Carasent AB (publ) (CARA) Earnings Call Transcript & Summary

Welcome to Carasent Q1 Report for 2025. [Operator Instructions] Now I will hand the conference over to CEO, Daniel Ohman; and CFO, Svein Martin Bjornstad. Please go ahead.

Good morning, and welcome to our presentation of the first quarter of 2025. My name is Daniel Ohman, and I will start to present, and then I will hand over to Svein Martin Bjornstad, our CFO, to take the rest of the presentation. So looking at the first quarter, we continued to improve rapidly. We have our EBITDAC margin going from minus 8% to plus 6%, and that's our most important financial metrics internally. And performance is in line with our plan overall. We have slightly higher costs in the quarter than we had planned for, and that's -- it's not a lot we're talking about. We're talking about SEK 1 million to SEK 2 million more cost than we would have liked to have. So it's not a big deviation. And this deviation is due to partly that we have chosen to invest more into AI and then we're talking AI in our products, AI in our development, we've been working it for a long time. We've been able to offset most of the costs of development in AI by getting rid of other costs, but some of it has increased our total costs. We also had to do some write-down of the receivables from the companies that went bankrupt as we spoke about in the last quarter. We also have had discussions in the Board about capital allocation, and I will get back to that later on in the presentation. I feel that we have good progress in our large development projects, that's surgery for Sweden. e-prescription, there's a new regulation around e-prescription called NLL in Sweden, which means that in all EHR systems, you will be able to see all prescriptions from all other systems, and you will also be able to change those prescriptions. So that would be a really good thing for our customers that even if you're not in one of the regional systems, you will still be able to see all -- everything around medication and that way around also. Volvat is proceeding according to plan, the implementation of Metodika in Norway. We're also building our patient platform for Norway, that's going well and Webdoc X continue to develop for the German market with a lot of new functionality. So in total, I think that we see really good progress in other projects nowadays. The bankruptcies for some Webdoc customers. The one we spoke about in the last quarter, there are no major new ones but a bit higher pressure on sales now. We are selling better and better. Every quarter, we get a bit better at selling. So I feel that's really good and we can follow that. We're learning. We do new things in marketing, we see that we can do different things and that our reputation is getting stronger and stronger, which makes it easier to sell. So that's really positive. And we need that because of those bankruptcies. Signed, not implemented ARR is now at NOK 12 million, so that's slightly down, and that's because we have implemented Medrave for VGR. So that's why that's -- and we have not signed any new major contracts. And we have 14% organic recurring revenue growth and 26% contracted ARR growth. So as we have started to talk a little bit about AI in our products, I just want to take the opportunity to talk a little bit about what we're doing and how we're thinking about it. So yes, briefly, there are basically 2 types of AI support in our products that we could do. One is clinical decision support. So that's when we help doctors, nurses, physiotherapists to take decisions on what to do with the patients. So that could be automatic triage where AI decides on the severity of the patient's problem and automatically guides them to the right care level. This type of decision support. We never aim to build ourselves. That's because this type of AI solutions or solutions in general, doesn't have to be AI, put in a very difficult legal framework called Medical Device Directory MDR. And you basically become a research company, and you have to prove in large studies that you always do the same thing and your advice is the right ones and so on. So that will never be our aim to build those type of solutions, either with or without AI. It's also not a big topic for our customers. We sell mostly to the private sector. The private sector has a bit easier patients, that's where what they're there for. So the clinical decision is not what takes a lot of time for our customers. The other type of support is administrative support. And this is what our customers really hate and what it's a lot of their time, all the reporting to different places, for example. We already do a lot with it. So one being our systems are really user-friendly, easy to use good workflows, we also have a lot of automatic reporting connections and so on. Between these -- through using our products, you have to much less demonstration than in many other systems. But still, there are things we can do. And what we invest in at the moment is what's called ambient listening. So that means that the AI is listening to the patient meeting and then automatically proposes a medical record for you. We've been playing around it for quite some time. I think like 2 years, we've been playing with it. And now we felt that actually last quarter, we felt that now it's time to start really put it into our products. We don't really feel that we have to be the first mover or the opposite actually. We want to see that first that the use cases are there that the customers really appreciate new technologies, new solutions and having a strong EHR position where we are the dominant provider of a system to our customers and difficult to change system, we are -- we don't have to be very first mover. It's easy to just replace whatever they're using or quite this at least. And our advantage in this type of scenario is that we can build it directly into the system. So we get really tight integrations and we have access to all types of data around the patients and visits and whatever it is within the clinic. So that means that we can build support, it uses all that knowledge. And that's why I think that sometimes is the right that we do it, but not always, and that's what I want to show you on this. Next picture. So different situations and different customers have different needs, and we will not try to solve all by ourselves. And this is some examples when we talk about ambient listening, what we're selling now or start selling now. There are really big international companies like Nuance, that's owned by Microsoft, that have, I mean, really large resources, large training data. But what they lack is knowledge about how EHR or methodologies supposed to be written in Sweden, how we set diagnosis and so on. So they are good at certain things, but less good at other things. We sell their products today, and they're really good at, for example, speech to text, where a doctor or physiotherapist talk and it writes exactly what the doctor, nurse or physiotherapist say. Their ambient listening is not as well suited for Swiss circumstances at this point in time. There are also specialized products. Another example is [indiscernible], which we also mean our customers appreciate that solution. It's built for our type of customers, they are niche, they can really focus on this and they can really invest in it in another way that we do and take higher risks than we would do with these type of solutions. And they will be the right for certain type of customers, for example, they built an app so that you can take the listening with you when you leave your outpatient office. So if you are physiotherapist and you go out to the training floor, you can take that with you and record entire meeting. It might not make sense for us to build such an app, for example, because it's maybe 10% of our use cases for our customers. And then we can have our own integrated. And the advantage we have is that we can build really seamless workflows as we do with other things. So it's always the right patient. You start it all within the same system. You don't have to switch windows. You don't have to go into other things, you don't have to copy things. We also build for our type of customers, and we have access to all the data that could be needed to provide a good medical record. But I think all 3 of them probably at the place, and it's also difficult to foresee exactly where technology will take us and what will happen. So we do not put everything on one horse or whatever to call it. So we're doing all these 3 things. But we think that for many customers, our solutions are probably the best choice, and we aim to make sure that it is. So that's a little bit how we're thinking about AI in our products. And over time, we see that we will add more and more administrative support in our systems. And that's why it's important to start releasing those type of features in our systems. Also worth mentioning is that the thing we're releasing now is for all our systems. So it's already included in Webdoc SE in pilots and also in Webdoc for Germany. It will soon be in our Norwegian systems, and it's all using the same back end and -- but it's been trained on different languages. So slightly different back end, but in the same organization that builds it. Moving on. We talked about how we use our capital. And looking at how we grow, new sales is, of course, very important. What's worth noting is that of most new sales are to start-ups, so clinics that start new and then we grow with them. So new sales are extremely important, more important than it looks like in the numbers because it's with those new start-ups that we then grow the coming years. So new sales is very important even if they often are small. With surgery, we aim to also move over larger clinics and to increase that part of new sales. We grow with existing customers, as mentioned, that's both since they are growing, but also since we add more and more value into our systems and different add-ons we can sell. And then we have acquisitions. And what's really worth and important to note here is that we do not aim to start making acquisitions and looking at different types of structured process that come out from advice and so on. We have a few companies that we know will add a lot of value to our organization that we would, over time, like to acquire. So what this means is that we would go and knock on the door and say, hi, we think that we could add value to create more value together and then have a discussion. So that's very different from the acquisitions of hold in this company, but it's the same strategy we had in Germany, where we looked at all different providers, and we knocked on a few doors and said "hi, we think that together, we would be a good fit." And that's how we have done acquisitions before also. I think that's where you really can create a lot of value that you have chosen this and this and this company/product fits really, really well with our company. So we're not aiming at becoming a serial acquirer or so, but we see that there are some opportunities to create real value and good value and strengthen positions. So that's what we're talking about. It will not be many acquisitions and not in a rapid pace. And what that means for our capital allocation, that is that we see that we want to do some acquisitions, but they are very targeted, and we know exactly who those are, and we have no hurry to do those. But that means that we want to keep some cash on hand for that. And we also have -- we have on hand already SEK 253 million, and we have a rapidly increasing cash flow. So that means that we will do recurring share buybacks. The exact size of those will depend on the discussions we have with those M&A targets I spoke about earlier. So the Board will decide on how much to buy back when they think it's the right time to do it. So I hope that we -- quite soon after AGM, we'll be able to come back to you all on that and what size it is at this year. But I cannot give you that answer today. But we see that share buybacks is a good way of distributing cash to our shareowners. And then we will be looking at a few very selective M&A opportunities. And looking ahead, we continue to have a big focus on growth, of course. We have pilots in 3 very high potential projects ongoing at the moment. So we have Surgery, we have Volvat where the first pilots are live now and also [indiscernible] that's our ambient listening solution, where we also have pilots live. So 3 very high potential projects that will be really fun to follow. We continue to focus on efficient use of resources every day, every month, every quarter, becoming more and more efficient in all parts of what we do. And I think that's extremely important. That's how we will be able to scale in a really good way and cost control is vital. And finally, launching Webdoc X in Germany. And there we also have our largest high potential project, so the fourth one with first German pilots live, as you know, and we aim to replace Data-Cur, their older product in Data-AL during 2025. So with those words, I will hand over to Svein Martin.

Thank you. Starting off by looking at high-level metrics. We improved a lot also in Q1. Our ARR grew 26% to NOK 321 million, including the backlog. And our recurring -- organic recurring growth was more or less in line with previous quarters, net retention rate as well at 110%. And then margins also improved. We did expect margins to improve a couple of percentage points more, but we have this additional cost that was mentioned. But overall, a quarter in line with our plan. If we take a closer look at the P&L, you see strong improvements year-over-year. Revenue growth was 29%. And we have highlighted some points there where Webdoc grew at 15%. So there, you see that it's slightly lower than what we posted last year. And this is because these bankruptcies or churn took full effect from the end of Q1. So going into Q2 as well, the pace will be affected by this churn. On the other hand, we did have a very strong quarter on the sales side in Webdoc in Q1. So we expect to be back on track quite fast. Overall growth, as mentioned, 29%, driven by the acquisition of Data-AL and strong organic growth. And you see also consulting revenues was very high. This was due to this big implementation projects being at full speed and also sort of weak comparables. Last year, it was quite slow on consulting. Third point, SEK 10 million EBITDAC improvement or 14 percentage point increase in margins. Worth noting as well is that in the first quarter, we were close to being neutral on EBITDAC for our German operations. And this was because of a very strong quarter on profitability side for Data-AL which had good consulting revenues, which helps, of course, and also that we have gone through the cost base after the acquisition and removed particularly on the OpEx and COGS side, removed unnecessary costs and also negotiated with suppliers. So the underlying profitability now is better than before the acquisition. If we look into the growth, ARR growth, it was, as mentioned, more or less in line with previous quarters in the reported figures, but there are some effects that pull in opposite directions. So as Daniel mentioned, we implemented the VGR contract for Medrave and also implemented some clinics for Frelsesarmeen in Norway, which also contributed to the growth. That would have increased the growth a couple of percentage points. But then the Webdoc churn for the bankruptcies took full effect from -- in these figures. So that pulled in the other direction. So overall, it was quite stable. If we look at the profitability, it's improving rapidly. We have gone from minus 30% margin 2 years ago to plus 6% now. We are, of course, still far away from our potential. And the key -- given that we have a strong backlog of revenue to implement and a good underlying growth momentum, the key will be to convert as much as possible of those revenues into profits. And we look -- if you look at this slide, it shows how we are doing with this over the last year. So the left-hand bar, it shows the revenue growth, the revenue increase, excluding Confrere, which was sold and Data-AL, which was acquired over last year, so the organic business. And then we had the COGS increase naturally. OpEx was quite flat. And then the personnel expense increased SEK 2.6 million. But we did have -- last year, we had some one-offs related to layoffs of SEK 1.7 million. So if we remove those from the comparison figures, it increased SEK 4.3 million. And then CapEx decreased by a similar amount. So in total, we were able to convert 90% of the revenue increase into EBITDAC. And if we adjust for the nonrecurring last year, it was 73%. So we have set an internal target to convert around 80%. And yes, we did have this extra cost this quarter. Next quarter, we will have around SEK 1 million in extra cost for the new incentive program. So it will be key that we succeed on these cost initiatives that we are taking. And over the last year, we have removed roles that were not necessary and also replaced consultants for employees, which typically generates a good saving. So that is why we are able to keep these costs quite flat even though the -- of course, we have wage increases, et cetera, and add roles in other areas. Finally, the cash flow. We had, as mentioned, good improvements in profitability and lower investments, but we had the working capital headwinds. So I mentioned this in the last report that we had a lot of outstanding invoices for the relisting at the year-end, and these were paid in Q1. This was an effect of around SEK 12 million, SEK 13 million. So if you look at the figures, it would have been quite strong if we hadn't had this effect on the cash flow. So overall, financially, we developed despite some smaller items on the cost side, we developed according to plan and in line with our financial targets for the year, which we maintain. The key to reach those will be to roll out the implementation projects in time and also, of course, keep the cost control. So with that, we can open up for Q&A.

[Operator Instructions] The next question comes from Fredrik Nilsson from Redeye.

I want to start with the new AI functionality. Could you perhaps elaborate a bit on what share of customers do you believe will be interested in your solution relative to third-party solution? And also, if you could say something about the pricing?

Yes, sure. Thanks, Fredrik. So I believe that over time, we will be able to sell to a large portion of our customers, this type of solutions. It has the potential to -- I mean, what doctors do when they have an outpatient, they have physiotherapist or nurses for that matter? Is that they meet the patients, but then they have a lot of documentation to do afterwards. And if the more we can automate that for them, they can really help more patients. So it's really a big potential in time saving for the user. Of course, none of the AI solutions today, I mean, deliver 100% of the time saving, but they're doing a really good job. And it's -- therefore, over time, I think that we will see a really large part of our customers using these type of solutions. I think that also our solution will have clear advantages by being completely connected into the system and just being a part of it. It's a natural part of the EHR system. It's not a system on the side. But you have to pay to get access to it and then it opens up and then you have access to it in the system or in our systems, so to speak. So I think the potential is really strong. Then health care is always slow to take on new technology. So I think it will take some time before it goes really big. But the reason why we have chosen to kind of overinvest compared to plan is that I believe that the potential is really strong. And the pricing from our side will be very competitive. So we build our solution based on open source products. So that means that our cost will be quite low, and then we are hosting it with our own hosts, so to speak, just like we do with our other systems. So that means that we can scale costs in a very good way compared if we would use ChatGPT or similar solutions. And we can also make sure that there are no access from the U.S. to our solutions, which cannot do if not 100% if you're on Azure cloud. So I think that we have some clear advantages and the pricing will also be lower than competition. In general, these type of solutions today that are sold are a bit -- are more expensive than what the EHR systems licenses per month. So it's -- we will be a bit -- price it a bit lower than what the EHR license is. But yes, in Webdoc, I think we have 18,000 users. Our estimate is that more than half of those generate medical notes. So the potential is really strong. And I mean -- over time, that could really be an area for growth. So that's why we have taken this choice to overinvest a bit. But most of the costs we've been able to offset by -- I mean, just have to outcompete other projects, and we have removed some roles we maybe hadn't before planned to remove. So I think that's been a priority for us and that want to -- yes, there are really big potential in these types of solutions. I think over time, we will see more and more built-in AI support, just like we have over time built more and more integrations that make other type -- in other ways, automate reporting for our customers. And given that our -- that we -- type of customers we sell to, we can be very quick at implementing these type of solutions. If you're selling to the public system, it's completely different because they have to go through the tender process and they have to go through all the committees, and we can be a couple of years before that easily. So I think it's also an advantage when comparing different systems. So there was share of usage you said. So I think that over time, we will be able to sell to most. And I think that our solution is likely to become the most popular around our users, but it's hard to tell exactly where these technologies go. So I think it's important not to put all eggs in the same basket, and we're selling our own and we're selling the other solutions, too. So that's -- I think it's fine. But of course, for our margins are much better when we sell our own solution. Did that answer your question, Fredrik?

Yes, yes, absolutely. That was a good answer, I think. So I want to -- I have some questions about the opportunity for Webdoc outside of the 3 largest regions in Sweden. What is the TAM like relative to the 3 large regions? And what can you do to potentially open up additional regions?

What's the time line...

TAM.

TAM, okay.

I mean look at it at the long-term time line.

Yes. So private health care is by far the largest in the 3 large regions. And by far, it's Stockholm that's the largest. So Stockholm is really the big market, so the most important market. Then there are private caregivers around the country. We have customers in all regions. So where we really are locked out kind of in many regions are, is primary care. You have a few primary caregivers like 2, 3 in the region. Then it's really no or maybe 10 -- I mean, that's very few, not much revenue. But in total, all those regions, that adds up to something. It's not -- we're working a bit on it to open it up. So we have projects in -- or a project in one region where they've now rolled out Cambio and the private caregivers are really not happy. And we have discussion where Cambio is positive, and we see if the region is positive, but we might be able to do something. But I think it will not generate a lot of revenue, but I think the point of that project is just to prove it and to show that it works well. I think that over time, we will have the new regulation, [indiscernible], I should probably say, which says that all systems have to be able to -- and have to actually exchange information with each other. So I think that for us is an excellent opportunity. Then all those arguments goes away because all systems have to be able to talk with each other. And that's by [indiscernible] I think it should be implemented in most areas by 2030. So -- and there's a lot of work going on with that. We're sitting in those committees, working on those proposals together with the other EHR providers. So that will also open up a lot of markets. But at the moment, we're fully focused on taking those -- I mean, there are so many caregivers to sell to, and we can grow so much within existing potential markets that we don't need to focus really on the other markets. But I mean, potentially in VGR, if they go for -- one of the proposals that's been proposed there is that they will have a floor of different systems, then potentially we could sell to the public primary care centers. That's never been a focus on us -- for us and it's not included in our TAM numbers. But if that will be the case, that would open up. But it's not really -- we don't need to fight to get those type of new situations where there are so many customers we can sell to already.

Okay. I see. That makes sense. And lastly, just a clarification regarding the churn. As you mentioned in the last quarter, you will see an uptick in churn in the beginning of this year. Is all of that taken in Q1? Or should we expect a further increase in Q2?

So that was -- the full effect of that was in the March figures. So in our ARR, it's taken.

The next question comes from Elvin Rolder from Carnegie Investment Bank.

I hope you can hear me. Congratulations on a good report, solid growth. I have a couple of questions, more nitty-gritty nature, if I may. You mentioned that the OpEx increased partly due to the increased investments into AI, but also that there were some write-down of receivables for these customers that have gone bankrupt. Would it be possible to split -- or you said that the AI investments was SEK 1 million, SEK 2 million. How much were the write-downs of receivables, so we get a feeling for the size there?

So in total, the extra costs were SEK 1 million to SEK 2 million. So nothing dramatic, but slightly higher than we expected. And then the write-off of receivable was the majority of that.

Okay. And if we think on the AI cost or the AI cost, you said that you were able to offset most of it in Q1. How should one think about that for the rest of the year? I mean, how much would that drive an increase in OpEx if you look at compared year-over-year? Or will you be able to offset it still? Or how should one think about that for the rest of the year?

Yes. No, we should be able to continue to offset most of it. What possibly could happen because I think you need to be a bit flexible on these kind of things is that -- if we see that -- now we're running pilots, when we start selling, if we see that it really starts selling well, I think we might invest more in it. But we have chosen to invest more in it and go a little bit beyond our budget just because we see that there's so great potential in it over time. And then we have kind of made it a little bit more difficult for us to live up to the targets for this year. We think we can do it, but made it a bit more difficult for us to deliver short term. But for the long term, we really -- we feel strong that, that will create more value. So the choice we have taken, we try to offset most of it, and we continue to have that offset. It's just prioritization between different roles and different projects. So -- but we have chosen not to offset it completely because we believe strongly in many of the projects we had planned to run. And then this is starting to really show some great potential. And I think it's also important that I think this will be one of the technologies that will be used in our products. And then I think it's very important that we also start learning how to commercialize those type of technologies. But most of it will be offset and it will not be a major factor.

Great. And a bit related to the AI investments then. Is there any like hardware adaptations or anything you need to do on that front? I know that some of these like AI assistant and so on, use a specific hardware that is adapted to that assistant for some. Is there anything you can do there? Or is it just plug and play, you need just ordinary like? Bit of a weird question, but...that's what you need to do.

Yes, that's a good point made there. So we're not running our own data centers. So I think that's important. We do set them up ourselves. It's private clouds. So I think that's important for our customers and the type of data we handle. And we're the one configuring all of it, but it's not our hardware. And with the AI, we use much more hardware than we do for our normal solutions. So that means that COGS for these types of solutions is higher than what we used to. So they will be around 25% to 30%, somewhere around there, I think. It's difficult to foresee exactly. We're playing around with smaller LM models also. And if you train and they can be really good, then you can get those costs down quite a lot. But at the moment, our focus is not to get them down; the most is to have really good quality in the outcomes. And then after that, we can try to go to smaller models and in that way to have a better margin. But first, we want to win customers. So I think we will not buy any hardware, but we will have COGS of 25% to 30% on those products to start with at least. And that's just all data. Yes.

Okay. Cool. And then a bit on Germany, I guess. Can you comment a little bit on the initial feedback you have gotten there with Webdoc X? And how should one -- I mean, how should one think when you're ready to like fully sell the first version of Webdoc X for like actual use and so on, how is the time line there?

Yes. So the first pilots are -- seems happy, but those pilots -- when we talk about the AI project, that's called [indiscernible] and also when we talk about surgery, those are full-scale pilots. So they're using the systems every day, all the time and in all circumstances. Webdoc X do not have the full functionality to be used and completely replace your existing systems. So that's a big difference from other types of the other pilots we have, where they completely chosen away other types of solutions, and they use it full time all the time every day. So these are users testing functionality for us, but then they also have to use the normal system. So we -- and that's because we still have, for example, a billing you cannot do yet in our system in Germany. So we know exactly what to build. The Data-AL organization is really good at making sure that we build exactly what the customers need. And there is a clear road map. And during this year, our aim is to replace then all of the users that use Data-Cur today with our new product. And that means that by the end of the year, we should have around 80 paying customers, I think, in Webdoc for Germany. And that's -- I mean, that's quite okay. It's then in physiotherapy, so they pay a little bit less than doctors. And in general, clinics in Germany is a little bit smaller than in Sweden. So if you look at Webdoc Sweden, we have 800 customers, a bit more. But there, the average size is much bigger than those German first 80 clinics. But from there on, we can continue, of course, and then we're moving to doctors the year after. So that's the time line we're working towards and aiming for.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions.

Okay. We have gotten quite a few questions in the chat here. First one is from [indiscernible] Are you able to charge extra for the AI transcription feature that you are launching?

Yes. Yes, for sure. So the cost for that will be roughly 70%, 80% of the license cost, somewhere around that.

Next one, you mentioned strong new sales in Webdoc. What has improved from before? Is it sales efforts or improved product?

I think it's very difficult to break those 2 things apart. The product is improving. I think it will -- and it will be improving more and more all the time because we get quicker and quicker in our development. So that really helps. But I think also it's within sales and marketing, we're learning and improving all the time. I think I mentioned this before that add-on sales were something we were not that good at. And it took a bit longer than we had hoped for it to get started. But after the summer last year, we really started to get moving on that, and it has continued to improve. And for all months so far this year, we're selling both new customers and add-ons at a higher pace than planned. So -- and the plan was a bit up from last autumn. So -- and in our plans, we have increasing sales all the time. So we get better and better and better at it. So that's a little bit of the everyday improvement I've been talking about.

Okay. Next question is from [indiscernible] First one, can you give us more information on the operations module? How many trials do you have? And have you closed any deals yet? Any large customer discussion? And what do you expect from it by the end of the year?

Yes. So we have one pilot using module fully, and they are really pleased with the functionality. They're just all happy. And as I remember, the contract, they will start paying in half year or now, I guess, 4 months or something like this. 4 months. We're getting the second pilot up and running any day now, it could be already up and running. I'm not really sure. And they will also be paying customers after a couple of months. We have a third one going online quite soon also who will be paying customers. But all of these are existing Webdoc customers that been lacking this functionality. So it -- for sure, it adds some revenues for us. So that's good. But the real aim of this model is to add new customers, the large new. And we are in those discussions. It takes time to convince if you have a small hospital of a couple of hundred or 100 users, they are not the quickest to change. And they want to see that everything is top-notch in all parts of it before they change systems. And I can understand that as the previous customers, you've been promised a lot from software companies and then they don't really deliver what they've said on time. So they want to see everything in place, all parts before committing. I can understand that. So I think that month after month, we should really have good development within new customers, and it will help us add new customer sales. But it will not be like going from 1 to 100 in a couple of months. It will be customer by customer, but we have a new good tool to take on large customers where we have a big advantage to the competitors. So I think that step by step, you will see sales increasing and partly thanks to the surgeon model.

Great. Next one. If you can give an update on your customers' actions against VGR and Millennium?

Yes. So [indiscernible] was judged against our customers. We believe that it was a very faulty judgment. Of course, we think. But it's also, I think, that anyone would think so because the reason they used saying that it was not proven that it was much less work or less -- what's the right word. They said it was not proven that it would be much easier for our customers to live with the existing system than changing to Millennium. And that was not something that VGR tried to say it wasn't the case. So it was not part of what was actually discussed. So they just ruled on something that was not discussed and not part of what shouldn't be part of the ruling. It should only be things that the parties are not agreeing on that should be ruled on. So typically, in these cases, when you are in this type of course, it's only around 12% to 14% of the ones when you try to appeal. When you try to appeal that actually get to go to an appeal. So it's not like normal course. We believe that our customers have a good case of getting their appeal through. They have appealed, and we think they should be able to get the ruling in an appeal court. But it's not given that since normally only 40% of all appeals go to the next level. That being said, I think that Millennium is a bit difficult to see how Millennium could go forward in its present form, and we have good discussions with primary care centers in VGR about switching to Webdoc now. So we'll see, but fingers crossed, and we will have some new primary care customers in VGR within not too long.

Great. Next one is on quantification of the receivable loss. I think we addressed that. And then a question for me, 80% revenue to profit, is that target for '25 or long term? So that is an internal goal that we have set, and it's basically reflective of that we have -- we are at a level on the margin side that we think, as I said, we are far from our potential margins. So we think we can be able to grow for quite some time without increasing the cost base significantly. So that's sort of the internal target. And that's also on the VGR appeal. So I think we can skip that. And then the final question we have gotten is also related to this 80% incremental EBITDAC implying that basically all additional gross profit translates into EBITDAC. Is that correctly understood? Our gross profit is around 85%. So it basically allows us to add some roles where we see the need. But yes, not a lot of wiggle room there, and I think that's important as well if we are -- if we should deliver on the plan we have to increase margins rapidly.

Yes. And as mentioned last quarter, we have larger capacity when it comes to development, and we become more efficient in all roles. So I think that's what's built on. That were all the questions we had for today. So thank you all for listening in and just reach out if you have any further questions. Thanks for this morning.

Thank you.