Okay. Good morning, and welcome to this earnings call, where we will cover the third quarter, summarizing our business from July, August and September of this year.

And I'm Fredrik Ruben, I am the CEO of Dynavox Group.

Hello. I'm Linda Tybring.

I'm the CFO of Dynavox, and I will cover the financials later on.

Great. So for those of you who have been participating in these calls before, you will be familiar with that.

We will start by a quick recap about what Dynavox Group is about. And then we will summarize the main takeaways from the quarter.

We will then dive deeper into the financials, and thereafter, there will be a Q&A session. And you can submit your questions during this call in the function here, in Teams, in the chat function.

Or you can ask them live if you have asked -- or if you've been given prior notice to our team. We, of course, always welcome offline questions sent over e-mail to the above e-mail address [email protected].

But a brief overview of Dynavox Group. First and foremost, it's important to reiterate our mission and our vision, which I know is very dear to not only our over 1,000 colleagues around the world, but also to our ecosystem of partners and investors.

And our vision is a world where everyone can communicate, and we contribute to this via focusing on our mission, which reads: To empower people with disabilities to do what they once did or never thought possible. And this also summarizes 2 of our main user stories.

The first one, the do what you once did, that may refer to a person who led a normal life until a diagnosis such as ALS, which rendered her then unable to control the body and communicate like before. And the other, the never thought possible can refer to the child diagnosed at an early age with a condition such as autism, cerebral palsy or so where thanks to our solutions, he can now do much more than the world around him ever thought possible.

On the picture here to the right, we see [ Lyn ] from Lawrenceburg in Kentucky. She is one of our amazing users diagnosed with cerebral palsy and is a great example of this.

The market that we serve is hugely underserved. Some 50 million people have a condition so grave that they simply cannot communicate unless they have a solution like ours.

And every year, we estimate some 2 million people are being diagnosed and yet only some 2% of those are actually being helped and the rest remain silent. And the main reason for this spells lack of awareness and also among the professionals and the prescribers who are tasked to assist these users and a poor health care reimbursement system.

We operate this with a global footprint. Today, some 3/4 of our business stems out of the U.S., and that's largely because of a reasonably well-functioning funding system established some 20, 30 years ago.

But our products are sold in some 65 markets around the world, of which the U.S., Canada, U.K., Ireland, Denmark, Sweden, Norway, Australia, New Zealand and France; most recently, Germany, are markets where we sell directly; while the others are served by a network of some 100-plus resellers. Our staff is distributed in a similar way as the revenue.

That means some 60% of our staff are based in North America with our U.S. headquarters in Pittsburgh, Pennsylvania.

And our second largest office is here, our headquarters in Stockholm, but we have branch offices in several European countries as well as in Suzhou, China, Adelaide, Australia. As of today, we are about 1,000 employees in total.

We provide a comprehensive portfolio of solutions that ranges from -- if you start from the left, the content and the language system, such as the world's leading library of communication symbols called PCS and the leading solutions of off-the-shelf or custom-made synthetic voices of the highest quality and with a large diversity in terms of languages, ages, ethnicities. We then offer highly sophisticated communication software, which is tailored to the type of user, which can vary greatly based on the needs.

We then develop and design devices with cutting-edge technology and medically certified durability, and that includes communication aids controlled via eye tracking and accessories such as the Rehadapt mounts. We have a services portfolio to help our users through the complexity of obtaining and getting funding for the solutions.

And last but not least, we're there to help our users, the therapists and the caregivers through our global teams and support resources. We operate this model globally, and it's important to note that each piece here is critically important and also a significant differentiator for us, making us absolutely unique.

Our go-to-market model is predominantly as prescribed aids, and that means that some 90% of our revenue comes from public or private insurance providers. And this also means that we have solid paying customers and have always been resilient towards changes in the overall economic climate.

But now I will go back at focusing on the main topic of today, namely the earnings report for the third quarter 2025. So, if I look at the highlights, we had another strong quarter when it comes to revenue growth.

The growth compared to the same quarter previous year sums up to over 35% after adjusting for currency effects. And this marks a further acceleration of the already strong trajectory over the past 3 years.

The demand for our solutions remains high, proving the solidity of our underlying business, and we see robust growth across all markets. In this quarter, a particular highlight is the outstanding performance in our direct presence markets outside of North America.

We continue seeing increased growth in our touch control product portfolio, and they are typically serving younger users with autism. However, in this quarter, we also saw very good traction in the eye-gaze controlled solution area, serving users with more complex needs.

Our investments in systems, infrastructure and organization to support our long-term ambitions continue according to plan, and I will come back to that shortly. EBIT came in at SEK 64 million in the quarter, but this includes nonrecurring costs of some SEK 26 million in this quarter and implying then a strong underlying profitability.

And on September 1, we completed the previously announced acquisition of our long-standing German reselling partner, RehaMedia. Coming back to our investments.

So strategic investments are an important part of our growth strategy and a way for us to scale and build an efficient and resilient company. So in 2025, we expect to invest some -- approximately SEK 100 million in total in of nonrecurring nature in 2 main projects that are progressing well and according to plan.

The first one is the rollout of a new ERP system in North America and an establishment and a consolidated product and development hub here in Stockholm. The ERP successfully launched on July 1.

And despite almost a week long freeze period, we have been able to keep up deliveries and even deliver more voices to our customers than in Q2. And during Q3, the nonrecurring spend totaled some SEK 9 million or SEK 40 million spent year-to-date on that.

The second topic, the consolidation of our product and development organization into a central hub in Stockholm continues according to plan. All managers are in place since a while back and the majority of all functions have been recruited and have started.

And since April of this year, all new product releases have been handled from the Stockholm hub. During Q3, the nonrecurring spend totaled SEK 14 million on this with a SEK 33 million spent year-to-date.

But now I will hand it over to you, Linda, to take us deeper into the financials.

Thank you, Fredrik. So let's talk Q3 financials.

Revenue for the third quarter came in at SEK 606 million, a 35% year-on-year growth after adjusting for currency effects. Recent acquisition contributed with 3% and the organic growth was a solid 33%.

This marks another chapter in our 3-year strike of robust growth and consistent execution. Currency fluctuations had 10% negative impact on our revenue.

Sales continued to grow across all markets. However, this quarter, our direct market outside North America delivered outstanding performance, exceeding already high expectations.

As we have talked about in prior quarters, we continue to see growth among younger users with autism. At the same time, there is a good traction in eye-gaze control solutions, serving users with more complex needs.

The gross margin ended up at 70%, an increase of 0.8 percentage points. The margin was improved by increased sales, also by further strengths in addition to having more direct market contributed to an extra layer of gross margin.

Gross margin also had slightly help from currency this quarter. We had some negative impact of increased cost of freight, and this is mainly related to using air freight, which has been driven by strong sales momentum, and we wanted to ensure that we are delivering on time.

EBIT for the quarter was SEK 64 million, and the EBIT margin was 10.6%. It was negatively affected by nonrecurring costs totaling some SEK 26 million in the quarter, lowering the profit margin temporarily by 4.3 percentage points.

Our OpEx increased by 30% organically. The OpEx increase was affected by factors such as continued investment in staff, increases in the sales and marketing.

In total, we added more than 200 FTE, including M&A, of course, also adding normal salary adjustments. During the quarter, we continued to invest in new systems ands tools to strengthen scalability.

The total nonrecurring spend related to this in the quarter was SEK 9 million. As of July 1, we are live with our new ERP in our largest market, North America.

Operating expenses was also affected by nonrecurring costs related to our restructuring cost in the product and development organization. The total nonrecurring spend in the quarter was SEK 14 million.

Both these 2 investments are according to our strategic plan. The recent strong development of the Dynavox Group share price has rendered an increased cost for employee long-term incentive program of SEK 3 million compared to the third quarter last year.

All in all, nonrecurring costs in the quarter sums up to SEK 26 million. In addition, EBIT was negatively impacted by currency of SEK 6 million in the quarter.

Net R&D costs increased by SEK 23 million, SEK 10 million of this relates to nonrecurring restructuring costs within the research and development organization. If we look at the basic earnings per share, it totaled to SEK 0.36 per share to compared with last year's SEK 0.43 per share.

For the quarter, cash flow after continuous investment was positive with SEK 20 million. Cash at the end of the quarter was SEK 172 million and net debt was SEK 924 million.

The total used credit facility and term loan at the end of the quarter was SEK 900 million. The net debt after last 12 months EBITDA was SEK 2.0x.

And also note that during the quarter, Dynavox signed a new refinance agreement with Swedbank totaling to SEK 1.2 billion. And this is classified as a social loan as our prior agreement.

And this agreement reflects our continued commitment to advancing sustainable social initiatives that a positive impact on society. The credit facility includes a SEK 900 million term loan and a SEK 300 million revolving credit facility, which means -- which can be used for both working capital and strategic acquisitions.

The facility has a 3-year term with 2 optional 1-year extensions. For end of September, we have unused revolving credit facility of SEK 300 million.

So back to you, Fredrik, to conclude the earnings call.

Thank you, Linda. So before we open up for questions, I'd like to reiterate the main takeaways from the third quarter.

So first of all, we continue our strong growth trajectory, a trend that started in the early spring of 2022 and just keeps accelerating. We grew revenue by 35% adjusted for currency.

Sales continue to grow across all markets, but with direct presence markets outside of North America exceeding expectations in this quarter. We continue to see growing adoption among younger users with autism, but at the same time, we also see really good traction in the eye-gaze control solutions area that serves users with more complex needs.

Our profitability was negatively affected by nonrecurring costs totaling some SEK 26 million or 4.3 percentage points related to these long-term investments focused on building a more robust company. The current uncertainties in the macroeconomic climate or policy changes has not had any direct effects on our business, but we experienced some indirect effects through elevated freight costs in the aftermath of various tariffs announcements.

The currently ongoing U.S. government shutdown poses no immediate execution risk, but we are monitoring the development here closely.

Given the continued and sustainable growth, we continue to grow in term -- the team, while investing in systems and tools to enable future business growth that is much bigger than today. Our financial targets are expressed where -- and they were communicated in February 2024 with a time horizon of 3 to 4 years.

And the first target was to, on average, grow revenue by 20% per year adjusted for currency effects, and that includes contributions from acquisitions. And in local currencies, the third quarter growth was 35%, which means that we have found a revenue growth momentum to build on.

The market we serve remains hugely underserved. And with the example of growth levers such as sales teams expansion, adding direct markets and operational excellence, we continue to build on our growth journey.

The second target is to deliver an annual EBIT margin that reaches and exceeds 15%. We feel that we have proven to build a strong growth with incremental improvements in profitability.

We need to continue to invest in future growth with improvements in scale, but the recipe is rather simple. We want to maintain continued revenue growth, high and stable gross margins and then total operating expenses that increase at a lower pace than our revenue growth.

And as a consequence, we see good opportunity to further leverage how revenue growth translates to reaching and exceeding an EBIT margin of 15%. Lastly, we have a dividend policy.

We feel that we have an attractive cash flow profile. And given the growth opportunities, we need to maintain a capital structure that enables strategic flexibility to pursue growth investments, including then acquisitions.

But it's still expected to, over time, generate excess cash, and our policy is, therefore, to distribute at least 40% of the available net profits to shareholders via dividends, share repurchases or similar programs when time so allows and it's deemed the right prioritization for us. With that said, I am taking a step to the left, and I invite Elisabeth Manzi, our Corporate Communications Director, who will help to moderate and enable us to take questions from the audience.

Elisabeth?

Yes. Well, thank you.

We have a lot of questions here today. So I will start with a question from Daniel Djurberg, who is asking about the nonrecurring outlook for ERP and R&D for 2026.

So I mean our goal, when it comes to our product and development organization is that it should be completed by the end of the year and that we are geared for starting to execute in 2026. When it comes to ERP, we are still in the transition of getting all our legal entity over into the new ERP.

And our goal is that we will be completed somewhere during next year.

Yes. But -- and to the last point, I mean, we, North America represents some 3/4 of our business, and that's what we started with.

It's obviously the most complex area and also by far the most costly area. So, we definitely see that's going to…

It will gradually, yes, decrease over the next year.

So, following up on the North America and the U.S. situation, Daniel is also asking if there are any hiccups to the funding systems or to Medicare organizations due to this shutdown?

And also, is the Nairobi Protocol still valid?

The short answer to your first question, Daniel, is no. We have no current impact on our ability to get paid basically in North America.

That might change, and we don't know exactly what's going to happen in the future. But as of today, no.

Our assessment on the Nairobi Protocol is that there are no suggestions or paths where the tariff-free import on our types of products will be changed just because of recent announcements. So, we -- the best guess right now is that it will remain in force.

Good. And then I do believe that we also have someone calling in.

So, let's see if we have Ramil on the line.

I have a bunch of questions actually. I'll try to contain myself.

But maybe if we start on like the progression you've made throughout 2025 with younger users within autism. It sounds very much like a TD Navio type of sort of use case.

So, do you think that the launch of TD Navio in mid/late 2024 was sort of the driving element behind sort of the organic growth acceleration in this year?

It's a good question. And the answer is yes and no.

What is actually the main product that is benefiting that customer group is a software called TD Snap, and that's a software we had in our portfolio for quite some year, but it's obviously been refined over time. That software is the software that you run on TD Navio.

So, with the launch of the TD Navio, which is simply a better version of a very similar product that we had prior to that, that was what we can see that has sparked a really strong growth momentum. But as such, it's the software that actually makes the bigger difference.

TD Navio is the can that holds a very good soup, if I would use that analogy.

Yes. Makes sense, Fredrik.

And then on the topic of direct sales outside of North America improving, could you -- because you've acquired several distributors in the last say, 2 years. Could you elaborate a little bit on what markets you are seeing the pick up in?

And if that pertains to the new acquisitions, France, Germany or older ones?

It's actually quite a strong growth across the board. So, there isn't one country that kind of stands for the majority of the growth.

It's a very strong growth across many markets. But one clear trend that we see is the markets where we have no middle layer, no middleman, where we go directly.

And those obviously includes the markets that we recently acquired. But we should also remember that we were already direct in a number of other markets prior to that.

But those - if we see some sort of trend of the kind of across-the-board growth, it's definitely those markets that are in the lid.

Okay. Makes sense.

And then I mean, I can see the notion of like margin expansion being visible ahead as per your financial targets. But if you take Q3 isolated, organic growth in OpEx is 31%, so just 1 percentage point lower than organic growth on top line.

The phasing of margin expansion, how should we think of that, say, for Q4 and into 2026, perhaps?

Do you want to address that?

Yes. First of all, you need to consider the significant investments that we are doing this year.

Both the restructuring cost is impacting our organic OpEx increase and that we will not see next year. Over time, that means also our R&D spend will go down in relation to revenue over time.

So, you will have that kind of improvement. We will also start to see gross margin.

You will slightly see some improvement when we go direct in more markets. And then over time, the more efficient we will get with the systems that we are now implementing, we will not -- we don't need to invest as significant to actually continue our growth journey.

So, you talk about the crocodile sometimes. So, we will gradually see an improvement of OpEx slowing down growth and revenue continue.

We want to spend as much money as we see reasonable in sales and marketing because that really drives growth, whereas we want to see a very moderate increase in all other OpEx areas.

And just one final one perhaps on like outlook as well. I mean, in connection with Q2, you said that the first and the last week of Q2 were really strong.

Could you shed any light on how Q3 progressed throughout the quarter?

Yes. I think you're absolutely right.

So just to reiterate, we said both in Q1 and Q2 that the first week of Q1 or Q2 was as good as the last week of Q1 and Q2. That was actually not the case in this quarter because we had a planned -- how should I put it, standstill in the very first week or so in North America due to the ERP change.

So, there was a little bit more of a catch-up effect, which could argue that we had an accelerating growth throughout this quarter. But on the other hand, that was a little bit kind of artificial because we kind of -- we created that problem, I should say, ourselves.

So good momentum is probably the short answer.

And actually, both Jessica and Daniel also had questions relating to the Q4 and if we could see any seasonality outlook for Q4?

Without being too detailed, we should just remember that we have a fairly consistent seasonality effect in our business, where Q1 is the weakest; Q2, a little bit better; Q3, a little bit better; and Q4 is our best quarter, both in terms of absolute top line revenue, but obviously, spreading out the larger top line over almost the same OpEx will hopefully have a bigger kind of drop-through. We see no difference here.

The reason for this is that the -- a lot of our clients and customers have a big incentive to get their orders shipped and delivered before New Year's Eve before the so-called co-pays or deductibles in insurance systems resets on January 1. So, no change.

Good. So, let's continue with some questions -- more questions from Jessica Grunewald at Redeye.

She's asking if we could walk us through the working capital buildup and how you see it developing going forward, particularly with the increased share of direct sales.

Yes. So, what happened when we get more direct sales is, of course, then that we need to build up more inventory because we get an extra additional layer of inventory.

So now we've seen in the last couple of quarters, one is related to Tobii that we have increased inventory, but also the second part is that we go direct in more markets, which means that we are building up more inventory. But over time, we will balance this and we'll be able to get more release also part of us that we have grown this year, we needed to adjust because making sure it's more important for us at the moment to make sure that we deliver on time than to build up slightly higher inventory.

But over time, we will see the evidence of that. Also in this quarter, we should also know what Fredrik mentioned that we also saw some of the sales coming in, in the later part of the quarter, which means we build up some of the accounts receivable as well.

And a last question from Jessica here. She's asking, what are your expectations regarding the RehaMedia acquisition and the market dynamics in Germany?

We should just remember that these acquisitions, when we acquire our research, they're quite small in the grand scheme of things. With that said, Germany is one of the most exciting and interesting markets, not just in terms of share size or funding system.

It's also a market where we believe that there is a lot of growth potential. So having our own feet on the ground in Germany is going to be instrumental for the slightly longer run, and we feel it's off to a very good start.

And Germany is actually very -- Germany funding is actually very similar to the U.S.

Right.

Good. So Oscar from SEB is asking if you can elaborate on the increased freight cost and how many basis points that would be a pressure on the gross margin?

It's very small effect on the gross margin, but that is, of course, related to that we needed to get inventory in the warehouse as soon as possible because we saw the need from a sales perspective. Over time, that will go down, and we will be able to ship much more with both because we are able to balance the sales momentum that we'll have.

Yes. I would say it's more of an opportunity of actually improving it going forward when we are -- when we can plan a little bit more ahead.

I think it's fair to say that this announcements of tariffs and the new policies that come out specifically from the U.S., have an actually profound effect on supply chains and freight chains across the world because it's quite bumpy.

Good. And a follow-up question on the performance and North America.

We said that markets outside of North America was performing very well. So what about North America?

Did they underperform the expectations in Q3? Any color would be helpful.

Okay. I will provide color.

North America did fantastic. And some of those markets outside of North America did amazing.

That's the amount of color I can provide. It's hard when everybody is performing personal best to say that someone didn't perform.

It was very strong across the board, but simply even better out in those direct markets outside of North America.

But I think it's also a strength from us that it's not one country or one product. We are actually across the board growing our company.

And this was actually the same question as Mikael at DNB Carnegie had. So, we will move on to bringing in another voice.

So, I'll ask [ Philip from SB ] to join.

So, you mentioned in the report that you witnessed good traction in touch control devices during the quarter. What is the sales split between touch control and eye-gaze devices?

The split.

It's around, I would say, touch is today probably slightly over 50 and eye tracking slightly below, but we should also remember the ASP. So, from a quantity perspective, touch is significantly higher than eye track.

It's almost -- it's an ASP difference of 2. So, an eye tracking device costs twice as much as a touch device.

Yes. And do you anticipate it to be kind of the similar split going forward?

I think past performance is a good predictor of future performance. That's how much we can say right now.

And I remember you mentioning -- I don't know if it was at the end of last year or beginning of this year that around 10,000 prescribers have ever prescribed a Dynavox device. Has that number increased during the year?

Or how should we think about that?

I don't have that number. It's my honest answer, but we can definitely look into it.

My gut feeling says that it's increased slightly. But what I do believe is that the prescribers that prescribe 4 or more that has a little bit more traction, that group has grown -- yes, quite strong.

And what measures do you use to increase like the revenue per prescriber for those people.

So, what kind of measures we take to increase that?

Yes. Why do you see that the people that prescribe several devices increase their prescribing rates?

The simple answer is because it's one of our focus areas. We believe that it's better to spend our time on taking the ones who have done something and make them become more self-sufficient and better at the jobs rather than just trying to pull more new prescribers into the loop.

But it's a balancing act.

And a follow-up on that last conversation here then on the eye-gaze controlled solutions. Could you describe what's driving that momentum?

And I believe it's Daniel or was it Mikael Laseen.

Yes.

It's a very good question, Mikael. I think that there is a combination of where the market had focused quite a lot on what was then a year ago a new device, the touch devices from the Navio device.

That is -- that's now yesterday's news, and we could potentially see that it's normalizing a little bit. So, it might be almost like an internal effect, but it's hard to say.

Good. And then let's see if we have another one here from [ Matt ].

Does your strategic investment currently holding back reported margins then into 2026? The market seems to focus on the lower-than-expected U.S.

sales. Any worries for 2026 U.S.

organic development?

No.

No.

That was short. Good.

So let me just double check here. There was a little bit of a follow-up from Daniel as well on the freight cost and the impact on gross margin in Q3 and if this will turn substantially tougher ahead?

Quite the contrary.

Yes.

I think we are in a position now where there is less interruption, less uncertainty, and we obviously feel quite confident with the momentum, which will enable us to not necessarily get lower freight costs. We can choose freight by sea, for example, which is significantly cheaper.

We have a better ability to plan right now.

Good. I believe that was everything.

All right. Fantastic.

I'm happy to see that the technology work with some of the call ins, that's great. But also thank you, everybody, who participated and submitted questions in the chat.

We are looking forward to seeing you all back again on February 5. So next year, when we will summarize the business for the full year of 2025.

Thank you very much.

Thank you.