Embla Medical (EMBLA) Q1 2026 earnings summary

Executive summary

• Achieved 15% reported sales growth in Q1 2026, with 4% organic growth and 8% including M&A, despite FX headwinds and tariffs.

• Net profit increased by 21% year-over-year, reaching USD 15 million, driven by operating improvements and favorable financial expenses.

• Gross profit margin at 62% and EBITDA margin at 17%, both down 1 percentage point year-over-year due to tariffs and FX impacts.

• Patient Care business is nearing completion of an 18-month global rebranding initiative (ForMotion), expected to finalize in Q2 2026.

• Free cash flow was seasonally low at USD 4 million (2% of sales), impacted by working capital changes.

Financial highlights

• Tariffs and FX reduced margins by 1.5 percentage points; tariffs cost $2 million in Q1.

• Operating expenses were USD 120 million (52% of sales), with organic OPEX growth below organic sales growth.

• Diluted EPS was 3.4 US cents, up from 2.8 US cents in Q1 2025.

• Net interest-bearing debt/EBITDA before special items was 2.4x, within the target range.

• Free cash flow was lower year-over-year due to negative net working capital changes.

Outlook and guidance

• Full-year 2026 guidance maintained: 5-8% organic sales growth and 20-22% EBITDA margin.

• Growth expected from Prosthetics & Neuro Orthotics, new product launches, and Medicare coverage expansion in the US.

• Patient Care expected to improve as timing effects normalize and efficiency initiatives take hold.

• Effective tax rate expected at 23-24% for FY 2026.

• CAPEX guidance at 3-4% of sales.