Senzime Stock

Hello, everyone. Welcome to today's live Q. Senzime released its Q2 report earlier this morning. And with me on LINK, I have the CEO, Philip Siberg. First, he will give us a presentation about the quarterly report. And then after that, we will have a Q&A session discussing the report and, of course, also the news that we received yesterday about the partnership with Philips. But yes, let's start with the presentation about the report.

Good morning. Welcome to the presentation of our second quarter 2026 report here in the midst of Swedish summertime. So the second quarter, a quarter characterized by continued strong growth for our sensors utilization, but continued market headwinds for new monitor sales, specifically in the U.S. market. So U.S. market has continued to be challenging for us over the last 6 months. I do note an improvement. But in parallel to this, we've been working diligently on the fundamentals, and I'm happy to report that we have a 15% decrease in our operating expenses. We are reporting a 27% improvement in our EBITDA, and we're reporting a 46% improvement in our cash flow. And this is despite pretty much a 0 growth quarter.

So let me come back a little bit more on the numbers and a little bit the background of the business. Okay. So I wanted to comment on the recent announcement of our partnership with Philips. So I'm extremely pleased to announce this. This is the most important commercial agreement that we've signed so far. I would say it's the result of over 10 years of work. It's the result of our investments in innovation, in clinical and in market access. What we are planning to do is to jointly develop a portfolio of products based on each of our proprietary technologies. We will be driving the development and manufacturing. These will be our products and exactly what we are to develop and what to launch, that remains confidential until it comes out to market.

This is an extremely strong validation of our technology. We're partnering with the global leader in patient monitoring and also one of the global leaders as a medical device company. What it does is that it significantly expands our market reach. It will expand our reach way, way beyond the markets we are in today. And I expect this agreement to have a significant positive impact on our medium- to long-term financials. We're targeting new market segments. So this is importantly a complement to what we're doing today. This is a different product. It's going to complement what we are doing today with our portfolio. And the whole idea is also that it will leverage what we're doing. And I believe that the partnership has very nice synergies with the business we're in.

So I've noted before, we have been working over the last few years with many industry partners and leaders. I think this is -- the recent Philips announcement is alongside with this. We're working with Fukuda in Japan, now with Philips on a more expanded level. And then we have connectivity of our solutions via GE, Masimo, Mindray, Getinge, Ascom and others. So we're really driving that the unique clinical data that we are creating is now integrated into systems and electronic health records around the world.

Looking a little bit more on the numbers. So we continue, of course, to expand the TetraGraph base. As I introduced, it was another tough quarter in terms of new monitor sales. We shipped out 239 monitors in the second quarter, and the number last year was significantly higher. I mean there's one comparable to this that we had 422 last year that were new TetraGraphs that we shipped out quite quickly as upgrades. So existing customers decided to upgrade from their classic TetraGraph. So there is some comparables to be noted in this perspective. TetraSens sensors continues to grow very nicely, 56% growth in, kind of, rolling 12 units. We shipped out about 132,000 sensors. So this corresponds to a growth of about 48% in local currencies. So we're driving utilization with the customers that we have.

If we look a little bit then on the product market mix in general. So I mean, we're becoming, as I've always said, more and more a sensor and utilization company. So over 80% of the business in Q2 was disposables. U.S. continues to be, despite the tougher macro climate, the big locomotive for us. But overall, it was a little bit of a bumpy quarter. But again, underlying with 48% growth in local currencies for disposables, while new hardware and monitors took a little bit of a hit during the quarter.

If we do a little bit of a deep dive into the U.S., and we've had significant investments in the market. We do have our own team. If we look at sensors, they continue to grow well, 58% up, which is a good driver that utilization really works. The macro climate that I'm noting here is more that the big new hospital opportunities keep getting pushed forward. I think there is a fear of inflation, capital goods in general have had a tougher time to close. So some headwinds. I do believe still we have the opportunity to catch up many of these deals. And as I noted, some of the deals this year versus last year were compared and affected by the rollout that we did last year of the new next-generation monitor.

So U.S. -- I mean, if I look at the map, I've shown this before. This is just some highlights over the last 18 months. We've secured and won so many leading hospital systems all across the U.S. And this map is starting to get pretty messy, and this is just to mention a few of them. And then if I add on what's happened in the last couple of months, we've added more leading hospital systems. So the map is starting to get really, really busy, and I'm extremely proud of what we're doing in the U.S.

To note, 3 significant accounts or events that we press released during the quarter. The first one was entrance into one of the world's largest integrated delivery networks or IDNs. So this IDN has over 150 hospitals. We've now secured 6 of the hospitals within the system and really moving ourselves up the ladder and I think we have an opportunity here that this could become the largest single account for us. We expanded our presence in a very dominant and very leading U.S. hospital systems in the Southeast of the U.S. So we included another 65 TetraGraphs in that installation. So this account alone has now 160 systems installed and is recurring -- is running at about SEK 6 million in annual recurring revenue.

And the third important account was announcing a win, another big and important pediatric account. This is a nationally leading pediatric hospital in the Eastern U.S., and we secured it via a very well-executed competitive evaluation. Further announcements: And further, what we did during the quarter was to get the TetraGraph included in the 3 leading GPOs in the U.S. So more than about 95% of all U.S. hospitals or in some way have GPO agreements. This is agreements that makes them buy and procure goods at a kind of a group purchasing level, meaning you get better prices and it's easier to acquire. So we secured among the 3 leading ones. This will kind of accelerate our access to about 5,000 hospitals in the U.S. And a GPO agreement per se does not give you instant business, but it's a hunting license, and we believe it will accelerate and it will make it easier to get access and win these accounts.

So we did sign our first GPO agreement back in 2024. It remains intact. We have delivered quite a lot of monitors. And there, we are the sole source supplier. There's a lot more to come in this space that I will come back to during this year. So in the U.S., we also did some organizational upgrades that we announced. Josi Wood joined us as our new Vice President of Sales. Josi has 20-plus years of experience in driving, growing and been very successful in winning within the medical device space, patient monitoring. So I'm very glad to have her. She joined us on May 11. Jen Sanders was -- she's been with us for 5 years. She was promoted to be our Vice President of Clinical and Med Affairs.

And then I just wanted to highlight that Wolfgang Reim, who's been an adviser to us, joined us as an ordinary Board member. He is extremely operational and helping. But Wolfgang has a history of being, among others, CEO of Draeger, the anesthesia and patient monitoring company. He was also the CEO of parts of Siemens and running the U.S. business within ultrasound. So very strong knowledge in how to conquer the U.S. market.

So we continue also to lead. I mean we continue to drive innovation, continue to be the leader in this field. We did announce during the quarter that we rolled out our new TetraSens. This is a European-made sensor, and that's important because it's produced with a minimum environmental footprint. It uses novel technologies. And by this, it's a more eco and sustainable product. And because of disposables in general, there's an overarching interest, specifically from European accounts to have sustainable products used in the operating room. So I'm very happy with this, and this also gives us better unit economics in general.

We also announced the launch of TetraAnalytics. This is a very powerful cloud-based analytics software. It's AI-ready. And what it does is that it gives you -- visualizes the data from TetraGraph systems. And I think it can turn it into clinical insights, and this is all about driving utilization. So a very powerful tool used in clinical practice to make sure that the TetraGraph are used as expected and then follow trends to make sure you are compliant to guidelines.

We had 2 important market approvals and expansions. So we got another FDA clearance. I'm pretty proud of it that we filed with the FDA in early April and already in mid-May, it was cleared. So a number of features that we have now on our future road map to be launched. And then we also announced that we got regulatory approval from ANVISA, which is the Brazilian equivalent to the FDA. So we have secured a partner. We have secured first orders. And in general, we've had some good success in the Latin American markets recently. So we're now active in Chile, in Mexico, in Nicaragua and now in Brazil. And I think these are markets that typically follow a lot of what's going on in the U.S., and there is also local guidelines supporting our products.

A little bit more on the numbers. So to start by looking at the gross margin. So the gross margin continues to improve, and this is a consequence of getting a little bit better paid for the products, continuously lower the cost of production and a more favorable product mix with more sensors. Tariffs, of course, and currency effects continue to affect these numbers. But if I look at overall, the reported gross margin of the quarter was 65.7%, which is an improvement over the last couple of quarters. So we're really moving in the right direction. I do believe that the gross margin will continue to improve, thanks to products, new business models.

And we're also now -- we just received a few days ago our first repayment from the U.S. tariffs. We received $116,000, and I have about $350,000 more than we are expecting likely coming in over the next couple of quarters. Back to the fundamentals. As noted initially, operating expenses continue to decrease. We have an extremely cost conscious and very efficient way of running our business and continue to drive cost down. So we reduced costs in the quarter with about SEK 6 million, down to SEK 34.2 million. So we decreased it over the 6 months with about 10%.

If we look at EBITDA, we're continuing to make progress, a 27% improvement. This was about SEK 6.3 million. So now reducing it to SEK -17.3 million, and it's moving towards. And this is a result of better gross margin and lower operating expenses. And then to the cash flow that took the biggest improvement, 46%, equivalent to SEK 13.1 million, driven by improved results, of course, but also by a very diligent work on optimizing the working capital levels. So we have SEK 37.1 million in our -- in cash end of the quarter, and then we have another SEK 42.5 million in a credit facility.

Okay. A little bit short on the investor base. The overall cap chart remains fairly the same on top. I think the notable change is TIN Ny Teknik, the fund. They reduced their shareholding with just under 1.3 million shares. So those shares have been for sale of the market for some time.

So just to recap again, 2 seconds, what is it we do again? So remember, Senzime, we have our world-class unique system, the TetraGraph that is used in the operating room. It connects to our disposable sensor that stimulates the patient with small electrical impulses. And by doing this, then we can measure when is it the right timing to intubate the patient. When is it time to get them on the ventilator. And then we can manage the patient throughout the procedures to make sure that everybody gets the right individualized dose of paralytic drugs. And then we define exactly when is it safe to turn off the ventilator and let the patient breathe on its own.

So it's a way of personalizing anesthesia and making sure that nobody leaves the operating room with paralysis. And this is all based on over 40 years of research, and we have over 100 patents in the area. And remember, these TetraGraphs are used typically in the operating room with the anesthesiologist, very often in robotic surgery. And by using this type of technology, it's been shown that you can eliminate complications. So you can move the traditional 40% of patients moving out of operating room still paralyzed to 0. And by individualizing monitoring, you can reduce the cost of drugs significantly.

Okay. So to wrap this up, what are the key takeaways of the second quarter report? One is the evidence of our hard work in improving the business fundamentals. We continue to drive actions to move Senzime rapidly towards profitability. And this is shown by an increased gross margin. It continues to be increased quarter-over-quarter. We continue to decrease our operating expense level down by 15%. We continue to improve our EBITDA as well as our cash flow. And our goal that by the end of the year within the fourth quarter to show positive cash flow remains intact.

Number two, we're seeing a very strong underlying momentum in our sensor sales. We're growing at nearly 50% rate. So the business model works very well. Utilization is going up. And if I look specifically on our key U.S. accounts, they're moving very nicely in the right direction. We're rolling out innovations to further drive and improve utilization, and we keep winning new accounts around the world. And then number three, we're leading a very unique clinical and technology shift. And I am again extremely pleased to have announced the Philips agreement, a long-term agreement. It's a landmark agreement for us where our technology portfolio is validated, and this will drive significant revenues for Senzime over the mid- to long term.

In parallel to that, our core business, we have the new U.S. GPO agreements that I think will open up for more business. And we have a world-class team working very hard every day to execute on the mission and vision, and I think we're moving very nicely in the right direction despite some macro headwinds.

So thank you for listening and make sure to join us on our mission as we safeguard every patient's journey to wake up securely after anesthesia. Thank you.

Perfect. Thank you very much for the presentation. Can you hear me, Philip?

I can. Can you hear me?

Perfect. Yes. So let's dig into some questions. Maybe we can first start with the report, and then we go into the agreement with Philips. So first, if we talk about the sales, SEK 24.7 million. As you also mentioned in your presentation, you still continue to see this macro uncertainty. Could we expect a bounce back or a rebound during the second half of this year, what do you believe?

I mean, I certainly believe so. I mean it's been a tougher definitely, like I said, first 6 months of the year. And I think it's more general uncertainties in the market. Capital deals, irrespective of how we sell them are just a little bit pushed forward. There's a hesitation. Yet underlying the accounts we have are growing very nicely. And we keep on winning accounts by account, but the big hospital systems where this is a major upfront investment to do somehow has been a little bit challenging during the first 6 months. I do believe in a rebound, and I feel that the market has improved over the last couple of months. So I think we're moving in the right direction.

But maybe you can add some more color to that. You said that you believe that the market has improved a bit. What is the evidence around that?

I think it's more how we are seeing the pipeline evolve, dialogues with customers, the feedback we're getting from -- we have a mix of our own sales team. We have a mix with our sales partners and also a bit a mix of -- if we look, for example, in the Japanese market, we launched with our partner, Fukuda Denshi, the next-gen TetraGraph. It was launched in May, even though it was prelaunched early in the year following the local Japanese clearance in December. But it takes time to build this business. They built a local sales force, specifically around the next-gen TetraGraph. And I think work like that in many markets will start to take off. And I still believe certainly in the same effects in the markets where we sell direct, which is the U.S. and Germany.

But if we look into the numbers, so the sensor sales were really good, in my opinion, during the quarter. Of course, the system deliveries was a little bit weaker than expected. But how many monitors during this quarter were delivered for free versus paid?

So during the quarter, we had -- I mean, all monitors that we shipped and sold were this quarter under standard kind of capital agreements. So for various reasons, we did not close any TetraGraph-as-a-Service agreements as we did in Q1. TetraGraph-as-a-Service, I think, is still a very compelling business model, and we have a lot in the pipeline. It does shorten the sales cycle, but it's still a an investment that needs to be justified, which takes some time sometimes for hospitals given that the recurring sensor cost is something that the hospital incur. But I continue to foresee that, that's going to be part of our business going forward. But specifically in Q2, it was predominantly capital sales.

Because we also received a question from an investor about -- let's see here. You said that it's over 6,000 systems that has been delivered over time. How many of these would you say are active?

Yes, that's a good question. It's slightly under 6,000 units. But it's always hard to define that. And I don't have the exact number. But a part of those are have been upgrades from our previous classic versions. So you can't just multiply the amount of units that we have shipped times utilization to get an accurate number. But I would say, as I've always said in the past, that the business we've been doing in the last 2 to 3 years, these installations are purely driven by protocols and standards of care. So there's a way difference in terms of utilization level. In the early phases of our sell-out where we were selling to very early adopters, which is more perhaps research-oriented, those types of monitors may have lower utilization. But it's hard for me to give you an exact number of the exact installed base that is in use.

Yes. I understand. Also to talk about the costs, the development within operating expenses have been solid. You continue to have a solid cost control. But what is your expectations for the rest of this year and also maybe into 2027, of course?

I mean I've always iterated that we're trying to grow this company very rapidly while maintaining a fixed cost level. But given that the macro uncertainties and lower capital sales on a temporary basis, what we've done is that we've just adjusted the cost base. So we've lowered where the areas where we can. I think a 15% reduction marks a very kind of -- it's pretty significant for us, but it's also the abilities to move. So as we see the market take off, we can adapt to that. But we are definitely driving smarter processes. And I think we are at a lower cost level, and we will remain at that type of level going forward.

Because if we look into your objective, you also restated this in the report that your objective is to reach a positive cash flow during the end of this year. My question is basically -- you really need to grow your sales in order to reach that with the current cost base, but could -- do you expect cost base to decrease a bit? Or, what do you believe? How would you?

Yes. I mean I think you'll see a combination of many factors. We're going to see a combination of continued to increase gross margin. The cost will continue to decrease to kind of a new base level. And I think we're going to see a continued improvement in working capital. We're getting paid a lot faster from our customers. We're working a lot on optimizing working capital levels. So there's a combination of these 3 things and of course, growth in the business. So those 3 things -- 4 things will iterate. And I think that still gives us the ability to very firmly meet the target in Q4 of cash flow positive within Q4.

Okay. Great. But let's dig into the news that we also received last night about the new partnership with Philips. What can you tell us about it?

Well, first of all, I'm extremely proud. This is the work, like I said, over -- it's like 10 years of work behind this, but accelerated work over the last 3 years. But you could almost compare this to what pharma is doing all the time, small pharma companies partnering with big pharma to drive some kind of a molecule. But here, we are partnering as a niche med tech company with big med tech.

So I think it's a perfect symbiosis. We're bringing in world-class technology, working together with Philips, which is a global market leader in the field with an enormous reach and a very powerful sales force and also technology portfolio. So I'm extremely pleased about this. I think it verifies it validates what we've been doing, and it's a result of really hard work over the last years.

Okay. Because I believe that when I read the press release, it's a bit difficult to understand the potential. And I know it's a lot of information they can't say probably. You mentioned in the last question that maybe you can compare it to like a licensing deal within pharma, stuff like that. Does this mean that you view this agreement or this partnership like SEK 1 billion deal over time? Is that correct?

I mean, so we did not disclose any numbers here for various reasons. And of course, one is the respect of our big partner, Philips. But this definitely is -- I mean, if you look at what happens in many medical device spaces is that you develop your niche technology and then you partner with large giants to really get the scale of it. And I mean, I've seen many other cases in other patient monitoring sectors where ultimately, 80% of the business is generated through partnerships and various types of technologies being integrated or joint product development, et cetera. So I think this adds a significant revenue stream for us in the mid- to long term. Exactly what this is, we're not going -- we're not making public. But I wouldn't say the word I have a very bullish and significant view on this unless that was the case.

Okay. But did I understand it correctly, you can't say anything about the time line? What does the medium to long term mean for you?

No, we're not going out with that at the moment. So we're not really disclosing at this time what is we are developing and when is it coming to market. And I think that's -- it's more a smart way of doing it to -- as we release this, we'll get the most power out of it rather than telling competition in the world what we're doing.

Yes. Of course. But would you say from a cost perspective, will this agreement increase your cost in some way? Or what do you believe?

I mean we -- so we are driving the development of these projects. We will be manufacturing the products. We will de facto will be the product owner of the products. So there is -- yes, but these -- the costs of getting there will be, I think, it will be part of our operational business. While at the same time, I anticipate interesting synergies behind this because some of the technologies that we are working on can be reused and benefited from in our core business.

So remember, this is something that will run alongside what we're already doing. This is addressing new markets, new segments that we are not currently getting access to. I mean we're targeting today about 30 countries. This partnership expands that opportunity significantly into new markets. and also addressing typically hospital systems that are very hard for us as a small company to reach.

But what do you mean with new market segments? Because that could mean a lot. Is it like a completely different product? Or is it more like now you're operating more in the operating rooms and with Philips, you can maybe go to other parts of the hospital. Is it more like that? What do you mean with other market segments?

Yes. I mean, so Philips is one of the absolute global leaders in patient monitoring and also has a very strong presence in the operating room, but also perioperative, meaning outside the operating room. And Senzime has a broad portfolio of technology assets and a broad IP portfolio. So it's combining what we have and what Philips has and the capacity of that and then putting pieces together. So I'm still not disclosing what we are exactly planning to do, but I think it's understandable that the technology we have, I think it's quite clear, and that is what we're going to bring to market together with Philips. I mean, for example, Philips is one of the absolute global leaders in AMG neuromuscular monitoring and has been so for quite so many years.

So that is an interesting fact. And just looking at that and then partnering with Senzime, which is a leader in the field of EMG-based monitoring, I think it signals that there is a shift and a validation that is about to happen. I think that's just one view of looking at this. While as I said, we have multiple technologies in our portfolio, and I'll come back to what we're going to do.

Perfect. You also answered my next question. So that was great. Also a question that I received from an investor. If the demand accelerates faster than expected through Philips, do you have the manufacturing capacity and supply chains to scale without becoming a bottleneck?

Yes, we do.

Perfect. Also, I received a question about ExSpiron. We don't hear that much about that anymore. Is there any focus at all on that product or...

There is limited direct commercial focus. It's part of our kind of technology portfolio and part of these assets that I've mentioned, and it's part of our long-term road map. So the ultimate kind of commercial solution around that remains on our road map for the future, and I'll come back when timing is right to tell you more.

We do have some customers. I mean we have the ExSpiron running at a number of U.S. larger hospitals. It keeps running, but it's a different type of sale. And for now, we've been more focused on the neuromuscular opportunity, which is more in and around the operating room, while the ExSpiron is more postoperative care typically. So that's more kind of part of our perioperative journey.

Perfect. Also another question is about the new sensors that you are launching. How much could that improve the gross margin? And also when could we expect to see signs of that?

Yes. So we -- what we did was we used to have -- I mean we are the legal producer of our sensors, but we work with various expertise partners to put these sensors together. And a part of that production process has been done in Asia in the past with quite a lot of logistics and limited abilities for us to control development.

So what we've done now is we moved the production to Europe. We have done some very interesting redesigns to make the sensor extremely eco-friendly to meet sustainability demands. And of course, as part of ongoing development and improvements, we're working hard to optimize unit economics in and around the sensor.

So definitely, the sensor, which is now -- as you saw in Q2, about 80% of our business, everything we do there makes an effect on gross margin. So I think as part of our very firm goals to keep increasing the gross margin the market should see effects of that in the next coming quarters.

Interesting. Also a question about the competitive landscape. So let's see here. Where was it there. So Drager has launched a new dual technology TOFscan with EMG and 3G-AMG. Would you -- or why should the hospitals choose TetraGraph instead of this product?

Yes. First of all, I think it's a great new product and entry to the market. So what they've done is that they've redesigned their AMG system to also have EMG. So I think they're just adapting to market demands, which I think is an important signal that the whole market is now shifting from AMG to EMG. I think it's a valuable device as well, what they developed. It's nice, and I've tried it and I play with it.

The difference with what we do is that they use standardized electrodes, which is more cumbersome. It's less standardized. You need to make sure you place them in the right way, while the disposable slip-on sensor that we have makes it very simple and minimizes the change in the workflow. So there's differences in this, and I'm still awaiting to see any type of clinical validation data or accuracy data in the system. I think that's going to be interesting when it comes out. But I'm pretty proud of -- I mean, we've spent over 10 years in optimizing our EMG algorithm. There is an incredible amount of work behind optimizing the way you monitor, filtering for any type of disturbances and then using this technology to get extremely accurate.

And we remain the only system that is clinically validated throughout the whole procedure from low block to high block, but also showing accuracy, which is best-in-class versus laboratory references. And then I think -- I mean, the last part of this, which I mentioned is the kind of industry integration. That's been quite a journey for us as well over the last few years is everybody now wants their data integrated into their electronic health records. And that needs to be done by industry partnerships and various types of integrations. And I think we are way ahead of other parties in the industry and adapting to the integration possibilities.

Also a question about the major IDN contract that you signed during Q2 in the U.S. Could you give us an update on the development since you announced that news?

Yes. So remember, IDNs are big hospital systems encompassing a lot of hospitals within an umbrella. And why I like IDNs is that you can work your way from the bottom. And by winning account by account, you ultimately create a very nice business case that you can take it to top management and standardize the rollout throughout the IDN. The specific one that we announced is one of the global leading ones and one of the largest in the U.S. We've secured 6 hospitals, I believe, 6 or 7 hospitals within the IDN system now. We have a very strong internal high-end advocate who is driving the business case for us.

So it will take some time, but this is exactly the dynamics that once you get there and you move your way up the ladder, you ultimately can get very nice leverage on the work you're doing. And that's a way -- it's a very cost-effective way of selling using peer-to-peer and then using the system to ultimately drive up a big rollout to a massive IDN.

But how would you describe the overall pipeline when it comes to hospital IDN discussions at the moment in the U.S.

We keep growing the pipeline. We do a lot of investments in the market. We do a lot of presence at big meetings. We do a lot of investments in driving science and standardization and a change of practice. So as we do these investments, we can see paying off in an increased pipeline all the time. And then the pipeline is always a challenge in our sector and industry that it takes time.

But we've seen some deals take over 2 years. We've seen some deals take 3 months. And I do believe, in general, what we're seeing is the time for closing deals is overall shortening, yet the last 2 quarters have been a little bit extra challenging from a macro level to close the deals. But the pipeline keeps growing.

Perfect. We've also seen in some quarters, fluctuations a bit in the sales and one of the reasons have been FX, for example. Are you doing any action to minimize the FX impact?

We are not hedging at the moment. We haven't done it. I mean we just feel -- we -- because we are sourcing quite a lot in euro, we are selling in dollars. We also have quite a lot of expenses in dollars. So we have a little bit of natural hedging throughout our business. We're always trying to optimize the currency effects. But it's -- we had -- for the first time in a long time, we had a little bit of a positive currency effect. on various parts of the P&L in Q2. So as long as the dollar balances out and the euro stays where it is, I'm reasonably happy.

Perfect. I think that we have covered all the questions here. So maybe is there anything else that you would like to highlight before we end?

I think probably on the cash, it's just worth highlighting, we didn't do any separate press release, but we did get our first repayment of U.S. tariffs, which I noted peers in the industry have received as well. These are getting paid back in tranches. So we received $116,000 early here in July. Those were not included in the Q2 report. And we anticipate more repayments to come over the next couple of quarters. But it's good to see that it's getting -- that it's actually getting paid back, some of these tariffs are paying in.

Great. Perfect. Thank you very much, Philip. And we look forward to hearing more about, yes, the Philips deal, of course, but also the overall development.

Good morning. Welcome to the presentation of our second quarter 2026 report here in the midst of Swedish summertime. So the second quarter, a quarter characterized by continued strong growth for our sensors utilization, but continued market headwinds for new monitor sales, specifically in the U.S. market.

So U.S. market has continued to be challenging for us over the last 6 months. I do note an improvement. But in parallel to this, we've been working diligently on the fundamentals, and I'm happy to report that we have a 15% decrease in our operating expenses. We are reporting a 27% improvement in our EBITDA, and we're reporting a 46% improvement in our cash flow. And this is despite pretty much a 0 growth quarter. So let me come back a little bit more on the numbers and a little bit the background of the business.

Okay. So I wanted to comment on the recent announcement of our partnership with Philips. So I'm extremely pleased to announce this. This is the most important commercial agreement that we've signed so far. I would say it's the result of over 10 years of work. It's the result of our investments in innovation, in clinical and in market access. What we are planning to do is to jointly develop a portfolio of products based on each of our proprietary technologies. We will be driving the development and the manufacturing.

These will be our products and exactly what we are to develop and what to launch, that remains confidential until it comes out to market. This is an extremely strong validation of our technology. We're partnering with the global leader in patient monitoring and also one of the global leaders as a medical device company. What it does is that it significantly expands our market reach.

It will expand our reach way, way beyond the markets we are in today. And I expect this agreement to have a significant positive impact on our medium- to long-term financials. We're targeting new market segments. So this is importantly a complement to what we're doing today. This is a different product. It's going to complement what we are doing today with our portfolio. And the whole idea is also that it will leverage what we're doing. And I believe that the partnership has very nice synergies with the business we're in. So I've noticed before, we have been working over the last few years with many industry partners and leaders. I think this is -- the recent Philips announcement is alongside with this.

We're working with Fukuda in Japan, now with Philips on a more expanded level. And then we have connectivity of our solutions via GE, Masimo, Mindray, Getinge, Ascom and others. So we're really driving that the unique clinical data that we are creating is now integrated into systems and electronic health records around the world. Looking a little bit more on the numbers. So we continue, of course, to expand the TetraGraph base.

As I introduced, it was another tough quarter in terms of new monitor sales. We shipped out 239 monitors in the second quarter, and the number last year was significantly higher. I mean there's one comparable to this that we had 422 last year that were new TetraGraphs that we shipped out quite quickly as upgrades. So existing customers decided to upgrade from their classic TetraGraph. So there is some comparables to be noted in this perspective.

TetraSens sensors continues to grow very nicely, 56% growth, in kind, of rolling 12 units. We shipped out about 132,000 sensors. So this corresponds to a growth of about 48% in local currencies. So we're driving utilization with the customers that we have. If you look a little bit then on the product market mix in general. So I mean, we're becoming, as I've always said, more and more a sensor and utilization company. So over 80% of the business in Q2 was disposables. U.S. continues to be, despite a tougher macro climate, the big locomotive for us.

But overall, it was a little bit of a bumpy quarter. But again, underlying with 48% growth in local currencies for disposables, while new hardware and monitors took a little bit of a hit during the quarter. If we do a little bit of a deep dive into the U.S., and we've had significant investments in the market. We do have our own team.

If we look at sensors, they continue to grow well, 58% up, which is a good driver that utilization really works. The macro climate that I'm noting here is more that the big new hospital opportunities keep getting pushed forward. I think there is a fear of inflation, capital goods in general have had a tougher time to close.

So some headwinds, I do believe still we have the opportunity to catch up many of these deals. And as I noted, some of the deals this year versus last year were compared and affected by the rollout that we did last year of the new next-generation monitor. So U.S., I mean, if I look at the map, I've shown this before. This is just some highlights over the last 18 months. We've secured and won so many leading hospital systems all across the U.S. And this map is starting to get pretty messy, and this is just to mention a few of them. And then if I add on what's happened in the last couple of months, we've added more leading hospital systems.

So the map is starting to get really, really busy, and I'm extremely proud of what we're doing in the U.S. To note, 3 significant accounts or events that we press released during the quarter. The first one was entrance into one of the world's largest integrated delivery networks or IDNs. So this IDN has over 150 hospitals. We've now secured 6 of the hospitals within the system and really moving ourselves up the ladder. And I think we have an opportunity here that this could become the largest single account for us.

We expanded our presence in a very dominant and very leading U.S. hospital systems in the southeast of U.S. So we included another 65 TetraGraphs in that installation.

So this account alone has now 160 systems installed and is recurring -- is running at about SEK 6 million in annual recurring revenue. And the third important account was announcing a win, another big and important pediatric account. This is a nationally leading pediatric hospital in the Eastern U.S., and we secured it via a very well-executed competitive evaluation. Further announcements and further, what we did during the quarter was to get the TetraGraph included in the 3 leading GPOs in the U.S.

So more than about 95% of all U.S. hospitals or some -- in some way have GPO agreements. This is agreements that makes them buy and procure goods at a kind of a group purchasing level, meaning you get better prices and it's easier to acquire. So we secured among the 3 leading ones. This will, kind of, accelerate our access to about 5,000 hospitals in the U.S. And a GPO agreement per se does not give you instant business, but it's a hunting license, and we believe it will accelerate and it will make it easier to get access and win these accounts. So we did sign our first GPO agreement back in 2024. It remains intact.

We have delivered quite a lot of monitors. And there, we are the sole source supplier. There's a lot more to come in this space that I will come back to during this year. So in the U.S., we also did some organizational upgrades that we announced. Josi Wood joined us as our new Vice President of Sales. Josi has 20-plus years of experience in driving, growing and been very successful in winning within the medical device space, patient monitoring. So I'm very glad to have her. She joined us on May 11.

Jen Sanders was -- she's been with us for 5 years. She was promoted to be our Vice President of Clinical and Med Affairs. And then I just wanted to highlight that Wolfgang Reim, who's been an adviser to us, joined us as an ordinary Board member. He's extremely operational and helping. But Wolfgang has a history of being, among others, CEO of Drager, the anesthesia and patient monitoring company. He was also the CEO of parts of Siemens and running the U.S. business within ultrasound. So very strong knowledge in how to conquer the U.S. market.

So we continue also to lead. We continue to drive innovation, continue to be the leader in this field. We did announce during the quarter that we rolled out our new TetraSens. This is a European-made sensor, and that's important because it's produced with a minimum environmental footprint. It uses novel technologies. And by this, it's a more eco and sustainable product. And because of disposables in general, there's an overarching interest, specifically from European accounts to have sustainable products used in the operating room.

So I'm very happy about this, and this also gives us better unit economics in general. We also announced the launch of TetraAnalytics. This is a very powerful cloud-based analytics software. It's AI-ready. And what it does is that it gives you -- visualizes the data from TetraGraph systems. And I think it can turn it into clinical insights, and this is all about driving utilization. So a very powerful tool used in clinical practice to make sure that the TetraGraph are used as expected and then follow trends to make sure you are compliant to guidelines.

We had 2 important market approvals and expansions. So we got another FDA clearance. I'm pretty proud of it that we filed with the FDA in early April and already in mid-May, it was cleared. So a number of features that we have now on our future road map to be launched. And then we also announced that we got regulatory approval from ANVISA, which is the Brazilian equivalent to the FDA. So we have secured a partner. We have secured first orders. And in general, we've had some good success in the Latin American markets recently.

So we're now active in Chile, in Mexico, in Nicaragua and now in Brazil. And I think these are markets that typically follow a lot of what's going on in the U.S. and there's also local guidelines supporting our products. A little bit more on the numbers. So let's start by looking at the gross margin. So the gross margin continues to improve, and this is a consequence of getting a little bit better paid for the products, continuously lower the cost of production and a more favorable product mix with more sensors.

Tariffs, of course, and currency effects continue to affect these numbers. But if I look at overall, the reported gross margin of the quarter was 65.7%, which is an improvement over the last couple of quarters. So we're really moving in the right direction. I do believe that the gross margin will continue to improve, thanks to products, new business models. And we're also now -- we just received a few days ago, our first repayment from the U.S. tariffs. We received $116,000, and I have about $350,000 more than we are expecting likely coming in over the next couple of quarters.

Back to the fundamentals. As noted initially, operating expenses continue to decrease. We have an extremely cost-conscious and very efficient way of running our business and continue to drive cost down. So we reduced costs in the quarter with about SEK 6 million, down to SEK 34.2 million. So we decreased it over the 6 months with about 10%. If we look at EBITDA, we're continuing to make progress, a 27% improvement. This was about SEK 6.3 million. So now reducing it to minus SEK 17.3 million, and it's moving towards. And this is a result of better gross margin and lower operating expenses. And then to the cash flow that took the biggest improvement, 46%, equivalent to SEK 13.1 million, driven by improved results, of course, but also by a very diligent work on optimizing the working capital levels.

So we have SEK 37.1 million in our -- in cash end of the quarter, and then we have another SEK 42.5 million in a credit facility. Okay. A little bit short on the investor base. The overall cap chart remains fairly the same on top. I think the notable change is TIN Ny Teknik, the fund, they reduced their shareholding with just under 1.3 million shares. So those shares have been for sale on the market for some time. So just to recap again, 2 seconds, what is it we do again?

So remember, Senzime, we have our world-class unique system, the TetraGraph that is used in the operating room. It connects to our disposable sensor that stimulates the patient with small electrical impulses. And by doing this, then we can measure when is it the right timing to intubate the patient. When is it time to get them on the ventilator. And then we can manage the patient throughout the procedures to make sure that everybody gets the right individualized dose of paralytic drugs. And then we define exactly when is it safe to turn off the ventilator and let the patient breathe on its own.

So it's a way of personalizing anesthesia and making sure that nobody leaves the operating room with paralysis. And this is all based on over 40 years of research, and we have over 100 patents in the area. And remember, these TetraGraphs are used typically in the operating room with the anesthesiologist, very often in robotic surgery. And by using this type of technology, it's been shown that you can eliminate complications. So you can move the traditional 40% of patients moving out of operating rooms still paralyzed to 0. And by individualizing monitoring, you can reduce the cost of drugs significantly.

Okay. So to wrap this up, what are the key takeaways of the second quarter report? One is the evidence of our hard work in improving the business fundamentals. We continue to drive actions to move Senzime rapidly towards profitability. And this is shown by an increased gross margin. It continues to increase quarter-over-quarter. We continue to decrease our operating expense level down by 15%. We continue to improve our EBITDA as well as our cash flow. And our goal that by the end of the year, within the fourth quarter to show positive cash flow remains intact.

Number two, we're seeing a very strong underlying momentum in our sensor sales. We're growing at nearly 50% rate. So the business model works very well. Utilization is going up. And if I look specifically on our key U.S. accounts, they're moving very nicely in the right direction. We're rolling out innovations to further drive and improve utilization, and we keep winning new accounts around the world. And then number three, we're leading a very unique clinical and technology shift. And I am again extremely pleased to have announced the Philips agreement, a long-term agreement.

It's a landmark agreement for us where our technology portfolio is validated, and this will drive significant revenues for Senzime over the mid- to long term.

In parallel to that, our core business, we have the new U.S. GPO agreements that I think will open up for more business. And we have a world-class team working very hard every day to execute on the mission and vision, and I think we're moving very nicely in the right direction despite some macro headwinds. So -- thank you for listening and make sure to join us on our mission as we safeguard every patient's journey to wake up securely after anesthesia. Thank you.

Hello, everyone, and welcome to today's Live Q with Senzime. With me here, I have the CEO of Senzime, Philip Siberg. First of all, we will hear a presentation from him. And after that, we will have a Q&A session. And also, on our website, you can see that you can send in questions to the Q&A session. But first, we will hear the presentation from Philip.

Okay. Good morning, pleasure to be here. I am pleased to announce the Q1 2026 report from Senzime. So just to start off with kind of a high-level summary. So Q1 2026 was a little bit of an outlier quarter. We reported a temporary dip on our growth journey, yet, at the same time, we reported strength in margins and good cash flow. And the full year targets remain intact.

What kind of stuck out in Q1 was slower sales in the U.S., specifically of closing new monitor deals, and mainly driven what we've seen as delayed purchasing processes and a year starting with a bit of macro concerns in the U.S. Nevertheless, we reported 40% growth in our sensor sales, calculated in constant currencies. Our underlying gross margin continues to improve very nicely. And we also reported a good traction on our operating cash flow. So all in all, I remain confident in our full year targets despite the growth dip, and I will explain a little bit more on the background.

So let's deep dive a little bit specifically on the U.S. market that I mentioned. If you look at the U.S. business, it grew 11% in local currencies in U.S. dollars. Specifically look at disposables, the sensors, it grew at 55%. But then we were affected by, of course, the strong Swedish krona and the weak U.S. dollar. So versus the first quarter of last year, it was about 15% lower. So this ultimately led to our reported sales decreasing with 5% in the U.S., which was about SEK 2.5 million (sic) [ SEK 0.75 million ]. But as I said, the growth, I would say, was predominantly delayed because of TetraGraph deals that were delayed and many of them moved into the second quarter.

We do not see any of our deals that have been lost to competition. On the contrary, we've been secured with a number of verbal commitments, and we know that they are in the pipeline to close as they come. So during the quarter in the U.S., we shipped out 246 TetraGraphs, and I will tell you a little bit more about a new business model that we've launched as a complementary service. And of those 246, 120 of them were part of our new TetraGraph-as-a-Service model.

So if we look at the TetraGraph-as-a-Service, this is a business model that we've introduced in the U.S. It's a little bit of copying what's been common typically in the robotic surgery world. So what we do is that we provide the TetraGraph monitors on subscription. So we own them and we place them with hospitals. And then we charge customers with a premium on the disposables that are used. So for hospitals, this is a compelling rationale, because it shifts kind of the capital purchasing process rather to operational processes and costs. So it simplifies and accelerates purchasing processes.

And for us what it does is that it shortens sales cycles. The 2 deals that we have secured during the first quarter were closed at about half of the time versus a typical capital purchase. And if you look at the type of deals that we sell to customers, the value for us over time is about 90% of the revenues contribute from the sensors. So by having a variable sensor price, it creates strong margin enhancements for us over time. So the first 2 key wins in the U.S. were to 2 Ivy League hospitals on the East Coast, and we supplied them with 120 TetraGraphs to their hospitals.

So we have had a tradition of focusing very hard on the U.S. market, because that's where the conversion to our technology is happening the fastest. This is a map that I've shown before. We've had a lot of announced and big hospital wins over the last 15 months. And if I now start to add up to that one, and I put in -- so what we've done so far this year? And I'm saying year-to-date April.

So we've had a number of important accounts. We secured a big hospital extension in Florida. We recently announced a statewide IDN expansion deal. This is to become one of our larger customers with a run rate of about SEK 6 million a year. We announced an IDN entry. So we've entered into one of the largest IDNs in the world, secured a number of hospitals, both on the Central U.S., but also on the West Coast. And there's a huge potential for us to further leverage that opportunity. We've won a very important children's hospital in Texas and the Ivy League hospitals I already mentioned. So just to just give you a few of what's going on in the first 4 months of the year. So right now, in the U.S., we have about 250 hospitals as customers.

Okay. So to wrap up the U.S. and try to conclude a little bit and comparing the numbers apples-to-apples. So if you look at what it was last year. So last year, in Q1, that was the time when we rolled out the new next-generation TetraGraph. Quite a few of the rollouts were demo monitors and some were upgrades to accounts we already had. So if I compare that and then I look at, okay, what happened this quarter. So I had my reported sales, and then I had about SEK 2.5 million in currency effects, and on top of that, I had the TetraGraph-as-a-Service where it did not have a capital revenue, rather the long-term enhanced margin revenue on sensors. So if we look at that all in all, and just compare these apples, just to explain, there's about 6.5 million, the ratio of difference here. So the underlying business in the U.S. is still moving in the right trajectory.

Okay. So let's move on and look at, in general, the global business. So we continue to grow our installed base and grow our shipments of TetraGraph. So we've shipped over 5,500 TetraGraphs by now. In the quarter, we shipped out 376 in total versus 443 last year. And again, last year was a little bit boosted by upgrades and demo units that came out.

If we look at our disposable sensors, remember, this is a razor-razorblade business where each patient connects to a sensor. We continue to grow the sensor business very nicely. We passed the milestone during the quarter of 1 million monitored patients. And this is an important milestone for us. Not only does it help to enhance margins, we get economies of scale, but it also provides kind of the reference base for further growth. So if you look at the rolling 12 months of the sensors, and sometimes go up and down in volume, it's a 66% (sic) [ 27% ] growth.

So to sum up a little bit of sales numbers. We've talked about the U.S. here first in line. Europe has had a decent start of the year, almost 60% growth in terms of disposables. We also had a small currency negative effect because of the euro. The rest of the world had a little bit of weaker start of the year, still very strong belief in the opportunities in Japan and South Korea, and we will certainly catch up that during the year. So you can see, if you look at the spread of our business today, U.S. is a little bit less dependent and the sensor sales continue to be very strong as part of our company.

Something that was announced during the quarter and that we have preannounced before, but during the quarter, the actual publication of the new pediatric guideline was published. So this is a guideline set that was created by the European Society of Intensive Care and Anesthesia. And really what it says is that children that receive neuromuscular blocking drugs as part of surgery should be monitored using a quantitative neuromuscular monitor and preferably use an EMG-based solution because of the higher accuracy and reliability, and that's exactly what we offer.

So the pediatric opportunity is interesting. I mean it is a smaller part of our overall business. I would say it's about 5 million patients a year versus about 100 million in total for adults and all patients. But children are a specific group here. I mean, residual paralysis is common. And with residual paralysis, I mean that they wake up and they're still partly paralyzed. The consequences of this are serious. Children end up in postoperative care and they get all kinds of different respiratory issues. And the issue has been here, lack of available technology and a lack of kind of practice standards. So I think this is a very strong guideline, and we have had the fortune to work with a lot of the guideline authors. We've conducted a number of webinars and seminars, and I believe we have the support to really grow this business opportunity.

And to look like where are we in this pediatric opportunity. It has been a small yet important part of our business, but it's a notable number to see that in Q1 -- the number should actually be here 2026, I can see -- we actually threefold increased the sensor units, and we sold 65 TetraGraphs specifically delivered to pediatric operating rooms. So definitely a trend shift here, yet from small levels.

Another important news piece we had during the quarter is that we introduced what's called the TetraCom. The TetraCom is a novel technology that enables physicians and IT personnel to connect the Senzime TetraGraph directly to hospital health records, meaning directly into Epic and Oracle and other types of systems. And we do have a suite of partnerships where you can connect the data through providers such as Philips, Masimo, GE, and Mindray. But with the TetraCom, you can connect seamlessly, wirelessly directly into these systems. So it's a way for us to provide a service and also monetize on the data and the value to the customers.

Let's look a little bit more about the numbers. So gross margin, I mentioned initially that the underlying gross margin continues to improve, and it does. So in the quarter, the underlying gross margin was 69.3% (sic) [ 69.2% ]. We continue to improve it versus end of last year and Q1 last year. We continue to have a number of effects on the gross margin that are, I would say, beyond the company's control. We have the U.S. tariffs. They are still hitting us. We will see where that ends up, and we have the currency effect. So we had quite a hit on the currency in Q1. So the reported gross margin was 63.1%. We continue to increase pricing. We are noting U.S. pricing levels now for us increasing. So I continue to iterate that the gross margin will improve over time.

If we look at our operating expense level, I've iterated before, we continue to keep it very flat. So we try to grow this business rapidly with a flat operating expense curve. We were actually down 5% versus last year and almost 17.5% versus Q4 of last year. And this is important, because we continue to invest in sales, in marketing, in med affairs, and we continue to do a lot of science to be the industry leader in our field.

If we then move down the profit and loss and look at the cash flow. So I think the cash flow stood out this quarter. It improved by 33%. Yes, we are still negative, but as we work diligently on optimizing working capital, we're starting to see that the burn rate is significantly getting down. EBITDA was slightly better than last year. Net earnings improved drastically, which was majority of focus or a result of currency effects. So we had SEK 55.3 million in cash by the end of the quarter, and then we have a credit facility of an additional SEK 42.5 million. So I think we're well funded for our venture.

And to comment on the credit facility, this was something we announced in conjunction with our Q4 report, but just to iterate it again, we had a group of key shareholders and a bank, DBT, which is part of NOBA Bank Group, that provided us with a credit facility of SEK 50 million. This is to be used for working capital purposes to give us the flexibility to grow very fast. And there are no warrants, no dilutive instruments or any other type of special conversion rights. We have called for SEK 7.5 million of this, and that was part of a contractual obligation as part of the credit facility from DBT Group.

If we look at our shareholder base, if we look at the kind of the top 10, it hasn't changed very much. There are some small changes, but the top 5 shareholders remain very strong and intact. We have 3,600 shareholders. There has been some good trading volumes. So definitely has been shares trading hands. I don't have the specifics of who's been buying or selling at this point.

Okay. So a little bit back on the goals and where are we. As I've said so many times before, we're on a mission here to radically build and create the undisputed market leader within quantitative neuromuscular monitoring. We're targeting a very big market. There's a lot of hospitals, and there's a lot of operating rooms left to be converted. And the outlook for our business is that we're going to continue to grow in line with what we've done in the past. So if you look at our full year goal, it remains strong and intact despite this little dip in the growth rate of Q1. And we're going to make this happen by continued streamlining and optimizing the gross margin, continuing to scale down on the operating expense level and continue to grow our recurring base of revenues.

So just a minute on what is it we do again. So remember, we have developed -- we're the first in the world to have pioneered a technology, make it available in operating rooms to make sure that people are intubated at the right time, that they get the right amount of these paralytic drugs and the reversals of them, and that they are extubated at the right time. Sophisticated technology. We have over 109 patents now, 40 years of research behind this, but a very smart real-time technology to assess and monitor the level of paralysis in the patient. And this is specifically important in operating rooms where, for example, you're doing robotic surgery. This is just an example picture from a Swedish hospital, a good customer of ours. But what's been seen in published research, if you use the type of technology we have, you can eliminate complications related to these dangerous drugs. And you can actually reduce the amount of these drugs by 70%. So you're not only saving the patient, but you're saving the hospital a lot of money on this.

So to wrap up on the key takeaways. I mean, we are in a hyper growth journey. We've had a CAGR of almost 60% over the last 5 years. Yes, Q1 stuck out a little bit, but that curve is going to continue. Operating expenses and margins, we are improving. We're on the path to profitability. There is a strong demand for our products out there. The pipeline is strong. We have a lot going on and I think will materialize, and I'll come back to that. And again, the guidelines are there, the science is there, and the clinical need is there. And we have the people, we have the technology, and we have the funding to make it happen. So join us on our mission as we safeguard every patient's journey from anesthesia to recovery. Thank you.

Perfect. Thank you very much for the presentation.

Thank you.

So we have received some questions, and I'll also have some questions by myself. First, maybe we can focus on the sales. Came in a bit lower than expected. You also stated that this is mainly due to FX, also a softer U.S. market. You also believe that this is temporary. What kind of arguments do you have for that statement?

Yes. I mean, like I said, it was an outlier, a little bit of kind of a onetime quarter. I think we saw that so many of these opportunities have been working on for a long time. Just had a difficulty. I mean there's these budget processes, the year starts, and it was difficult this year to really get it to close as fast as we were hoping. So we just saw a general -- specifically in the U.S., that is like 60%, 70% of our business, which is pushed forward. And it was difficult to put a very, very sharp kind of excuse on it, but just hearing like, okay, macro level, we're a little bit concerned about what's going to happen in inflation rates in the U.S., et cetera. So it just kind of gently pushed.

And I think we caught up a little bit here and some of the things that happened early April. And I feel that the market is kind of waking up. And I've noticed some industry colleagues and peers seeing similar types of -- a little bit of a whirlwind in the U.S. market in Q1.

Because also, if we look at your press releases during Q2, it has been a better order flow. However, of course, you do not press release all of your orders.

No, we don't.

But you would say that, in general, it looks much better during Q2?

I mean, so far, so good. We're just 3 weeks into April, but I feel more confident now than I did a couple of weeks ago. And I feel a different tonality, so definitely.

Perfect. I was actually a bit surprised about the sensor sales during the quarter, because if you look at your installed base, it continues to increase. And I expect the sensor sales to increase quarter-by-quarter. What is the reason behind that? Is that delayed orders as well?

Yes. I mean there's always a little bit of fluctuations between months. And some sensor orders came in on the 30th of December and then it kind of stocked up. So I think I don't see any -- there's no kind of worrying trends or differences. It just kind of comes and goes with a little bit of ordering patterns. But perhaps what I noted a little bit -- I was looking at the same thing, why it's a little bit -- it's just -- I mean, we had a number of big hospital opportunities and wins that we did last year. And it's just taking time for things to materialize. And for example, we were awarded this big NHS contract in the U.K. in December, and the hospital is still working to get everything installed and getting it planned as part of their operations. So we're a little bit tied in the hands behind the big hospital systems.

And what about the rest of the world markets? It was also a little bit of a setback there as well.

Yes. So if we start way to the East, so Japan, we announced in December that they got the regulatory approval for a new system. They started rolling it out early January. They've secured -- so we had a pretty good kind of volume shipment to them in December. They've now started to win deals. So they're on good progression. Japan is going to do the big kind of major launch in May in the Japanese market. South Korea keeps doing well. We're still struggling with the regulatory approval. It takes time in South Korea. So a couple of months left, I believe. And South Korea is on a good trajectory. It was just a little bit of phase between the quarters in terms of sensor shipments. So nothing really that stood out in any way. But South Korea is a little bit awaiting the new TetraGraph to be approved.

But do you still expect a little bit of a bounce back?

I do. I do. Yes. And I have -- I mean, in Asia, I have 2 very strong partners. They give me very clear, like accurate pipelines. So I feel more confident working with them.

Perfect. Also, I received a question from an investor. You write that no deals have been lost and that several purchases were postponed into Q2. How much of these delayed deals have already materialized or been confirmed after the end of the quarter?

Yes. I mean, good question. And the deals typically, specifically in the U.S., are always -- the larger ones are competitive in some way. So the hospitals invite 2 or 3 of us in the industry, they evaluate it and they test it. And so we always try to understand like did we win this competitive deal or not. And we continue to have very strong win rate when there's a competitive deal. Then there might be deals happening outside that we know of, of course, but others are winning. But as I noted, we've seen that a number of these deals, we typically get a verbal acceptance afterwards. They say, okay, we've chosen your system, there's been a vote, we like it, and now it goes to contracting purchasing. And that's the process that sometimes takes time, because you end up in a big bunch of contracts and sometimes it takes a week and sometimes it takes 9 months. But overall, some of these things that we knew about came in now and they keep on coming in. Yes.

Perfect. Let's leave the sales for now and focus on the costs, because I also received a few questions about the cost development. OpEx during this quarter came in at SEK 35.6 million. It's a little bit of a decrease. What kind of level should we expect in the upcoming quarters?

I mean, we're going to continue on that type of a level that we are now, potentially even a little bit lower. I mean, we've invested heavily in bringing out a new technology to market. But I think the larger we get, the bigger scale and the leverage we have. So as we're now inside IDNs, we're inside hospital systems, the cost of sales will reduce over time, because we can automatically get scale effects from where we are. And we've done a lot -- a lot of groundwork has been done. So that's why I keep on saying, we're foreseeing that we can keep this level potentially even a little bit lower, just being a lot more effective and a lot of the work done, so now it's just about execution.

So when you also say that maybe OpEx can even go down a bit, is that mainly, if we talk about the specific line item, is it selling expenses and so on?

Just always being super cost conscious and keeping everything under control.

Yes. Also, if we talk about -- you changed your business model a bit when you're now offering the TetraGraph for free. So my question is, what has the market response been?

Yes. We don't offer it for free. We offer it as a service.

Yes.

So I think the response has been very positive, because even the hospitals know that contracting purposes or process can take over 2 years. So by doing this, by coming in, it just changes the opportunity to be more a standard operational. And the deals that we announced were closed in just a couple of months. So it's a different shift. And I mean, some big hospital systems, they want to own the capital. They have the funding and that's part of their business. But many are used to this kind of just a service process. We take care of it. And we can control it. And if they don't deliver on the volumes that we want them to, we simply take them back and we move into the next hospital. So it's a flexibility for us. But again, the value is here in the premium price that we get on the sensors. And then we do a lot of other kind of compliance requirements in terms of training and other things that they should do. So I believe this -- I will come back in the next quarter to show that this is actually going to drive up utilization.

But if you look at the number of monitors that were delivered during this quarter, it was 367 sic [ 376 ], if I'm correct. And was it around 250 in the U.S...

Something like that. Yes.

And 120 of them were as a service.

Yes.

Do you expect it to be like 50-50 between the...

Roughly, probably a little bit lower on the service side, but somewhere around there.

Yes. Great. Also, another investor wanted to know more about TetraCom. Also about that. Maybe you can -- what has the...

Yes. I mean, as I presented it -- I mean, it's a platform technology offering connectivity of our systems directly into electronic health records. And when you sell this, you typically sell it under the IT budget. So the IT budgets, if I generalize them, there is a little bit more elasticity there, there's a little bit more funds available. They understand the cost. So by doing this, we can add a cost. We sell the TetraCom at a specific price point. And then we also charge for an annual service fee for this. So we kind of introduce both. We upscale the TetraGraph hardware device, but also get even more kind of recurring revenues on it.

And then there's some other benefits to this is that we can actually pull out the data as well. We can use the data for continued product development, research purposes, and can help the customers to summarize the data and kind of AI-generated reports to see how are they doing, how are they progressing to guidelines and to best practices, et cetera. So there's a number of benefits.

But it's always -- sometimes the rollout, it always takes some time and so...

It does take some time. We're just about to wrap up the first big installation with the TetraCom.

Okay. But when do you expect that we can see significant numbers in quarterly reports?

I think, later this year.

And you will disclose it separately or...

I will try to, yes, hopefully.

Great. Also, I wanted to talk to you about the contract that you signed with this major IDN in the U.S. So maybe you can just talk more about that, because it's a huge potential.

It is. Yes, definitely. I mean, again, IDNs control a large part of U.S. health care. It's like big clusters of hospital systems. Some of the bigger ones have up towards 150 to 200 hospitals. So there's strong powerful kind of mechanisms. And getting in there, the benefit of them is that you can ultimately get centralized contracts, but it's a long path. And you need to work your way [ underwards ] and you need to win hospitals and then get key opinion leaders who drive and mandate for your technology and then get them to ultimately convince the C-suite on top. And we've been working on this big kind of umbrella IDN for a long time, and we've now made our way into different corners of this IDN, and we identified the champion who is driving this internally.

So why I wanted to make a news announcement about it is just because I think there is an apparent opportunity to grow this and become kind of a centralized vendor within the IDN system. So that was one important. I mean the other one that we announced last week was also interesting because there, we're already in, and it shows just how we can expand within an IDN once you're in. Sales process is faster. It's already validated. And again, I can grow the business with limited expenses, because I'm already in the system.

But what's the probability -- if I talk about the first IDNs, up to 150 or more than 150 hospitals, what is the probability that you will, let's say, a couple of years or a few years that you will have TetraGraph monitors on each of these hospitals?

I think it's unlikely that we'll have it in 150 hospitals. But I think there's an opportunity to become a big supplier to the whole of the system, definitely. And as guidelines increase kind of the requirement of them, I think, yes, there is ultimately an opportunity to have it. I just want to be moderately careful in my expectations.

Okay. Great. I'll turn to the next question actually about the U.S. market, about your whole addressable market. How much would you see that you are penetrating at the moment?

We're just skimming the ocean here. Like I said in the presentation, we have about 250 hospitals as customers. The U.S. has roughly 5,500 hospitals. On top of that, you have a number of ambulatory surgery centers. So there's a lot left to be done. And the driving force is, again, references, the products, the guidelines. And one thing that stood out that I'm starting to hear, there's more and more legal lawsuits going on in the U.S. market, where hospitals have not had adequate monitoring, patients have had complications, and they're now saying that, okay, well, we need to have this type of technology, because we're not guidelines compliant. So that will ultimately help to drive our business and accelerate it.

Great. And also, what would you say is the -- when you have these dialogues with hospitals, of course, you have a high win rate, but what are the biggest reasons why hospitals do not want to adopt TetraGraph?

I've always said that the worst competitor I have is kind of the anesthesiologist who's been doing one way for 40 years and doesn't want to change.

But now you have the guidelines.

Yes, yes. So I mean, we have a target to have 80% compliance. That's what we see. And some of our best customers are up towards 90% compliance, but you will never get 100% compliance of any technology in a hospital despite guidelines or standard of care. There's always going to be discrepancy. So it's just hard work time and then getting -- we're trying to help every single hospital to adopt kind of protocolization and make it standard of care, so you get to that 80% to 90% compliance rate.

Perfect. But if we look into the rest of this year, and maybe except the U.S., what other markets would you say will be extra interesting to follow in this year?

I mean, we've always kind of tried to keep it focused on a couple of Asian countries, Europe and the U.S. We have some interesting outlier markets that are popping up. I mentioned last year, we got approval in Mexico, for example. We've had some notable deals won during the first 4 months here in Mexico. So that's an interesting market. Mexico kind of resembles a lot about U.S. Recently, we had market approval in Saudi and a couple of Middle Eastern countries. I think Saudi is a very interesting market. And I think that's going to be our major markets in the future. It's just a little bit disrupted down there right now, so it's delayed some of the things. But we have a great partner. They are working on getting the kind of local buy-in. So I think we're going to have traction in there. And then we continue to expand very carefully, very sharply without more expenses, but we got approval in Vietnam. We got approval in Taiwan. So we're expanding carefully with partners.

Yes. Also, you stated in the report that you continue to have the objective to become cash flow positive at the end of this year. Looking into this quarter, a little bit of a setback, you expect a bounce back in upcoming quarters, also cost to maybe be flat or even decrease a bit. But how confident are you that you will be cash flow positive in Q4?

Yes. So a number of things need to happen. One, we need to keep on growing. We have a strong pipeline, specifically U.S. market, but also together with our partners. So we need to continue to leverage on that. We need to see that the recurring revenues -- remember, the sensors are recurring revenues. And they were, what, 70%, 74% of the business. So that keeps growing up. The gross margin, I've talked a lot about before, it will continue to grow. There are some volume things happening here. We kind of celebrated this 1 million mark, and that triggered kind of a volume price component to it. So the gross margin has all the prerequisites to really increase.

And we'll see about the tariffs. We just started the project yesterday. I was trying to get back. We have paid about roughly SEK 5 million in tariffs to the U.S. It would be fantastic if we get that money back. It's going to probably -- we're probably going to get a little bit back, I believe, now hearing, but it's going to take time. And then the third part is strict cost control. So these 3 things, plus working with working capital, getting paid faster and then being optimal there, all those stars aligned together, I still believe strongly that we have the opportunity to get to these goals.

And as you mentioned, the gross margin, if we look at your numbers in the presentation, it was at minus 4.4% in currency effect. Do you have any plans for any actions to maybe reduce that? Because it's always difficult FX.

Definitely. I mean, we increased the prices in the U.S. I'm seeing -- there was about 5% increase now that I saw on the average sales price. So it's started to kick in. I think we're trying to always get a higher price point, and we're building into every single contract that we are independent of tariffs, et cetera, that, that will -- so we've backed off to do kind of currency hedging, because there's always -- it's a lottery here, which way it will go, we do not know. And for now, we're just trying to stabilize the cost.

And also your other, not objective, maybe it's more of a guidance that you have a sales growth in 2026 in line with previous years. Are you still that confident of that one?

I am. And that's why I reiterated that the long-term targets remain intact, yes. We set up -- I mean, we haven't guided anyway this year in terms of quarter. We set a goal for the year, and we said that we want to continue to grow in the same pace as before. And that means in absolute terms to grow in the same kind of base that we have. And again, we do it by recurring base of business, winning new deals and getting more recurring on that one. And the further we progress as a company, the bigger the base is, and we're just -- we're getting scale. That's really the message here.

And what about the cash situation? Yes, do you believe that it will be sufficient to...

Yes. I mean, we were clear in the report and the annual report. I mean, we have the funds needed to do this. If we, for some reason, foresee that we need to accelerate things again or do differently, then things can change. But I have the support from strong shareholders. We did the credit line to have like a backup, and we're not foreseeing any low-priced rights issues or anything like that to happen.

Perfect. Just one last question before we end. Or is there anything else that you would like to highlight?

No, I'm just -- I mean, I wasn't -- when you're on a growth journey like we are, I've tried to kind of raise a warning signal in the past. Some quarters will have a little bit of a dip. You can't have -- but I've had the fortune to, every single quarter, quarter after quarter the last 3 years, always have a fantastic growth. So it hurts, and I'm annoyed when the growth curve takes a dip, but it just creates more energy and more confidence. We're going to get back. It's just about grit and delivery.

Yes. I hope that we see a really good bounce back in Q2. Thank you very much. Thank you for being here.

Thanks.

Okay. Good morning. Pleasure to be here. I am pleased to announce the Q1 '2026 report from Senzime. So just to start off with kind of a high-level summary. So Q1 2026 was a little bit of an outlier quarter. We reported a temporary dip on our growth journey, yet at the same time, we reported strength in margins and good cash flow. And the full year targets remain intact.

What kind of stuck out in Q1 was slower sales in the U.S., specifically of closing new monitor deals, and mainly driven what we've seen as delayed purchasing processes and a year starting with a bit of macro concerns in the U.S. Nevertheless, we reported 40% growth in our sensor sales, calculated in constant currencies. Our underlying gross margin continues to improve very nicely. And we also reported a good traction on our operating cash flow. So all in all, I remain confident in our full year targets despite the growth dip, and I will explain a little bit more on the background.

So let's deep dive a little bit specifically on the U.S. market that I mentioned. If you look at the U.S. business, it grew 11% in local currencies in U.S. dollars. Specifically look at disposables and sensors, it grew at 55%. But then we were affected by, of course, the strong Swedish krona and the weak U.S. dollar. So versus the first quarter of last year, it was about 15% lower. So this ultimately led to our reported sales decreasing with 5% in the U.S., which was about SEK 2.5 million (sic) [ SEK 0.75 million ]. But as I said, the growth, I would say, was predominantly delayed because of TetraGraph deals that were delayed and many of them moved into the second quarter. We do not see any of our deals that have been lost to competition. On the contrary, we've been secured with a number of verbal commitments, and we know that they are in the pipeline to close as they come. So during the quarter in the U.S., we shipped out 246 TetraGraphs, and I will tell you a little bit more about a new business model that we've launched as a complementary service. And of those 246, 120 of them were part of our new TetraGraph-as-a-Service model.

So if we look at the TetraGraph-as-a-Service, this is a business model that we've introduced in the U.S. It's a little bit of copying what's been common typically in the robotic surgery world. So what we do is that we provide the TetraGraph monitors on subscription. So we own them and we place them with hospitals. And then we charge customers with a premium on the disposables that are used. So for hospitals, this is a compelling rationale because it shifts kind of the capital purchasing process rather to operational processes and costs. So it simplifies and accelerates purchasing processes.

And for us what it does is that it shortens sales cycles. The 2 deals that we have secured during the first quarter were closed at about half of the time versus a typical capital purchase. And if you look at the type of deals that we sell to customers, the value for us over time is about 90% of the revenues contribute from the sensors. So by having a variable sensor price, it creates strong margin enhancements for us over time. So the first 2 key wins in the U.S. were to 2 Ivy League hospitals on the East Coast, and we supplied them with 120 TetraGraphs to their hospitals.

So we have had a tradition of focusing very hard on the U.S. market because that's where the conversion to our technology is happening the fastest. This is a map that I've shown before. We've had a lot of announced and big hospital wins over the last 15 months. And if I now start to add up to that one, and I put in -- so what we've done so far this year? And I'm saying year-to-date April.

So we've had a number of important accounts. We secured a big hospital extension in Florida. We recently announced a statewide IDN expansion deal. This is to become one of our larger customers with a run rate of about SEK 6 million a year. We announced an IDN entry. So we've entered into one of the largest IDNs in the world, secured a number of hospitals, both on the Central U.S., but also on the West Coast. And there's a huge potential for us to further leverage that opportunity. We've won a very important children's hospital in Texas and the Ivy League hospitals I already mentioned. So just to just give you a few of what's going on in the first 4 months of the year. So right now, in the U.S., we have about 250 hospitals as customers.

Okay. So to wrap up the U.S. and try to conclude a little bit and comparing the numbers apples-to-apples. So if you look at what it was last year. So last year, in Q1, that was the time when we rolled out the new next-generation TetraGraph. Quite a few of the rollouts were demo monitors and some were upgrades to accounts we already had. So if I compare that and then I look at, okay, what happened this quarter. So I had my reported sales, and then I had about SEK 2.5 million in currency effects, and on top of that, I had the TetraGraph-as-a-Service where it did not have a capital revenue, rather the long-term enhanced margin revenue on sensors. So if we look at that all in all, and just compare these apples, just to explain, there's about 6.5 million, the ratio of difference here. So the underlying business in the U.S. is still moving in the right trajectory.

Okay. So let's move on and look at, in general, the global business. So we continue to grow our installed base and grow our shipments of TetraGraph. So we've shipped over 5,500 TetraGraphs by now. In the quarter, we shipped out 376 in total versus 443 last year. And again, last year was a little bit boosted by upgrades and demo units that came out.

If we look at our disposable sensors, remember, this is a razor-razorblade business where each patient connects to a sensor. We continue to grow the sensor business very nicely. We passed the milestone during the quarter of 1 million monitored patients. And this is an important milestone for us. Not only does it help to enhance margins, we get economies of scale, but it also provides kind of the reference base for further growth. So if you look at the rolling 12 months of the sensors, and sometimes go up and down in volume, it's a 66% (sic) [ 27% ] growth.

So to sum up a little bit of sales numbers. We've talked about the U.S. here first in line. Europe has had a decent start of the year, almost 60% growth in terms of disposables. We also had a small currency negative effect because of the euro. The rest of the world had a little bit of weaker start of the year, still very strong belief in the opportunities in Japan and South Korea, and we will certainly catch up that during the year. So you can see, if you look at the spread of our business today, U.S. is a little bit less dependent and the sensor sales continue to be very strong as part of our company.

Something that was announced during the quarter and that we have preannounced before, but during the quarter, the actual publication of the new pediatric guideline was published. So this is a guideline set that was created by the European Society of Intensive Care and Anesthesia. And really what it says is that children that receive neuromuscular blocking drugs as part of surgery should be monitored using a quantitative neuromuscular monitor and preferably use an EMG-based solution because of the higher accuracy and reliability, and that's exactly what we offer.

So the pediatric opportunity is interesting. I mean it is a smaller part of our overall business. I would say it's about 5 million patients a year versus about 100 million in total for adults and all patients. But children are a specific group here. I mean, residual paralysis is common. And with residual paralysis, I mean that they wake up and they're still partly paralyzed. The consequences of this are serious. Children end up in postoperative care and they get all kinds of different respiratory issues. And the issue has been here, lack of available technology and a lack of kind of practice standards. So I think this is a very strong guideline, and we have had the fortune to work with a lot of the guideline authors. We've conducted a number of webinars and seminars, and I believe we have the support to really grow this business opportunity.

And to look like where are we in this pediatric opportunity. It has been a small yet important part of our business, but it's a notable number to see that in Q1 -- the number should actually be here 2026, I can see -- we actually threefold increased the sensor units, and we sold 65 TetraGraphs specifically delivered to pediatric operating rooms. So definitely a trend shift here, yet from small levels.

Another important news piece we had during the quarter is that we introduced what's called the TetraCom. The TetraCom is a novel technology that enables physicians and IT personnel to connect the Senzime TetraGraph directly to hospital health records, meaning directly into Epic and Oracle and other types of systems. And we do have a suite of partnerships where you can connect the data through providers such as Philips, Masimo, GE, and Mindray. But with the TetraCom, you can connect seamlessly, wirelessly directly into these systems. So it's a way for us to provide a service and also monetize on the data and the value to the customers.

Let's look a little bit more about the numbers. So gross margin, I mentioned initially that the underlying gross margin continues to improve, and it does. So in the quarter, the underlying gross margin was 69.3% (sic) [ 69.2% ]. We continue to improve it versus end of last year and Q1 last year. We continue to have a number of effects on the gross margin that are, I would say, beyond the company's control. We have the U.S. tariffs. They are still hitting us. We will see where that ends up, and we have the currency effect. So we had quite a hit on the currency in Q1. So the reported gross margin was 63.1%. We continue to increase pricing. We are noting U.S. pricing levels now for us increasing. So I continue to iterate that the gross margin will improve over time.

If we look at our operating expense level, I've iterated before, we continue to keep it very flat. So we try to grow this business rapidly with a flat operating expense curve. We were actually down 5% versus last year and almost 17.5% versus Q4 of last year. And this is important, because we continue to invest in sales, in marketing, in med affairs, and we continue to do a lot of science to be the industry leader in our field.

If we then move down the profit and loss and look at the cash flow. So I think the cash flow stood out this quarter. It improved by 33%. Yes, we are still negative, but as we work diligently on optimizing working capital, we're starting to see that the burn rate is significantly getting down. EBITDA was slightly better than last year. Net earnings improved drastically, which was majority of focus or a result of currency effects. So we had SEK 55.3 million in cash by the end of the quarter, and then we have a credit facility of an additional SEK 42.5 million. So I think we're well funded for our venture.

And to comment on the credit facility, this was something we announced in conjunction with our Q4 report, but just to iterate it again, we had a group of key shareholders and a bank, DBT, which is part of NOBA Bank Group, that provided us with a credit facility of SEK 50 million. This is to be used for working capital purposes to give us the flexibility to grow very fast. And there are no warrants, no dilutive instruments or any other type of special conversion rights. We have called for SEK 7.5 million of this, and that was part of a contractual obligation as part of the credit facility from DBT Group.

If we look at our shareholder base, if we look at the kind of the top 10, it hasn't changed very much. There are some small changes, but the top 5 shareholders remain very strong and intact. We have 3,600 shareholders. There has been some good trading volumes. So definitely has been shares trading hands. I don't have the specifics of who's been buying or selling at this point.

Okay. So a little bit back on the goals and where are we. As I've said so many times before, we're on a mission here to radically build and create the undisputed market leader within quantitative neuromuscular monitoring. We're targeting a very big market. There's a lot of hospitals, and there's a lot of operating rooms left to be converted. And the outlook for our business is that we're going to continue to grow in line with what we've done in the past. So if you look at our full year goal, it remains strong and intact despite this little dip in the growth rate of Q1. And we're going to make this happen by continued streamlining and optimizing the gross margin, continuing to scale down on the operating expense level and continue to grow our recurring base of revenues.

So just a minute on what is it we do again. So remember, we have developed -- we're the first in the world to have pioneered a technology, make it available in operating rooms to make sure that people are intubated at the right time, that they get the right amount of these paralytic drugs and the reversals of them, and that they are extubated at the right time. Sophisticated technology. We have over 109 patents now, 40 years of research behind this, but a very smart real-time technology to assess and monitor the level of paralysis in the patient. And this is specifically important in operating rooms where, for example, you're doing robotic surgery. This is just an example picture from a Swedish hospital, a good customer of ours. But what's been seen in published research, if you use the type of technology we have, you can eliminate complications related to these dangerous drugs. And you can actually reduce the amount of these drugs by 70%. So you're not only saving the patient, but you're saving the hospital a lot of money on this.

So to wrap up on the key takeaways. I mean, we are in a hyper growth journey. We've had a CAGR of almost 60% over the last 5 years. Yes, Q1 stuck out a little bit, but that curve is going to continue. Operating expenses and margins, we are improving. We're on the path to profitability. There is a strong demand for our products out there. The pipeline is strong. We have a lot going on and I think will materialize, and I'll come back to that. And again, the guidelines are there, the science is there, and the clinical need is there. And we have the people, we have the technology, and we have the funding to make it happen. So join us on our mission as we safeguard every patient's journey from anesthesia to recovery. Thank you.

Good morning. Pleasure to be here. I'm here to present Senzime Q4 2025 results as well as a brief summary of the year of 2025. So if we start by looking at overall 2025, it was a year of continued accelerated growth, and we took clear continued steps towards profitability.

We grew about 90% in constant currencies. So we met the guidance of reaching above SEK 110 million in constant currencies. Our underlying gross margin increased. Our OpEx remained stable and our adjusted EBITDA improved by about 16%.

So the fundamentals are there. We're really reconfirming our goal to reach positive cash flow during 2026, and this is going to be fueled by continued growth and stringent cost control.

So this was a summary. I'll dig down deeper into the numbers. If we look at Q4 alone, it was a strong ending to the year. We more than doubled the business. We reached SEK 28.3 million in reported revenues and SEK 31.2 million if you're looking at the constant currencies.

The growth was driven by more important hospital wins, very strong sensor growth. We had more guidelines coming in that I'll dig deeper into, and we had an exciting regulatory approval in Japan that started kicking off the next gen.

And it was also a quarter of launching additional new products. We came out with the EMGINE software suite that I will talk a little bit more about. So if you look at our installed base of TetraGraphs and the shipments we're doing, it keeps on growing.

Throughout the year, we shipped out 2,139 TetraGraphs, predominantly the next-gen TetraGraph comparable to just under 900 the year before. So strong growth. If we look at Q4 stand-alone, it was 416 units. It's notable that some of these units, a few hundred are hospitals that have upgraded from the older platform to our new next-generation platform. Hence, the installed base is slightly lower than the 5,100 mark you see here.

What's encouraging is the growth and the continued growth in sensors. Remember, there's one sensor for every patient connects to the TetraGraph. So throughout the year, we shipped over 440,000 sensors strong ending again in Q4. We shipped just over 140,000 sensors versus 67,000 sensors Q4 in '24.

So more than double growth in sensor use. So we're seeing an increasing utilization of the systems out there in the market. If we look at geographies and product groups, we had strong growth throughout the global markets we are active in.

U.S. continues to be our biggest market with approximately 70% of the sales. We are noting more growth also in other regions. So we're becoming more and more a diversified global region company.

Europe had a phenomenal year with nearly double growth, and Japan and Korea had exceptional growth with very strong uptake of our markets. So we're -- you can see that we're now transitioning from being a hardware company to truly a sensor company with sensor being more than 70% of the business and really an interesting deep dive into this.

If we look at a little bit -- start with the U.S. and see what's going on there. We announced a number of strategic wins throughout the last 12 months. This is a mix of integrated delivery networks. It is university hospital systems. It is Veterans Affairs. One of the key wins last year was delivering to Department of Defense and the Walter Reed Presidential Hospital in Washington, D.C.

So we're really winning ground in the U.S. and winning the key hospitals who are driving this shift to electromyography-based neuromuscular monitoring. It's also notable, like I said before, that some of these accounts upgraded throughout the year from our previous classic version to the new next-generation version.

And if I compare utilization rates, the utilization is up in excess of 50% in the accounts that have upgraded to the new system. So the new next-gen TetraGraph is really driving up utilization and is very well accepted by clinicians.

Okay. So what is driving this underlying growth? There are 3 perspectives on this. One is, of course, patient outcomes. It's truly proven that quantitative neuromuscular monitoring is driving patient safety. The second pillar is reducing costs. We're helping to significantly reduce the amount of anesthesia drugs by using monitoring to individualize the guidance and the therapy during anesthesia.

And the third pillar is, of course, to be guideline compliant. So there are strong drivers of our business. If we then move to the European market, as I mentioned, we had strong growth throughout the European market. One notable hospital win was announced in December. This was a major -- one of the leading NHS hospitals in the U.K.

It was the largest deal so far that we have announced in Europe. It was over 70 monitors that are going to be used for standardized neuromuscular monitoring. And we believe this is an excellent reference and inroad to the NHS system.

And remember, the U.K. was early with guidelines. It's just been a very slow transition in moving into the guidelines, and we believe this is going to open a lot more doors. The deal was secured by our local partner in the U.K., Healthcare 21, doing a phenomenal job in working the market.

Another snapshot, South Korea, just an interesting market, one of our major growth markets in Asia. The South Korean market is often known to be an early adopter kind of driving new technology, setting new standards in Asia. We have a few hundred TetraGraph Classic TetraGraph installed in the market, and we've seen an incredible uptick in the usage of these systems over the last 3 years.

And the curve and the bar graph to the bottom left is showing how this installed base of TetraGraph Classic monitors in a number of key hospitals in South Korea has really taken off from low levels to being in excess of 250 patients roughly now on average, and it's anticipated to grow additionally.

So I think the success factor here is a very strong local partner. There is some type of reimbursement available in the South Korean market. And finally, the health care strike there has helped to open up the doors again, and we believe there's going to be more uptick in the South Korean market.

The last pillar of our journey was in December, we announced that our next-generation TetraGraph received regulatory approval in Japan. We had an initial order that we shipped to Fukuda Denshi, our local partner and have strong beliefs in the 2026 numbers as we roll out the next gen.

Okay. Just a glimpse back on the guidelines. I mentioned this before. But since over the last 15 years, there has been a number of national and international guidelines that have been published in favor of our technology and the mission we are on.

During 2025, there were a number of important guidelines that came out. We had the Japanese society who updated their guidelines to say that every patient should be monitored using an objective type of monitoring technique.

We had the pediatric guidelines. We had the German society who kind of sharpened them, and we have Difficult Airway Society. And if we just look into these quickly, what was preannounced during the fall was that the ESPA, which is the Pediatric Society for Anesthesia came out and said specifically recommending EMG-based quantitative monitoring on children due to its higher accuracy and better reliability.

So we noted a strong uptake since these were presented in early Q4. We had a number of clinics reach out to us, and we started to deliver TetraGraphs to pediatric hospitals across Europe. The other interesting part here is about the airway itself.

Now remember, paralytic drugs are used to facilitate safe surgery. And remember, they're used to make sure that the patient lies absolutely still. And once you get these drugs, it takes about between 1 to 2 minutes, you're paralyzed, you cannot breathe anymore and you need to be intubated and mechanically ventilated to breathe.

And the timing of such intubation is very important because you want to intubate when the vocal cords are relaxed and open, so you safely can intubate the patient and put them on the ventilator.

And remember, there's about 100 million patients and more that are intubated every year. And if you look at research, between 5% to 20% of patients are damaged or receive some type of complication because they are intubated at the wrong timing.

So new guidelines have now come out saying that quantitative neuromuscular monitoring shall be used to confirm adequate neuromuscular block before tracheal intubation. So this is -- what this means is that you should use a monitor that we have to assess the right timing, when is it safe to intubate the patient.

So this really drives the TetraGraph of not just being a monitoring system, but also to a decision support system. So timely on this matter, there was a study performed late last year at Mayo Clinic in the U.S. What they did was that they randomized a group of patients to either kind of subjective timing-based intubation, typically waiting for 2 minutes and then just intubate.

And then the other group, they used the TetraGraph to define, okay, by science and monitoring, I want to define the perfect timing for intubation. And what this study came out in November and showed that by using the TetraGraph to define the right timing to intubation and make sure safety, you had a significantly higher proportion.

It was superior in detecting the ideal conditions for intubation. So as a result of this, we introduced in December what we call the TetraGraph Intubation Readiness indicator. It gives clinicians a scientifically validated number to understand, okay, when is it safe to intubate? When are the vocal cords in perfect shape so you can intubate the patient.

So this was a strong new innovation that we've driven, and it's patent pending, and I think it's going to be a very important driver of safe intubation. So we continue to do groundbreaking innovation and really to personalize anesthesia. We launched in Q4 what we call the EMGINE software platform. It's our operating system that runs the TetraGraph.

So the uniqueness of the TetraGraph is that we are collecting billions of data points from our users. We're using that clinical data to continuously update, innovate and perfect the system.

So we continue to develop new things. And just as in -- with your phone, with your computer or your car, you are expecting to be continuously updated with the latest features and improvements. And this is exactly what the TetraGraph is about.

By being a user, you can be assured that you will get continuous improvements, the latest innovations and groundbreaking research brought into your operating room. So we will continue to bring out new features as we go along to our existing user base.

Okay. Let's look a little bit some numbers. Gross margin. As I said, the underlying gross margin has improved and it has done so because of product mix, but also because we're seeing lower production costs. If we compare the whole year, the underlying gross margin was 66.7% versus 64.4% the year before.

If we look at specifically Q4, we had an uptick to 69.3%. But then we had 2025 was a year of various events. We had the U.S. tariffs come in. So the U.S. tariffs hit us with about 1.3% negative on the gross margin, which was in line with previous statements I've done.

And then we have the weakened U.S. dollar that hit the gross margin with another 2.6% negative throughout the year. And then as we now are focusing so diligently on the next-gen TetraGraph, we made a onetime noncash driving write-off or write-down of raw material and components for our older TetraGraph system.

So we made a write-off of SEK 10.7 million, which was a onetime thing that hit the Q4 numbers. And again, we're doing it because we're seeing the growth for the next gen, and that's where we want to focus our efforts going forward.

We are continuing to raise pricing. We're continuing to introduce new innovative business models. So in '26, we anticipate quite an uptick in our gross margin. If we look at our expense level, I also guided about a year ago saying that the operating expense level of Senzime is to increase maximum of about single-digit percentage.

And we increased our direct expenses with 1.9% over the full year versus the year before. And this is despite major commercial investments in the U.S. We grew the sales team. We invested in a new medical affairs department. We continue to grow out our marketing team.

So if you look at Q4, the operating expense level was pretty flat compared to the year before. And the strategy for Senzime continues to be rapid growth while maintaining a very stable operating expense level.

So we are moving towards profitability. EBITDA continues to improve. We had a 16% improvement. I'm reporting here adjusted, meaning took out the onetime inventory write-down. By the end of the year, we had SEK 74 million in cash, and we had a little bit of money still pending from a non-closed shares issue last summer.

We are growing rapidly and growing rapidly means working capital needs and optimizing the inventory for fast deliveries. What we constructed here is a credit facility. We have secured SEK 50 million, and this is a credit facility to secure working capital needs as we grow.

The credit facility is a combination of a loan provided by DBT Capital, which is part of NOBA Bank Group. But also in large, it is a credit facility provided by our major shareholders and using, as I said, for working capital purposes.

This is a credit facility without any type of warrants, other dilutive instruments or special conversion rights. It's done at fair market terms, and I think it signals a strong vote of confidence from our major shareholders and confirming that we have the long-term financing need to take this to pure profitability.

So our investor base continues to be very strong. I think that the major changes that we noted in 2025 was Handelsbanken left us as well as Carnegie Funds. We had an uptake from other investors come in. We grew the amount of shareholders with about 30% over the year. So we're seeing a strong interest in the share itself.

Looking a little bit forward-looking. I mean, the mission, I think you guys know it by now, this is about safeguarding every patient's journey from anesthesia to recovery. It's about developing user-friendly systems that are used in the operating room to drive a new standard of care.

We're targeting a big market in excess of 100 million patients. We're running towards 160,000 operating rooms, and we're targeting over 15,000 hospitals. And it's about winning by science, commercial excellence and working with the best partners in the market.

So if you look at our outlook for this year, given that the uncertainties in the currency rates and the difficulty in predictability them, what we've done is we've made a clear new statement.

2026 is about maintaining strong sales growth in line with our previous years and to generate positive cash flow within the fourth quarter. And we're going to make this happen by strong growth, fixed expenses and a strong uptick in our gross margin. Our longer-term goals remain very intact. This is about building a strong global market leader, and we believe that the next milestone of this is reaching SEK 1 billion in sales.

Okay. So to wrap up, some key takeaways. One, Senzime, we are a hyper-growth company. We've had phenomenal growth over the quarter-by-quarter. We had a little bit of uptick Q4 in 2024, where we launched the new next gen and everybody waited to get deliveries.

Operating expenses remained stable. We're improving our EBITDA, and we're on path for profitability. Number two, we're winning a technology shift. There is a very strong demand for the next-gen TetraGraph. There's a strong demand for our technology.

Electromyography is changing in every operating room out there, and we're winning the key hospitals, who are driving the change. And number three is the guidelines and the building blocks. We have the guidelines. We're backed by long-term science. The clinical need is apparent, and we have the long-term funding and the shareholder base to succeed.

So that's the wrap-up. And I want to join everybody to really -- we're on a mission. We're there, again, as I said, we're there to safeguard every patient's journey. We have the technology, we have the team and we have the platform to make sure that everybody wakes up safe from anesthesia. Thank you.

Hi, everyone, and welcome to Redeye and today's interview with the CEO of Senzime, Philip Siberg. Welcome, Philip.

Thank you. Nice to be here.

Earlier today, you released your Q4 report, and we also have some investor questions. But first, maybe we can have like a broad question at first. If you talk about the sales, SEK 28.3 million during the fourth quarter. You also installed 416 new TetraGraphs systems. How would you summarize the quarter and also, of course, the full year of 2025?

So Q4 was pretty good. We doubled the business more than that. I had probably expected more. So a little bit came in, in January. It's always hard to define these closings of large hospital systems. But all in all, I think we had another strong year. We delivered according to our messaging and our guidance. We're continuing to strengthen our market position, and we're seeing a continued very fast conversion to our technology. And it's interesting to see as well that it's not just U.S. now that we -- in the Q4, we had strong uptake in Asia and European market as well.

And you mentioned the timing there. But if we look at the number of new installed systems, 416, if you compare that to Q2 2025 and also to Q3, it's a bit lower. But that also depends on how many upgrades you have been doing during the quarter. So maybe you can elaborate on that. And yes.

Yes. So I mean, during 2025, we definitely had a few U.S. accounts specifically who decided to upgrade from the previous classic TetraGraph to our new next generation. The response has been very positive. And as I presented, the utilization rate has spiked up significantly among these accounts and seeing across the line over 50% uptick in usage.

So there were a few hundred devices last year, I think predominantly during the spring and summer that were upgrade deals, while during the fall, it was more normal deliveries. I think it -- I mean, the number of monitors varies a little bit quarter-to-quarter, just depending on when the contracts come in. And as I mentioned, just we had some major contracts come in, in January instead of closing in December. December and Q4 is specifically in the U.S., a tricky quarter. It's Thanksgiving, it's holiday season, and it's hard to push purchasing and contracting to close with the same urgency as we want as a company.

Great. And if we look at the full year, the total sales or the reported total sales came in a bit lower than your guidance of SEK 110 million to SEK 140 million. However, if we look at the fixed currencies, you reached that target. Of course, one of the reasons is the weakened dollar. Are there any other reasons why you're in the lower end of this guidance if we look at fixed currencies?

Yes. Thanks for good summary. Definitely, the dollar and the euro affected us top line-wise. We had expected regulatory processes in Japan and South Korea to move faster than they did. So we had expected for the year to start delivering great volumes of next-generation TetraGraphs into these regions. We did get the regulatory PMDA approval in Japan in December. So we had our first shipments there. And Korea is still in the process and should happen mid- to late 2026.

So once that is in place, I foresee continued strong growth there. So that -- and uncertainties in some of these deals when they come in or not, I think it was really the currency effects and just delayed regulatory processes beyond our control.

Maybe we can also focus a bit on the South Korean market because I saw your presentation earlier today, and you showed a really nice graph about the usage rate in South Korea, and it has increased a lot. What are the main reasons for this?

So I think it's -- South Korea is an interesting early adopter, fast-moving market, likes technology. We came in there a couple of years ago with a strong partner. We've been kind of methodically working to develop it, and now we're really seeing the results from it. I would say that we have a strong market position by now. Our local partner is successful in their business model.

I'm just seeing that the conversion to EMG is now kind of double-digit conversion. So moving very fast. And there is a little bit of reimbursement available in the local market, which we believe is going to increase as well as come into the Japanese market. So those are some of the driving factors. But I think that it showcases as an example of how we can develop markets once we're in there and working methodically, you can get to these types of utilization rates, which is in line with our long-term plans.

Great. If we move on, also talk about the costs. OpEx increased a bit during Q4 if compared to, for example, Q3. Maybe you can add some color to that.

It did. I mean Q4 is always a more expensive quarter. We have a lot of marketing events. We always have our big congresses happening. And there's always a little bit of an extra boost in terms of sales expenses and commissions. But we did have roughly SEK 4 million to SEK 5 million that were, I would say, onetime effects in the fourth quarter. I did not separately report these as onetime effects, but they were certain expenses that we incurred that we took in Q4. So I think it's -- as we look ahead for 2026 and this year, we're anticipating a flat to decreased operating expense level for this year.

And when you have that guidance, does that include the one-offs in Q4?

So the one-offs are not supposed to happen again in 2026. So that's why I foresee an operating expense level, which is lower than what we had in 2025.

Great. Also in the report, you had this inventory write-down in the cost of goods sold. What is the reason behind this?

Yes. So the reason -- I mean, we've had the TetraGraph Classic on the market for a couple of years. And then as most of you know, we introduced the next generation just over a year ago. That platform has been extremely well received. We're seeing increased uptick in usage. So we decided here strategically that we want to carefully start end-of-lifing the classic because of the superiority of the NextGen platform and really the focus that we're doing it.

So we decided to make a write-off of some of the older raw material and kind of components related to it and decided to take it in the '25 books. We're still going to remain with the product in the market. We need to have it for 7 years as part of regulatory requirements, but really pushing out the NextGen at a higher price point this year and continue to drive up utilization rates.

Because if we look into 2026, first of all, maybe what trends do you currently see? And also in the report, you have the guidance that you expect growth to be at the same level as in previous years and also you expect to become cash flow positive during Q4 this year. Yes, maybe you can just summarize your overall expectations and also how will you -- what will you do and what actions will you make to reach this target?

Yes. I think the -- I mean, the headwinds of our business and the tailwinds, sorry, continue to be strong. I mean there's a continued very strong underlying macro effect for neuromuscular monitoring in general, more and more guidelines coming out, more and more data supporting the conversion. I would say that the EMG technology that we are spearheading has certainly taken over as the new gold standard. But it's -- you don't convert large hospital systems overnight, but I think we're winning after winning, and we're really making our success story here.

So as I look into this year, we're foreseeing continued growth in all our markets. We're foreseeing continued increase in utilization and using of sensors. And how we do that is work very tightly with our customers. We have a dedicated clinical team that helps to educate, helps to create standardization protocols.

We're very methodical in the way we choose our customers. So we make sure that wherever we sell and that we install, there is a clear long-term uptick and usage trend among our customers. I mean we've seen published papers come out looking at other technologies on the market, other similar types of products. And when you don't have that kind of support that we offer, then the usage rates are very poor. So that's part of our mission to have the science, have the team and have the technology to really drive up usage.

Interesting. Also, this morning, you also announced that you have secured a SEK 50 million credit facility. What are the reasons behind this?

Yes. So we -- I mean, as part of being a fast-growing company, you have -- we have a working capital needs here. We partly need to -- the expectations from our customers are very fast deliveries. So we're kind of tying up a fair amount of capital in inventory, et cetera. And what we wanted to kind of show and have is just the security as we continue to grow that we have this kind of a credit line.

So as we have peaks in working capital needs throughout the next 18 months, 24 months, we have the ability to kind of draw that money. And I've been clear to the market before that we're not expecting to do any rights issues or capital raises from equity rather we're funding this company now based on our customers, but also having a little bit of -- we're growing up as a company. I think it's a strong vote of confidence showing that we have a bank and a credit facility to continue to grow this company.

And again, this is fair market terms. There are no special covenants or other types of dilutive instruments tied to this. So it more gives the company an assurance to continue to grow in the path we're on.

And also, I guess that this could be related to actually one of the questions that we got from an investor. If you could -- yes, you have talked about introducing a new business model. What is that -- what kind of business model is this?

Yes. So we're -- I mean, we're seeing that -- I mean, if you look at reference case, Intuitive and the da Vinci robots, I mean, probably the most successful medical device company out there. A big part of their business case has been to do different types of robotics as a service. And we've just seen that there's been a customer demand among hospitals to offer if we could have the TetraGraph as a service offering where you link it to usage rates of disposables.

So what we've introduced is a Tetragraph as a service business model. We then offer the monitors on a placement type of agreement. We get a premium pricing for the sensors. We link it to various types of agreements around this. And what we've seen is that the sales cycle reduces about 50% in time because the hospital is no longer relying on burdensome capital processes.

So this makes it easier to rapidly deploy into large accounts. We won a number of these deals. It ties up a little bit more working capital or CapEx for us because we own the instruments, the monitors. But the upside of this is that we're getting a significant premium on the sensors. So the return on investment of this is very short and long term, it drives up gross margin and ultimately revenues and earnings.

But just to clarify, this is only in the U.S., right?

This is the U.S. only.

Yes. But if you look into 2026 then, how many of your new customers do you expect to have this updated business model and...

Yes, it's hard to say exactly the split. I mean there's definitely a lot of interest among hospitals, but hospitals also are very clear on their strategies. Some simply want to do capital purchases. They want to own the goods. Some of our best customers in the U.S., we have placement agreements with, where we tie usage of the device and secure revenues from that. But this is a third business model where we provide it as a service. But I think that we're going to see a large part of our -- a significant part of our business this year in the U.S. is going to be that. And we've already signed two important deals very fast this year. So I think it's going to help to drive business.

Interesting. Also, another question from an investor was about the manufacturing of the system and also the sensors. Could you elaborate a bit more on the manufacturing location and also components and so on? Where do they come from?

Yes. So we're Uppsala based. We have a strategy. We produce all the monitors here in-house. I try to drive a very church tower principle, meaning that I want to see my suppliers. I want them to be local because we drive a very sustainable business model in the production where ISO 14001. We are connected to the UN Global Compact. So it's all about making sustainable production.

So we produce it in-house. We have the capacity here for the next 5 years to meet the business plan in the current setup. The disposables, we are the legal manufacturer as well, but we produce them together with partners. And we are shifting all our kind of sub-supplies and base manufacturing from Asia to Europe. So we're really localizing this to be a European, Scandinavian manufacturing process.

Many of the investor questions have already been discussed in previous questions during this interview, but we also got a question about if you could give an update on the patent situation?

Yes. So we continue to invest and really drive innovation and science in the market we are in. We currently have 107 patents approved for our portfolio. We filed 8 new patents in 2025. So really driving field and coming out with new innovations. And I've shared before, what we're doing here is we're continuously coming out with a new feature set and more and more becoming a software company where we're providing -- since we're pulling in so much data from our users, we can use that data to further train, innovate, come out with new feature sets.

So our customers can always be assured that they have the latest science and features and benefits of the technology that we have. So a customer of Senzime is not just buying a onetime device. They're buying a 7-year cycle of significant new feature sets coming out that will ultimately drive patient outcomes.

Great. Maybe just the last question here because we haven't talked about that yet, if there are any other Senzime products that are in development?

There is always a lot of exciting things in development. So keep your eye out. We're going to come out with more things this year. And this is I would say, solutions and products that are adjacent to what we're doing today to help drive up usage rates to make it more universally connectable. Remember that probably 99% of all our monitors today are connected to electronic health records and external monitors. So it needs to be universally connectable to any system and transmit data. But there's more in the pipeline, and there is more in our research lab that we have in the long-term road map, including further development of the RMI ExSpiron technology that we also have in-house. And there are exciting things that are to come. I will get back when that is ready.

And I guess that we all look forward to that. Thank you very much, Philip, for this interview.

Thank you very much.

Okay. Good morning, good afternoon, depending on where you are. Welcome to this summary presentation of our first 9 months of 2025 and a little bit deep dive into our third quarter of '25. So let's start with a little bit of a high-level summary of what we've achieved this year so far.

We've had exceptional growth, 80% in constant currencies. Sensor deliveries continue to perform very well with unit growth of 78%. Our underlying gross margin keeps on improving, thanks to decreased production costs.

Our operating expenses are in line with plan, remaining fairly constant, and our EBITDA improved by 20% over the first 9 months. So really, what's happening here is twofold. We are growing our installed base of TetraGraph systems.

We shipped 553 monitors during the second -- during the third quarter, sorry. So that makes our year-to-date shipments 1,723 monitors compared to 776 of last year. So we keep on growing our installed base and delivered units very fast.

Equally, the amount of sensors, which are used on every single patient that the TetraGraph is used for keeps on growing as well. We shipped over 300,000 sensors the last 9 months, and this continues to grow in a very nice exponential growth rate.

If we continue to look at what we've done over the last couple of quarters, I mean, we continue to be one of the fastest-growing medical device companies on the NASDAQ main market.

We've had a hockey stick type of business since our products came out, since we rolled out a fantastic commercial organization, strong focus on the U.S. market and also have had strong help from clinical guidelines around the world.

So we're running at about a run rate of SEK 90 million this year. If I look at the last 3 months, we are far beyond SEK 100 million. So if we look at more kind of actuals, including the currency effect. So we have been hit by the dollar and a little bit by the euro.

If we look at net sales in the third quarter, we reached SEK 26.5 million. So that means over the 9 months, we are at SEK 75.7 million. Sales growth was, during the first 9 months, about 70%. And if I currency adjusted it and looking at constant currencies, it was 80%.

I'll come back to gross margin and OpEx later in the presentation, and we will talk about those in more detail. If we look at our different markets around the world, we're growing very nicely in all our markets.

U.S. continues to be the locomotive. In the third quarter, it was 73% of our business. But equally, we're growing very nicely as well in Asia and Europe. And if we look at Asia, that is predominantly South Korea and Japan.

We nearly doubled the business this year. It's driven by South Korea, very strong growth, very high utilization of our monitors in the South Korean market. There is part reimbursement for our sensors that helps to drive the business.

If we look at the Japanese market, our licensee, Fukuda Denshi is performing very well with the integrated module with our technology that they launched to the market about a year ago.

If we do a little bit of a deep dive into the U.S. market, we've announced a number of major deals this year. These are big hospital system wins. Typically, they're competitive valuations. Typically, they are part of a substantial kind of clinical review and understanding and deep dive into our system.

If we look at what happened in Q3, we announced the win of a major California-based university hospital system. So that kind of adds up to our list of strong California accounts.

We also announced that we secured the third of what is typically determined as the world's leading hospital system, which is based in the U.S. So now we have supplied all 3 of these hospital systems with our technology.

One deal that I would like to mention was a contract that we were awarded by the U.S. Department of Defense. And this is specifically for delivering TetraGraph units to all major surgical operating rooms at the Walter Reed Presidential Hospital just outside Washington, D.C.

I think this is a very nice landmark win for a company like us to be able to meet the specifications to really win and be the supplier to -- this is supplying health care to the U.S. administration, to members of Congress, and it's been the presidential hospital in the U.S. for over 50 years.

So if we do a little bit of a snapshot on the U.S. market, what I did here is I summarize 5 of our more leading U.S. hospital accounts. What you see here on the y-axis is the number of sensors used per TetraGraph monitoring week. It's a way of understanding what is the utilization rate.

If you look at the pink line, that is what it was year-to-date last year, first 9 months. And if you look at the blue line, that is what the year-to-date is this year. So all these accounts have upgraded to our next-generation TetraGraph system that we launched about a year ago.

If I summarize these 5 accounts, the utilization rate is up about 50%. So we're seeing that the new system is driving usage and the commercial team that we have in combination with science and research is really driving up the usage rate.

So if I look at, again, these accounts, they are, in average, a run rate of about SEK 2.5 million in sensor sales per year. So this is a nice recurring type of business that we are in.

Okay. So I'm just back from the ANESTHESIOLOGY meeting. This is the major event of the year in our market. It's held in the U.S. It attracts typically about 10,000 to 12,000 people. This is where science is announced. This is where the latest technology is announced.

And I just came home with such an energy. I mean it's very clear like we are the industry leader in our field. And of course, we have an extraordinary team to help make that happen.

We have a number of key opinion leaders that are truly backing up what we are doing and helping to drive the message. And then number three, research on our products continues to be very strong, and we saw also data at the meeting that competitive devices do not meet the same type of utilization rates that we can achieve.

At the Congress, we took the opportunity to launch our latest software suite. We call it the EMGINE suite. And this is the result of thousands of data points and thousands of patients, actually billions of data points and thousands of patients.

So what we do with the TetraGraph is that we download data and via the cloud can use that to continuously improve and make -- come out with new features.

So our users are always promised with a commitment that we'll come out with new advanced features to help make neuromuscular monitoring more simple, more accurate and really help to drive standard of care. At the anesthesiology meeting, we also had a -- we held a large symposium about neuromuscular monitoring and implementation strategies. And I just want to take the opportunity and highlight one of the quotes.

So Dr. Aaron Persinger, he's an anesthesiologist. He's based in Colorado. I think he said something very nice. Bringing the next-generation TetraGraph into our community hospital has transformed how we manage neuromuscular block. It has improved patient safety, has standardized our practices and has reduced our annual drug spend by more than $100,000.

Equally, we were recently announced by one of many market-leading institutes of looking at what's happening from an independent point of view outside.

So Intel market research summarized that Senzime AB has emerged as a frontrunner in this space, leveraging its proprietary electromyography technology to capture about 15% of the share -- market share in 2024.

So I think this just kind of gives a flavor of what are we doing and where are we. The last part of this U.S. excitement is the QUANTUM study. So this is the largest outcome study done to date within neuromuscular monitoring. It's over 1,000 patients.

And this leading University of Texas hospital system is going to compare qualitative to quantitative monitoring and truly prove that by using the type of technology that we have, they're going to use our TetraGraph system is that it improves patient outcomes.

The study is well underway, and it's planned to be finalized in 2026, and results presented thereafter. So I think this is going to help to additionally leverage the market space we are in.

Okay. I've been talking about guidelines for many years. And since 15 years back when the Helsinki Declaration of anesthetic safety for patients came out, a number of countries and societies have adapted to this.

The latest to come out was the pediatric guidelines that were announced by ESPA, which is the European Society of Pediatric Anesthesia. They came out just a few weeks ago recommending that all kids should be monitored with preference to electromyography-based technology, so EMG-based technology. This is exactly what our TetraGraph system is based on.

So I think this is a strong marker and signals that our technology is on the forefront and is what's going to be part of future guidelines. So that was one to mention.

The other one was Japan. So Japan has had guidelines in this field for a couple of years. They announced an update to the guidelines here in September, where they more stringently said that it's time to use a quantitative monitor, before it was more general, you should monitor.

So Japanese doctors, if you look at research, they are more prone to follow guidelines. I'm excited about the opportunities that lie in front of us here.

Okay. Integration and partnerships. This is also a key component of our growth strategy. We have been working with a lot of industry partners over the years. We started with Philips. We started then working with Masimo and Fukuda and GE. The 2 latest additions to our portfolio are Mindray and Getinge.

So with Mindray, which is one of the world-leading patient monitoring companies, we now have a collaboration where you can connect the TetraGraph into a Mindray system. You can either display the data on a Mindray patient monitor or you can have the data transfer to electronic health records.

And similar, we've done with a technology part of Getinge. I mean these are all very important strategic puzzle bits on our journey because 99% of our technology today is sold and required to be integrated into larger systems.

Okay. Let's deep dive in a little bit to the numbers and the financials. And predominantly, let's look at the gross margin. As I said initially, the underlying gross margin continues to improve very nicely. But we were affected by a number of effects hitting the reported gross margin during the quarter and during this year.

So the underlying gross margin for the quarter was 69.2%. And if we look at the table to the right, I've broken out what are the things and what are the effects that are negatively affecting the gross margin to a reported level.

So the new U.S. tariffs hit us with 2%. The currency effects, predominantly the U.S. dollar hit us with 3.4%. And then we had a number of contractual upgrades. This means that we upgraded customers and hospitals that had our older generation TetraGraph system to the new NextGen.

A number of these upgrades were done because of contractual obligations where we have provided a technology type of insurance to give them the latest technology. The preference and why we're doing this is because it's driving utilization.

As I said earlier, we've shown and we've seen now with the new generation, the next-generation TetraGraph, we get a higher utilization rate and a higher rate of sold sensors. So the reported gross margin for the quarter was 61.2%.

If we look at the first 9 months, we have similar types of numbers, reported gross margin at 68.1% and then a number of effects coming down to reported adjusted gross margin of 62.9%. So on the positive side, we're seeing very good traction from lower production costs.

On the positive side, we're also starting to work very diligently with increasing U.S. price levels. The first contracts have been renegotiated. And I think from 2026, we're going to see a broader rollout of increased pricing that will help to mitigate the effects of the U.S. tariffs.

If we look at our operating expense levels, it continues to be stable and on plan. As communicated before, the strategy of Senzime is to grow at hyper speed while maintaining a very fixed rate of expenses.

And I'm well on that plan, I feel. And then if we look at the steps towards profitability, we are moving in a very nice trajectory with our EBITDA. We remain on a negative level. We are investing heavily into technology, into development, into the marketing and really kind of winning this market segment.

So we are taking steps. We were 20% better in the first 9 months and the trajectory of this looks very nice. At the end of the quarter -- of the second quarter -- sorry, the third quarter, we had SEK 106.3 million in cash and bank. So we're well funded for our journey.

Just a quick recap, what is it we do again? I mean we are a leader in the field of personalized anesthesia. We're backed by years of research, a lot of science, and we're backed by over about 100 patents covering our technology.

The TetraGraph system is used now in thousands of operating rooms around the world. It's used to help determine the right dose of paralytic drugs that are used during surgery.

It's used perioperatively and in real time to determine that every single patient gets the right dose of drugs and that every patient is also extubated or woken up for a safe recovery at the right time, so they can leave the operating room safe of postoperative complications.

The technology is based on the monitoring system and the disposable sensor. And really, what we're addressing is a market with over 100 million patients every year that get paralytic drugs as part of surgery.

They get it as part of the anesthesia. It's used to paralyze the patient to make sure they lie perfectly still. These drugs are quite scary because you get paralyzed in 45 seconds. So you lose the ability to breathe, and you need to be on a ventilator.

So research after research has shown that if you don't monitor these patients very rigorously and accurately, up to 40% of patients leave the operating room as they've been woken up, still partly paralyzed, typically having breathing problems, they get respiratory issues.

They may need to be reintubated and some people need to go back to the ICU. So this is a large problem, which leads to increased length of stay and also excessive drug costs. And one of these drug costs is the use of reversal drugs.

So when you get paralyzed, they will use an antidote in the end of the surgery to make sure that you get antiparalyzed, so to say. These drugs are also very expensive and need to be carefully monitored to make sure you get the right dose.

There was an interesting study that came out last year showing that 87% of all patients that receive these reversal drugs, they are overdosed, while 13% of the patients are underdosed. So this just proves that 100% of the patients actually get the wrong dose.

And by using our type of technology, you can eliminate those types of problems and get the right dose for every patient. So this is a picture I've shown before, a typical setup. The TetraGraph is used in a modern operating room where you have the da Vinci robot in the back.

The procedure is important where the patient is very deeply blocked. The patient needs to be absolutely lying still because you're working with a robot to the procedure.

So here, you can see the TetraGraph here monitoring very low levels of neuromuscular block. And what has been shown with this type of technology that it eliminates complications. You know exactly that the patient can leave the operating room safely.

It's been shown to reduce drug costs by over 70%. And you will know that the robotic surgeon can safely perform the procedure without complications.

Okay. So a little bit of our goals. I mean, we're on a mission here to really build the undisputed market leader in this fast-growing emerging market. The goal is to be the leader, as I said, in electromyography-based neuromuscular monitoring.

We're going to win this race by being the scientific leader by commercial excellence and having a strong partnerships with the leading medical device companies out there.

So it's really about safeguarding every single patient's journey from anesthesia to recovery. If we look a little bit about the outlook. So in February, we communicated a range, which we did an estimate of what we thought the revenues will be for this year.

We did that estimate based on a U.S. dollar rate that was about 15% higher than it is today. And this is the life of currencies. And it's a management challenge that I cannot control. But I remain confident that we will be able to reach the range that we communicated.

We will do it within constant currencies, and it's supported by the recurring growth that we have in sensors, but also because of a number of large deals that we have secured.

We're just waiting for the orders to come in and -- that we can ship them and recognize the revenue according to plan. We also defined a goal for our OpEx level for the year, and that remains very nicely on plan.

Okay. So to wrap it all up, what is this all about? And what are we doing here? So we are driving patient safety. We're driving reduced health care costs, and we have a check on that.

The other part of the triad is generating strong growth and making sure we are the strongest market leader in the sector, check. We're on that path.

And then also to generate strong returns to our investors. We're showing clear steps towards profitability. We're on the path to profits. So again, join us on our mission.

I mean we're safeguarding every single patient's journey from anesthesia to recovery. We're driving a paradigm shift. Senzime is a fantastic company. Any questions, reach out to me. You want to place orders, give me a call. Thank you.

Hi. Welcome to Redeye and this interview with the CEO of Senzime, Philip Siberg. Welcome.

Thank you.

So first, Philip will give us an introduction to the company. And then afterwards, we will have an Q&A session. So Philip, the stage is yours.

Thank you very much. Pleasure to be here. We are a medical device company. We're based in Uppsala, Sweden. We're in the field of precision-based monitoring of patients as they undergo surgery and are under anesthesia. We've developed a technology, which is world-leading, enabling that every patient that is under anesthesia gets the right amount of dose of these paralytic drugs and are woken up and extubated at the right time to secure a safe recovery after surgery.

Our technology is the TetraGraph system. It's based on over 40 years of development. It's sprung out of Mayo Clinic in the U.S. and research of Professor Sorin Brull, which is a world-renowned anesthesiologist. We brought the technology to market in the U.S. starting in 2020. And since then, we've brought and installed over 4,000 TetraGraph systems in hospitals in the U.S., Europe, Japan, South Korea and other countries. It's a typical razor-razorblade business model where we provide the monitor and then you connect a single-use sensor on the arm, which stimulates and records the neuromuscular function of the patient.

And this is used in real time in the operating room to assess the level of blockade. And what that means is understanding how these paralytic drugs are affecting your body, how much dose you need specifically need and when these toxic substances are out of the body and it's safe to wake you up and take you into recovery. We are a hypergrowth company in a commercial phase. So we're past the regulatory hurdles. We have FDA, CE and many other countries in regulatory approvals.

We are -- have about half of our commercial team based in the U.S. We have a small subsidiary in Germany, and then we have distribution and license partners covering about 40 countries in the world. And by now, we've monitored over 750,000 patients. So very well-established presence in the global market. If we just look at the product again, the TetraGraph, you'll see that the system that we developed is used bedside in the operating room. It's used by the anesthesiologist. It will monitor, as I said, in real time using these disposable sensors, each sensor, one for every single patient.

The beauty here is the accuracy and the ease of use. So by using our digital technology, which is powered by smart algorithms, the patient is stimulated with a small electrical current that travels through the nerve system and the muscle. And by this, you can measure the response rate in the muscle and by that, give a very, very accurate number on the level of block that the patient is in.

And this is, as I said, used throughout the surgery, you pull off the sensor and then you know that it's safe to wake up the patient. That's where we are. We are developing -- continuing to develop more products in our field to be -- continue to be the niche leader. We have very high-set targets. We are to become the market leader in our field, and we're well away on our path to profitability as we go on.

Thank you very much for the presentation.

Thank you.

So I wonder, first, if we could talk a bit more about the market for the TetraGraph system. What does it look like in terms of competition, current standard of care and so on?

Well, if we look at the market in general, there's about 160 million to 200 million major surgeries conducted in the world. About half of these patients receive paralytic drugs. It's part of the anesthesia package where you want to keep the patient asleep. You want to make them paralyzed, so they're lying still, which is important, for example, in robotics and laparoscopic surgery. And then you want to make sure they're not into pain. So we are addressing about half of these patients, which is about 100 million patients a year.

The competition here is divided into several buckets. I would say the largest competition is not monitoring at all. So despite these drugs being on the market for over 40, 50, 60 years, there has been a tradition of more subjectively assessing, okay, this patient needs this dose. I think this patient is fine. I can wake them up, et cetera. In the last 20, 30 years, new technology emerged that started to measure analog, measuring the responses by looking at muscle movement.

And that technology is pretty well established, has about 50% penetration in operating rooms, I would say, in the world. And what worse spearheading is making this digital, making it algorithm-based and making it personalized and moving from an accuracy, which has been down to plus/minus 50%, taking this to 99.3% accuracy. So making sure that every patient gets the perfect monitoring experience.

I also glad that you mentioned about the subjective versus objective monitoring. Maybe you could elaborate a bit more on what health economical benefits objective monitoring has.

Yes. So there's thousands of studies in the field we are in. And all these studies have ultimately led to a number of clinical guidelines. So a lot of countries, U.S., Europe, Japan and many other countries have adopted guidelines because they've seen that there is clinical benefit and there's cost justification of our type of technology. There are also very large independent studies showing that if you are not -- if you're leaving the operating room and you're still partly paralyzed with these drugs, you are prone to get what's called residual paralysis, which is that you're still partly paralyzed, you get breathing problems, and that leads to extended stay in the postoperative care. It leads to increased expenses. So that's one part of it.

The other part is when you're in the operating room itself, you want to personalize the dose of these anesthetic drugs because they're very expensive. And by -- if I monitor you, I can find your specific dose. And it's found in many studies now that by using this type of technology we have, you can significantly reduce the cost of these drugs because you're getting the right dose and you're getting the antidote at the right time. A recent study showed that I think it was 87% of all patients are overdosed with these anesthetic drugs. And at the same time, 13% are underdosed, meaning that specifically, 100% of the patients are getting the wrong dose. And that's what we want to try to change here.

But if we look at clinical guidelines, for example, they're promoting, they're supporting methods like the TetraGraph, for example. But what is the main reason why subjective methods are still very common, especially in the U.S. like the PNS method, for example?

I think it's just a lag of -- it takes time to introduce new technology in health care. There's this number that everybody has seen that it takes 17 years plus to get something changed. I think it's been driven by lack of guidelines. It took a long time to get the guidelines in place. And then I would say it's been a lack of simple-to-use technology. The technology that we're spearheading called electromyography, or EMG, which is basically EKG that you do with the heart, but we do it inside the muscle itself.

There was a lack of these technologies. The predecessor that we worked was large like a dishwasher. So you rolled it into the room. And we said, okay, we want to be first in the world to make this portable, simple and addressable for this mass market. So that's why we came out with the TetraGraph, which is an EMG-based device, very cost efficient, very easy to use. It takes like 5 seconds to get the sensor on. No calibration, very easy versus existing technologies are more calibration prone, takes time and other limitations that we've solved with this.

And you also mentioned in your presentation about your business model, razor-razorblade approach, which make increasing the utilization rates very important for the future growth. Could you elaborate a bit more on what actions are you doing to increase this utilization rate?

Yes, good question. I mean, yes, the trick is here to really get the usage up. Every -- once we place a monitor, which we can either sell or we place it, it should generate usage pretty much every day. So what we've done is we built up a clinical team of -- there are most of them are nurses who have been working in the operating room or intensive care. They're out there. They're helping. They're driving utilization. We're helping hospitals to implement standard of care protocols.

We are driving education in the field. I mean we are the key opinion leader company in this field. So that's why we're seeing the more we really help these clinics, the more you can see the traction of usage rates. And I think we've come to a phase now where hospitals are learning from others and now it's kind of a self-sustaining ecosystem. So we don't have to be everywhere because the standards are being set by clinicians themselves.

But if I look at the different markets, for example, the main focus for you is in the U.S., but the system is also available in Europe, for example, but that market is a bit different.

I mean U.S. is -- it's like 40% of the world market. So either you make it there or you don't make it at all, and that's my mission here in medical devices. And U.S. has a little bit of a different technology shift. They went from using small little buzzers that was very subjective and prone to errors. So when the guidelines came, there was a technology leap that they instantly everybody went towards our technology. So I've been -- we've been winning contract after contract in a large university hospital systems in the peak, and they're kind of trickling down now to the -- there's about 5,000 hospitals in the U.S.

But penetration of our technology so far is single-digit percentages. While in Europe, they were early on. They've been monitoring very rigorously for the last 20, 30 years, but they've been using this analog where you measure the muscle movement, which is prone to -- there's a lot of studies out there showing it's not adequate. And because it's hard to use, it's not often always used, but it's there. So Europe is just a little bit of a laggard in terms of moving to this new shift, but it's happening, and it's specifically happening in robotic surgery.

So I would say that 80%, 90% of our patients in Europe are da Vinci robot patients because, again, when you're doing robotic surgery, you need to be very deeply paralyzed. You need to be perfectly still unless -- because you're not having -- the surgeons movement is in the robot and not by the patient. So I can see that we're kind of head-to-head. And as that market grows, which is very rapidly growing, we're perfectly positioned to capitalize on that.

Yes. And we have also seen that your development, the past couple of years have been really, really strong. I think it was around 90% sales growth if you compare the first half this year.

Yes, we've had a nice growth trajectory.

Yes. So I also want to mention your financial targets or guidelines. You guide SEK 110 million to SEK 140 million in sales this year. Also, you have a sales target of reaching SEK 250 million to SEK 350 million in sales next year, also in the long term, SEK 1 billion in sales and also an EBITDA margin of over 40%. How confident are you in these objectives?

I mean we did this guidance to kind of better explain the type of business we're in and the momentum we are in. I think after 6 months, we were at just under SEK 50 million. So we're about almost halfway into the yearly target. As we've grown and matured and installed this base is growing, we can -- it's easier for us to forecast the business. So we are pretty confident. There are definitely headwinds with U.S. currency rates and other things, but our market underlying is not affected by this. What that hits perhaps is a little bit of the gross margin.

Our business should be normalized 70% plus. The gross -- the tariffs and the currency has had some effects this year that I explained in the Q2 report. But we're also then very keen on keeping the OpEx. So we want to grow this company exponentially while keeping a good gross margin and then a fixed OpEx level. And that's what ultimately gets us to a very profitable company as we get the volumes up. But overall, given the pole position we are in this market, we are quite confident in our numbers.

Yes. And also, if you look at the current burn rate, it's still relatively high. But as you mentioned, also, you expect sales to increase very good in the coming years. But what about the cash position? It is very strong at the moment, but...

It is, yes. I mean we've had a history of doing -- we have a long-term investor base. So we've funded this company over the years through a number of directed shares issues predominantly. And we've attracted institutions. We did one just before summer in June, where we raised SEK 110 million at market price. We attracted a number of new institutions, including Unionen, which is probably the largest Swedish trade union, some international investors and then the top 5 investors participated as well.

So that's why we've had a very -- I've always been confident in our financing. But we've decided to finance this in steps. Building a global leader in medical technology is expensive, and it takes time. And rather than diluting everybody from start and raising the $100 million that these types of companies need, we've taken it in steps. But the message in this latest round was that we believe that we have now the preconditions to take the company to positive cash flow on this funding round. So we're getting near the finish line, which is fantastic.

And yes, I mean, the operating expense level of roughly SEK 150 million a year is -- it's a lot of money, but really building and capitalizing on such a unique market change. It's really a clinical and a technology market shift. This is where you should really go in and make a change. And that happens. You win that market by direct sales and strong partners. That's what I believe in. So that's why we have an expensive base because we have half of the team base in the U.S. Evidently, U.S. commercialization is expensive, but it pays off.

Hopefully, now the viewers have a great overview of the company. But if we look forward in the short term, what key events should investors keep an eye on?

Yes, there's a lot of things that are going to happen in the next 12 months. I can't say too much yet, but we're continuing to win a lot of hospital accounts, and we try to press release some of them that we feel are relevant information to the market. We have a lot of interesting partnership discussions are going that I think we will tell more about the market. There are more guidelines in various countries and applications coming. So I will keep you posted. But there is -- this is an interesting market. And there's also a continuing amount of big clinical studies ongoing. I wouldn't say that they are anyway a prerequisite for our growth, but they are continued to just build the momentum in our business we're in.

And you also announced last week, you announced that you have a new hospital agreement. Could you elaborate a bit more on that?

Yes. I thought that was interesting because we're continuing to win these large university hospital systems. And as I said, that trickles down to everybody else. And California being, what is it now, the fourth, fifth biggest country stand-alone in the world, it's an important market because they are early adopters over there. They're very, very [indiscernible] -- they really are rigorous to standard of care and following guidelines. And now we've won a number of university hospitals in California plus leading hospital systems. So we're doing the right thing. We're capturing the market. And these are all extensive evaluations where they require integration into electronic health records.

And we -- so we just check the box for what these hospitals need. And what we see is that a couple of years ago, the buyers were enthusiastic professors. Now it's management teams of hospitals who want to implement standard of care, and they want to see cost reduction and they want to see patient benefits. So the drivers are very different, and that helps to shrink the purchasing processes as well because they need to get this now. And they want to be guideline compliant.

That's very interesting. Do you have any final words before we end this Q&A session? Anything else that you would like to highlight?

I think we've summarized it pretty well. I mean we are a company, as I said, a very exciting commercial phase. We have the base. We have the technology. We produce the core products in Uppsala. We have the capacity. And this is a commercial race, and we're winning.

Looking forward to following your company. Thank you very much, Philip.

Thank you.