Swedish medical technology company Elekta AB reported Q1 FY2026/27 results showing margin expansion alongside a 2% decline in net sales and a 5.6% pre-market stock drop.
The company posted adjusted gross margin of 42.6%, up 560 basis points from 37% a year earlier, while adjusted EBIT margin reached 11.2%, reflecting the impact of cost savings exceeding 500 million Swedish kronor under its turnaround plan. Net income totaled 106 million SEK, with adjusted earnings per share at 0.31 SEK. Free cash flow before dividends and M&A improved by 154 million SEK year-over-year to negative 266 million SEK.
Net sales declined 2% in constant currency terms, with solution sales down 9% and service sales up 5% across all regions. Order growth stood at 3%, with a book-to-bill ratio of 1.11. The company benefited from a 53 million SEK tariff refund tied to U.S. tariffs under the International Emergency Economic Powers Act, equivalent to approximately 150 basis points of margin improvement, with an additional $3 million expected in Q2.
Elekta maintained R&D spending at roughly 10% of revenue and secured a EUR 100 million credit facility from the European Investment Bank in August for R&D project funding, maturing in six years. The company reiterated its full-year guidance, projecting net sales growth of 2% to 4% in constant currency and adjusted EBIT margin between 12.5% and 13.5%.
Regional performance showed mixed trends, with Europe revenue up 5% and EMEA down 4% due to installation delays in markets such as Iran. The Americas region grew, supported by the launch of the Elekta Evo system and pricing actions, while China’s order intake improved for three consecutive quarters despite a weak prior-year backlog. Asia Pacific and Japan faced softer demand amid healthcare budget constraints in Indonesia, Vietnam, and Japan.
The stock fell 5.57% to $51.75 in pre-market trading, extending a decline from its 52-week high of $66.60. Elekta has paid dividends for 22 consecutive years, with a current yield of 4.35%.
