C-Rad AB's Strategic Position in the SGRT Market Amid Revenue Headwinds

In the evolving landscape of radiation therapy, C-Rad AB (STO:CRA B.ST) has carved a niche as a leader in Surface Guided Radiation Therapy (SGRT), a technology poised to redefine patient safety and treatment efficiency. While the company faces short-term revenue headwinds—particularly in the Asia-Pacific region—its strategic focus on order intake momentum, service expansion, and regulatory tailwinds positions it as a compelling long-term investment.

Order Intake Momentum: A Global Footprint Strengthened by Key Markets

C-Rad's Q2 2025 interim report revealed a 6% year-over-year increase in order intake to 134.8 MSEK, driven by robust performance in the Americas and EMEA regions. In the U.S., the company secured a 10 MSEK product order for a prestigious Texas hospital and an 8 MSEK multi-year service contract with an East Coast clinic. These contracts underscore C-Rad's growing traction in a market where SGRT adoption is nearing 40% of radiation therapy setups.

In EMEA, order intake surged by 47%, with landmark agreements in France and Germany. A 8.5 MSEK strategic contract with Ramsay Santé and a 9 MSEK deal in Germany's Stuttgart region highlight C-Rad's ability to penetrate advanced markets. These wins are not isolated; they reflect a broader trend of SGRT's integration into standard clinical workflows, supported by international standards like the AAPM Task Group 302 report (2022), which validated SGRT's role in replacing outdated tattoo/laser-based patient setups.

Service Expansion: A Recurring Revenue Engine

C-Rad's pivot to service contracts has proven to be a stabilizing force in an unpredictable economic climate. Service-related order intake grew by 86% at constant exchange rates in Q2 2025, driven by multi-year agreements that provide recurring revenue. This shift aligns with a global trend of healthcare providers prioritizing operational expenditure (OpEx) over capital expenditure (CapEx), particularly in cost-sensitive markets.

The company's service contracts, typically spanning three to five years, not only ensure long-term cash flow but also deepen customer relationships. For instance, the U.S. East Coast clinic's service agreement includes ongoing support for SGRT integration, fostering loyalty and cross-selling opportunities. C-Rad's CEO, Cecilia de Leeuw, emphasized that this model enhances customer satisfaction while insulating the company from the volatility of one-time product sales.

Regulatory Tailwinds: A Catalyst for Global Expansion

Regulatory developments in 2025 have further bolstered C-Rad's growth prospects. In Asia-Pacific, despite a 15% decline in order intake (due to a strong prior-year comparison in Japan), the company secured proton orders in China and expanded its presence in India, Thailand, and Vietnam. Regulatory approvals in these markets are accelerating as governments prioritize cancer care infrastructure and digital health transformation.

Southeast Asia, in particular, is emerging as a high-growth corridor. Singapore's adoption of AI-driven SGRT workflows and Thailand's investment in modern oncology centers are creating fertile ground for C-Rad's technology. By 2030, the Asia-Pacific SGRT market is projected to grow at a CAGR of 17.2%, reaching USD 650 million, driven by rising cancer prevalence and healthcare modernization.

Navigating Challenges: APAC Headwinds and Strategic Resilience

While the APAC region's Q2 performance was softer, C-Rad's long-term strategy remains intact. The decline was attributed to a high base in Q2 2024, which included a large Japanese order tied to the VitalHold launch. The company is addressing this by diversifying its APAC portfolio—expanding into India and Vietnam, where demand for SGRT is rising due to urbanization and improved healthcare access.

Moreover, C-Rad's recent product innovation—a new gating solution developed in collaboration with a major industry partner—positions it to capture market share in emerging applications, such as stereotactic body radiotherapy (SBRT). This innovation, coupled with cost efficiencies from replacing external consultants with in-house teams, strengthens its competitive edge.

Investment Thesis: A Long-Term Play on a Disruptive Technology

C-Rad's ability to secure high-value contracts in advanced markets, expand its service business, and navigate regulatory tailwinds in key regions paints a compelling picture for investors. While short-term revenue fluctuations in APAC may test patience, the company's focus on recurring revenue and global expansion mitigates these risks.

For long-term investors, C-Rad represents a unique opportunity to capitalize on the shift toward precision oncology and non-invasive radiation therapy. Its alignment with global standards (e.g., AAPM TG-302), strategic partnerships, and operational discipline suggest a strong trajectory toward its medium-term targets: organic growth of over 10% and an EBIT margin of 25%.

In conclusion, C-Rad AB's strategic positioning in the SGRT market—anchored by order intake momentum, service expansion, and regulatory tailwinds—makes it a resilient long-term investment. As the global adoption of SGRT accelerates, particularly in Asia-Pacific and EMEA, the company is well-placed to deliver sustainable value for shareholders.