help us strengthen, this initiative. And as I said, there were 36 installed, year to date, and they have a nice pipeline behind it. And you can already see the impact in some of the key countries that have adopted the the Viscera three where Olympus has a stronghold.

And finally, I’ll conclude, you know, we had a very strong presence in the AUA and EAU. Some of it orchestrated by us, but much to our surprise and very much to our delight, we were in active conversation in so many presentations, so many discussions about using blue light cystoscopy in bladder cancer patient care. So we’re really excited about where this is going. And finally, obviously, Eric mentioned, we have a very strong balance sheet and a nice cash balance of $239,000,000 And I’ll close with the final anticipated milestones and corporate objectives. We remain with the financial guidance today at 7% to 11% product revenue growth and positive EBITDA improvement in 2025.

We also expect continued operating leverage through the commercial businesses, as Eric articulated in his presentation, and we see the possibility for significant growth in milestones this year with Osiris and Sabira. We continue increasing HEXFIX and SYSFU kit throughput through tower upgrades, new installations, and leveraging of the mobile solution in The US. And the Olympus launch is going quite well, and we see already see the impacts. We’re gonna continue to advance the partnership with Richard Wolff, obviously, on the development of this next generation state of the art four k high def flexible blue light system. But also, you know, where we can implement this interim solution in in countries that Richard Wolff has it available, Europe primarily, especially UK.

We want to continue to keep blue light cystoscopy an active conversation in the surveillance market. Lots of work going on with publishing and presenting additional data. As I mentioned, we were sort of talked about whether we forced it or someone just talked about at AUA and EAU. We see that continuing a lot of publications that have been coming out if you’ve been following them. So this is really exciting.

And our U. S. Registry continues to be a very key asset EAU. For the company. And there’s a lot of interest of how people can access it for the information they need in developing their products, etcetera.

We’ll continue to support the additional equipment manufacturers coming into The US. I mentioned the systems petition and the reclassification is a key pathway, and we are putting a lot of money, effort, and pressure on that. The FDA is fully aware. It’s not an awareness issue. It’s a prioritization issue.

It’s a government entity. So we are making every effort we can to pressure them from all sides, 360, to get them to make a move. In the meantime, there has been identified ways potentially to get to market by a couple of the manufacturers. So we support their efforts. And hopefully, one way or the other, there are additional manufacturing in The US market soon.

And finally, on Acerus progress, again, we can only say what Acerus says, which is everything appears to be on track. HEXFIX is approved. Richard Wolff is working through its approval in China, hopefully, can get it end of this year into early next year so they can launch HexFix in China. And then, of course, on the survivor side, they continue to have exchanges with the NMPA looking for a decision maybe later this year, early next year. So with that, I want to thank everyone, and I guess we’ll open up to Q and A.

Moderator/Analyst: We have a large number of questions here. So some are overlapping, and we will then leave it with one question for the sake of good orders so we can finish the call by the estimated time frame. So the first time the first question is, can Fodor confirm whether it has any knowledge of Richard Wolff’s regulatory submission for System Blue to the Chinese authorities, especially in light of what appears to be two approvals granted on 07/11/2025?

Dan Schneider, President and CEO, PhotoCure: So that that was surprising to Rich and Wolfe because both those products were already approved. What it opens up is the opportunity for an interim solution. It’s just saying that those camera heads are compatible with their their current system. That was not a new approval. It was a recertification as it turns out.

There’s no new news there.

Moderator/Analyst: Do you have any insights into what is delaying the reclassification of SISU in The US?

Dan Schneider, President and CEO, PhotoCure: It’s a government. I mean, you know, as I mentioned when they went down this first path with SISU’s petition, there’s no statutory requirement. It’s not like, submitting an NDA for FDA approval and they have so many days, to approve it or five ten ks in ninety days. These systems petitions, can be identified and acted on by the FDA very quickly or they can linger. We believe, we know for a fact through our efforts, in fact, our last interaction with the FDA, they asked us before we showed up, please do not remind us again about this re class.

We are fully aware of it. It is on our radar. It’s, you know, it’s about prioritization. So, you know, sometimes it takes more efforts. Sometimes it take know, we just had to switch in administration.

We believe the new administration is a little more open to clearing some of this stuff up They call it, you know, kind of under their common sense initiatives of things that just don’t make sense. Let’s fix it. We think this is a common sense, just fix it, situation. So if we can leverage, the current administration, congress, whatever we need to do, we continue to push on it. But in the meantime, like I said, you know, there there are more ways to skin this cat, and we found some other ways.

The whole the holy grail, you know, is to have additional manufacturers in the in The US market so that there’s more access. Hospitals that are, you know, identified as, you know, Olympus Hospital or Richard Wolf Hospital or, you know, or whatever hospital, that they have the opportunity to access blue light from whatever manufacturer they prefer. And it works very well for us in Europe, we think it works very well in The US. So again, reclass is one way, and that’s big and splashy. And even with an announcement like that, it’ll take the FDA time to sort of lay out the cookbook on how to submit their 510s.

In the meantime, we are fully aware there’s other efforts, and we’re very optimistic that those efforts will be successful.

Moderator/Analyst: Can you provide some more flavor on the following from the presentation? Business development marks SEK 7,800,000.0 in the second quarter relates to efforts that can diversify our business?

Eric Dahl, CFO, PhotoCure: It definitely can. It can also further enhance the development for Hexvixischio. What we’re looking at in terms of spending this quarter is kind of expenses related to market research, I think, 3,000,000 or 4,000,000. We have legal fees, which is much related to negotiations on the more end market research for partnerships. We have we have multiple conversations going with different companies on this.

So we’re really, I mean, we’re really pushing this. It’s very important for the future of the company.

Moderator/Analyst: We have a long question here regarding statutory requirements for NMPA for supplementary review. It seems like the timeline for NMPA is around one third in addition to the ordinary review of two hundred days. This adds up to sixty seven days extra, meaning a reply is expected q three twenty twenty five. Is this correct? Which reference to your statement in the presentation?

Dan Schneider, President and CEO, PhotoCure: I don’t know any of that. And I I again, this is Osiris’ product. I cannot make a public comment on Osiris’, expectations there. The only thing I know about the NMPA and past processes is that it’s, you know, it’s on average now around a year and a half to two years for their approvals. This is a drug device combination.

That’s as much of a comment as I know personally. If you want specifics, I would suggest the investors go straight to Osiris. They’re a public company. We have to respect their privacy on that.

Moderator/Analyst: And we have questions on Fortech. How big is the contribution from Fortech on total or US revenue, and what is the potential? Are Fortech or is Fortech considering purchasing extra scopes?

Dan Schneider, President and CEO, PhotoCure: They are currently over 10% and accelerating. Forgot I don’t know. That was a three part question. I know one of them was do will they purchase additional scopes? As they reach capacity and they can’t they can’t service the demand, they they surely and I said that when we first announced the deal that they would purchase additional scopes.

Well, there was a middle a middle question in there, one there.

Moderator/Analyst: Got there? Is the potential for Fortech partnership?

Dan Schneider, President and CEO, PhotoCure: Yeah. I you know, it’s a good question. I’ve said, you know, it’s it’s definitely north of 10%. Maybe it gets to 20%. I think it’s you know, we’re we’re still, you know, we’re still analyzing and looking and seeing what it does.

Because, it’s partly there’s two parts to this. One is part is there are hospitals that just can’t afford it or don’t or don’t believe in buying a bunch of capital equipment, and they will forever be a mobile solution hospital. But there are some hospitals that, that are trying and buy. So what I’m saying here is Fortech I’ll just make up a number. Say Fortech is is you know, got 10 hospitals.

Each of them are doing 10 units. Alright? That’s a 100 units. The next month, one of those hospitals buys its own equipment. Now those hospitals or nine hospitals doing 90 units, but we got a hospital out there now that bought the equipment and doing they’re doing 10 units.

So when I get throughout these percentages, so part of the analysis is, okay. Where where did the hospital go? Are they still a Fortech customer, or have they become a buyer of the equipment? Either way, it benefits us, truly, and we want, you know, we want whatever is best for the hospital. Typically, if they’re buying as a hospital, it’s because they’ve got so much, usage or they believe they have so much usage that it’s economically or financially favorable for them to buy it, rather than paying a premium for the mobile solution.

So, you know, it the math will get a little bit fuzzy on the fringes because things will shift back and forth. But, certainly, this this could be, you know, 20% of the business. I I don’t know. But it’s accessing a market that we otherwise would not be in right now. So I think that is really key.

The 10% of our business right now is a market that these hospitals were not buying blue light, at least in the near term, at the current price that it was offered, you know, in the market. So, again, if we get multiple manufacturers in the market, I believe there’ll be economic and technological competition. So everybody will wanna have the latest bells and whistles, and then they’re also gonna compete on price. And that might also drive more hospitals to buy and use less of mobile. So, again, it’s it’s a lot of moving parts here.

But, ultimately, what we want is accessibility to blue light in every hospital in The United States. That’s our goal.

Moderator/Analyst: Will this quarter be remembered for the one where Fotocure really turned the corner?

Dan Schneider, President and CEO, PhotoCure: Well, I hope so. I mean, I I feel good about what you’ve done. You know, if you follow the story actually, the first time you come in contact with PhotoCare, you think, oh, this shouldn’t be too hard. Simple. Single product, you know, sell it directly into hospitals or or whatever.

As you learn this business, it is very complex. There are so many, you know, complexities to it. It’s the, you know, the mobile stuff. It’s the surveillance and the rigid. It’s three or four different manufacturers.

It’s so many different pieces. And so through the course of the last several years, we’ve been struck with some some various challenges. But I’m proud of the team in the way that we quickly respond, the resilience, the speed of action, putting the right plans in place, having the patience and the fortitude to see it through. I mean, I think back to 2023, Carl Storrs was supposed to launch the Safari system literally in 2021, delayed by two years. Then we went through the entire 2023 with almost no installations because it just kept getting delayed, and they weren’t selling the old system because they knew that was crap.

So we went a whole year, lost a whole year sales there. We hit we also hit in 2020, as many people did, the pandemic. Then in 2023, they withdraw I just said I meant 2022 on on the on the Safari system. Then 2023, they withdraw Flex, which was our fastest growing segment at 37%. We had a pipeline of 35 accounts we’re gonna fire up.

They’re high productivity accounts. What do you do? You know? What we did and, again, a lot of our effort was in the rigid surveillance market. So we had to switch our focus back over to rigid.

That takes time. It takes time to, you know, move the ship. Meanwhile, we try to hold on to flex. We form a a strategic partnership with Richard Wolff. We are developing the world’s only four k high def blue light flexible system to be to be launched globally in the largest cystoscopy market of $1,300,000,000 TAM.

I mean, yeah. I I I I don’t know. Maybe maybe we turned the corner two quarters ago. You just you couldn’t see it. Maybe it’s gonna continue to turn the corner over the next quarter or two.

But I do feel good about where we’re at today, and I feel very proud of the team behind this and the way they respond to the challenges.

Moderator/Analyst: So we have passed the indicated end for this call, but we will take a couple of more questions. And turning to OpEx, can we expect the OpEx to stay fairly flat with revenues increasing as fodder care investments in The U. S. And Europe starts to pay off?

Eric Dahl, CFO, PhotoCure: I think what you should expect is that the personnel cost will remain relatively stable. I don’t see any major increases in the headcount. However, there are other costs in the P and L which are project related. That could be medical projects, that could also be business development projects. And those will vary.

And those will be, I mean, at least at the level where we are now, be higher as well. So I can’t promise a flat OpEx going forward. I can promise a flat fixed element of the of the OpEx. But the project spending, we have to take take part in. We have to do that.

Moderator/Analyst: With Ford Tech kicking off in in the overseas market, is something similar possible in Europe?

Dan Schneider, President and CEO, PhotoCure: Looked into it. It’s no. There’s nothing obvious. There we had we we have piloted a very local distributor in Italy. It was it didn’t quite work the same as well.

Fortech is, you know I mean, the competitor to Fortech is Agility in The US. They are they are absolute pros at this. They have different slightly different segments of of the health care market, but Fortech is a pro. But we will continue to look, for a similar opportunity in Europe. But there’s nothing that’s, obvious or identified at this point.

There’s nobody who runs these kinds of things.

Moderator/Analyst: We have shortly a hard stop here, but we take one more question, and that is if Subaribas approved in China triggering a substantial milestone payment and potentially significant role payment royalty payments, will Fodyker consider dividends?

Dan Schneider, President and CEO, PhotoCure: Erik, you want to answer that one? Yeah. I

Eric Dahl, CFO, PhotoCure: always say that this company is a growth company, and we gotta ensure that we have cash required to do the growth and to do the investments needed. I can’t say no to a dividend because, I mean, maybe it happens, maybe it doesn’t, but my priority right now is growth.

Moderator/Analyst: That conclude the, q and a session. Back to you, Dan.

Dan Schneider, President and CEO, PhotoCure: Right. Well, good. Well, great. Well, thank you. Thanks to the team for great quarter.

Looking forward to q three when we present in November. So until then, have a great rest of summer. See you soon.

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