Dynavox Shares Fall 16.02% After Third-Quarter Results Despite Higher Profit
Key Facts
Dynavox Group shares fell 16.02% following the release of its third-quarter 2026 results, Investing reported on October 21, even as revenue and operating profit rose. The company said in its quarterly report that revenue increased 13% to 685 million Swedish kronor from 606 million kronor a year earlier. Revenue fell short of a forecast of 709.77 million kronor listed in Investing's results and forecasts table for the same quarter. Currency-adjusted revenue growth was 15%, exceeding the reported growth rate. Management said complexities in insurance reimbursement procedures in the United States hampered growth during the period.
The results showed reported operating profit rose 87% to 119 million Swedish kronor, compared with 64 million kronor in the corresponding quarter of the previous year. The operating margin improved to 17.4% from 10.6% a year earlier, according to the company's financial disclosure. Basic earnings per share were 0.83 Swedish kronor, up from 0.36 kronor in the comparable period. Basic earnings per share exceeded the forecast of 0.783 kronor listed by Investing, while revenue fell short of the forecast shown for the quarter. Cash flow after ongoing investments also rose to 62 million Swedish kronor from 20 million kronor a year earlier.
Explaining the obstacles facing the U.S. business, the chief executive cited "increasing administrative complexities and longer processing times," according to the company's earnings report. He linked these difficulties particularly to Medicaid and its managed care organizations in the United States. He said those procedures hampered the company's growth in the U.S. market during the third quarter. Outside the United States, management described business performance in Europe and other markets as mixed during the same period. It named Germany and Australia as the leading contributors to growth in its review of performance across the group's markets.
The gross margin declined to 69% from 70% in the corresponding quarter of the previous year, according to the company's results. Management said higher component costs exerted pressure, while "operational efficiency and improved logistics" supported the gross margin during the period. In comparison with the previous quarter, the company had reported in July that second-quarter revenue grew 11% to 670 million Swedish kronor. Currency-adjusted revenue growth in that quarter was 16%, according to its financial report. The second-quarter operating margin was 15.7%, compared with 7.4% in the corresponding period of the previous year.
For the January-September period, group revenue totalled 1,942 million Swedish kronor, compared with 1,790 million kronor in the corresponding period, according to its financial report. Dynavox is the parent company of Tobii Dynavox, which specializes in assistive communication technologies. The group is headquartered in Stockholm and listed on Nasdaq Stockholm under the ticker DYVOX. Under its published financial targets, the company aims for average annual currency-adjusted revenue growth of 20%, including contributions from acquisitions. It also aims to reach and exceed an operating profit margin of 15%.
On product plans, the chief financial officer said during the earnings call that the company was preparing to launch new products in 2027. He added, according to the call transcript published by Investing, that these preparations were increasing capitalized research and development expenditure compared with previous years. He said: "We have new product launches coming in 2027, and this increases capitalized research and development expenditure compared with previous years." The next event on the company's financial calendar is the release of its year-end report, including fourth-quarter 2026 results. The company set February 4, 2027 as the publication date, according to the calendar included in its report distributed through Nasdaq.