Embla Medical hf.

For 2025, Embla Medical reported 6% organic sales growth, 9% reported growth, and 7% growth in local currency. In Q4, sales were $257 million, with 7% organic growth and 14% reported growth, including 5 percentage points from FX and 3 points from M&A. Full-year EBITDA margin was 20%, and Q4 EBITDA margin was 19% versus 21% in Q4 2024. Gross profit margin was 62% in Q4 versus 63% a year ago, and 62% for the full year. Net profit grew 33% in Q4 and 21% for the full year. Free cash flow was $42 million in Q4 versus $33 million last year, and $100 million for the full year versus $77 million in 2024. Net interest-bearing debt to EBITDA was 2.4x at year-end. For 2026, the company guided to 5% to 8% organic sales growth and a 20% to 22% EBITDA margin; at current FX rates, EBITDA margin is expected to face about a 30 bps headwind versus 2025.

The CEO emphasized that 2025 was a year of “meaningful progress,” highlighted by the Streifeneder acquisition, new product launches, the Ukraine clinic and partnership, and continued rollout of the ForMotion brand. His tone was constructive but measured: Prosthetics and Neuro Orthotics are gaining from innovation and mix, while Patient Care needs continued work to return to market growth. He framed 2026 as a year where execution in Patient Care, continued prosthetics momentum, and new launches will determine whether the company reaches the upper end of guidance.

The CFO focused on margin bridge and cash generation. Gross margin was 62% for both Q4 and the full year, with pressure from FX, tariffs, and Patient Care initiatives partly offset by manufacturing efficiencies and strong Prosthetics and Neuro Orthotics sales. She said Patient Care initiatives affected COGS and OpEx by about $2 million in Q4 and around $6 million for the full year, and that the combined impact of Patient Care initiatives, FX, and tariffs was around 3 percentage points on EBITDA margin in Q4 and 1.5 points for the year. Free cash flow was $42 million in Q4 and $100 million for 2025, CapEx normalized to about 3% to 4% of sales, and leverage ended at 2.4x net debt to EBITDA, within the 2 to 3x target range, supporting continued share buybacks.

Analysts pressed on the strength of EMEA growth, the softness in the Americas, tariff and FX pressure, and the outlook for Patient Care recovery. Management said EMEA was broad-based across prosthetics, neuro, and patient care, with Streifeneder helpful but not the main driver, while the Americas weakness was mostly tied to Patient Care disruption and tougher bracing conditions. On Patient Care, management said restructuring work is largely done and that 2026 should bring gradual improvement toward at least market growth, though exact timing was not specified. They also said tariffs were about $5 million to $6 million for full-year 2025 and would be somewhat higher in 2026 if all else were equal, and that the new U.S. Medicare code for neuro orthotics should start contributing in the first half of 2026.