This article first appeared on GuruFocus .
Release Date: August 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ambu AS ( AMBFF ) delivered strong 16% organic growth in endoscopy solutions, with respiratory growing 17.1% and urology/ENT/GI growing 15%.
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The company returned to positive growth in ANPM (1.6%) after two quarters of negative growth, signaling recovery.
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Gross margin improved by 60 basis points year-over-year to 59.5%, driven by better output efficiency, pricing governance, and product mix.
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Reported EBIT margin improved to 13.5%, up 2.2 percentage points year-over-year, with expectations to land in the upper end of the 12%-14% guidance.
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Strong cash flow generation with net free cash flow of $154 million in the quarter and cash conversion of 48%, above the 40% full-year target.
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The company received tariff refunds (DKK 40 million in Q3 and an additional DKK 85 million after quarter-end) that will positively impact Q4 results.
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New product launches, such as SureSide video laryngoscope and Neuroline COP MRICT electrodes, are driving growth and expanding market opportunities.
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Ambu AS ( AMBFF ) maintains its long-term endoscopy growth target of 15%-20% CAGR, with confidence in continued market share gains.
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The company is investing in commercial expansion, particularly in the US, and expects operating leverage to improve in Q4.
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Cybersecurity validation for its monitors strengthens its Indo Intelligence platform, a key differentiator in hospital integration.
Negative Points
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ANPM growth remains very low (1.3% rolling 12 months), with anesthesia volumes still declining due to lost accounts from prior price increases.
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FX headwinds, particularly the US dollar to DKK exchange rate, negatively impacted revenue, gross margin, and EBIT margin in Q3.
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Adjusted EBIT margin declined to 12.5% in Q3, below Q1 (15.2%) and Q2 (14.5%), due to one-time costs from commercial expansion and strategic projects.
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The company faces ongoing tariff costs, with a runway cost of approximately 1 percentage point negative impact expected to carry into next year.
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Ureteroscopy market share gains are slower than planned due to a crowded market and longer sales cycles, impacting growth in that segment.
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The updated revenue guidance of around 10% organic growth is lower than the initial expectation, driven by weak ANPM performance.
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Gross margin in Q3 was lower sequentially due to FX and one-time costs, with no immediate improvement expected until Q4.
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The company is making strategic pricing concessions in ASCs, which could pressure gross margins if not managed carefully.
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Commercial investments in the US sales force have increased costs, with ramp-up expenses impacting Q3 profitability.
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The company remains cautious about recognizing outstanding tariff reclaims (DKK 70 million) until they are received, adding uncertainty to future earnings.
Q & A Highlights
Q: Can you provide more color on why the Q3 margin impacts are one-off and not persistent into Q4, and what this means for 2027 top-line and margins? A: CFO Henrik Skagbender explained that the Q3 one-offs are mainly three things: onboarding and ramp-up costs for new commercial hires (particularly in the US), a couple of strategic projects expensed in admin costs that are now complete, and FX timing effects. He confirmed these will not recur in Q4. For 2027, he deferred detailed guidance to the Q4 call but reiterated the runway cost of tariffs at around a negative one percentage point before refunds, and confirmed the company remains on track with its long-term strategy.
Q: Are you still comfortable with the mid-term EBIT margin target of around 20% by FY28, and how do you view the ANPM business's long-term growth trajectory? A: CFO Henrik Skagbender confirmed the 20% target remains unchanged, noting that the path to it is driven primarily by operating leverage and a lower OpEx ratio, with gross margin improvements as a secondary factor. He reminded that growth investments remain a priority. For ANPM, he stated the company remains solidly within its 3% to 5% long-term growth guidance despite this year's lower trajectory, and sees no reason to change that view, supported by new product launches like the Neuroline COP MRI/CT electrodes.
Q: Can you elaborate on the commercial investments in Q3, and should we expect a gradual ramp-up or a front-loading of these costs? A: CFO Henrik Skagbender clarified that the company has not front-loaded massive costs. The Q3 increase is due to onboarding and training costs for new commercial hires, particularly from the US sales force expansion and the separation of the Urology and ENT sales teams. He confirmed that these costs are now at a run-rate level that will carry into Q4, and there is no expected big step-up in commercial costs in Q4. Longer-term, the company will continue to evaluate growth investments with longer payback periods.
Q: What should make investors believe we will see an inflection point in the slowing Urology, ENT, and GI segment? Is it product launches or new markets? A: CEO Britt Meelby Jensen stated that the only major change since the Capital Market Day is that the company is not gaining market share in Ureteroscopy as fast as expected due to a more crowded market and longer sales cycles. However, she highlighted that growth is currently driven by existing solutions like aScope 4 Cysto and aScope 4 Rhino-Laryngo, and the company has improved solutions in development that will address a broader market. She emphasized the company's leadership in technology and integration into hospital systems as key differentiators, and noted growing momentum in GI with the aScope Gastro.
Q: Given the price sensitivity in the ASC segment, are you willing to compromise gross margin to pursue growth there? A: CEO Britt Meelby Jensen acknowledged that ASCs are more price-sensitive, but clarified that while the company uses strategic pricing in selected accounts, it still maintains a significant premium over other single-use players. She emphasized a focus on avoiding price dilution and highlighted that the aScope 5 Cysto premium solution is attractive in some ASC settings. CFO Henrik Skagbender added that the gross margin impact from ASC pricing is not significant at the group level and is smaller than the FX impact.
Q: Can you quantify the gross margin impact from price concessions on aScope Cysto in Q3? A: CFO Henrik Skagbender declined to quantify the exact impact, stating that FX is a bigger factor on gross margin than these underlying pricing trends. He reiterated that the company is not seeing wider price erosion at a larger scale and remains focused on differentiation through innovation and commercial execution. He also noted that while the outpatient/ASC segment has a lower gross margin than hospitals, it does not have a major effect at the group level.
Q: What is new in your commercial approach in the US, and how should we read the investment breakdown between manufacturing and commercial next year? A: CEO Britt Meelby Jensen explained that starting in April, the company adjusted its US commercial setup to be more customer-centric, focusing on decision-makers and leveraging the portfolio across different hospital departments, while also addressing the shift to outpatient settings. CFO Henrik Skagbender added that the company has attracted strong commercial talent, and the OpEx investments are now at a run-rate level. On CapEx, he noted continued significant investment in innovation and production ramp-up for upcoming product launches, but no new factories are needed.
Q: What is the gross margin difference between your Mexico and Malaysia manufacturing sites? A: CFO Henrik Skagbender stated that excluding tariffs, the landed margin (production cost plus distribution cost to customer) is the same level for both Mexico and Malaysia. He noted that there is currently a 10% tariff on products imported from Malaysia to the US, which is a factor in the company's manufacturing footprint strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
