Swedish medical technology company Elekta reported first-quarter results for fiscal 2026 on Thursday, showing margin expansion despite a modest decline in net sales. The company’s adjusted earnings before interest and taxes rose to 11.2%, up from 5.8% in the same period a year earlier, as gross margins expanded to 42.6% from 37%. The improvement followed the implementation of a turnaround plan targeting cost savings exceeding 500 million Swedish kronor.
Net sales fell 2% in constant currency to $364 million, reflecting a 9% decline in solution sales partially offset by a 5% increase in service revenue. The company’s order intake grew 3%, with a book-to-bill ratio of 1.11, indicating stronger demand relative to shipments. Free cash flow before dividends and mergers and acquisitions remained negative at 266 million SEK, though this represented an improvement of 154 million SEK year-over-year.
Elekta’s stock declined 5.57% in pre-market trading to $51.75, down from the prior close of $54.80, following the results. The shares have traded within a 52-week range of $42.20 to $66.60, with a market capitalization of approximately $2.2 billion. The company maintained its dividend yield at 4.35%, marking 22 consecutive years of payouts.
Management highlighted progress in stabilizing operations after a strategic reset. Chief Executive Officer Jakob Just-Bomholt noted that while Elekta’s order intake has strengthened over three consecutive quarters, revenue growth has lagged broader market expansion of roughly 6% annually in the global radiotherapy sector. "We are still not growing with the market. That is highly unsatisfactory. We are going to do something about it," he stated. The company expects sales growth to turn positive in the second quarter, driven by order conversion in China, increased U.S. revenue from the Elekta Evo platform, and an additional tariff refund of approximately 3 million SEK.
Chief Financial Officer Klara Eiritz emphasized the margin gains, citing a 560-basis-point improvement in adjusted gross margin to 42.6%, supported by a 53 million SEK tariff refund that contributed roughly 150 basis points to the increase. Full-year guidance remains unchanged, with management targeting constant-currency net sales growth of 2% to 4% and an adjusted EBIT margin of 12.5% to 13.5%.
