OssDsign (OSSD) Q3 2024 earnings summary

Executive summary

• Achieved 114% year-over-year net sales growth in Q3 2024, marking 10 consecutive quarters of triple-digit U.S. growth and 13 months above 100%, driven by a strategic shift to pure-play orthobiologics and deeper U.S. market penetration.

• Gross margin reached a record 96.9% in Q3 2024, up from 79.6% in Q3 2023 and 93.2% in Q2 2024, reflecting production efficiencies and provision releases.

• Operating loss narrowed to TSEK 9,836 in Q3 2024 from TSEK 17,911 in Q3 2023; loss after taxes improved to TSEK 9,760 from TSEK 33,125.

• Enhanced sales force and production efficiency, demonstrating scalability and economies of scale.

• Cash flow from operating activities improved to TSEK -8,694 in Q3 2024 from TSEK -18,579 in Q3 2023, with Q3 2024 being the first quarter without non-recurring cash outflows from the cranial business.

Financial highlights

• Q3 2024 net sales: SEK 35.7 million (TSEK 35,728), up 114% year-over-year (121% constant currency); all sales from orthobiologics.

• Gross margin for Q3 2024 was 96.9%, up 370 basis points sequentially and 17.3% year-over-year; nine-month gross margin at 94.7%, up 19.2% from prior year.

• Rolling 12-month sales momentum up 163% year-over-year.

• Operating loss Q3 2024: TSEK 9,836; loss after taxes: TSEK 9,760; earnings per share: SEK -0.1.

• 1%-1.5% of gross margin improvement in Q3 was due to release of provisions.

Outlook and guidance

• Gross margin guidance raised to above 93%, with quarterly fluctuations possible due to production ramp-up and mix effects.

• Growth expected to remain strong but non-linear, with a "staircase" pattern as new accounts are onboarded and matured.

• Board deems current liquidity sufficient for at least the next twelve months; confidence in mid- to long-term profitability and positive cash flow.

• Continued focus on expanding U.S. market access, leveraging Catalyst technology, and developing new products for adjacent orthopedic segments.

• Underlying demand for orthobiologics remains strong, with continued improvement expected as post-pandemic impacts subside.