Good morning, everyone, and welcome to Fractal's third quarter 2026 presentation. Today, we'll take you through our results, the progress that we have made, and our priorities ahead.

After a difficult first half, Q3 was a step in the right direction for us. Sales increased compared to Q2, and our cost measures are delivering results.

Together, these helped us return to positive EBITDA, also excluding the tariff refund that we received in August. The market remains challenging, but our partners' inventory reductions are easing, and their purchasing is moving closer to end-consumer demand.

Our focus now is on making products available to meet that demand. I'll start with the highlights, the market, and our launches, before Karin takes us through the financials.

As usual, we'll open up for questions after the presentation. Let's start by looking at the highlights from the quarter.

Net sales reached 105 million SEK, up 41% compared to Q2, although still 42% below last year. This development reflects both an improvement in end-consumer demand and increased purchasing from our partners.

Reported sales-out grew 5% compared to Q2, but remained more than 20% above our sales-in. That means that partners were still reducing inventories during the quarter and thereby holding our sales below the underlying demand.

Towards the end of the quarter, the need for further reductions eased, and purchasing picked up, in September, sales-in and sales-out were broadly in balance. We also saw a stronger product margin that was supported by a stronger dollar and a favorable product mix, including effects from earlier price adjustments and lower purchasing costs.

Product margin reached almost 62%, or 45% excluding the refund. We can also see that our cost program has clearly lowered our operating cost base.

We expect full effect in 2027, with fixed costs around 20% below 2025. We're already seeing results now.

Higher sales, improved product margin, and lower operating costs brought us back to positive EBITDA. Reported EBITDA was 21 million SEK, including 18 million from the tariff refund.

We're also working to strengthen our product offering through both new launches and improvements to existing products. We introduced four major products in September, one of our biggest launches ever.

Alongside these launches, we're continuing to improve our existing portfolio. For Scape, we're addressing problems with the ear cushions.

As these appear after a period of use, the extent has become clear over time, and the number of affected products are more than we can accept. Production changes and an express replacement service was introduced in the spring, and our focus now is on helping customers while replenishing the markets with products that come from updated production.

Finally, across the full portfolio, improving availability remains a priority. Some constraints, however, are expected to continue during Q4 as we and our partners replenish stock to meet the end-consumer demand.

Turning to the market, we see that high component prices continue to affect when and how consumers spend their gaming budgets. AI and server demand keeps pressure on memory supply, but price increases slowed during Q3.

Memory retail price rose around 10%, a much lower pace than earlier in the year. Greater price stability could help consumers plan their purchases and gradually adapt to new price levels.

For now, consumers remain selective. Some delay a complete build, while others prioritize individual upgrades.

That makes clear product value important, whether through performance, design quality, or lifespan. At the same time, the gaming engagement remains strong.

Spending on Steam increased around 15% in the first half of the year, and in total, the PC games market is expected to grow around 5% this year. People continue to play and spend on gaming, even when hardware purchases are being postponed.

In that market, our job and our focus is to give them a clear reason to choose Fractal when they upgrade. That brings us to our September launches, where we introduced four products across cases, cooling, and gaming chairs.

Starting with Summit, where we've taken our Scandinavian design approach further. With curved wood and great aesthetics, it fits naturally into the home, while keeping the performance and the building experience that people expect from Fractal.

Then with Define 7, where we're building on one of our best-known product families, keeping the signature closed front, while bringing cooling performance and noise levels to today's demands. Then within water cooling, where Radius strengthen our offering with a combination of performance, low noise, and competitive pricing.

Finally, we've updated our gaming chair with the Refine 2, where we've taken feedback from our community and turned it into improved ergonomics and functionality. The reviews has been very positive, particularly on comfort, build quality, and value.

Together, these launches strengthen our offering. They support sales today, and they support growth tomorrow.

Several products sold out in parts of the channels as demand exceeded our partners' expectations, and initial orders were cautious due to the market situations. Now we're working with our partners to replenish stock and meet that demand.

With that, I hand over to Karin for the financial review.

Thank you, Jonas. Let me start with our net sales performance for the third quarter.

In Q3 2026, net sales amounted to 105.4 million, down 41.9% compared with the same quarter last year. In US dollar, net sales amounted to $10.9 million, corresponding to an organic decline of 42.8%.

Compared with the second quarter, net sales increased by 41%, reflecting a gradual recovery from the low levels seen in the spring. As Jonas talked about, market conditions remained challenging, with high component pricing continuing to weigh on consumer spending and prolonging upgrade cycles.

To put our sales performance into context, we also monitor sales-out, meaning sales to end consumers in US dollar reported to us by retailers. We estimate that reporting covers around 90% of total end-consumer sales, although coverage varies by region and customer mix.

Reported sales-out declined by 32.1% year-on-year to $13.7 million, but increased slightly compared with the second quarter. As in the second quarter, partners sold more products to consumers than they purchased from us, reducing their inventory levels.

This meant that our net sales were affected by both lower consumer demand and continued inventory reductions in the channel. Towards quarter-end, partner purchases increased as the need for further inventory reductions eased and focus shifted towards replenishment ahead of the peak season.

Product availability also remained a constraint. Inventory adjustments combined with increased demand for smaller cases and models for AI workstations led to shortages of several popular products.

We are adjusting production and replenishing inventories, although some availability constraints are expected to persist during the fourth quarter. Let's now turn to performance by product category and region, starting with cases.

This category accounted for 86% of total net sales. Sales were down 41% year-on-year, making cases the largest contributor to the overall reduction in net sales in absolute terms.

This reflects the pressure on demand and longer upgrade cycles that we discussed earlier. The other product category saw a slightly steeper reduction of 47%, with sales amounting to 14.8 million.

Moving on to regional performance, sales remained below last year's level across all regions, although the extent varied. EMEA remained our largest region, representing 46% of total net sales.

Sales were down 54% year-on-year. However, channel inventories gradually normalized, contributing to a higher share of total sales compared with the second quarter.

While the year-on-year comparison remained weak, channel inventory pressure eased during the quarter. The Americas accounted for 37% of total net sales and held up better, with sales down 22% year-on-year, the smallest decline across our regions.

In APAC, sales decreased by 27% year-on-year, and the region accounted for 16% of total net sales. Overall, regional performance reflected both challenging demand conditions and continued channel inventory adjustments, with easing inventory pressure in EMEA contributing to the change in sales mix compared with Q2.

Let me walk you through the development in our product margin. Product profit amounted to 65.1 million, corresponding to a product margin of 61.8%, compared with 39% in the same quarter last year.

The 22.8 percentage point year-on-year improvement was driven by several factors. The largest contribution came primarily from IEEPA tariff refunds, but also from lower tariff costs, which together added approximately 18.5 percentage points to the margin.

Beyond the tariff, a stronger US dollar contributed approximately 3.5 percentage points. An improved product mix, price increases during the year, and lower purchase prices together added a further 1.7 percentage points to the margin.

These positive effects were partly offset by higher sales discounts and freight costs, which together reduced the margin by approximately 0.8 percentage points. To summarize, tariff refunds accounted for most of the improvement, while currency, product mix, and price effects also supported the margin.

Let's have a look at the profitability performance for the quarter. EBITDA amounted to 21.3 million, corresponding to a margin of 20.2%, compared with 13.7 million and a margin of 7.6% in the same quarter last year.

EBIT amounted to 13.4 million. The main driver of the year-on-year improvement was IEEPA tariff refunds, which contributed 17.8 million to EBITDA.

Excluding tariff refunds and restructuring costs, EBITDA amounted to approximately 4.9 million, corresponding to a margin of 4.6%. Lower operating expenses also supported profitability.

Other external expenses decreased by 5.9 million year-on-year, mainly due to lower warehousing and logistics costs. Personnel expenses decreased by 4.6 million, reflecting the organizational changes implemented as part of the cost-saving program.

The quarter also included 1.3 million in restructuring costs related to these changes. Overall, the improved product margin and a lower cost base supported positive EBITDA, even excluding tariff refunds, despite significantly lower sales than in the same quarter last year.

Let's move on to cash flow and financial position. Operating cash flow improved to -$24.1 million, compared with -$28 million in the same quarter last year.

Higher EBITDA and lower inventory levels supported cash flow. However, higher accounts receivable and lower accounts payable had a negative impact, resulting in a net working capital outflow of 36.5 million.

Investments amounted to 9 million, compared with 6.8 million in the same quarter last year, these mainly related to product tooling and the development of new products. Investment levels may vary between quarters, largely due to the timing of individual projects.

At the quarter-end, net debt was close to zero, at 2 million. All bank covenant requirements for the quarter were met, and available credit facilities provided additional financial flexibility.

With that, I hand over to Jonas.

Thank you, Karin. Let me now bring the main points together.

Q3 was a step in the right direction. Sales increased 41% compared to Q2.

We returned to positive EBITDA, also without the tariff refund. Still, the sales levels remain well below last year, but our actions are then making a difference.

The channel is an important part of that story, where reported sales-out increased 5% compared to Q2 and remained more than 20% above our sales-in, meaning that partners were still reducing inventories, holding our sales below underlying demand. Purchasing picked up towards the end of the quarter, and in September, we had balance between sales-in and sales-out.

This is the development that we discussed after Q2, that as inventory reductions ease, our sales can better reflect actual consumer demand. At the same time, improved product margin and lower operating costs brought us back to positive EBITDA.

Our cost program is delivering, but full effect will come in 2027. We ended the quarter with a net debt close to zero, and while improved earnings supported cash flow, higher receivables and lower payables meant it remained negative.

Looking ahead, our immediate priority is to improve product availability. Several popular products are in short supply, and we are adapting production and replenishing stock, both in our own warehouses and with our partners to meet that demand.

Transport lead times and cautious partners may remain during Q4. That also includes our four September launches, which received strong interest.

We're now focused on turning that interest into further sales by getting availability up in the channels. The market remains challenging, but end-consumer demand is above the spring levels, and gaming engagement remains strong.

We are adapting the business to these conditions while continuing to developing our offering. With a lower cost base and partner purchasing moving closer to consumer demand, we can build on the progress made in Q3, where continued cost control means higher sales will progressively strengthen our EBITDA margin.

With that, we conclude the presentation, and we open up for your questions.

Hi, good morning, guys. Exciting report.

A couple of questions from my side here. Firstly, it's obviously good to see that inventory levels are reaching more sound levels here end of the quarter.

I was also wondering if you could elaborate a bit more on the September launches, which were the most important for sales, any change in the margin profile of these new releases versus the older lines, anything else that we should think about for the mix going forward?

Thank you, and that's a great question. The four launches made in September, as I said, one of the biggest launches that we have done in one go actually within Fractal, has big meaning and importance for us.

On the case side, both Summit and Define 7 adds and sort of updates the portfolio in very important areas. Summit takes and builds on the heritage and legacy of North, taking wood to a complete new level.

Define 7 then building on our core Define series, one of the best-known that we have had, showing that you can get quiet performance out of a closed-front case. Both of these fit well into the portfolio, and they continue to add the business performance that we usually get from cases.

Radius, looking at water cooling, sort of revitalizes our water cooling offering. We see that as an important support category for our cases and to the market out there, seeing that also very high interest from our consumers.

Radius, with the great price point it has and the performance that it delivers, is a very good offering to us, and a step forward when it comes to the water cooling offering that we have at Fractal. Finally, Refine 2, building on Refine 1, taking all the input we have had from the community, all the learnings, everything into that new product, and it's been fantastic to see the reactions from reviewers and also customers.

That's been great to see. All four launches were affected, I would say, in the commercial performance by the sort of conservative initial build-up from the partners.

We should remember that deliveries were sent out quite a while ago when the channel inventory adjustment was in full swing. That has been using a quite conservative build-up.

What we can say is that we have outperformed compared to the expectation that our channel partners had on these products. That is very positive, and right now, focus is on replenishing.

All four is really supporting the portfolio growth, I would say. They push Fractal forward, and we have solid indications now from the launches that they will continue to support us going forward as well.

Sorry for a bit lengthy answer, but of course, from us, really proud of these launches and the reception that they've had.

Good, good answer. Thank you for that.

You sound positive and optimistic even on the replenishing part of these launches as well going into Q4. Is there anything else you want to highlight here in terms of the seasonal pattern into Q4 and market dynamics?

I know you talked a bit about it already, but anything else we should keep in mind?

No, I think as we pointed out now here both in the report and in the call that the market remains challenging. That's still a tough market out there, but we have seen it stabilize, and that's creating good grounds for us to continue working now.

Our focus is really on driving availability and ensuring that we have products out there, but it is still cautious partners and cautious activities out there. It's step-by-step, and now we're sort of looking ahead with the focus on that, replenishing our own inventories, replenishing the partners' inventories, and over time meet the end-consumer demand fully.

Okay. Great.

Just one question on the Scape issues as well. Could you elaborate a bit more on that, how that has affected you, maybe even what it means for the future in terms of potential return costs, replacements, I don't know, other financial effects?

No, essentially, first the main issue there concerns the adhesives on the ear cushions, it's not with the actual headset technical side. Production changes and express replacement service has been introduced earlier this year, but the reason why we also are clear about it is that the issue appear after a period of use, and as we see it becoming bigger over time with a proportion that is higher than that we can accept.

The good thing from our side is that we track it by serial number, checking what's happening out there, and it shows that the production improvements that were done are working. With that, the focus is just to help the affected customers, replenish the market with products that comes from the updated production.

Then, I think we can take some inspiration from the Refine 2 launch on how learning from the market, learning from the feedback that we're getting from community, issues that we are seeing when we are launching upgrades or improvements, and it's a good sign of how Fractal is working with that. As said, with Scape, the production improvements are already in place, and the products that is getting to market are free of the problems of Scape.

That's our priority, and still we're proud of the product and the sort of the entry of getting into the audio category for Fractal. Now we're looking ahead.

Great. I won't take up too much time, but just a final one, maybe more aimed at Karin.

On the product margin side, obviously a lot of moving parts, currencies, inventories, etc. Even if we adjust for the tariff refund here, it was a very strong product margin in the quarter.

Do you think you can keep this at a 40%-plus level going forward here for the foreseeable future? I know Q4, obviously, a lot of lowered prices and stuff, but beyond that, do we see this as a kind of a new level here versus the prior three, four quarters?

As and you have seen the bridge as well, as you said, tariff is the big one here that is taking us to nearly 62%, so that's an one-off, to speak. We also have currency at 3.5 percentage points.

Currency, we are sensitive to how the dollar moves, of course. We can also see that we have positives in our product mix, and that we have seen positive effects from price increases during the year, and also reduction on the supplier side, which are long-term.

Yes, we are working on to get a stable margin above 40%.

Perfect. Thank you, guys.

That's all for me.

Thank you.

Thank you.

Yes. Morning, Jonas and Karin.

I would like to build on pricing. How much contributed more recently or perhaps year-to-date?

Is there any significant trajectory on this that we should expect over the coming quarters? Also, perhaps this question in light of the comment you make about the intense competition, does that mean that prices could even decline in near future?

Just curious on the trends you're seeing here. Thanks.

Did I understand you correctly, Simon, that was about trends going into Q4 that we have ahead in your part of the question?

Both year-to-date trends in terms of pricing and going forward.

Okay. No, as we clearly point out also and mentioned here in the report, it's tough price competition out there.

We have mentioned that also after the Q2 with a lot of activity from actors in the market trying to drive and boost sales. We are maintaining and keeping our position in that market without being the driver of any of those kind of activities, but of course we monitor and try to follow it.

At the same time, what we also see when it comes to trends and activities is that there is slight movements or changes in what kind of products that are being sort of in demand. From our side, Terra and Ridge and other smaller products are getting higher attention, but also other products that is used for AI builds, for example.

There is a slight change in the portfolio demand than what we have seen before also within the market. There is quite interesting tendencies within the market that are trends, the starting of trends at least, that we're monitoring, seeing, and meeting.

What's good from a Fractal point of view is that with a broad portfolio and very strong case portfolio, we are well-equipped to meet various trends that would come or arise in that part of our business. I think Q4, looking ahead into that quarter, it will for sure be an important campaign period.

I think partners will focus a lot on what they have in stock. They will drive that, and then we will see different kind of activities happening.

We are staying close to the ground and what's happening, and following, supporting our sales where needed.

Very good. Thanks for that.

On the savings, you have been very helpful on providing us color that you seek to reduce the fixed base by 20% in 2027 versus 2025. Have those savings already now started to contribute in Q3 and into Q4, or is it mainly Q1 2027 that we should be looking at?

We can see that most of the program has already been implemented, and we can already in the third quarter see clearly effect from that in our cost base, so that is really good. We have, as I wrote and said, lower personnel cost, consulting, external cost, and so on.

That supported, of course, getting back to positive EBITDA. Some effects, as you said, Simon, remains, and existing commitments needs to come to an end, and once the program takes full effect in 2027, it is as you said, we expect the fixed cost base to be around 20% below 2025.

As said, we already now see a clear sign in the numbers that the cost-saving program has taken effect.

Very good. Thanks for that.

A final question from me. It's quite encouraging to hear that the reception of the new products have exceeded the anticipated demand amongst your resellers.

Of course, it also entails some bottlenecks in the near future. Do you expect these bottlenecks to be a short-term issue, could it last for the medium term as well, given the dynamics we are seeing in this industry, of course?

You're referring to the bottlenecks of availability and lower inventories?

Yes, exactly.

Yeah. No, as as I mentioned, it was a conservative initial orders also coming in from the partners.

Again, these orders were placed quite a while ago, it's a continuous build-up. Now the focus is on on or has been not only in the these coming days, but currently, the focus is on getting the products and availability up and available to the to the customers and and meeting that end-consumer demand.

It will take a little bit of time, and I think it's a gradual increase. I think everyone, again, us together with our partners, is taking this step-by-step, making a cautious, stable growth back in in this market where we are.

Focus is on that: demand, sell-out, replenishment and driving activities together with our resellers to to build up their inventories and and supporting sales-out.

Appreciate that. Thanks for having my questions.

Thank you.

Thank you.

Yes, we have a first written question here: "Can the smaller organization deliver your product roadmap and support growth without adding significant costs?"

The focus on the Q2 program there was to reduce costs while retaining capabilities to develop and drive the strategic growth initiatives that we have, develop products, and support sales. I think the September launches show that we can do that.

We deliver strong offerings to the market with the organization that we have. Of course, we'll make targeted investment where needed, but do not expect our cost to grow more than the pace of the revenue growth, meaning improving our EBITDA over time.

Clear priorities and more efficient ways of working will be important to support that.

Second question: "Do you feel that you have enough cash to rebuild your inventory if the business rebound?" If I start, Jonas, yes, based on our current liquidity and our current planning assumptions, we believe we have sufficient fund to rebuild inventory as demand recovers, but of course while maintaining discipline around working capital and cash.

The answer is yes. Third question: "How much sales are you losing because of limited availability, and when do you expect supply to catch up with demand?"

That is similar to what we have been talking a bit about here, but lower availability in the channel is then holding back sales-out of several products. To some extent also our sales-in, as the supply that we're doing from, for example, our American warehouse to the channel will impact revenue directly.

The impact of that is a little bit difficult to estimate reliably, and we would not really put a specific figure on it. Focus from our side is on increasing, driving the right production and then replenishing the inventories.

Again, it takes some time for the products to reach the markets where they're needed, we expect availability to improve towards the end of Q4. Some products may remain more constrained than other depending on how that demand changes that I mentioned earlier.

Next question: "How reliable are your reported sales-out figures? Could changes in reporting coverage or customer mix affect the comparison?"

It's important to remember, sales-out is what is reported to us from our retail partners. It's numbers we're getting from the partners we're working with.

It's estimated to cover around 90% of the total end-consumer demand, but the coverage varies with regional mixes, customer mixes, it's not a fixed percentage in that sense. We use it as a very important measure for us to understand demand trends and what's happening in the channel, and I think it's highly important to, yeah, provide that context and understanding.

It's a very important measure, but remembering how we're obtaining it and the coverage rate and how that's important as well, of course.

Good, and that was all the questions.

Great. We thank everyone for your participation, and you know where to find us.

Thank you.

Thank you, all.