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Gustaf Meyer: Hi, everyone, and welcome to Redeye and today's interview with the CEO of Senzime, Philip Siberg. Welcome, Philip.
Philip Siberg: Thank you. Nice to be here.
Gustaf Meyer: Earlier today, you released your Q4 report, and we also have some investor questions. But first, maybe we can have like a broad question at first. If you talk about the sales, SEK 28.3 million during the fourth quarter. You also installed 416 new TetraGraphs systems. How would you summarize the quarter and also, of course, the full year of 2025?
Philip Siberg: So Q4 was pretty good. We doubled the business more than that. I had probably expected more. So a little bit came in, in January. It's always hard to define these closings of large hospital systems. But all in all, I think we had another strong year. We delivered according to our messaging and our guidance. We're continuing to strengthen our market position, and we're seeing a continued very fast conversion to our technology. And it's interesting to see as well that it's not just U.S. now that we -- in the Q4, we had strong uptake in Asia and European market as well.
Gustaf Meyer: And you mentioned the timing there. But if we look at the number of new installed systems, 416, if you compare that to Q2 2025 and also to Q3, it's a bit lower. But that also depends on how many upgrades you have been doing during the quarter. So maybe you can elaborate on that. And yes.
Philip Siberg: Yes. So I mean, during 2025, we definitely had a few U.S. accounts specifically who decided to upgrade from the previous classic TetraGraph to our new next generation. The response has been very positive. And as I presented, the utilization rate has spiked up significantly among these accounts and seeing across the line over 50% uptick in usage. So there were a few hundred devices last year, I think predominantly during the spring and summer that were upgrade deals, while during the fall, it was more normal deliveries. I think it -- I mean, the number of monitors varies a little bit quarter-to-quarter, just depending on when the contracts come in. And as I mentioned, just we had some major contracts come in, in January instead of closing in December. December and Q4 is specifically in the U.S., a tricky quarter. It's Thanksgiving, it's holiday season, and it's hard to push purchasing and contracting to close with the same urgency as we want as a company.
Gustaf Meyer: Great. And if we look at the full year, the total sales or the reported total sales came in a bit lower than your guidance of SEK 110 million to SEK 140 million. However, if we look at the fixed currencies, you reached that target. Of course, one of the reasons is the weakened dollar. Are there any other reasons why you're in the lower end of this guidance if we look at fixed currencies?
Philip Siberg: Yes. Thanks for good summary. Definitely, the dollar and the euro affected us top line-wise. We had expected regulatory processes in Japan and South Korea to move faster than they did. So we had expected for the year to start delivering great volumes of next-generation TetraGraphs into these regions. We did get the regulatory PMDA approval in Japan in December. So we had our first shipments there. And Korea is still in the process and should happen mid- to late 2026. So once that is in place, I foresee continued strong growth there. So that -- and uncertainties in some of these deals when they come in or not, I think it was really the currency effects and just delayed regulatory processes beyond our control.
Gustaf Meyer: Maybe we can also focus a bit on the South Korean market because I saw your presentation earlier today, and you showed a really nice graph about the usage rate in South Korea, and it has increased a lot. What are the main reasons for this?
Philip Siberg: So I think it's -- South Korea is an interesting early adopter, fast-moving market, likes technology. We came in there a couple of years ago with a strong partner. We've been kind of methodically working to develop it, and now we're really seeing the results from it. I would say that we have a strong market position by now. Our local partner is successful in their business model. I'm just seeing that the conversion to EMG is now kind of double-digit conversion. So moving very fast. And there is a little bit of reimbursement available in the local market, which we believe is going to increase as well as come into the Japanese market. So those are some of the driving factors. But I think that it showcases as an example of how we can develop markets once we're in there and working methodically, you can get to these types of utilization rates, which is in line with our long-term plans.
Gustaf Meyer: Great. If we move on, also talk about the costs. OpEx increased a bit during Q4 if compared to, for example, Q3. Maybe you can add some color to that.
Philip Siberg: It did. I mean Q4 is always a more expensive quarter. We have a lot of marketing events. We always have our big congresses happening. And there's always a little bit of an extra boost in terms of sales expenses and commissions. But we did have roughly SEK 4 million to SEK 5 million that were, I would say, onetime effects in the fourth quarter. I did not separately report these as onetime effects, but they were certain expenses that we incurred that we took in Q4. So I think it's -- as we look ahead for 2026 and this year, we're anticipating a flat to decreased operating expense level for this year.
Gustaf Meyer: And when you have that guidance, does that include the one-offs in Q4?
Philip Siberg: So the one-offs are not supposed to happen again in 2026. So that's why I foresee an operating expense level, which is lower than what we had in 2025.
Gustaf Meyer: Great. Also in the report, you had this inventory write-down in the cost of goods sold. What is the reason behind this?
Philip Siberg: Yes. So the reason -- I mean, we've had the TetraGraph Classic on the market for a couple of years. And then as most of you know, we introduced the next generation just over a year ago. That platform has been extremely well received. We're seeing increased uptick in usage. So we decided here strategically that we want to carefully start end-of-lifing the classic because of the superiority of the NextGen platform and really the focus that we're doing it. So we decided to make a write-off of some of the older raw material and kind of components related to it and decided to take it in the '25 books. We're still going to remain with the product in the market. We need to have it for 7 years as part of regulatory requirements, but really pushing out the NextGen at a higher price point this year and continue to drive up utilization rates.
Gustaf Meyer: Because if we look into 2026, first of all, maybe what trends do you currently see? And also in the report, you have the guidance that you expect growth to be at the same level as in previous years and also you expect to become cash flow positive during Q4 this year. Yes, maybe you can just summarize your overall expectations and also how will you -- what will you do and what actions will you make to reach this target?
Philip Siberg: Yes. I think the -- I mean, the headwinds of our business and the tailwinds, sorry, continue to be strong. I mean there's a continued very strong underlying macro effect for neuromuscular monitoring in general, more and more guidelines coming out, more and more data supporting the conversion. I would say that the EMG technology that we are spearheading has certainly taken over as the new gold standard. But it's -- you don't convert large hospital systems overnight, but I think we're winning after winning, and we're really making our success story here. So as I look into this year, we're foreseeing continued growth in all our markets. We're foreseeing continued increase in utilization and using of sensors. And how we do that is work very tightly with our customers. We have a dedicated clinical team that helps to educate, helps to create standardization protocols. We're very methodical in the way we choose our customers. So we make sure that wherever we sell and that we install, there is a clear long-term uptick and usage trend among our customers. I mean we've seen published papers come out looking at other technologies on the market, other similar types of products. And when you don't have that kind of support that we offer, then the usage rates are very poor. So that's part of our mission to have the science, have the team and have the technology to really drive up usage.
Gustaf Meyer: Interesting. Also, this morning, you also announced that you have secured a SEK 50 million credit facility. What are the reasons behind this?
Philip Siberg: Yes. So we -- I mean, as part of being a fast-growing company, you have -- we have a working capital needs here. We partly need to -- the expectations from our customers are very fast deliveries. So we're kind of tying up a fair amount of capital in inventory, et cetera. And what we wanted to kind of show and have is just the security as we continue to grow that we have this kind of a credit line. So as we have peaks in working capital needs throughout the next 18 months, 24 months, we have the ability to kind of draw that money. And I've been clear to the market before that we're not expecting to do any rights issues or capital raises from equity rather we're funding this company now based on our customers, but also having a little bit of -- we're growing up as a company. I think it's a strong vote of confidence showing that we have a bank and a credit facility to continue to grow this company. And again, this is fair market terms. There are no special covenants or other types of dilutive instruments tied to this. So it more gives the company an assurance to continue to grow in the path we're on.
Gustaf Meyer: And also, I guess that this could be related to actually one of the questions that we got from an investor. If you could -- yes, you have talked about introducing a new business model. What is that -- what kind of business model is this?
Philip Siberg: Yes. So we're -- I mean, we're seeing that -- I mean, if you look at reference case, Intuitive and the da Vinci robots, I mean, probably the most successful medical device company out there. A big part of their business case has been to do different types of robotics as a service. And we've just seen that there's been a customer demand among hospitals to offer if we could have the TetraGraph as a service offering where you link it to usage rates of disposables. So what we've introduced is a Tetragraph as a service business model. We then offer the monitors on a placement type of agreement. We get a premium pricing for the sensors. We link it to various types of agreements around this. And what we've seen is that the sales cycle reduces about 50% in time because the hospital is no longer relying on burdensome capital processes. So this makes it easier to rapidly deploy into large accounts. We won a number of these deals. It ties up a little bit more working capital or CapEx for us because we own the instruments, the monitors. But the upside of this is that we're getting a significant premium on the sensors. So the return on investment of this is very short and long term, it drives up gross margin and ultimately revenues and earnings.
Gustaf Meyer: But just to clarify, this is only in the U.S., right?
Philip Siberg: This is the U.S. only.
Gustaf Meyer: Yes. But if you look into 2026 then, how many of your new customers do you expect to have this updated business model and...
Philip Siberg: Yes, it's hard to say exactly the split. I mean there's definitely a lot of interest among hospitals, but hospitals also are very clear on their strategies. Some simply want to do capital purchases. They want to own the goods. Some of our best customers in the U.S., we have placement agreements with, where we tie usage of the device and secure revenues from that. But this is a third business model where we provide it as a service. But I think that we're going to see a large part of our -- a significant part of our business this year in the U.S. is going to be that. And we've already signed two important deals very fast this year. So I think it's going to help to drive business.
Gustaf Meyer: Interesting. Also, another question from an investor was about the manufacturing of the system and also the sensors. Could you elaborate a bit more on the manufacturing location and also components and so on? Where do they come from?
Philip Siberg: Yes. So we're Uppsala based. We have a strategy. We produce all the monitors here in-house. I try to drive a very church tower principle, meaning that I want to see my suppliers. I want them to be local because we drive a very sustainable business model in the production where ISO 14001. We are connected to the UN Global Compact. So it's all about making sustainable production. So we produce it in-house. We have the capacity here for the next 5 years to meet the business plan in the current setup. The disposables, we are the legal manufacturer as well, but we produce them together with partners. And we are shifting all our kind of sub-supplies and base manufacturing from Asia to Europe. So we're really localizing this to be a European, Scandinavian manufacturing process.
Gustaf Meyer: Many of the investor questions have already been discussed in previous questions during this interview, but we also got a question about if you could give an update on the patent situation?
Philip Siberg: Yes. So we continue to invest and really drive innovation and science in the market we are in. We currently have 107 patents approved for our portfolio. We filed 8 new patents in 2025. So really driving field and coming out with new innovations. And I've shared before, what we're doing here is we're continuously coming out with a new feature set and more and more becoming a software company where we're providing -- since we're pulling in so much data from our users, we can use that data to further train, innovate, come out with new feature sets. So our customers can always be assured that they have the latest science and features and benefits of the technology that we have. So a customer of Senzime is not just buying a onetime device. They're buying a 7-year cycle of significant new feature sets coming out that will ultimately drive patient outcomes.
Gustaf Meyer: Great. Maybe just the last question here because we haven't talked about that yet, if there are any other Senzime products that are in development?
Philip Siberg: There is always a lot of exciting things in development. So keep your eye out. We're going to come out with more things this year. And this is I would say, solutions and products that are adjacent to what we're doing today to help drive up usage rates to make it more universally connectable. Remember that probably 99% of all our monitors today are connected to electronic health records and external monitors. So it needs to be universally connectable to any system and transmit data. But there's more in the pipeline, and there is more in our research lab that we have in the long-term road map, including further development of the RMI ExSpiron technology that we also have in-house. And there are exciting things that are to come. I will get back when that is ready.
Gustaf Meyer: And I guess that we all look forward to that. Thank you very much, Philip, for this interview.
Philip Siberg: Thank you very much.