Nordhealth AS (NORDH.OL) Earnings Call Transcript & Summary

Hello, everyone and welcome to the Q2 2025 Presentation. The next slide. See that I'm Charles MacBain, I'm the CEO of Nordhealth, and I'm joined by my colleague, Alex Cram, our CFO. Then we'll go through 4 different topics today, similar to previous presentation and end with a Q&A. So we'll start with a general company update. Then we'll do a slight deep dive into the veterinary BU, then the therapy BU and Alex will end the presentation with a financial update. [Operator Instructions] So starting with the company update. I always like to take a historical view, so you can see where we came from, as there's a lot of fluctuations year-over-year. So over the last -- over 6 years, we've actually been able to grow the business had a CAGR of 49%. As you can see, the majority of this growth has actually come from organic growth and some from M&A, but we have not made M&A acquisitions in 2025 so far, 2024 or 2023. We are still looking for opportunities from time to time if we can find some that fits our criteria and the right price. Next, so if we look at the business year-over-year, ending Q2 2025, you can see that our ARR overall owning grew 9.5%. And it's important to note that this 9.7% excludes the Vets4Pets and AmeriVet post-pilot rollouts. But if we break down the growth and where it came from, at the end of June 2024, we stood at -- our ARR stood at 38.6%. We added 1.8 million new ARR from new customers. Our current customers also spent 3.6 million more of us, and we had a churn of negative 1.6%. Important to note is that this 9.2% net upsell is primarily driven by growth and expansion within existing enterprise clients. This is not a big rollout that we've seen in 2024, and we'll see in the latter part of 2025 and 2026. And you can also see the churn rate of 4.2%, which is quite a low churn rate. The story here is that in 2024, H1, we had the CVS rollout. And in H1 2025, we've been very much working on ensuring a successful pilots of our 2 next big rollouts, which are our AmeriVet and Vets4Pets, which will take place in H2 2025 and 2026 as well. If we'll go now to the next slide. Here, we can see the breakdown of this growth over time, not just a snapshot in time, but within a historical context. The main point here is that our growth has slowed down in LTM Q2 2025 relative to previous years. Due to, first, as I mentioned in the previous slide, the large enterprise rollouts being slated for H2 2025, 2026 versus the last 12 months. And the second part to understand is that we are also driving to acquire new customers, and it's quite a healthy LTV CAC that we've got ratio. This is especially driven by our low churn rate. If you go to the next slide. We can see that in the last 12 months, we've added EUR 2.5 million in net new spending for R&D and CAC investments. However, that's been offset EUR 1.5 million that has been offset by improved revenue, so minus the COGS and customer service. So the additional revenue that we brought on board has offset EUR 1.5 million of that cost, resulting in a net change in EBITDA minus CapEx of negative EUR 1 million. Now we'll talk more about the additional investments in the veterinarian therapy BU deep dives, but the 2 big buckets that we're investing in are one, versus what we had predicted is we want to be more aggressive in our localization for the DACH region for our veterinary business units. The DACH region is the largest veterinary market in Europe. And we also want to be able to accelerate the migration of our veterinary clients on the private cloud. Second is we see a massive opportunity in our potential to develop and upsell AI features to our current customers and making this a unique value proposition for new customers, which are coming from us a legacy systems. So we see that as a big potential for a catalyst for change. If we think through the -- one of the biggest issues we're growing in this business, which is the fact that the churn is very low. It's very low for us, but it's also very low for our competitors. So a lot of these competitors have been in legacy software, server-based software, hosted software. And they cannot as fast as we can develop these new features. And so we see that our ability to be at the forefront here will enable us to convince a greater proportion than historically customers to migrate over. It's a reason to switch as that. Now let's go into the veterinary update. So a couple of key business topics. One, the big news is AmeriVet, which is a 200-plus U.S. corporate chain -- location corporate chain, approved the pilots and full migration. This is a big, big deal for us. It's our first flagship U.S. customer that's a corporate, and it's -- I'm very happy with the team and our progress on this one. It was -- we're expecting that the full migration will happen in H2 and 2026 over time. And it's important to note that this the ARR from this decision is not included in our signed ARR previously, but as the approval happened at the end of Q2. But you will see this in the Q3 signed ARR numbers. The second is we actually did get a second smaller U.S. enterprise customer, and we're currently rolling them out. It's called PetVet365 65. We've rolled out as of the end of H1 6 of 27 locations and that roll up is continuing. Third is, we'll talk about it and do a little bit more deep dive in the next slide, but we've launched our first Provet AI features, which are Scribe, Discharge Notes and Patient Summary will go through and show you those in the next few slides. The pilot started in August; 44 vets have already signed up even before the product is out of beta. So there's a very, very strong demand for these features. Fourth is we made a decision to accelerate the Vetera migration through investments in Provet localization for the DACH market, so accelerating those investments relative to what we had expected before. Fifth, we were able to sign EUR 1.9 million new customer ARR; and lastly, we've migrated 109 clinics to date, and we've actually successfully sunsetted Provet Net, which was a platform in Finland. They've all migrated over to Provet Cloud. So we can now focus more of our development resources on our core products. Now let me show you a bit about these new AI features that we've launched. So let me put you in the world of a veterinary clinic. In our vet clinic, especially a first opinion clinic. These appointments are 15 to 20 minutes. And the history, sort of patient history can be pages and pages long with lots of PDS, lots of attachments, especially the referral letters and so on. The vet has minutes, if not tens of seconds to be able to go through that whole patient history to figure out the important information. So we've come up with a solution with -- where we take all this information and highlight the most important information in many different parts of the system, so they don't have to go through the full history. They can see the most important information just in one click. If we go to the next one, is a Scribe. So after they review the patient history, they will start what we call a consultation, which is an appointment where sometimes the pet owner is there, sometimes it's not, but the vet will give instructions and for example, provide certain medicines, so on and do procedures. All these voice notes are actually recorded through an ambient recording, transcribed and then that transcription is sent to OpenAI to be able to generate very clean clinical notes. So in the previous world, right, people were typing in notes, not paying attention to the pet parent, which is in the room, not having their hands free, right? And so they had to do it after the appointment happened. So now they no longer have to type anything, right, in the clinical notes, and they just have to focus on patient care more. The first situation of this will be just the clinical notes, but we're looking to have a fast follow with adding treatment on, so identifying, for example, when someone says that they gave a certain amount of a certain medicine, it would identify that and add the charges. If, for example, a vet would say a new updated weight, it would add -- figure out the weight, add it and structured data. And then we see a huge potential in converting our unstructured data into structured data for improved care analysis. So this is a really, really big feature, what we developed for therapists, and we initially trialed there. We've now brought it to vets, and there's a big interest in this one. Go to the next one. The last one that we've developed so far in our clinical AI bundle for vets, as we call it, is the AI Discharge Instruction. So after the appointment is done, the pet parent usually receives an e-mail or printed document in some clinics where with a summary of what happened in pet parent language, right? So it's not medical language. So this allows you to, with one click, generate a discharge instructions from the consultation. And it saves many, many minutes for the vet. And a lot of the consultations actually do not have discharge instructions, so they don't have the time to do it. And so the pet parent is left going home without a real idea of what exactly happens, what are the instructions for medicines so on. So this elevates care in addition to saving loads of time. So we're very excited about this one, too. Now beyond the features, looking at the numbers, as we said, we grew 13% year-over-year, right? The net retention rate was 109%, which was primarily driven by small expansions from enterprise clients rolling out new clinics, but we have not had a significant rollout of corporate clinics like we did in, for example, H1 2024 and in the future, looking at the AmeriVet and Pets at Home rollout. Our churn remained extremely low at 3.4%. And if we exclude the impact of the migrations that we've been doing, that would actually be 2.9%, but even both numbers are quite spectacular. Lastly, it's really important to note that the Vets4Pets and AmeriVet post-pilot rollout ARR is not included, and that is estimated at EUR 4.5 million. That is the amount that is net needed to be implemented, not included the amount that they have an ARR based on pilot. If we go now to look at the trends over time, right? So in 2021 and 2022, we also did not have a big enterprise customer with roll out. And so you can see that impact in our numbers. Relative to what we saw in 2023 or 2024, where we did, right? So we do have some seasonality based on when they decide the implement. And you can see that our new customer ARR is around 4%, which is slightly lower than our average 7.8%. That is one place where it's impacted. And the second primary place was impacted is in net upsell, where it was 12.4% versus the historical average of 19% and a high of 35% in 2023 and 27.6% in 2024. The upcoming large enterprise rollouts and revenue from AI features will support net retention in the future. Other interesting to look at is how we're performing in terms of our profitability. So if we look at 2025, the last Q2, the last 12 months before that, we were roughly remained on the same level as last year. We've been able to add additional revenue, which has brought us an additional contribution margin of EUR 1.3 million. We spent EUR 1.2 million to accelerate CAC and R&D. So we have slightly improved profitability. And those investments have been in 2 areas that we discussed before, the first being the acceleration AI and the goal there is to transform product from a passive system of record, where the majority of the information is inputed manually by typing clicking into a proactive operating system that can anticipate workflows, automate admin as we often the Scribe or the Discharge Notes with the aim to boost initially clinician productivity and in the future, other user personas, for example, the receptionist or the inventory management person. The second big bucket that we're spending on is to be able to accelerate our DACH rollout. We've had very strong interest from enterprise customers in the DACH region that are looking to get a cloud solution to replace their legacy solutions, some of which are ours, Vetera, some of which are on [indiscernible] and some which are on other third-party softwares. And so this will not only unlock this 1,500 clinics, which are on Vetera today and be able to unlock efficiencies in -- that we don't have to have 2 development teams. We do not have to have as well a lot of support tickets, which are generated by service-based softwares, but also we believe that there is going to be a big opportunity for us to upsell our current add-ons like AI, integrated payments and so on. On the next slide. Now looking at our growth split by country. We can see in -- at the end of 2024 with EUR 4.5 million in U.K. that is now EUR 5.4 million in the end of June 2025, some of which is CVS. The U.S. has grown, but there was -- due to currency issues have been changed. Southern Europe has continued to growing nicely. There are some corporate which are slowly increasing the amount of locations that they have driving our growth. In the DACH region, we remain relatively stable with our Vetera products, but we're excited about the potential way we bring our cloud product to market. And you can see in the Nordics, we've also slightly grow. If we look at the U.S., just deep diving on that. It's in addition to currencies. In Q2 2025, the PIMS ARR actually increased by 15%. However, there was also a big volatility in Provet Pay volumes. So that was one -- another one of the big drivers. The next slide. Looking at the revenue split by products. You can see that we have -- our SME is growing quite nicely in the last 12 months ending of June 2025. We have had slower growth than previously in enterprise due to no big rollouts. But our payments and partners and add-ons are becoming a bigger share of revenue. As we have more and more partners coming on board of our marketplace. And it's always good to look at -- despite our focus on enterprise, our customer concentration remains low with our top 3 customers composing 21% of our AR. Looking at the migration. So the -- in 2021, 40% of our ARR came from cloud. And as of June, this year, it's 83%. So we've made a big dent in our migration. Vetserve and Provet Net were sunsetted in 2024 and Provet Net in Provet Win, and Provet Net in Q2 2025. We still have to migrate VetVision in Denmark, Sanimalis in Norway and Vetera at some point in the DACH region. Now going over to therapy. The therapy business have been focused on migration of the Aspit users to a new unified platform. So far, we've migrated 193 Aspit users through Unified platform. But as of the end of June, the rollout continues, but at a measured pace. So we can act on feedback that we get from customers and make sure that we protect the reputation thereby protecting retention. We estimate migration volumes will increase in H2 2025. We also have had over 500 users, which is still small, less than 5% of our practitioners have activated AI assistance, which provides clinic an AI Scribe and we've delivered over 25,000 AI-generated summaries and over 11,000 hours of transcribed in Q2 alone. And lastly, we also signed 410 new ARR in Q2. Looking at the growth, as we discussed before, the main focus, the primary focus on therapy business unit is this migration. And so -- but despite that, we still seen some growth in current markets despite our low headroom for growth in these markets and given our market share, we grew at 4.3%. Our net retention rate was 98.9% and churn of 5.4%. Looking over time, our long-term average churn has been around 5%. So you see it slightly above the long-term average. Despite the fact that our revenue mix has shifted quite significantly. So if you look at 2023, which is the year when we acquired EasyPractice, we've been working very hard at reducing the churn EasyPractice, and you can see that trend in 2024 and 2025. In LTM Q2 2025, our new customer ARR was impacted at 5.4% given our focus on shifting the -- as everyone onto the new Unified platform Aspit. And secondly, the fact that we are no longer targeting actively non-therapy professionals, which were targeted before with EasyPractice. This is what has driven our churn down as we want to focus on therapists only. And looking at the BU EBITDA minus CapEx, we have made -- our additional revenue has generated a contribution margin of an initial EUR 400,000. However, we've invested EUR 1.4 million additional in order -- in CAC, in R&D to be able to speed up the migration of Aspit customers to our Unified platform. And the rationale behind that is that, that unlocks EUR 2.8 million in annual savings. And second, it's accelerated our investment in our AI Scribe to empower practitioners to be able to focus on patient care and reduce time on administrative tasks. Looking at the development by country. So we can see that Aspit was acquired in 2021 and EasyPractice in 2022. So this was you can see why the drivers of those growth. And growth has been slow as we've focused on R&D on the Aspit migration. Once the migration is completed, we'll resume work on add-ons and new country expansion. And as you can see, there is a decline in Norway from 9.4 to 8.6. Norway decline in ARR as you see seasonality in Q1, you see high churn. It's the big churn and Finland ARR grew after implementing a price increase. Now looking our cloud share of ARR increased from 34% in 2021 to 51% in 2025. So we have made some leeway on migration. The churn for non-cloud was 3.5%. So it's quite a low churn. And we go to the next slide. Over to Alex for the financial update. Thank you.

Thanks, Charles. Hello, everyone. To begin, I'd like to let you all know that in addition to this Q2 update, today, we also published our interim financial report for H1 225. You can find this on the company website. It includes further details on many of the headline numbers that we'll be running through today. So looking first at our reported revenues in Q2 2025, we did EUR 12.9 million of revenue, which is a 5.4% increase versus the same quarter last year. It's important to note that our underlying recurring revenue growth has been much higher at 13.5%, going from EUR 9.9 million in Q2 2024 to EUR 11.3 million in Q2 2025. The reason for the decline in other nonrecurring revenue is due to a spike in implementation revenue that we saw in Q2 2024, because Q2 2024 was a period of rapid enterprise rollout in Veterinary with CVS. Correspondingly, the share of recurring revenue in Q2 2025 is 87.7%, up from 81.5% in Q2 2024. For H1, reported revenues, we see a similar story. Total reported revenue grew by 13.4% to EUR 25.3 million in 2025. But again, reported recurring revenues were higher, growing 17% from EUR 19.1 million in H1 2024 to EUR 22.3 million in H1 2025. Our share of recurring revenue in H1 2025 is 88.1%, up from 85.5% in H1 2024. It's also worth noting that our core veterinary and therapy business units have been outperforming are much smaller other businesses. So recurring revenue for the 2 core business units has grown by 18.9% year-on-year. Looking now at quarterly adjusted EBITDA minus CapEx. In Q2 2025, we reduced by EUR 1 million year-on-year to an adjusted EBITDA minus CapEx of negative EUR 1 million. Revenue grew by EUR 0.7 million year-on-year. COGS and customer service also grew by EUR 0.6 million. This EUR 0.6 million growth is higher than proportional to the revenue growth due to the temporary need for extra client support for the early migrated therapy clients. The largest item impacting adjusted EBITDA minus CapEx is the product development, which is by itself a EUR 1 million increase in expenditure versus H1 2024. The increased product development expenditure is for new features, platform scalability and enterprise client custom work, although most of the custom work is charged to clients. And as per our recent update, we are stepping up investments in AI feature development, and DACH localization. For H1 adjusted EBITDA minus CapEx. This was negative EUR 1.8 million compared to negative EUR 0.9 million in 2024. The H1 variances are mainly driven by the variance in Q2 because the variance in Q1, 2025 was only EUR 100,000 versus last year. Next, turning to adjusted cash flow. In Q2 2025, we had a cash outflow of EUR 1.2 million, which is an improvement of EUR 1.3 million compared to Q2 2024. The main driver of this increase comes from changes in deferred revenue of EUR 0.9 million. As we saw Q2 total reported revenue had a higher share of implementation revenue, and this is typically billed later than our recurring revenue. Other profitability and working capital changes amounted to a EUR 0.4 million improvement versus Q2 last year. Now looking at H1 2025 adjusted cash flow. In H1 2025, we had a cash inflow of EUR 1.7 million, which is an improvement of EUR 3.4 million compared to H1 2024. EUR 1.3 million of this comes from the Q2 variance discussed on the previous slide. The Q1 variance was primarily driven by trade debtors, which were EUR 1.9 million more favorable in Q1 2025 than they were last year. The largest individual item here is a payment that we received from one of our large enterprise clients in Q1 2025 for a backlog of their invoices, which totaled about EUR 1.1 million. Finally, looking at the June 2025 balance sheet. Cash as of June 2025 is EUR 20.5 million, of which EUR 13.5 million is in money market funds. There were no changes to goodwill in Q2 2025, except amortization and changes to FX. There was no external financing taken in Q2 2025. There were movements in treasury shares. In Q2 2025, we transferred approximately 48,000 treasury shares to participants of our performance share plan. We also completed a share buyback after the balance sheet date in July, which I'll talk about in the next slide. Our balance sheet remains healthy with equity at EUR 68.2 million, and the company has no interest-bearing debt. The full detailed financial statements for Q2 2025, including P&L, balance sheet and cash flow are in the appendices. So next, looking at the share buyback. In July, we settled the transaction to purchase 300,000 shares at a price of NOK 36 per share. So as at the settlement of that transaction, the company owns 1,377,793 shares in the company. A key use of these shares is the performance share plan. The company is moving towards equity as its primary form of bonus compensation. And in 2025, we expanded our PSP scheme from 16 participants in 2024 to 55 participants in 2025. For our 2025 guidance update. We're reiterating our full year guidance on Vet plus Therapy recurring revenue based on December 2024 constant currency and excluding acquisitions of 12% to 17% growth. As discussed during this presentation, our focus in H1 2025 has been on preparing for the large enterprise rollouts in veterinary, and these will lay the foundation for strong revenue growth in H2 2025 and 2026. On adjusted EBITDA minus CapEx, as we announced earlier this week and discussed in the presentation today, we're accelerating our investments in DACH localization for our veterinary business unit and in AI development across both business units. We believe the timing is right for both of these investments to optimize growth in the coming years. So the adjusted EBITDA minus CapEx guidance for 2025 is being updated to between minus EUR 4 million and minus EUR 2 million, excluding acquisitions -- from -- it was plus or minus EUR 2 million, excluding acquisitions. Lastly, a reminder on our financial calendar that the Q3 2025 presentation will take place on the 11th of November 2025. The calendar can be seen on the company website as can our history of presentations. I'll now turn back over to Charles for Q&A.

Thanks, Alex. [Operator Instructions] So just going through the questions, we had 3 questions in the chat. The first was, how do you currently perceive the competitive landscape in the DACH region, the U.K. and the Nordics? Are you seeing new start-ups emerging with a modern tech stack and strong customer proposition? So let's -- we'll target -- I believe that question was aimed for veterinary given the 3 of them. So we'll talk about each of the different regions first, both in terms of emerging start-ups, but also the competitive landscape. So in the DACH region, we are the #2 player with Vetera. All of our clinics, except for a handful, which are on Provet Cloud or on Vetera. The #1 player is EzyVet or VetZ, which not to be confused of the New Zealand EzyVet, which was bought by IDEXX in 2021. That company was independently owned, then was purchased by a diagnostics manufacturer, which was then purchased by Mars. So Mars is the ultimate owner of this company. And there are a few sort of low functionality cloud players in the DACH market. For now, people are -- as we can see from our Vet app, people are not looking for a new solution. And so churn has been relatively flat, especially from the SME. However, we have been receiving inbound interest from corporates, which are on our solution and also our competitor solution. And that is why we're actually accelerating the DACH opportunity in that the current cloud pages in the market are -- do not currently accommodate -- have functionality to accommodate the cloud, these large enterprises in the cloud. And so that's the primary reason why we want to go after it. There's no other entrants, which in the PMS space in DACH region, which are significant threat. In the U.K. There are some upstarts that -- such as Lupa in the market, which do not have a full-fledged PMS yet, but have an AI Scribe. The -- there will be more competition from these AI Scribe trying to go into the PMS market. It's a -- I think that once they enter the PMS market, they realize how big of an endeavor it is to build a full ERP system. However, I'm a strong believer and only the paranoid survive. So we -- the reason why we're investing heavily in AI is to make sure that we are seen as the frontrunner in these markets as if you've got the PMS plus the integrated AI, that is way better than having an unintegrated AI value proposition. Think about the -- there's no need to copy paste. We know both the history of the clients and what happens in that certain consultation. We also can -- adding clinical notes is the one of it, but you'll also be able to add structured data if we are the ones who actually provide that as a service. So we have a right to win in terms of the value from a product perspective. And also the second is this is a paying add-on. And this -- which we can afford to sell at a lower price than the competitors because we don't have to offset the full CAC given that they're already our customer. And in the Nordics, we have not seen any major competition on the vet side. There are some upstarts which have created an add-on for scribes and so on, but they have not actually launched a PMS solution. And similar to -- in all markets, we'll keep vigilant in that by having a great AI solution, there's no reason for our customers to go to a third party. Then you mentioned the more modern tech stack. Provet is a Python back end and VGS front end for hosting AWS. We've got a very modern tech stack. And so we don't see any competitors with a more modern tech stack, especially at scale, right? So we've done a lot of work to migrate our front end over the last few years, and we're continuing on that work, but we don't see a big risk from a more modern tech stack coming on board. And in terms of value propositions, there are -- there was one theory from this great investor VC fund called Tidemark. I highly recommend that you take a look at their website. They've got this vertical market software project where they detail a lot of the ways that vertical market software can grow. And so there's a strategy that our competitors could use called Integrate and Surround, which is basically at first, you integrate the PMS, then you surround them by slowly adding feature after feature. So that's what we're trying to protect against because we have the core PMS. And if we don't develop these additional features, right, at some point, our customers will ask us to integrate with these start-ups, which are providing the same feature, even if they're slightly worse. And so -- and over time, they can add more and more features and slowly surround fully in order to become the PMS. So that's what we have to prevent against. The second question was the -- what is your view on AI in terms of both threats and opportunities for Nordhealth? Do you believe you can monetize new AI-powered features? And how do you see AI impacting the efficiency of your software development processes? So this question is twofold. One, it's about how do we see it leveraging AI to be able to improve our products and our business model. And then secondly, internally, how we can use those. So on the value proposition, I'm so excited about the potential. If we think through like my -- the original value proposition that we thought, we had with cloud was that people don't want to have the hassle of servers and servers burning out and so on. And so they want to move to cloud as well to access their data from anywhere. Even though that value proposition did cause migration, it didn't dramatically change the way people work. So the catalyst to change was less intense, right? The AI dramatically changes how work is done. If you think about a clinician, right, the amount of time that, that clinician can spend on admin can be by typing clinical notes can be reduced by 95% of these features. So there's a huge opportunity to dramatically transform how work is done. With cloud, it was a nuisance for the practice manager, but not so much for every single practitioner. And so this is quite a unique time in that I believe it will be a big catalyst to change if you've got a much more than it was for the shift with the cloud. From a business model perspective, prices are a bit all over the places. People are -- start-ups are trying to figure out what pricing they should charge for their AI solutions. For the Scribe alone, we've seen anywhere between EUR 69 on the low end to all the way to EUR 129 per user for the Scribe's only in both the vet side and on the human side. So this is a huge -- this is a potential to almost double our average revenue per vet or per therapist if we are looking at the higher end of that. So there's a big, big opportunity from our -- to be able to increase our average revenue per account. Internally, there's a couple of places where AI is particularly adept at being able to provide improved efficiencies. The first, if we go to the top of our P&L, it's -- or looking at the cost, customer service, whereas we grow, we've got more and more customer support tickets, right? And so the ability of us to -- we use both Zendesk and Intercom. So we're trialing 2 different software's in 2 different business units to be able to experiment. And we've seen that AI is particularly adapted at answering a lot of the how-to questions. So that's a -- will be a big cost saving if we look at percent of revenue basis over time. The second is on our developments, where the -- if we think about the development, software development life cycle from -- there's a discovery process, right, which is done by a product manager to figure out what problem should we solve. And AI is really good at figuring out all the information that you get from your customers internally from support tickets, collating that to figure out what are the most pressing problems to solve, right? The second one is design where or -- and discovery process was a product manager will create what's called a document outlining the problem and so on, right? Now they don't have to do that. They actually can go all the way to create a prototype, which in the end, the document can be confusing to some a prototype, everyone understands it very easily, and it gets [indiscernible] to align much easier. On the design side, right, you can leverage AI to create designs way faster than you did before, right? And on the development side, both on -- we use tools such as cursor or cloud and so on to be able to accelerate developments and also other tools to be able to test and improve our safety and our quality of our code to make sure it matches our standard. So big potential internally. The third question is Provet Cloud and DACH. When do you expect to have a fully market-ready Provet Cloud offering for the DACH region? So although we mentioned the DACH region, there's 3 countries. And in those countries, they've got 3 specialties: small animal or companion animal, as you call it, dog, cats, the exotics, equine and production animal, cows, sheep and so on. So we're first going to focus -- we've got a few clinics in Austria. And so we've got an initial focus to -- for small animal in Austria, which we're almost localized for. Then we'll go after small animal in Germany. Then after that, we'll see. But we're going to segment by specialty and by country. But when is really hard to say because the way we go about localization is we do have a good understanding of the gaps that we've got in terms of features, but ways of working slightly different. And so it's a bit like an iceberg in that it's hard to set an exact date because we only move on to the next segment when the first segment is happening. And so the definition of satisfaction can be different. But we'll continue to update you on progress as we continue rolling out more and more clinic in the DACH region. The next question we had was preparing the rollout for AmeriVet and Vets4Pets to take place in H2 2025 and 2026. When will we see the full effect of the EUR 4.5 million in reported ARR numbers? Could you help us think about phasing on both ARR growth and revenue growth in H2 2025 and 2026? So the total amount of ARR, which is not rolled out as of the end of Q2 is around EUR 4.5 million, right? That's an estimate because there's transaction fees and so on for those 2. When they roll out is really hard for us to predict because the enterprises have certain requirements that they want, and those requirements change. They have to upgrade their Internet sometimes, upgrade their equipment. And so it's really hard for us to predict exactly when that will happen and that phasing. But as we've guided, this will happen in H2 2025 and 2026. So you should see the full EUR 4.5 million by the end of 2026. The next question is beyond headcount and other OpEx investments in the AI and DACH launch. Should we see any impact on gross margin in H2 and 2026? We don't provide forward-looking guidance on this. But Alex, any comments?

Yes. I mean I think as we've discussed, one of our biggest projects is in the therapy business, migrating clients from the legacy Aspit platform to the Unified platform. And that should help us realize the savings that Charles mentioned on that rollout. Now in the meantime, it costs a little bit more to migrate, but then the savings from the migration will help support gross margin and other cost lines into H2, and certainly into 2026 when the larger volumes of migrations will start to come through.

Thanks, Alex. The next was, could you share some more insights into why the time is right to accelerate your DACH efforts now? So as I mentioned in the presentation, the main reason we're doing it now and accelerating versus what we had initially planned is the strong inbound requests we'll be getting from enterprise. So they want to migrate. And a lot of them are on both partly on our system, but also on our competitor system. And we see a big opportunity to be able to do work in parallel. We onboarded a new CTO, James this year and which I'm very confident in his ability to be able to do products in parallel. So our capability internally to be able to do it, some ramp up net new teams. And the second one is the strong demand from enterprise. Then there was another question from Eric. The EUR 2.8 million in annual savings in the therapy from migration of Aspit, did you see any of those gains in Q2? Or is that an H2 2025, 2026 story? So the savings in -- from the migration on the therapy side come up from probably a few different areas. First, it's the license fees that we pay for. So basically, we pay for license fees to be able to provide the Aspit legacy products to Microsoft and to remote desktop providers, Citrix. And so once they migrate, those are no longer needed. So that's one big area. right? The second is the efficiency. So a lot of the changes that are required to be made are made manually. So someone has a contact support to be able to make. So the number of support tickets on the Aspit platform is much higher than it would be on a new cloud platform. And so as a result, we should see a decrease. And the third one is that we don't have to support 2 different platforms. We only have to support one. And so those are the 3 categories of savings. So the first one is we get -- and the second one, we get as people migrate. And the third one comes only when we shut off the system properly. And that should happen. We don't have an exact end of life, right? But we should see this improvement in mostly 2026. The next question was, are the financial targets communicated at the Capital Markets Day still valid, or should you assume they have effectively been abandoned? No. In the Capital Markets Day, we had communicated our growth targets, and those are still valid, right? As we see that there are some fluctuations over time, right? And we've seen that historically in our revenue numbers as well, for example. But these are still valid as of today. Great. Any other final questions? Perfect. Well, thank you very much, everyone, for joining.

Thanks a lot, everyone.

Nice day.