Earnings call transcript: Senzime Q2 2025 Sees Strong U.S. Growth

Senzime AB’s second-quarter earnings call revealed robust growth, particularly in the U.S. market, and significant improvements in financial metrics. The Swedish medical technology company reported a 90% increase in sales in local currencies, with the U.S. now accounting for 72% of its business. With a remarkable revenue growth of 72% over the last twelve months, InvestingPro analysis suggests the stock is currently undervalued. Despite an expected EPS of -0.17, the company remains optimistic about future growth and market expansion.

Want deeper insights? InvestingPro offers 6 additional investment tips for Senzime AB, along with comprehensive financial analysis in their Pro Research Report.

Key Takeaways

• Sales surged by 90% in local currencies.
• U.S. market represents 72% of total business.
• Gross margin was 61.7% for Q2.
• Installed base of TETRAGRAPH units exceeded 4,100.

Company Performance

Senzime’s performance in the second quarter of 2025 was marked by significant growth, especially in the U.S. market, where sales more than doubled. The company has successfully expanded its market presence, now serving nearly 200 hospital systems. This expansion aligns with broader trends in the healthcare technology sector, where demand for advanced monitoring systems is on the rise.

Financial Highlights

• Revenue: SEK 49,200,000, a 90% increase in local currencies.
• EBITDA improved by 23%.
• Gross margin: 61.7% (underlying adjusted gross margin:68.4%).
• Cash position: SEK 132 million.

Outlook & Guidance

Senzime remains confident in achieving its annual guidance, with plans to offset tariffs through price adjustments and expand into pediatric monitoring. According to InvestingPro data, analysts forecast 90% sales growth for FY2025, though the company is not expected to be profitable this year. The company anticipates continued growth in sensor utilization and aims for positive cash flow.

Executive Commentary

CEO Philipp Sibber emphasized the company’s growth trajectory, stating, "We are a company in a hyper-growth phase." He highlighted the company’s commitment to making advanced technology accessible globally and noted the financial and strategic resources available to achieve their business plan.

Risks and Challenges

• Supply chain disruptions could impact production.
• Market saturation in key regions might limit growth.
• Tariff impacts require careful price adjustments.
• Competition from other medical technology firms.
• Economic downturns could affect hospital budgets.

Senzime’s robust performance and strategic focus on the U.S. market position it well for future growth. However, the company must navigate potential risks and maintain its competitive edge to capitalize on emerging opportunities.

Full transcript - Senzime AB (SEZI) Q2 2025:

Klas Poliden, Host/Moderator, DNB Carnegie: Hello, welcome to DNB Carnegie and this Q2 presentation with Sansheim and its CEO, Philipp Sibber. My name is Klas Poliden, and I will be hosting the Q and A session. First, we will be listening to a Q2 presentation. Please go ahead, Filip, with the presentation.

Philipp Sibber, CEO, Sansheim: Okay. Thank you, Klaus. Nice to be here on Link. Let’s start by a little bit of a summary of the kind of the first six months of twenty twenty five. So good momentum.

Sales grew in local currencies with 90%. Strong boost by our new next gen TETRAGRAF and the disposable sensors, the TETRA Sense. If we look at currency adjusted or the actual currency growth was 82%, and we reached just under SEK 50,000,000 or SEK 49,200,000.0. Deliveries of sensors, which is the important KPI here for seeing recurring use, grew over 100. The installed base of TETRAGRAPHTS is now over 4,100.

Gross margin over the first six months has actually increased and that’s despite some hits we’re going to take in Q2, or that we did take in Q2. I’ll come back to it because of currencies and U. S. Tolls. Our operating expenses remained stable, pretty much in line with last year and that is despite significant investments in our commercial team and continued investments in innovation and R and D.

So our EBITDA improved over the first six months with 23%, which is really driven by increased sales. If we look at some snapshots here, if we look at our rolling sales, we’re continuing to be in this hockey stick phase, where one of the main triggers was in 2023 when The U. S. And European guidelines came out, which recommend using objective neuromuscular monitoring on all patients undergoing anesthesia and receiving paralytic drugs. And we’re continuing to grow very nicely.

And if you look at the curve to the right, this is the momentum of each quarter. We did have that dip in Q4 last year, which was predominantly related to the launch of our new next gen system, which delayed deliveries a little bit into Q1 of this year. Looking at the installed base of Tetragraph units, the monitors, we had very strong deliveries in the second quarter. We shipped out seven twenty seven units, which was a strong number. If we look at the full year, we’ve shipped over shipped out over eleven fifty units.

So during the first six months, we shipped way far than we did the full of 2024. So good momentum. And remember, the TETRAGRAF units are the drivers of the TETRA Sense sales, which is the sensors disposable sensors. As said, they grew over 100%, so volumes are very strong. You can see a little bit of a bumpiness in the curve, which relates typically to hospital purchasing patterns.

But we’re seeing a good underlying growth in procedures and in utilization rates. So if we look at our different markets, again, over the first six months, there’s a nice growth in all regions. The currency did take effect. I’ll come back to it further. But if I look at all margins in all regions, I’m very content with this.

We had a very strong product mix during the quarter towards tetra graphs, again, important for building the installed base in the market. U. S. During the year is now 72% of our business, so very strong and very strong dependence on The U. S.

Market. So if we make a little bit of just sort a snapshot in The U. S, I mean about two years ago, we made a strong strategic focus. That’s U. S, the largest market in the world, let’s really make a stab there and focus.

So if we look at what we’ve done over the last two years, we’ve quadrupled the business. In local currencies in The U. S, sales grew over 100% in Q2. We have now nearly 200 hospital systems as customers. Last year, we signed our first GPO agreement and I think more is to come.

I’m seeing continued progression and growth in utilization rates and the pipeline is very strong for the coming year. So there was a strong installed base. So we had a number of important key wins during the quarter. Not all of these were published. Just to name a few, we had a strong big deal up in the Pacific Northwest, about 65 units.

We installed 122 units at a major high profile Northern California hospital system. We had two major wins in the Texas region. We shipped out to a university hospital system in the Southeast, which is a statewide hospital system. We had more wins to the Veterans Affairs, so we keep on winning U. S.

Government deals. And we also installed and delivered quite a few monitors up in the North Midwest area. If we have a look a little bit, if we move down the profit and loss here, let’s look a little bit about the gross margin. We did take a little bit of a hit in the second quarter. So if we look at the reported Q2 gross margin, it was 61.7%.

So the new U. S. Tariff effect was 1.5% of that. There was a couple of onetime hits. The tariff was a little bit higher in the beginning of the quarter, but then flattened out to 10%.

On top of that, we did some on purpose replacements of older tetra graphs to key accounts where we replaced units free of charge, which took a hit of for the quarter of 1.6% on gross margin. And then the strong Swedish krona hit, the gross margin was 3.2%, and then there were some other onetime hits of 0.4%. So the underlying adjusted gross margin was 68.4%. So we are, as said, the year to date gross margin is better than last year. The driver of that is really the next gen TETRAGRAPH, which has a more favorable production cost.

We are working in parallel to raise prices in The U. S. To stabilize versus the tariffs. And I foresee that that’s going to get it will be more visible into our numbers later on this year and next year. Okay.

Moving down again, the profit and loss. If we look at our operating expenses, we’ve had a very clear strategy to try to keep the operating expenses as stable as possible. So what SenSim is all about is growing this with hyper growth, keeping a good stable gross margin and then keeping a fixed cost base. And I think we kept that as well. We’re relatively flat if we look at the first six months versus last year.

And that is, again, despite significant investments in the market. And we’re also moving towards profitability. So the EBITDA in the second quarter increased or the negative loss moved in a favorable manner, so it was 18% better and also was cash flow better, so we’re working a lot with the working capital. And by the end of the quarter, we had SEK132 million in cash in bank. That excludes we have some more money coming in from the directed shares issue we did and we have additional funds coming in from a directed shares issue we did last year.

So that was a very important milestone of the quarter, the directed shares issue. We raised SEK110.4 million in an issue that was done at market price with strong interest. It was oversubscribed. We brought in a number of new investors as well as continued strong commitment from existing investors. So among the new ones was Uniungen, the large Swedish trade union Shape Q is a German investment company and Protean Funds, which is a very strong, very successful Swedish fund manager.

And then the continued strong support is very also very favorable from the Krafford family and the foundation from Siegler, from Swedbank and many others who supported us. So this funding really has the prerequisites to take the company to positive cash flow. So a brief on the shareholding update. The strong change here is that the main shareholders continue to be strong. I think the significant change from, if we look at the last couple of quarters, is that Handelsbankenfonde, which has been our main shareholder, has now exited.

I only has a small stake in a small fund. Okay. Two other events that happened during the quarter. It was the preannouncement of the European guidelines for pediatric patients. So at the European Society of Anesthesia that was held in Lisbon, there was a pre announcement done that children who account for about 10% of the total market for paralytic drugs and use of this.

They are typically very lack of monitoring. Research has shown that about forty percent of these patients leave the Operating Room still partly paralyzed and then are prone to postoperative complications. There has been a lack of good technology to be able to monitor children, but with the technology we have, the electromyography, EMG, it opens to totally new opportunities. So the preannouncement stated that EMG, which is our technology, is going to be the preferred choice and will be part of the guidelines that will be finalized and published later after summer this year. So I think this has the building blocks to help really grow our pediatric business as well.

Another important news announcement we did was expansion of the partnership with Fukuda Danshi. So Fukuda is a large Japanese patient monitoring company. They have an exclusive license agreement for us on the Japanese markets, where they sell our portable unit, but they also have an integrated module that plugs into their line of patient monitors in the operating room. They now received additional market clearances for The UK market and for The U. S.

Market. So we’re going to jointly work to commercialize our module through their channels. In The U. S, we will do it by our own sales team, but in The UK, will do it in partnership with our local distributor. But this opened up for us for additional sensor sales and additional royalty revenues, which is the business model we have with Fukuda.

So to summarize kind of the key takeaways of this in the Q2 and the first half year, I think we I mean we are a company in a hyper growth phase, 90% growth in local currencies, OpEx remaining stable and improving the EBITDA. We are winning big. I mean, there’s a huge demand for our next gen TETRAGRAV system, very well received in the market. I see that because of the simplicity of our technology, we’re truly expanding the market opportunity. We’re making our advanced technology available to every single hospital in the world.

I think we’re winning contracts also based on our focused investments in The U. S. Market and as well as in Germany with our distributors and in the Asian region. And then third, the building blocks are in place. We have the guidelines.

There are more guidelines to come. We’re backed by long term research and a very strong clinical need for this. And now we have the clinical and the cash and the funding to succeed with our business plan. So that was the summary. And join us as we transform perioperative care and make sure that nobody leaves the Operating Room with any type of complications.

Thank you.

Klas Poliden, Host/Moderator, DNB Carnegie: Okay. Thank you so much, Philippe, for the presentation. Maybe we can have some additional discussions about The U. S. Market where you performed very, very strongly again.

How would you categorize The U. S. Market right now? Do you feel is this still a very strong demand for your products out there?

Philipp Sibber, CEO, Sansheim: I think there is unchanged, strong underlying demand for our products. I mean the hospitals are still working to get guideline compliant. When guidelines come out, there is definitely a rubber band effect where it takes time for them to comply. So we’re seeing the drive from the hospitals from various perspectives. One is simply being guideline compliant.

The other one is helping to reduce drug costs. Since we’re monitoring the effects and making sure that you have the right dose of these paralytic drugs, it’s very clear now that we can prove that by using our technology, you can reduce the amount of these expensive drugs. So there is a case from the pharma departments or the hospitals who see a quite immediate return on investment by doing investments in our technology. And the third is that the underlying demand and the patient volumes continue to be strong. So continue to be very positive for The U.

S. Market.

Klas Poliden, Host/Moderator, DNB Carnegie: Yes. You also mentioned in your the CEO world that deals are being made even faster. Could you describe a little bit more what you mean by that?

Philipp Sibber, CEO, Sansheim: Yes. I would say as started and entered The U. S. Market and came in with a novel technology, the sales cycles could be up to twenty four months. They have continuously reduced in time, and we’ve now had a number of deals and wins where there was no longer a need for clinical evaluations.

The value committee part of the sales process was very quick. Hospitals are more relying on references and what’s out there. And we can move down to the timings of three to six months to win hospital systems. So there is quite a change happening in our favor in the market.

Klas Poliden, Host/Moderator, DNB Carnegie: Yes. And you have recorded a very nice shipping during Q2, seven twenty seven units, but you also mentioned that perhaps some of these were replacements. Is it possible to give some sort of a sense how much the replacement was?

Philipp Sibber, CEO, Sansheim: Yes. Mean there was a small part of these that were So we decided that some of our key accounts who have been using our classic or older generation monitor that we should swap them because either they were under a placement agreement or for other reasons we decided it was changed. So that was part of the shipments. We’re also doing it with the rationale that we believe that the new monitor has a higher utilization drive. Because of the simplicity of using it, we’re seeing that the usage rate is higher.

So by swapping some of these units, it’s going to ultimately drive sensor sales in our favor.

Klas Poliden, Host/Moderator, DNB Carnegie: And this replacement cycle, will this continue into the next coming quarters as well?

Philipp Sibber, CEO, Sansheim: No, not with significance, no.

Klas Poliden, Host/Moderator, DNB Carnegie: Okay. Looking at the sensor sales, it was more or less flat during in numbers compared to the Q1. So I guess there are lots of variation months to months. But are you satisfied with the utilization rates, how that develops?

Philipp Sibber, CEO, Sansheim: I am. Yes, it was a little bit flat towards Q1. It was very strong if we look at in a broader perspective. And as I showed, Sensor sales versus last year is doubling. There is always a little bit of a monthly, quarterly effect where orders come in depending on month and then closing.

So I’m not concerned in any way. I’m seeing, again, strong underlying utilization growth. We’re seeing that the accounts that we monitored last year were up to double the amount of utilization. And I mentioned one of the finer big large university accounts in Germany that we have, they’re trading now at roughly seven patients a week. And they just came back from The U.

S. This week, where we were also deep diving into the larger U. S. Accounts and I’m seeing similar patterns in the large U. S.

Hospital systems where utilization is really growing. And that is a function of compliance. It’s becoming standard of care and clearly protocolized monitoring technique within the hospital.

Klas Poliden, Host/Moderator, DNB Carnegie: And then just switching to the European market and perhaps rest of the world also. You sound quite positive about the development, but you don’t see actually large uptick in sales yet. What should we expect when it comes to these markets?

Philipp Sibber, CEO, Sansheim: I think we as I’ve said before, I mean, the markets are a little bit different. They’re dominated by legacy technology that is already on the market. So it’s more a replacing analog to digital and we’re doing that really operating room by operating room. In Q1, we introduced the next gen TETRAGRAPH in Europe with immediate strong sales in March when we released it. So a lot of units are now out for evaluations and in clinical trials.

So I think we’re going to see strong effects of that. We’re really focusing our distribution work to work with a few of them that typically dominate 90% of our business. So we’re seeing that this conversion is happening. We’re really following one to one with the robotic surgery industry. So that continues to be our strongest foothold.

But also saying that once we’re in there, it leaks to the other operating rooms. So I just think that U. S. Continues to be a more rapid growth market where we are right now, and Europe and Asia will come to the same extent, but slightly behind the curve.

Klas Poliden, Host/Moderator, DNB Carnegie: But you’re satisfied with the work what your distributors are doing in Europe?

Philipp Sibber, CEO, Sansheim: I am. They are doing a good job. And again, European market is a little bit different, long sales cycles as well. Often, it’s tender based. So I’m quite satisfied with what the results we had despite that we just launched it.

So typically, the sales cycles will be nine fifteen months as well in Europe before we’re really seeing the momentum.

Klas Poliden, Host/Moderator, DNB Carnegie: And during Q2, your Japanese partner, Fukuda, got their systems approved in The U. S. As well. Do you expect this to have any material impact the short term? Or is it just positive from the longer term perspective?

Philipp Sibber, CEO, Sansheim: I think it has more kind of a midterm. We Fukuda is a very strong player in Asia, not as strong in their market shares in The UK and The U. S, but they do have a market. So it’s they’ve been very successful in Japan in selling the module that they simply can place in as an accessory to the installed base. And there has been strong market demand despite them not even launching this yet.

So I think we’re going to pretty quickly see this module coming out in The U. S. And UK. I think the true volumes will wait a little bit, but it opens up a good door for us.

Klas Poliden, Host/Moderator, DNB Carnegie: Do they disclose the customers they have in The U. S. To you?

Philipp Sibber, CEO, Sansheim: Yes, yes, they do. We work together, yes.

Klas Poliden, Host/Moderator, DNB Carnegie: Yes. Perfect. Sounds good. And then jumping to the gross margin. As you mentioned, it was affected by numerous onetime issue or at least sort of but you also mentioned that a way to improve the gross margin going forward would be through price hikes.

Is it possible to give some sort of detail what you’re seeing, what

Philipp Sibber, CEO, Sansheim: is Yes. So we’re in discussions with a lot of our hospital accounts where we have pricing agreements to add a little bit of an amendment for the tariffs. Hospitals have not in general, mean, in general, if you look at a U. S. Operating room, about 70% of all products in an operating room are made in China.

So in the anesthesia world, everybody is very dependent on Asia and on exports. So there is quite a strong industry push for we need to adjust the pricing to settle for the tariff effects. So hospitals are understanding this, and ultimately, it’s going to be the patients that pay for this. But we have good dialogue with our main customers. We see that they are accepting an adjustment in the pricing.

We have one finalized agreement where we have adjusted up the pricing. So I foresee that we’re going to see the effects of this in the coming quarters, which I hope will ultimately stabilize the currency effects. And that’s what we also announced during the quarter that the effects of this is plusminus 1% or 2% on the gross margin. And I think we will be able to see kind of neutral effects in the long term.

Klas Poliden, Host/Moderator, DNB Carnegie: And price hikes, would that be primarily sensors or

Philipp Sibber, CEO, Sansheim: Primarily sensors, yes.

Klas Poliden, Host/Moderator, DNB Carnegie: Yes. Okay, great. Also you in the report, you mentioned that you have increased your production capacity because of the strong demand. Could you say anything more about have you made all the investments yet for this?

Philipp Sibber, CEO, Sansheim: I mean we have, yes. So we brought in there’s a full blown speed in the production. We produced this year more than we’ve ever done in a year. So it’s just the underlying demand is strong, and we have a very sustainable and scalable production model in our in house offices in Uppsalaen. So we can bring in capacity and very quickly expand up and down as demand fluctuates.

But now we have the capacity and we have the, again, the capacity to meet the business plan over the next five years.

Klas Poliden, Host/Moderator, DNB Carnegie: Perfect. Maybe we could then final stage of this, could have a discussion about your outlook guidance going forward? Do you feel confident in what you have said before?

Philipp Sibber, CEO, Sansheim: We do, absolutely. I mean the what concerns me the most is the currency effects here. So I mean, as you saw in the report, the U. S. Dollar does take a hit.

It affects us both top line, gross margin and, of course, the operating expenses as well. But we remain confident that we can stay within our guidance for the year. And if we look at where we are towards the guidance, we’ve come about halfway. And I think with continued quarter over quarter growth and momentum and underlying kind of recurring business and a lot of the wins that we announced this year, I feel confident that we can reach the presented guidance.

Klas Poliden, Host/Moderator, DNB Carnegie: Okay. Sounds very good. And that was all for me, Bernd. Thank you so much for the interview.

Philipp Sibber, CEO, Sansheim: Thank you very much. Nice to meet you. Thanks.

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