Q3 interim report 2024 – Focus on internal efficiency and product development to drive long-term growth

Q3 Highlights

• Continuing integration with newly signed customers in Asia and North America.
• Close collaboration with the market to receive feedback from customers to strategically develop and enhance our products.
• Internal reorganization to strenghen our teams and become more effective regarding marketing and product development.
• Execution of roadmap for upcoming products.

Q3 Financial Data

• Net Sales of 30.1 MSEK (32.8), down -8.1%.
• Adjusted EBITDA amounted to 11.4 MSEK (14.5) with an adjusted EBITDA margin of 37.9% (44.2).*
• Adjusted operating result amounted to 9.5 MSEK (1.5) with an adjusted operating margin of 31.6% (44.2).*
• Adjusted earnings per share was 0.10 SEK (0.13).*
• Cash flow from operating activities was 2.7 MSEK (14.3).

Nine Months Financial Data

• Net Sales of 96.5 MSEK (99.0).
• Adjusted EBITDA amounted to 34.4 MSEK (43.7) with an adjusted EBITDA margin of 35.7% (44.1).*
• Adjusted operating result amounted to 28.4 MSEK (36.9) with an adjusted operating margin of 29.4% (37.2).*
• Adjusted earnings per share was 0.30 SEK (0.38).*
• Cash flow from operating activities was 23.9 MSEK (38.8).

* Adjusted for investments in point-of-care ultrasound which amounted to 1.2 MSEK in Q1, 1.6 MSEK in Q2 and 1,6 MSEK in Q3.

Focus on internal efficiency and product development to drive long-term growth

During the third quarter of 2024, we focused on several key initiatives crucial to our continued progress. We continued the integration with our new customers in Asia and North America, as well as strengthened our internal teams. Additionally, we are working closely with the market to strategically enhance and develop our products – all of which are important steps for achieving increased growth.

In the third quarter of the year, net sales decreased compared to the same quarter last year, reaching 30.1 MSEK (32.8), reflecting a decline of 8.1%, or 1.7 MSEK. This decrease can be explained by non-recurring sales of services and licenses of 4.7 MSEK in the previous year for a product we decided not to market, which impacted Q3 2023 positively by 2.9 MSEK.

EBITDA for the quarter reached 11.4 MSEK (14.5) with an EBITDA-margin of 37.9% (44.2) when adjusted for investments in Point-of-Care Ultrasound (POCUS) totaling 2.1 MSEK (7% of net sales). The decline in profitability is mainly due to higher personnel and consultant costs as well as somewhat higher administrative costs. Furthermore, no costs have been capitalized, following an update in capitalization policy heading into 2024. Transactional FX affected the quarter negatively with 0.4 MSEK. As previously explained, we also anticipate our cost base to remain at a higher level compared to previous years, as we pursue our growth agenda in both image quality and data quality.

In the second quarter, we signed several new customers in Asia and North America, including a strategic partner with the potential to drive faster revenue growth in the future, and we are now integrating our software into these customers’ products. At the same time, one of our existing customers is currently under going restructuring, which presents a potential risk.

In our pursuit of increased revenue growth across both our existing image quality business and our new data quality segment, we reorganized our marketing and product teams during the quarter. This restructuring aims to strengthen our product and marketing teams, increasing effectiveness as we advance along our planned product development roadmap. While improving internal effectiveness, we also prioritize product enhancement through close collaboration with external partners. Together with our customers, we are strategically developing new products, guided by relevant market feedback.

In the area of data quality, commonly referred to as POCUS, we are laying the groundwork for our future product pipeline focused on organ-specific applications. Last quarter, we mentioned being close to signing an advanced development partnership

with a renowned university and a medical device manufacturer. The agreement is still pending as we finalize the remaining details, but it is expected to be signed during the fourth quarter. We look forward to sharing more information once the partnership

is officially in place.

Looking ahead, we remain strong and are actively taking steps toward increased future growth. While this does not happen overnight in our business, we are making the necessary preparations and investments to make advancements and reach our goals. Our cash position is solid and the Board has proposed a share buy-back program to be decided upon at our upcoming Extraordinary General Meeting.

Finally, I would like to extend my gratitude to our co-workers, customers, partners and other stakeholders. We will continue our journey to deliver best-in-class image quality technology and to push boundaries in new, groundbreaking areas, positioning ourselves as a key player in healthcare’s ongoing transformation.

Dr. Dr. Gerald Pötzsch,
Chief Executive Officer

For more information, please contact

Richard Hallström
Chief Financial Officer, ContextVision AB
[email protected]

About ContextVision
ContextVision is a medical technology software company specialized in image analysis and artificial intelligence. As the global market leader within image enhancement, we are a trusted partner to leading manufacturers of ultrasound, X-ray and MRI equipment around the world. Our expertise is to develop powerful software products, based on proprietary technology and artificial intelligence for image-based applications. Our cutting-edge technology helps clinicians accurately interpret medical images, a crucial foundation for better diagnosis and treatment. The company, established in 1983, is based in Sweden with local representation in the U.S., Japan, China and Korea. ContextVision is listed on the Oslo Stock Exchange under the ticker CONTX.

This information is inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.00 a.m. CET on November 7, 2024.