SECTRA (SECT) Q4 25/26 earnings summary

Executive summary

• Net sales increased by 9.3% year-over-year to SEK 3,541.7 million, with all operating areas reporting sales growth in local currencies and strong growth in medical imaging IT and secure communications.

• Recurring revenue rose 18.6%, driven by a 54.9% surge in cloud recurring revenue to SEK 915.8 million, now comprising nearly 70% of total revenue.

• Operating profit (excluding a non-recurring patent settlement) grew 15.9% to SEK 710.6 million, with a margin improvement to 20.1%.

• Customer satisfaction remains industry-leading, with multiple "Best in KLAS" awards and a number one ranking in large U.S. hospitals for 13 consecutive years.

• Strategic acquisition of Oxipit, a Lithuanian autonomous AI company, strengthens the AI portfolio in diagnostic imaging.

Financial highlights

• Full-year contracted order bookings reached SEK 7.6 billion, with a rolling 12-month book-to-bill ratio of 2.2.

• Fourth quarter sales exceeded SEK 1 billion for the first time, up 13% year-over-year.

• Cash flow from operating activities was SEK 1,097.3 million for the year, with SEK 500 million generated in Q4.

• Dividend proposal includes an ordinary dividend of SEK 1.30 per share and an extraordinary dividend of SEK 1 per share, totaling SEK 2.30 per share.

• Debt/equity ratio at 0.04 and equity/assets ratio at 47.8%, indicating strong financial stability.

Outlook and guidance

• Long-term focus on recurring revenue, with the majority of new U.S., Canada, and U.K. contracts now cloud-based.

• Ongoing transition to service and cloud-based business models expected to drive further recurring revenue growth and reduce seasonal volatility.

• Continued investments in innovation, AI, and cybersecurity to maintain competitiveness and support long-term growth.

• Significant go-lives from large contracts are underway, expected to reduce quarterly revenue and profit volatility.

• Non-recurring revenue in Imaging IT is expected to decline as customers transition to the SaaS model.