Danish medical device maker Ambu reported a 15.15% drop in its share price to $66.35 on Wednesday after releasing third-quarter results for fiscal 2025/26, citing concerns over margin sustainability despite strong endoscopy growth.
For the quarter ended June 30, Ambu posted total revenue of DKK 1.64 billion, up 10.3% organically from the same period a year earlier. The company’s endoscopy segment, which accounts for 64% of revenue, grew 16% organically, driven by gains in respiratory and urology, ENT and gastrointestinal products. Ambu’s anesthesia and patient monitoring division, representing 36% of revenue, grew just 1.6% organically, with patient monitoring outperforming anesthesia.
Gross margin improved to 59.5% from 58.9% a year ago, while EBIT margin rose to 13.5% compared with 11.3% in the prior-year quarter. Adjusted EBIT margin stood at 12.5% after accounting for foreign exchange effects and tariffs. Free cash flow for the quarter reached DKK 154 million, representing a 48% cash conversion rate.
Regionally, North America contributed 49% of revenue and grew 9.7% organically, while EMEA accounted for 41% with 10.2% organic growth. The rest of the world, representing 10% of revenue, posted the strongest growth at 14.4%.
Ambu maintained its full-year guidance for organic revenue growth of around 10%, down from 13.1% in fiscal 2024/25, as anesthesia and patient monitoring remains sluggish. The company reaffirmed its EBIT margin target of 12-14% for the year, with management noting expectations toward the upper end due to tariff recoveries. Cash conversion is projected to exceed 40% for the fiscal year.
Longer-term, Ambu reiterated its ZOOM AHEAD strategy, targeting EBIT margins above 20% by fiscal 2029/30, with management indicating the company is on track to reach approximately 20% by fiscal 2027/28. The company also expects an 11-13% organic revenue CAGR and 15-20% organic growth in endoscopy over the medium term.
CEO Britt Meelby Jensen said Ambu remains well positioned to deliver strong organic growth and improve profitability through its single-use endoscopy platform. The company emphasized the growing adoption of single-use endoscopes, particularly in respiratory care, where it described the technology as becoming the standard of care due to workflow efficiencies and availability in critical settings.
