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

Welcome to Carasent Q2 report for 2025. [Operator Instructions] Now I will hand the conference over to CEO, Daniel Ohman, and CFO, Svein Martin Bjørnstad. Please go ahead.

Thank you, and good morning to our report for the second quarter. We'll start with me giving a company update, and Svein Martin will give a financial update. Looking at the highlights of the second quarter. 2 days ago, we came out with revised targets, then the performance is a bit behind plan, and I will get back to that. It will be the major part of my presentation. But other updates, we now have our own functional ambient listening functionality built into 3 of our products. So that means that the AI is listening to the meeting between the patient and the doctor and automatically proposes a medical record. So that are the 3 products, that's Webdoc, Webdoc X and Metodika. It's only a Webdoc that's selling it now, and we have roughly 30 users live at the moment. So it's going forward. We continue to develop functionality, and I will get back also to this. What I think is the major highlight of second quarter is that we sold the first primary care centers in VGR since 2008 -- '18, I mean, 2018. So it's in total 8 clinics and which will give us an ARR of roughly SEK 3 million with the start of January 2026. And I think, I mean, it's fun always to sell to new customers. It's a pretty big customer or it's not a new, they have Webdoc in other clinics already, but to get -- win new contracts, it's always fun. But I think what's the most important is the sign that our customers in VGR are less worried than they used to be about Millennium and that they actually go ahead with the change of systems now. I think it's a very positive sign, and we have other good discussions with primary care centers in VGR. But we're very happy for this contract with Medtanken. It will mean a bit of work this autumn to get them live and then they will start being coming and paying customers 1st of January next year. We have also given our new medium targets also 2 days ago. I will get back also to them a bit later in my presentation. And finally, with the rapidly improving cash flow we have, and also since our acquisition pipeline is very targeted, we know exactly what to acquire. We don't have any other discussions. We have a few discussions and we'll take them in an orderly pace. We have too much cash on hand. So that means that we're now starting and initiating the buyback program of up to SEK 150 million until the next AGM, which I think I look forward to this process. Looking at growth. Signed, not implemented, ARR now amount to SEK 12 million. A large part of this is Volvat and Medtanken. Also, we had 13% organic recurring revenue growth and 25% total recurring revenue growth in the quarter. Profitability continued to improve. And even if we are a bit behind plan this quarter and the first half of this year, and then I get there by going to the main reasons for the revised targets for this year. If you're looking at these 3, Ad Opus, Metodika and our AI investments, starting with Ad Opus, we so far this year, SEK 3 million behind plan. We had a long period of underperformance and high churn in this business unit. It's our smallest business unit. Most of this SEK 3 million were behind plan. It should be said, is cost that we take for the restructuring of the organization. So that means costs for letting people go. It's most of those SEK 3 million. We didn't plan on Ad Opus doing a great year. So we're doing a reorganization where Ad Opus and Ad Curis is combined to one unit. Ad Curis have done a great job with sales, done a great job with support and delivery to customers, and we think that Ad Opus can learn a lot from that. Also, they share a lot of software already. So it's more efficient to be in one organization. So it's a way of saving cash. I strongly believe in Ad Opus still. And the reason I do that, even though they're actually shrinking by 25% in the second quarter and which is part of the reason for the restructuring, is that we are launching a new system Ad Opus Web, which is a completely newly built system, replacing the old system. It has taken some time, but now we have -- I've been interviewing a lot of customers within Ad Opus. And the largest one, Fintex is now really, really happy with the product, and they're giving out testimonial saying how good the product is. You can see them on the LinkedIn and also other social media. And I think Ad Opus Web is a great product. We have to learn how to sell it. We have to learn how to implement in a good way to make it easier for customers. But once we do, we will be able to really sell. But what this reorganization do is set us in a cost structure that give us time to succeed with Ad Opus Web, and that's the main reason. And what that means is that the coming 12 months we'll not try to do any new sales of Ad Opus Web. We just try to move all customers from old Ad Opus to new Ad Opus Web. Then when we have happy customers in that solution, we can start selling to new customers. And then we have all these present customers talking well about the new product. It's very difficult to do both at the same time. So we have to step back, lower the pace a bit in that organization, lower costs so we can take time to move customers over to the new product and then sell to new customers. And I think it will be a really beneficial structure to be in the same structure as Ad Curis. And that means then that the head of Ad Opus have had to leave the company and also another employee in that part of the organization. Looking at Metodika. Metodika is what I see as our enterprise solution. So it's for really big caregivers that use the same system across multiple clinics and hospitals. And those type of caregivers, they usually want some adoption. So if you're looking at Webdoc, which is for single clinics or groups of clinics, we don't do any adoptions at all. But in Metodika, a large caregiver like Volvat, which is for Swedish speakers, it's Capio in Norway, they're implementing in all of their old units. We're replacing roughly 5 different HR systems. Then you want as a customer, to be able to have some adoptions for your business, and that's what we're doing at the moment for Volvat. I think we have had a bit of mission creep. So they've been wanting a bit more function than we had planned for originally such a patient portal, which will drive profitability in the future but is increased amount of work now. And it has taken more work than we planned to get everything ready for Volvat. It also has meant that we have not had time to work with present customers that we used to. So we have a big backlog on change requests from present customers. And that's what we usually get quite a lot of revenue from. So in total, we have SEK 4 million backlog in the first half of the year. But looking from another perspective, our consultancy revenue in Metodika is SEK 4 million behind what it was 2 years ago, even though we have more employees, just because everyone is putting all the time into Volvat. And on the other hand, the most part of Volvat will go live by the end of the last quarter this year and the beginning of next year. And then we'll start getting our revenues from the customers and from Volvat, and that will be SEK 79 million of new revenue just for the system and for different add-ons, but there's no consultancy work in that numbers. And then we should also have the other SEK 4 million that we are now not getting for consultancy work for other customers. So it's a quite big swing of somewhere around SEK 11 million to SEK 13 million that we should see due next year from that product alone. And this is a part of the cost when we move from selling licenses, doing consultancy work to actually selling subscriptions is that it hurts us short term, but we win long term on it. And as most of you know, the majority of our products have always been subscription-based, but Metodika is not. The final major reason is AI investments. We are, so to speak, playing around with technology for quite some time. We have been looking at what other players do, and we became very convinced of the potential for AI to lessen the administrative burden of our customers, which is the big burden that they really don't like to spend the time on and they spend a lot of time on administration. AI is really good at helping with that. We also believe strongly that to build it into the systems is a great way of doing it, but then you can access all the information around the patient when you do it, not only listening to the conversation between the patients and the doctor. We can also use all the other information that are in the medical records and in the calendar and so on. So we can really do a lot to unburden our customers. We also think it's a technology that we shouldn't say no to. We should invest in also in that. I think that's where a lot -- potentially a lot of the future lies. So we decided in the beginning of the year to invest more into AI and to invest in partly new competence into the organization. I'm not very stressed about it. I think it's a great potential going forward, and we have no need to be first. We have the HR position. That's a difficult one. You don't leave that. It's less customer. You tend to stay there. So as long as we can be competitive, it's easy for customers to move from another competing solution to our solution. That being said, I think that we're also selling competitive solutions for this type of support. And we continue to sell also our competitors or partners, then to put it that way, solutions. And I think for some customers, one solution will be right and for other customers another institution will be right. But I think for very many of our customers, our solution will be the most appropriate. It will be completely built in. No need to do work in double systems. And with the AI, we'll have access to much more information than an external system. Today, we have the ambient listening, so listening on the discussion between the patient and the doctor. Next, we will start filling out different types of forms, referrals, sticky notes and so on to really unburden our customers. But we still have quite a lot of work. Just for example, this week, we -- we're releasing new functionality, which will cut the time it takes to propose a medical record by roughly 1/3, I think. So quite a big improvement for the customers that are already live coming this week. But these 3 are the areas which are the main reasons for the revised targets. I think that if you look at Volvat, it's really something positive for us going forward. It's, of course, negative that we're spending a bit more cost solid than we planned and also that it stops us from generating other types of revenue this year, but it will pass. Ad Opus, a big part of it is a restructuring cost for moving into a more lean organization, which will help us going forward. And, I think, will be really good going forward. And I think it was worth investing a bit more this year than we had planned originally. So those are the main reason for revised targets, which now look like this. So you see, the revenue has been slightly lowered and EBITDA. And EBITDA means CapEx is a bit higher, lower by roughly SEK 10 million. Looking into our new medium-term targets, we have great products. I'm really proud of the products we have and what I think is even stronger is that we invest quite a lot in our products, and we invest in the products to increase the distance between us and competitors. So we said that we invest more than most of our competitors. And that means that it will really help driving growth going forward and it should and will really allow us to grow with an average of 15% in the coming 3 years. And together with good cost discipline, this will allow us to continue to rapidly improve profitability, reaching an EBITDA margin of 35% with the CapEx of, yes, less than 10%. So these are our new medium targets, which, yes, we believe strongly in, and I think also it's wise to guide on this horizontal when we are in this type of rapid transition from where we used to be. With those words, I will hand over to Svein Martin.

Thank you. Starting off by looking at the financial highlights. As discussed, we are a bit behind plan in Q2. But in general, I would say the underlying financials continue to develop in the right direction. Our ARR grew by 27% to SEK 317 million, including the backlog of signed, not implemented contracts. The reported recurring revenues grew 13% organically in the quarter and net retention of 109%. And as we have talked a lot about during the last year, this, the pace going into Q2 was not that strong given this churn we have seen in Webdoc for the customers going bankrupt. So most of that, as we spoke about last quarter, took effect at the end of Q1. So this affected the pace going into Q2. The positive is that the pace going out of Q2 is stronger, which I will get back to. On the profitability side, our EBITDA margin was 15% and EBITDA minus CapEx, 3%. So improvements compared to last year but a bit behind our targets. This slide shows a key metric for us that is how we are able to convert our revenues into profits. And here, we exclude the acquisition we did last year, Data-AL. And excluding that, the revenue growth was around SEK 8 million and then COGS naturally increased around SEK 1 million. You see that the operating expense decreased by SEK 4 million compared to last year. But part of this is that last year was high, driven by one-off costs of SEK 2.5 million. And then we see that the big increase here on the cost side is the personnel expense. It should be looked in connection with the CapEx decrease. So -- because that's like the total cash cost for our employee base, those 2 combined, and that increased around SEK 6 million. The reason for this is mainly -- the biggest part of that increase is this restructuring cost that we had in Norway and also the option program that we executed in Q2. In total, these cost around close to SEK 4 million. So adjusted for this, the increase is not that big on the personnel expense side. But looking at like the total effect, we converted 56% of the revenues into EBITDAC. And if we had adjusted for like the one-offs last year and the special costs we had in the quarter, then we would have been close to our target, but still a bit behind our internal target, and this is converting around 80%. We have taken more steps on the cost side in this quarter, removed a few more roles in addition to the Ad Opus employees that we didn't see the need for. And this will help us in H2, and we need to be around our target there of 80% commercial to reach '25 goals, the new goals. Looking at the ARR, we grew from SEK 250 million to SEK 317 million. On the organic side, we grew by SEK 36 million in upsell or 16%. Churn was SEK 9 million and new customer growth was SEK 12 million. The reason, the 2 main factors driving the growth was that we onboarded several new large customers and clinics in Norway for Ad Curis in addition to a strong upsell for that product as well in the quarter. So we added around SEK 7 million in ARR in -- towards the end of this quarter for Ad Curis alone, which is really strong for that product. Partly this [indiscernible] contract that we have talked about. The second effect is we adjusted the prices for several smaller Webdoc customers that were paying enough compared to their production and so that added a couple of million in ARR as well. On the churn side, it's a bit higher than normal for reasons we have discussed with this churn in Webdoc related to the bankruptcies and also a high churn in Ad Opus as we have talked about before. But in total, the net effect is that we end the quarter at an ARR growth organically at 17%, which is decent compared to like what we report in the quarter. Looking at the P&L. I talked about most of this already, but we landed at SEK 83 million in revenues, up 26%. Gross profit margin remained stable at 85%. Then the big increase on the cost side is the personnel expense. Despite that, EBITDA increased from SEK 8 million to SEK 12 million within the quarter, and EBITDA minus CapEx from minus SEK 1 million to SEK 2 million on an adjusted basis. And so far this year, we have improved from minus SEK 6 million in EBITDAC to plus SEK 7 million. So a good improvement, but still a bit behind what we had expected. On the cash flow side, we are, of course, helped by these improvements in profitability, lower CapEx as well. If you look at the cash flow in the quarter, it was in total positive by a couple of million. For the first half of the year, we -- I've talked about this in the past few quarters, but we had this relisting expenses that were -- the costs were taken in Q4, but the invoices were paid in Q1. So that affects like the working capital for this year. Also, we had a bit of currency effect when we exchanged the cash from NOK to SEK in Q1. So normally, our working capital helps us support the cash flow. But this year, it will be a bit affected by this relisting expenses. So that was what we were going through and then we can open up for Q&A.

[Operator Instructions] The next question comes from Elvin Rolder from DNB Carnegie.

I have a couple of questions from my end. Maybe beginning a little bit with the restructuring of Ad Opus, the merger with Ad Curis. Are you -- like when you look at the current organizational setup of the group, are you happy with what you have now given these changes you have made? Or do you see any like obvious further improvements down the line that you're looking at? And how many people roughly in total did you have to let go from doing these initiatives in the quarter?

Yes. Thank you, Elvin. So restructuring of Ad Opus, in general, we run quite a decentralized organization because we think the most important is to be close to our customers. That's for a number of reasons. The first one is to develop solutions that actually fits our customers. The second is that the sales and support should really, really understand their customers. So in many parts, those are -- it's a decentralized organization. But in some areas, we really have some clear synergies and looking at Ad Opus and Ad Curis, they share part of the same software. And the new Ad Opus with Ad Opus Web is actually the same software behind the scenes as our online visit tools for Ad Curis So they are more and more working in the same platform. And then it makes sense to be the same organization. Also, Ad Curis is doing a great job with sales and delivery. They've done a really, really good quarter. And as Svein Martin mentioned in his part, we end the quarter really strongly on new customers going online, and that's thanks a lot to that's thanks a lot to Ad Curis organization doing a good job. Ad Opus organization, I think, can learn a lot from Ad Curis, and we gain from being part of that organization in that sense and it will also allow us to save costs. But in general, I think the decentralized structure is quite good. We will always look over the organization and do what I think at each point in time for the long term. And, there might be that, especially with the acquisitions we're looking at that they might fit well together with something we already have, and therefore, will be combined with [indiscernible], for example. In Ad Opus, there was only 2 people let go. It was the head of it and another person. It's our smallest business unit, so it's quite a small organization, but it's always a bit more expensive than to let the head of -- CEO of a company to go. Also, we have had other roles that we have to let go in the entire group in the quarter to also lower cost. But the numbers that are in those SEK 3 million is only those 2, together with how much Ad Opus is behind so far this year. Did that answer your question, Elvin?

Yes. Yes, more than enough. And then maybe looking a bit on Medtanken and signing a customer here in Västra Götaland, very positive to see, of course, that the customers are pulling the trigger. Was there anything specifically that made Medtanken go ahead right now? I mean, it's been pretty much of a stalemate in the region so far, but has there been any changes that made them go ahead right now? And you mentioned that you have several good discussions with other clients there. Do you see a similar like kind of development as you've had with Medtanken with those customers? If you can comment a little bit more on that.

Yes. So Medtanken is quite a big caregiver. I think there, in total, we have a turnover of a bit of SEK 1 billion, and they have a lot of primary care centers in Västra Götaland. So for historical reasons, they've had Webdoc in roughly half of the clinics and CGM software in the other half of the clinics, and I think that they've seen that over time, the difference between those 2 systems have increased. So since 2018, until now, there's been quite a big improvement in Webdoc in the functionality and what we offer, and I think they assume that, that is now quite a big difference. So I think that's why they pull the trigger, so to speak, and changed. So they will not be new sales in our columns. They will be in growth in existing customers, unfortunately, this sale, when we look at the numbers in Q1 next year. But -- so I think the reason is that they see both softwares and they see the difference, I think that's quite a big reason. And the other one is that everything coming from VGR, it seems very unlikely that any system will be pushed out any time soon. And I think that all of the caregivers see that and we have discussions with other primary care centers. We have no present discussions with primary care giver of the size of Medtanken switching all clinics. So it will be more one clinic at a time in that case. But I think it's a really positive effect and a positive signal to everyone. And we'll try to create some media around it after the summer to try to influence the politicians locally in the [indiscernible].

Okay. Great. And then regarding the ambient listening and the AI tools, I just wanted to clarify, when you were talking about 80 users. I mean you can equal that to, I guess, 80 physicians. So it can be several in the same clinic, I guess, if you can clarify on that. And roughly, how much is the revenue per user, would you say, if you can give some flavor on that? And then finally, on AI, the 30 users you have live now, have these been using the other tools that you have partnered with? Or are these completely new to this kind of tool?

Yes. So it's 30 users that are live. Yes, if I was unclear on that, Elvin, 30 users. And that's individuals, yes. So that's correct. And at stage we are, we started focusing really on this product in the beginning of this year. So we have 0.5 year of -- I mean it's, we're investing in it, but we're not investing very heavily in it. So I think we still have some work to catch up to competitors when it comes to the quality of all parts of it. Then we have advantages fully built in and so on, but we're rapidly catching up. So I think, for example, this week, we'll cut the time it takes to wait by -- it will become 1/3 of what it was last week. And then we will probably be the fastest in the market, I think, delivering the actual result after the discussion with the patient. That's extremely important for the position that when you say good bye to patient, but you don't have to wait too long to have a generated note. So that's this kind of improvements that we need to do, but we'll do them. And I think we have a clear road map on how to improve and how to move forward and add more functionality. But as I said before, I'm not stressed, we don't need to be first. I think it's quite good from our position to look a bit what works for our customers and what doesn't work, and then we build the things that work because there have been so many investments in Health Tech that has not been picked up by the customers even if they bring good initiatives. But this -- what we have seen is that this really fits the users. Many users like it. So that's why we started investing in it. How they pay is that we charge -- today, we charge SEK 750 per user. So we're cheaper than the competition. We still have really good margins on that. And the reason why we can be cheap is that we're not running in the American clouds, which I think have added advantage too, but we're running in our own server environment. And that means that we have quite high fixed cost for the AI solutions and the cost we already are taking for it in terms of service capacity and GPUs, we can scale to at least 500 users without a problem. So probably quite far beyond that, most of the cost. So there is some cost to increase a bit. But -- so that's where we are at the moment. We are in earlier phases, positive feedback. We have some improvements we need to do, and we will stop any users. The ones that are live now have, many of them are tested the different solutions that are out there. So it's still early adopters that are using this type of technology, I would say, and it's still a minority, a clear minority of all users in our system that use any such solutions, but I think going forward, it's likely that there will be more and more users of this technology as it gets better and better and also as it spreads. And health care is really conservative. It's slow in moving into new technology. But many are big fans and they really like it. So over time, I think it will really be a major point, but it's in our plans, it's still -- it's a cost of the entire year. It's not something that drives a lot of profitability this or next year. Did that answer your question, Elvin?

You're very clear, just -- yes. Very good answers. Just one clarification, SEK 750 per user. Is that per month, I guess, or...

Yes, it's per month per user. So you can say it depends on how much you use Webdoc, but it's a little bit less than what most you pay for the entire Webdoc. So if you compare the amount of time spent on building this compared to the amount of time spent building Webdoc, it has really good revenue per hour invested.

Good. And then maybe a little bit. You answered a lot of my questions during the call, but I have a couple of questions on maybe the financial targets here because you lowered the EBITDAC target somewhat. But I mean, looking at the H2 level, it doesn't seem like it's a big difference really from how it was before. It's mostly been from what has now occurred here in the first half of 2025. How -- I mean how confident are you in the current 2025 target? I guess you have better line of sight now than when you set out the initial target for more than a year ago. And is there some uncertainty still regarding the 2025 EBITDAC target, given the implementation of Volvat that can maybe delay or -- delay that? Or how should we think about that?

Yes. Yes, compared to our own plan, we still have -- we have some effects in the second half too. So -- but as I've said for quite some time that we felt that the targets had very little space left in them. I think I said it already at the end of last year that I was a bit worried about targets. And so -- but now we have, of course, much better visibility. It's not -- not with, it's not a walk in the park to get there to speak. We still have to succeed in what we're doing. It's so to speak our best guess of where we will end up. And I think, we are on a good track to get there. We've taken a lot of measures in the first half that will help us in the second half. We'll always do a good Q3. We have the vacation effects there. So I think the autumn -- I mean, obviously, if you look at the numbers, the autumn has to be really good. I expect autumn to be really good. As you say, there is, of course, some risk with all, but we're moving from 6 different HR systems into one. So it's, I mean, Millennium in -- they didn't import any data from any old systems. So -- and that's quite a complex because you have the same patients in many of those systems, and all -- each system saves data in different structures. And they continue to meet patients all the time, only 500 employees of that organization. So it's not the easiest process in the world. We've done it before in Metodika. We know how to do it. We moved entire [indiscernible] Norway into Metodika, a couple of years ago. So I think we have great experience in doing it. Obviously, we underestimated the amount of adoption work needed. It also took longer to get access to our competitors' databases that we need in order to export the data but we have that now. So there is a bit of risk in Volvat, I would say, but we expect to manage and reach these targets. It's not a walk in the park, but we should be able to get the data.

Okay. And finally, I should let some other people ask their question as well. But I have one more. It's a bit on the new medium-term targets. You said average 15% organic growth between 2026 and 2028. I'm just wondering because that -- it feels kind of like your -- the organic growth that the business kind of grows normalized basis given your higher net retention, the normalized low churn and so on. But how much in that figure do you bake in from this kind of, as I see it, at least four kind of organic growth optionalities that you have with Stockholm opening up, with Germany expansion, with this AI tool and perhaps even the surgical module, how should we think or I'd say how do you think when you bake those four factors into this target? If you can comment a little bit on that.

Yes. And that's -- I mean it's obviously difficult looking that far into the future. So I think that -- I mean, I think we will have great opportunities. If you look at Stockholm, you look at AI, you look at Germany, I think we have really great opportunities. On the other hand, things always happen, as we've seen this quarter, and I think that these targets include that things happen. And it's dangerous to put out full year target based on everything we see as an opportunity, then I mean, yes. And being in my position, obviously, I believe, very strongly in everything we do. So I can see us growing much faster also. But I think the sensible is to put out a target that you feel very comfortable about, and these are financial targets. Then you have other targets that's, I mean, we're trying to drive the business faster than that. And then you have internal targets on what you want to complete, what you want to do. But I think when you gave out financials, you'll need to be a bit prudent. And I think those targets are a bit prudent and especially given what we just have done 2 days ago, the first profit warning, I think I ever have given us as a stock, as a listed company. So I'm not too happy about it. So I think that it makes sense to put out targets, which -- I mean, also, this is not a walk in the park, but the opportunities are much larger than that. So you have to find a sensible level to communicate and make sure that the expectations out there are reasonable. So that's, I think, what we try to do. It's not our business plan that we've given out as financial targets, so to speak.

The next question comes from Fredrik Nilsson from Redeye.

I want to start with the primary care deal in Vastra Gotalands. I mean is this really the start of perhaps the positive case that you talked about last year discussing the potential churn and so on, starting to playing out? Or is it -- or is that reading in too much in the first new customer?

Yes, I think it's reading a bit too much into it. I think it shows that our customers are not that nervous about being forced into something very soon, but we have not yet gotten to a stage where they see it as a risk-free, and that's where we would obviously like to end up. We're pushing different ways of getting there. The court process is still ongoing. I think there's a lot of other good reasons why it will be free. We know that some political parties are now pushing that also. And the caregivers, of course, are pushing it quite hard. On the other hand, the region don't want to give the private caregivers a lot of advantage over their own business. So that's the difficult part. I think that sense will prevail, but it's not given, and we're not there yet. I think that it means -- what you should read into that, I think, is that our customers are less worried than before, they are -- and that we are now quite a lot better than competition, and that's why they changed despite it still being a bit of risk because you really don't want to change your HR systems unless you have to or you don't have to, but unless there are really good reasons to do it. So I think they -- obviously, they see those reasons, and that's really positive. So I should -- I would more see it as Webdoc doing a good job than -- and that the risk is a bit less in the region, but we're not there yet in the really positive case now.

Okay. Great. And could you elaborate a bit on the mix between the old and new product in Ad Opus so we could get some kind of understanding when the negative trend might turn?

Yes. So Ad Opus Web is, I mean it's a completely new product. It's really forward thinking. We have -- they don't have patients, but I use that word anyway now to make it clear what I'm talking about. They have the caregiver and the patient working in the exactly same system. I mean all of our systems have different type of patient portals for our own and third-party solutions, where you can interact between the clinician and the patient or -- and the clinic and the patient, hospital and patients and so on. But here they actually work in the same system. And I think that's really a ground breaking, I've never seen that before. Also, the UX is really thought out, and it has a lot of optimization that really helps the caregivers. The challenge is that it's a bit too new. So the move from old Ad Opus to Ad Opus Web is the step that's really big. And you have -- you can become much more efficient. If you look at the video, they talk about it. And they have put in efforts into implementing it and really making it work for them, and then they are much more efficient than before. So that's great. But not all customers want to do that journey, and I think that every time we develop solutions, they should always allow for you to work in your old ways. They should allow for new ways of working, but also old ways because customers don't always want to change how their work and they don't want to change that because we tell them to change. And that's something we'll work a bit with the system to make it also allow for the old workloads to function. It will be less efficient to work that way, but many customers really want to work in their old ways. So that's something we're doing. It's not really development. It's more setting up the system. So that's something we can do fairly quickly. We have roughly three customers, one of them being the largest, that are fully into the new solution. Then we have many others who have started testing it. But that's also something I want to lower the pace on. I want us to take online like maybe three, four customers at a time, not more, to make sure that we do it really well, we take care of them and they are happy with the process. If we try to take too many at the same time to a new system and it's everything looks different. And if we're not close enough to that, then we will have churn even if the new one is good, and they would appreciate if they got the right education, if they got us really helping them every step on the way. And that's what we need to do. That's what we do great in Webdoc and Ad Curis and all of that and in many of our other products. And we've been trying to push it a bit too quickly actually in Ad Opus, I would say, trying to move too many customers at once. I interviewed some of the ones that have left us. And to me, it's quite clear that the problem is we tried to move them over a bit too early, but also that we haven't yet learned how to move customers into the new system. So I think we're getting there, and it's really good to see the first customers being happy. It's just the last two months, they've been prepared to actually be, what's the English word, that they are out there talking positively about the system and prepared to recommend it to other users. So we just about got there. And the coming 12 months, we will not see any growth in the system. I hope we don't see any more churn. There will be some churn that's not yet in the numbers. So what really made us do the reorganization now was that we lost the second largest customer. So that will mean a churn in Q1 next year. Not a huge amount of churn. I mean still Ad Opus is our smallest business area. So we shouldn't put too much time into that or it shouldn't guide us too much. But I think that it has the potential to really grow. And if you're looking at Ad Opus, since I think it was acquired back in 2018, I think it was, in Amazon and then it went to [indiscernible] a bit later, they've gone from 90 customers to 30 customers. And that's because they've been building -- we've been building a new solution to replace the old one. And that has taken time. But now it's there, and I think we'll start winning back those customers going forward. And we have a much better solution than anything else out there. I think maybe it was the wrong choice back many years ago to build such a completely new system to replace the old one. I think you could have done it more gradually. But that's in the past. There were many right decisions taken too, and that's where I think we have this kind of a U-curve, where we've been losing customers because the old one has not gotten enough love and the new one has not been ready, but now we're getting there. And the churn we actually had now was leaving for another old system that's actually very similar to the one we're replacing, just because they didn't feel comfortable enough going to our new system because we were not close enough for them and we tried to move them a bit too early. So we have slowed the pace. I'm sure we will get people there. And the entire Ad Opus organization, I feel like a lot of energy. I think they like being part of Ad Curis. It's a positive vibe and the development we do is done in Moldavia. So we have low cost in what we're building and it's, I think in many ways, a groundbreaking system actually. So I look forward to that. It will take some time.

Great. That's clear. And so regarding ambient listening products in general, there seem to be mixed feedback, reading some news articles about larger caregivers implementing those. So could you give us an update on the customer feedback regarding Medsum?

[indiscernible] is that the report in [ GT ] about [indiscernible] implementing of that you're referring to?

Yes, that's one of the examples, yes.

Yes. So I think it's important to note that [indiscernible] implementation of what they call AI, and which has been criticized in media by the doctors is not AI as we see it. It's old speech-to-text, it's Dragon, as they call it, they call it AI, I don't know why. It's Dragon, Nuance product Dragon, which is an old speech-to-text solution that we've been selling to our customers for at least 5 years. Many of our customers use it, it is a good speech-to-text solution, but it's just a speech-to-text solution. And that's what VGR and [indiscernible] is trying to implement. The reason I think where they get this mixed feedback is that they also take away their medical scribes, the people completely, so the doctors do not get any support anymore with writing letters, so they move them into a completely separate building. And I think that's actually the reasons why the doctors are upset about the new tool, and I don't think it's too late. Of course, that tool that they are selling, we have sold to our customers for at least 5 years. I don't know exactly when that started. And we have very many happy users in that product. But that's what we're replacing. What [indiscernible] is going live with now is what we're replacing with our AI solutions. So the ones that's being looked at is not ambient listening as far as [indiscernible].

Great. That's clear. And also regarding Medsum, according to your website, you will shortly launch Medsum broadly. Could you give us some flavor on that? I mean what time period are we talking about approximately?

Yes. So we are selling it now. We're selling it. We've had the process where we sent out information about it to all our customers, then I just talked Webdoc, the other ones have not done it yet. And what we want to reach is those early adopters that are interested in being part of the journey, so to speak, that like the technology, are open to give feedback. They are open to that there might be not everything working perfectly yet. So they are happy to just be part of that process and many doctors, nurses, physiotherapists and so on, they like to be part of development. They are close to them to our development people and get to be part of the discussion, they get to influence what we build. So what we've done is to let everyone know that it's coming soon so that they know and they don't sign up for other products long term. And then we've said that if you are interested in being early users, let us know. And then we have a list of, I don't remember how many that has contact us saying that I'm interested, so out of those, we have taken 30 live, and we'll continue to take users live. They -- some of them are paying, some are not paying yet because we moved from just giving for free to pilots to now charging users and not all 30 are paying, but all new one we're taking on will be paying users and all will be eventually. We have no hurry to make them start paying. The most important is to make them really happy with the solution and then they will be happy to pay. So that's where we're at.

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

Okay. So we have gotten quite a lot of questions in the chat as well. We can try to be quick in addressing them. The first ones are from Nicklas. It's in Swedish, so I'll try to translate here. But development for Volvat has taken more time than expected? Are you getting paid for just development going for -- better pay for development going forward? Or -- and do you see risk of delays further into '26?

Yes. So usually, historical method, I guess has been selling licenses, not renting them and then charge for development. We're changing that around to ramping it and having a focus on ARR instead and the long-term value creation. So that meant in the Volvat deal that we halve the cost per hour for all the adoptions than what we usually take. We're still around breakeven per hour, but we're not making any profit on the adoptions for them. But also, I mean, we are the one with the best view of how many hours it should take. So not all of it, but quite a lot of it when it gets more work than needed, we have to take the cost. It depends a bit. But in general, in most cases, we are taking the cost so that means we're actually losing money on adoptions. But as I mentioned earlier, we'll have a really big swing next year. It's a really complex big project. I think we're on a good track to deliver it to most of the users in November, which is the time that's set. Then we have some small systems that we'll move over in the beginning of next year. I think we're on good track to get there. And -- but it's not without risks, but it's our best guess at the moment.

Next one, when do you expect Germany to be a substantial growth driver? So -- as we have talked about before, we will have -- aim to have start paying users within Webdoc X this year. And then it will, of course, be like a gradual step-up in terms of growth. So the growth rates in a percentage will be higher than like the rest of the group, but it will not contribute a lot to like the group organic growth in the next couple of years. But towards the end of the new target period, we could see that Webdoc X is materially contributing basically. Next one is regarding the AI solution. I think we have addressed that. The question is how much -- how big part of your current user base is within the sweet spot for Medsum.

I think basically, as I see it over time, all users that do a lot of documentation are in the sweet spot. In the beginning, it's mostly doctors, all doctors, but I think it will add to more and more users. I mean, we -- as I see it, we will, for example, if you want to do a -- say you want to do a referral, you can -- you might not have to say anything at all and you don't, might not have to have the recording from the patient, this you can push a button and we take data from different parts of the system, and write the proposal. So I think that it will become -- I think as I said before, roughly half of all of our users do notes in any larger extent. So I think that's where the future users will be, right? It will take time there. Health care is really slow at those technologies. But this has been one of those that's been growing the fastest I would say, of new technologies. So it's a real time saver and that's what everyone is looking for.

And next one is, can you sell it stand-alone? And how do you resonate around that?

Yes. Maybe. We do not have an interface to mention. I mean it's completely built into different systems, and I think that's the advantage we have and also the access to a lot of data in our systems, but it is a stand-alone that we're working towards many of our systems. So potentially, we could sell it to HR providers that are not ourselves. But that's not something we have taken a decision on and not something we have in our plans, but that's something we have thought a bit about.

Next couple of questions from Richard. Do you do any NPS with customers? And if so, have you considered publishing them?

We don't today have it in a format that's the same across our products. In general, I think that each product we have should focus on getting the feedback in the structure that fits them, and not what fits us centrally or fits external parties. But I still think it's worth thinking about, but we don't yet have one structure for all products. And also something I would like to have implemented actually in all our system is that each users every month get the question of how was your experience with the system last month because then we can have a much more real time data on how they like our systems and how they experience if you have a period of maybe some issues with the system, how they really experience it and so on. But we're not there yet. We're not able to prioritize that development yet. So I think we'll get there, but it's not a prioritized question for us.

Right. Next one, excluding Ad Opus, what the churn levels look like? Are you happy with the levels? Yes. So Ad Opus is close to 1% of the churn. So it would be like approximately around 3%. It's higher than we have had in the last few years. And I think most of it is related to these bankruptcies and basically churn that it's difficult for us to impact basically involuntary churn. If you look at like the voluntary churn, the customers leaving us because they changed the system is still very, very low, below 1%. So that level is good. But of course, the churn that is involuntary hurts us this year.

And we don't really have a good explanation why we had a lot of that now. To be honest, it's a bit surprising. I've been working in the private health care sector for a long time and I haven't seen this much bankruptcies. And there's nothing really in the market that I see that would drive it. I think part of it is that some of the tech start-ups are not getting funding anymore. So that's a part of the churn that we can say, but there's even more than that. And I think it might also be a bit of just -- it happened to be a couple of them at the same time.

Okay. Next one is relating to primary care and VGR. I think we covered it quite well, but there's one question here regarding the interest from primary care centers. If they will need 2 systems, Millennium or yours? Or are they simply not believing in the rollout of Millennium at all?

So I would say that if you change systems now to Webdoc, as this customer found, I don't want to put too many words in their mouth, so to speak, but it is -- I would say it's because we believe that it will not roll out and that there's nothing else being forced on them at least for 5, 6 years, I would say. Otherwise, you don't do that change. It's not that you're planning for it. It's being better when you have 2 systems that you might have to have for a few of them, but you wouldn't change systems for that scenario.

Great. Next one from Rasmus. It would be interesting now how you build up the 15% average growth. Given the business current growth rate in the low teens, do you expect that to decrease as AI and Webdoc X drive the growth? Or what are the different growth drivers you see? So as I mentioned, I think Webdoc X will build up gradually. So it will be a very small part of the group during this forecast period. So basically, we see that the 15% is mainly driven by the current business we have and tools such as AI will drive the net retention naturally. But in general, the core business selling to new customers and selling all types of functionality, including AI will be the main growth driver as we see it.

Yes. And we have improved sales quite a lot. We're selling more and more. We have this high churn, but we're also selling much more. The salesperson is selling more. And actually, we're selling on and a bit above our plan so far this year. So new sales are quite good and sales to existing customers are quite good. I think we can get better at both. But this is more of a -- there is much more of a top-down target and a bottom up because bottom up, you can end up at crazy places.

Yes. And I would say that Webdoc will be a very important driver of the growth which will grow probably above this target and then the rest of the business a bit lower. Can you provide an update on the operations, the surgery module?

Yes. So we have -- I think it's now 2 pilots running it. We have 2 new clinics, quite large clinics starting after summer, still existing customers and actually free after summer I think it is, and they are all paying customers. They will not pay from day 1, but they will be paying quite quickly and at a quite good level. And we will now start to really target the serving clinic that are not Webdoc users today. It takes time to convince a clinic of 50 to 100 users to change software from the point that they start thinking about it after meeting, and we're showing them things. I think it generally takes probably a year before they actually commit to changing. It's a very slow process. We're doing the best we can to really push it. We have really good feedback from the users of the system. We still have some functionality to add to make it even better. But I think it will be -- over this period, will be a really important part of the growth for a clinic, especially in Stockholm, if you have insurance patients, which many of them have and all of them have it necessarily goes to improve on that. And if you have surgery, then Webdoc is clearly a better choice than what's out there for you, more than other cases, even more than other cases. And if you also want to have a different type of online tools, connected directly into the system, then it's really clear that it's the best by far, I would say. So that's really the sweet spot to grow, but it's also then we talk about big customers and quite long process.

Next one. It would be interesting to hear your thoughts about [ Scona ] now that the smoke from VGR's launch of Millennium has settled down somewhat.

Yes. So Scona are saying that they will implement Millennium still. I think and I always thought that Scona has a much better project around Millennium, and they have a better version of it too, I would say. I mean both businesses has spent since 2018 roughly to actually do adoptions and changes in the system. And what VGR went live with extremely many users was something that was not even tested in a pilot. And I think to me, that's really strange. We will never ever do something like that. Scona has taken a much more sensible approach, and they had test versions and demo versions up and running way before VGR and they still haven't got live with any, not in the clinic, I think. So very much better, but what Scona has done is that they say now that Millennium will replace much fewer systems than they've planned from the beginning. And I think that's quite a good process for us, and there might be and there seems to be openings that Webdoc could be used for a certain part of care in Stockholm that -- in Scona that we had not planned for, and it's actually not still in our plans, but there seem to be some openings that are positive. I can't say more about it yet. And I think that it's not bad for us if Millennium eventually go live in VGR. It doesn't have to be. It's just, I think, for the hospitals, they don't have that much to choose from, why not go live with Millennium, there is nothing really good for them to choose. And then let the primary carrier use Webdoc, I think that's a sensible choice or let the primary care choose between all the systems that are available for primary care. So -- but we'll see if we get to that point, that's not what's in our plans, not in our targets, but it's something working towards.

Next one, a couple of questions from [indiscernible]. Could you comment on the development in Stockholm? Do you see clients shifting away from CGM already or not yet? And secondly, have you seen private clinics complaining about CGM software, given their decision not to invest further? Do you hear more about bugs, et cetera?

Yes. To answer the second first, yes, we heard from customers that they don't really understand how that software is going to live until the end of the decade as is in the past. So yes, it's not too much happening there, and that's understandable. If we had a system that we knew was going to be closed down in 5 years, I think we wouldn't be investing by this limit. So it makes sense. And the difference between that system and ours will increase over time even more. Yes, quite a lot of our new sales are in Stockholm. It's a clear focus for us. And we're working hard to make sure that everyone knows about us. And I think for every new customers we get in Stockholm, more and more get to know about the system, more and more talk about it, and it helps us in the new sales.

Next one. How is the development in Germany? Could you comment on that?

Yes. I think the data business is running really well since the acquisition, actually a bit better than we had planned for. We're winning customers. We have quite a good results in the business. We have now combined the R&D departments of the 3 products we have on German market to 1 organization so that we can have a clear prioritization. I mean obviously, we have to maintain the software we have there already in the market. We have to do some development for the data and software that's going to live for quite so many years still for some of the users. But we focus mostly then, of course, on Webdoc X, whereas before, we have the aim to get paying customers now during the second half of the year. It will not be a big part of the revenues or growth in the autumn, but it's anyway extremely important we start getting paying customers and start getting customers that can talk to other customers about our own products.

Next question from [ Kristofer Gasberg ]. In regards to the profit warning, when did you realize an update before Q2 was necessary? And what is the main learning from this process for the management?

So it's difficult to say an exact point in time when you realize. I've been saying on these calls and on other calls that there's little space, there's less space on target than I would like to. Compared to our own budget, there should be -- there should always be a bit of positive difference. I think the main learning is I think our medium targets are a bit more -- they have more space in it. I think that's an important part. There is more space for things not going as planned. So I think that's probably the main learning to make sure to have that type of space. From our perspective, there are so many opportunities, so much good we can do, so much value we can add for our customers that it's very easy to see all those opportunities. And I think that to have some space in the targets and what you actually see as doable is an important learning.

Next one. The revised target for EBITDA means CapEx is lower significantly from SEK 44 million to SEK 49 million to SEK 35 million. Could you elaborate a bit more about this? I think, yes, we had talked a lot about it in the call, but the main reason here is that the result in H1 is a bit behind what we expected. And that is partly driven by these extra costs we have talked about, but also this development for Metodika and Volvat and the AI investments and that those will naturally continue throughout the year.

Yes. As you mentioned, there's been a lot of questions today, and I have to go with an interview talking to industry here. But Svein Martin can -- the next couple of questions, he can answer. So I'm sorry for being a bit double booked. Usually, these calls don't take this long. And maybe I've given a bit too long answers, but -- so I have to go for that interview, but thank you from me so far. And Svein Martin will answer the final questions. Thank you.

Yes. We don't have a lot more questions, but a couple. So SEK 750 for the AI solutions. Is that for ambient listening only, and the AI for referrals is a separate product to that which can help expand the SEK 750 going forward? So yes, so that's for the base product, the ambient listening. And then where when we add functionality, it has potential to either increase the revenue base or reach more users depending a bit on how we position it, but definitely potential as we add more functionality. Next one, can you give an update on the surgery module and when the market potential of NOK 150 million that you had previously communicated is possible? Yes. So Daniel mentioned this in quite detail, but the market is still there. The product is close to being final. So we think that this will be a very important growth driver for Webdoc in the coming years, particularly these types of clinics and also the Stockholm market with these types of clinics. Yes. So final question we have gotten here from [indiscernible]. Can you give an update on Germany? And to clarify selective M&A would be primary in Sweden, if it happens, I guess. So the update on Germany, Daniel mentioned on the M&A side. Yes, I would say the selective M&A that we're looking at now, it's not a lot of companies, it's a handful and all of it would basically be to strengthen our position in Sweden, as we see now, given that we believe that we have enough to work on in Germany at the moment with Data-AL and Webdoc X and getting that commercially viable. So we don't really have capacity there to do more M&A at the moment. I mean, in a couple of years time, it might be opportunity if we are able to succeed. But then at the moment, we exclusively focus on the local market basically. So with that, that was all the questions we had. So thanks a lot to all for dialing in, and please reach out if you have additional questions to us. Thank you.