Genetic Analysis AS (“Genetic Analysis” or the “Company”) published on November 27th the Company’s Q3-report for 2025.
The following are some key points that we have chosen to highlight in connection with the report:
- Sales relatively in line with our expectations
- New product launches expected to accelerate growth
- Gross margin affected by import duties in the U.S.
- Strong cost control and financial position
Sales Growth of 3%
The sales revenue amounted to NOK 2.1m (2.0), corresponding to a growth of 3%. Sales were negatively affected by currency effects, as USD/NOK has decreased in the last year, in constant currency the sales revenue grew 6%. The U.S. continues to be the most important market for Genetic Analysis and accounted for 71% of the total sales during Q3-25, which grew by 4% while sales in Europe decreased by 8%. In terms of sales per category, product sales, mainly attributable to reagent kits to conduct test on Genetic Analysis platform, accounted for 89% of revenues and grew 2%, while service revenues accounted for the rest of the 11% and grew 12%.
The third quarter is a seasonally weaker quarter due to the vacation period during the summer months, why a decrease in sales compared to the last quarter’s NOK 5.9m is expected. Moreover, Genetic Analysis sales are expected to fluctuate between quarters based on activities and inventory level at partners and following a strong Q2-25 with 34% sales growth, a somewhat slower growth rate in Q3-25 was expected. Moreover, the newly launched GA-map® MHI GutHealth Reagent kit is not expected to have contributed significantly to the sales in the quarter, as it is expected to take some time to scale up sales, which is why the outcome of sales revenue in Q3-25 was relatively in line with our expectations.
Continues to Leverage on the Platform Strategy and Market Leadership Through New Launches
Genetic Analysis has continued to develop the Company’s platform, the GA-map®, during the quarter, with development and launches of new products, to continue to leverage on the market growth. The primary growth driver is expected to be advances in research, which have revealed the microbiome’s potential in therapeutics. As therapeutics become more readily available, the need for reliable diagnostic tools is expected to grow in tandem, both for selecting which patients that should receive treatment and for tracking therapeutic response over time, including the potential requirement for repeated dosing. To capitalize on this trend, as one of the first movers within microbiome diagnostics, Genetic Analysis has launched a new test, and reached an important milestone for another, in recent months.
On September 24th, Genetic Analysis announced the launch of the GA-map® MHI GutHealth Reagent kit as a Research Use Only (RUO), which makes the test available for Luminex xMAP® users globally. The test, which is a collaboration with Ferring Pharmaceuticals, combines Genetic Analysis’ GA-map® platform with Ferring’s Microbiome Health Index (MHI) biomarker. Initially, the test will be used for recurrent Clostridioides difficile infection (rCDI) patients to assess microbiome imbalances and monitor treatment effects during microbiome restoration.
The business model for Genetic Analysis regarding the test follows a similar structure as other products in the Company’s portfolio, which is to implement the GA-map® platform at customer sites, primarily laboratories that conduct tests to diagnose human microbiota and uses Luminex instruments. To perform tests, reagent kits from Genetic Analysis are required, which is the primary revenue source for the Company and as consumables, they contribute to recurring revenue with a gross margin of around 80%, paving the way for a scalable business model. The test is expected to drive growth for Genetic Analysis by adding a new product to the portfolio within a new disease area. While a significant financial impact is not anticipated in the short-term, as test sales are expected to scale gradually, we see substantial long-term potential in the recently launched test.
Moreover, after the end of Q3-25, on November 17th, Genetic Analysis announced that a milestone for the Company’s ongoing IBD Precision Dx project was reached, where the biomarker panel development was completed. Genetic Analysis has previously communicated an anticipated completion of a Research Use Only (RuO) version of GA-map® IBD Dx, a new innovative biomarker for Inflammatory Bowel Disease (IBD), by Q4-25 and with the announced milestone, a commercialization, expected during H1-26, is getting closer. GA-map® IBD Dx is a microbiome-based diagnostic tool to predict disease progression and treatment response in IBD, enabling earlier and more personalized treatment.
Like other areas in which Genetic Analysis is involved, the current diagnostic instruments within the IBD field are considered insufficient, leaving a gap in the market for the Company to fill. GA-map® IBD Precision Dx will add a new product to the portfolio, thereby contributing to growth of recurring and high-margin reagent kit sales, which is expected to drive growth and margin expansion for Genetic Analysis.
Gross Margin Affected by Import Tariffs
The gross margin during the quarter amounted to 64% (75.6%) and was affected by import in the U.S. Adjusted for the import tariffs, the gross margin amounted to 75%, in line with the same period last year. The U.S. has introduced a 15% import duty on goods from Norway, where Genetic Analysis manufactures its reagent kits. With the gross margin now affected for two consecutive quarters, it appears that the Company is absorbing the impact of the tariffs while maintaining stable pricing for its customers. If the current situation persists, we expect these duties to continue exerting pressure on the Company’s margins, reducing profitability by approximately 15 percentage points on U.S. sales and around 10 percentage points overall, assuming the geographical sales mix remains consistent with recent quarters.
Continued Strong Cost Control
The operating expenses amounted to NOK 4.3m (4.9), corresponding to decrease of 14%. The decrease is, like in the previous quarter, attributable to general cost savings and the fact that the IBD project is in a less costly phase. As a result of the decreasing cost base, the EBITDA-result amounted to NOK -1.8m, in line with the same quarter last year, despite the decreasing cost base. We reiterate our view that through estimated growing sales of reagent kits and new product launches, a high gross margin and strong cost control, we expect Genetic Analysis to be able to continue to strengthen profitability, even though results likely will fluctuate between quarters.
The chart illustrates Genetic Analysis financial development for each individual quarter, based on the last twelve months (LTM) at the respective point in time.
Stable Financial Position
The cash balance amounted to NOK 17.7m at the end of Q3-25, compared to NOK 25m at the end of Q2-25, corresponding to a decrease of NOK 7.2m. Operating cashflow before changes in working capital amounted to NOK -1.8m, while changes in working capital accounted for the lion’s share of the negative cash flow, amounting to NOK -5.4m, which was mainly attributable to a decrease in trade payables. Analyst Group sees fluctuations in working capital as natural and expects the effect to reverse in the coming quarters. With a cash position of NOK 17.7m at the end of Q3-25 and expectations of continued strong cost control and sales ramp-up, with increased profitability as a result, we view the financial position as strong.
In conclusion, Analyst Group views Genetic Analysis Q3-25 report as stable and largely in line with expectations, with 3% sales growth despite currency headwinds and quarterly fluctuations. The Company continues to strengthen its market position through new product launches and steady expansion of the GA-map® platform, including the recently introduced GA-map® MHI GutHealth test and the milestone achieved in the IBD Precision Dx project, both of which add long-term growth potential through high-margin, recurring reagent kit revenues. While import tariffs temporarily pressured gross margins, underlying profitability remains supported by strong cost control and a lean operating model. With continued product diversification, expanding diagnostic relevance, and a solid cash position of NOK 17.7m, Genetic Analysis is well positioned to drive margin expansion and sustained growth as sales ramp up in the coming quarters.
We will return with an updated equity research report of Genetic Analysis.
