Nordhealth AS (NORDH) Earnings Call Transcript & Summary

Great. Welcome, everyone, to our first Capital Markets Day for Nordhealth. So maybe we'll start with brief introductions. So I'm Charles MacBain, I'm the CEO of Nordhealth. I joined the company in November 2018 when I acquired the company. I bought the company after over almost 18 months' search. After business school, I was looking for a health care practice management software business in less regulated health care industries, hence, veterinarian therapy. After searching through like 400-something companies and actually trying to, I found that Nordhealth was the sort of best player in this space for veterinarian therapy. They weren't looking to sell. So after 8 months of me poking them, they finally agreed to sell. And it's been quite a journey ever since. So that's me. Maybe, Valter?

Sure. Good morning from my side as well. I'm Valter Pasanen, I'm the General Manager for the veterinary business unit. I have a financial background, specifically also in M&A and post-M&A integration. And I joined shortly after Charles had acquired the majority of the company. So I've been here for almost 5 years. And yes, 2 years ago, I got the opportunity, I was back then working as CFO to shift over to head the veterinary business. So Mari?

Thank you. So my name is Mari Orttenvuori, and I'm the CFO of Nordhealth. I've been with the company now nearly 2 years and following Valter as he moved on to the General Manager role for veterinary business units. So I've been the CFO then for almost 2 years now.

Thank you. Good. So let's kick it off. So going through the agenda, we'll start with a general company overview. I know a lot of you have known the company quite well, but for those that are less familiar with the company, we'll just go for a general company overview. Then we'll go through performance metrics over the last couple of years to see how the progression has happened. And then we will give a 3-year forecast on the top line and also bottom line. Then we'll deep dive into veterinary. Valter will do that. He'll deep dive into therapy. We'll go through Q3 performance, and also Mari will go through a financial update and we'll end with questions. [Operator Instructions] So company overview. So our mission is to build software that empowers veterinary and therapy professionals to save time so they can focus on delivering great care and growing their business. A little bit about Nordhealth. So we are today the #1 practice management software in the Nordics for veterinarians -- in Europe for veterinarians. And we are currently targeting U.S. and U.K. expansion. We are the #1 therapy practice management software in the Nordics. We stand, at the end of Q3, around EUR 36.2 million of signed ARR. But that does not include EUR 4 million of additional enterprise ARR, which is signed but we're just currently piloting those clinic chains. Once they're rolled out, we'll be around just above EUR 40 million. Today, we have over 70,000 users from 44 different countries that use our product daily. And this is a product that you're using multiple hours a day, so 3 to 6 hours a day depending if you're a therapist or a vet. If you look at the breakdown, Norway, it's where we're listed. Norway is our biggest country, with 41% of our revenue coming from Norway. 75% of our revenue comes from the Nordics, but 25% comes from other countries, such as Spain, U.K., U.S., Germany and so on. What's interesting to note is that when I bought the business, this chart looked very different. Finland was probably 90% to 95%. So we've had a dramatic change in our business structure. So why did we actually decide to go public was because of this unique market opportunity, in that 70% of vet and therapy clinics are still on on-premise or hosted software. What that means by on-premise, like they actually have servers in the clinic, or hosted means that their server is somewhere else and they have to log in via remote desktop, so a very antiquated way to look at it, very different from the modern software that you see as consumers. And you'll be quite surprised when you look at the screen of the doctors, what they look like. Over the next 5 years, the majority of these clinics will migrate to cloud-based software. So we've got this once-in-a-generation opportunity to be able to capture them because, for the last 10, 20 years, they've been on those hosted software, and they haven't changed. And so this is the once-in-time opportunity where they will be changing. And then once they're on a new cloud software, they won't change again. So that's why we decided to accelerate our investments and raised money during the IPO. So what you'll see in the next slide is that we have had a successful track record of being able to create efficient and repeatable go-to-market strategies. And there's 3 different ways that we actually acquire customers. One is the traditional marketing, sales and onboarding. And in the therapy side, we have just marketing and onboarding, in that there's no sales for the product-led motions. Then we also acquire companies. That's what makes us slightly different, in that we acquire some of these on-premise or hosted practice management software where we see that they're fairly priced. And then we migrate them over to our cloud software. These are very value-accretive because the fact that these companies, they're normally subscale, they have to invest a large percentage of revenue in product. They're normally quite inefficient because they have to have all the licenses for managing hosted or on-premise software. And so the EBITDA margins can go -- or EBITDA minus CapEx margins can go from around 0% to 10%. And those go up to our sort of gross margin minus customer service, which is around 75%, so a huge value appreciation when we market them over. Then PMS, practice management software, is just a core software of the clinic. It's the main software. Every single user use it every day, from the receptionist to the therapist, to the vet tech, to the imaging person, a software that integrates everything together. What that provides us is a great opportunity to go from one product to multiproduct. So we started with practice management software. We expanded to payments. We've got lots of other workflow solutions that solve more and more of the customer pain points. So that means that not only can we acquire new users successfully, once we have that user, every year, they will spend more and more with us. So let's take a look at acquisitions. So we've done 9 acquisitions since 2005, 3 of which have been fully migrated, Provet, Praktiikka, Trofast. We're in progress of migrating 5 of the acquired software. And we actually acquired EasyPractice, which became our flagship software for therapy. So what makes our business quite unique. One is that we've been growing quite fast. That's 64% ARR CAGR through this combination of organic and acquisition. And the reason I'd like to put it together is that it's a decision, whatever is cheaper is the way we go. We know pretty well, when we want to enter a new market, how much it's going to cost us to recruit additional clinics from scratch without having any brand name in that market. And we compare that sort of curve of customer acquisition cost to acquiring the company. And whichever is cheaper, we do. And then the most incredible number about the business is the churn, 2.5% gross annual churn. For SME companies, like you can see that that's only a monthly churn number. And that includes natural churn. That means like the way you have to think about it, because it's a bit of a crazy number, is that a company will stay with us for like 40 years with this kind of churn. So it's 1 over 2.5%. So it's a huge, huge amount of time and very stickiness. That means that the businesses themselves are actually also not going bankrupt because natural churn is, I'm guessing, that some therapy clinics sometimes close that. Then you can see our net retention, which is around 113%, which means that, on average, a customer will spend 13% more with us. There's a couple of levers for that. One is either user growth where our customers, given that there's an increased demand, they add more users to their clinics. They grow into a bigger location. Secondly, as Valter will look at more deeply, is these enterprises, which are normally owned by private equity funds or large families, they'll buy out new clinics and migrate them over when they buy lots. And the third part is add-on products where we continuously are improving the product, thereby through changes in planned pricing or add-on pricing, we'll be able to increase the amount that we have in average revenue per user. And this was about this efficient and repeatable sales. You can see our lifetime value to customer acquisition cost ratio over these years has been 31. And that's also been improving every year. And important to note, because there's different ways that people calculate lifetime value, we actually look at not the revenue divided by churn rate but the revenue multiplied by the gross margin. So it's a more conservative number. So here's what we have. We've got 2 flagship PMS that we migrate all of our customers to. We've got Provet Cloud, on the left-hand side, which is our veterinary cloud PMS; and we've got EasyPractice with our therapy cloud PMS. And so that's where we began. We began by building the core PMS, which is basically appointment calendar, health record, inventory management, invoicing. And then we've expanded from there. This was the starting base, the core platform that we termed payments, terminal payments, online payments, recurring payments, for health plans. We've also integrated a huge amount of different players for telemedicine, every single X-ray supplier, MRI supplier, all the local accounting companies, all the local wholesalers, local insurance companies, the global and local labs. And so this is a huge, huge moat for us because it's quite complex to be able to manage those. And there's also the chicken or the egg problem whereby, if you are a small player, these wholesalers or these insurance companies or labs don't want to spend money to integrate with you. And without that integration, you can't actually get the users. So it's quite a nice low feedback loop. The next one is we've been focused a lot on enterprise in the last few years. That's been a big driving force for our success. And so we built quite a few enterprise features, advanced security, unifying common items and pricing lists, building data warehouse for advanced reporting, and then focusing on making it an open system with an open API whereby they can build on top of our system. So some customers have built their own apps on top. Some customers have built their own AI solutions, even a Swedish customer of ours. And that's also creating additional stickiness because they're building on top of our platform. And this is just the start. So we're currently trialing 3 other products. And we're looking to expand way further in the future with many other product offerings. And the way we think about it is, let's think about what's the next pain point that's the largest addressable market, and we'll sell to that pain point with software. So why did we decide to go into veterinary and therapy? As I mentioned before, the key reason why I love this market was because it's a growing market. Most people are on very legacy software. There's less regulation than traditional health care markets, and there's low natural churn. Because if you're looking at restaurants, restaurants probably have like a 10% to 20% churn rate, just natural, because they go out of business way more frequently. So that would really hurt our numbers if that was the case. So that's a very important part. And then why practice management software? And why is it so sticky? Why do we have this 2.5% churn rate is because of the workflow gravity, which is a primary. It's the system they use every day. Imagine how angry you guys would be if we switched you from, like, I don't know, using your outlook to Google Mail. It's like you're using it every day. You know all the shortcuts. I think there's quite a few finance people here, so if I force you to go in Google Sheets, you'd be pretty angry with all these different shortcuts that you've learned over the years. So that's a very big part, a core part of why we are very sticky. The second is the integration, which I mentioned, which is we integrate all the local providers. The third is the data gravity where we are the source of the most important data for that clinic. And match the stickiness with a great revenue model, which is recurring revenue. So now off to performance metrics. So this is when I took over the business. We were quite small at that time, we have about 40 different people in the company, mostly, and we had 2 people that were not Finnish. The language of the company even was in Finnish back in the day. The majority of revenue was in Finland. And we decided to grow very aggressively over the first few years, again, through a combination of acquisition and migration, going into new markets. And we've been able to do that successfully over the last sort of almost 5 years with a 64% CAGR. Again, important to note that it's EUR 36.2 million, does not include this EUR 4 million additional ARR from the CVS and Vets for Pets deals that we have signed. Now let's look at our churn rate. Our churn rate has been relatively stable, sort of below 3% most years. There's a one-time event here that we'll discuss later. But still, these are very impressive numbers. They go up and down because like even 1 customer switching more that 1 year would make a huge difference. Again, our net retention, this has fluctuated a bit, but it's around 113% on average. And the fluctuation is based on when we change our plans, when we do new add-ons. So sometimes we focus more on new growth versus on new products. That's why you can see a fluctuation. But you can see it continue to be above 110% overall. So big news was that we're actually EBITDA positive as of the Q3, which is not EBITDA minus CapEx yet, but at least EBITDA positive. And we have burned a lot of money over the last few years. And why? I mean that's the original reason why we decided to go public. If we didn't need to burn money, I would have kept the whole company myself. The reason why we actually decided to go public was because we saw this unique opportunity. There's a time limitation to it. And so we want to invest upfront in R&D and establishing like new footholds in the U.S., U.K., these key growth markets for us. As you can see, each quarter, we've been reducing our burn because there's only so many people we can put to work on the calendar. And our users, they use it every day. So they don't want that many change in the software every day. So there's a certain limitation to the amount of people you can put in R&D, for example. So you can see that every quarter, we'll be improving the profitability. A further thing, which is important here in terms of profitability, is that there's a big inefficiency which is hidden in our numbers, which are all these companies we've acquired but not migrated. As I mentioned before, prior to migration, these have a lot of costs which no longer exist once we migrate them. So that will be a big driver of improved profitability in the future. Now our type of customers. So we've got great customers in the markets that we operate in. So on the therapy segment, we've got Nemus, which is a Norwegian customer; Coronaria, which is a corporate chain in Finland. And on the vet side, we've got IVC Evidensia, AniCura, which we have both here in Norway, but also lots of universities like Cambridge, Liverpool, Utrecht, and lots of other corporate chains like Vets for Pets in the U.K., CVS in the U.K., VetGruppen, which is in the Nordics, and Unavets as well in Spain. But despite having quite big customers, our revenue concentration is quite small, in that our top customer is around 12%. But our top 3 are 18%. Top 10 are 22%. And what's important to note and what's hidden in that number is that in that 12%, these corporate chains are across many countries, but they make decisions in each country separately. And so it's not as if like tomorrow, they will be able to switch. First, if they wanted to switch in one country, it'd probably take them 1 to 2 years to do that. And if they did want to switch, they probably switches to Norway. It's not the whole market. So it's as if they were somewhat separate customers. That's something important to note. Now looking at the 3-year forecast. So we're targeting 20% organic CAGR, excluding M&A, over the next 3 years. The thing that is unique about the next 3 years is that we're really focusing on migration. Migration is a driver of profitability, but it slows down growth because we have to focus on investing in those migrations. So starting at net upsell. Net upsell is basically the amount that every customer spends more of us to upsell minus the down-sell. So if someone like drops a number of users or reduces the amount of add-ons they use, that would be a down-sell. This is a net amount. And so that's driven by 4 main things. One is new PMS add-ons. We're constantly launching 1 to 2 per year for each of different specialties, new PMS add-ons to upsell to our customer base. The second is our customers are building new clinics, they're expanding their locations, adding more users. And so that's leading to a higher upsell. Third is price increases where, as we continue improving the platform, thereby creating efficiencies for our customers, or sometimes we add things to the platform, not as an add-on, but in the plan, thereby we can have some price increases. And fourth is migrations, in that the companies that we buy, their software normally has fewer features than us. And so when we do the migration initially, we actually try not to change our price. So price is not a decision. It's the same price you paid before. We just raised the price to the legacy software. So it's never a decision in fact when they want to switch. But once they're on the new software, they've got the option to like, "Oh, do you want online booking now. Do you want to have this referral portal add-on?" So there's lots of upsell opportunities that we can get through there. Then we can see churn. We put it at 3% to 4% to be conservative, which leads to a net retention of 110%. We're assuming organic new sales to new customers, that's just organic, not acquisition, to be around 10%, with each organic growth for around 20%. And on top of that, we will most likely do M&A as we have in the past. It's just hard to predict that. And I don't like putting it in the slide because then I lose my bargaining power with these sellers, so 20% plus M&A. Now on the EBITDA minus CapEx margin. We started in 2023, expected it will be around negative 16%, so we're still investing quite heavily in R&D and new market entry. But we're targeting by 2027 to have a margin of around 20%. And here's the levers that we're going through to be able to reach that new margin, which is basically one is migrations, as we discussed before, fewer costs when you migrate them over. We don't have to have multiple development teams working for each different products. And also the customer support is way heavier for these legacy products because, for example, if you want to add a new user, sometimes enough, but you have to call them, which is ridiculous. It's a much more complex software to learn, so there's a lot of support questions. So the number of support tickets per FTE per user is much higher. So that's what we'll see around 16% improvement. The second and third are scaling. As I said before, you can't really add that many more people to an agenda. So at some point, revenue grows faster than development. Same thing for G&A, we're not going to have a second CEO, a second CFO, so there's some scaling here also happening. And the last is CAC efficiency. We went into a lot of new markets at the same time. What that means is that when you're in a new market, you have no brand and you've got very few reference customers. As a result, it's hard to find new customers. And the customer acquisition cost is quite high in this new market. But we've seen, as in every new market we entered, it goes down over time. And the second thing is that some of our implementation processes on the veterinary side have been quite manual. It takes much longer on that side. But we've been doing a lot of investments to be able to make that more smooth. Good. Now Valter, off with veterinary.

Thank you very much, Charles. So next, we're going to take a look at the veterinary market, the industry that's underlying; then we're going to look at the strategy, so how we're going to capitalize on that market; and third, what the performance has been so far. So the global veterinary service market is around $120 billion annually. It's growing at a rather rapid pace at 7.5% per annum. The software market represents about $850 million annually, growing at 8.2% per annum. So a little bit faster. What's important to note, though, is that we are not just targeting, of course, the software market itself, but we're also offering, for instance, our add-on Provet Pay. Now that alone, the payment processing, is going to be something that a veterinary practice is paying almost the same amount for as practice management software. So the actual addressable market for us is clearly over $1.2 billion annually. So what's the strategy for us for the next 3 years? It consists of 4 main pillars. The first one is enterprise partners. Our flagship product, Provet Cloud, stands ideal as a choice for enterprise-grade players who are consolidating the market for a variety of reasons. But just to highlight some really key ones. Firstly, it's highly modular. That means when a clinic chain is acquiring clinics, they're going to have some really large referral hospitals. They're going to have some really small clinics with GPs who just have 1 to 2 vets perhaps. And to accommodate a variety of those different clinics, it has to be tailored to the clinic that's at hand. Otherwise, you're going to have an unbelievably complex system in a very small practice or a hospital that is missing all the important features. And we are quite unique in this capability versus our main competitors that are mainly just monoliths and serving one kind of size fits all. The second one is a robust open API that Charles has also mentioned earlier. So the practice management software is going to be the centerpiece of their digital ecosystem that everything else integrates with. So it's absolutely crucial for them to have a really good API that's open, so they can build add-on services on top of that and themselves as well. For instance, they might want to do a pet parent app where they control the customer journey. They might want to use some AI tools that some of our customers are doing. And that's really what's enabling that. And thirdly, and extremely important here, is the experience in managing these enterprise implementation projects because, as we know also from many other industries, switching to these kind of systems can be absolutely disastrous if it's not done right. And we are currently working with 4 enterprise players that have over 400 hospitals each, 5 more that are close to 100 or over 100 hospitals each. So we've proven over and over again that we can do this successfully. And that's really, really important for the decision-makers in those enterprises. So the second pillar here is expanding in the existing markets which means we are not looking to go into any new countries. We have our core markets, and they have ample room for us to grow. So in the U.S., the U.K., Southern Europe and the DACH region, we can grow to be 30x the size we are today in terms of ARR. And we've already proven that we can penetrate those markets, as we can see later, and when we look at the market shares. Now as Charles was highlighting, we see this curve of CAC to new ARR. When you enter those markets, it's, firstly, extremely expensive to get the lighthouse accounts, get the references in. And then you see that yield improve continuously as we expand. Now third in our strategy, we have the Nordic migrations. So we're going to be migrating from our legacy product users in the Nordics over to Provet Cloud, which is going to yield EUR 2 million to EUR 3 million in cost savings. But additionally, the migration is going to unlock tremendous upselling opportunities for the payment solutions, for the digital whiteboard and many other services. So we are going to have the migrations done by an estimate of 1 to 2 years. And then fourth, we have the add-on sales and increasing and expanding those customer accounts. So as I said, the payment solution can double the value of an account. Then we've got many, many, many other add-ons as well that are all focused on the Provet Cloud platform that are going to be available for our customers. So next, let's look at the footprint we have in our core markets. So firstly, we've got the Nordics. We've got about 1,700 clinics, a little bit shy of that, so a very strong market share of 80%. And when you look at the competitive landscape, we are competing against extremely small and very local companies. We're talking about a handful of employees in these companies. And the consolidation in the veterinary industry is really high. You've got 3 companies controlling 50% or more of the market. So from their point of view, having your EUR 100 million-plus revenue company sitting on a platform that's maintained by a few developers at best, in some cases, 1 developer, is just a massive risk operationally, data security, of course, the product road map is not going to be that great. So that's not really a good option for them. Secondly, we've got the U.K. market. Important to note here, this includes the CVS and Pets at Home signed clinics as well. So we've got a little bit shy of 1,200 clinics that we're working with, a market share of 25%, representing there. And there, we are having the same competitors that we're also having in the U.S. So essentially, it's the same companies that we're competing against. And in reality, there's a lot of server-based, and actually the majority is still server-based software that's active in the market and we're all pushing, as cloud-native products, those out. So this migration opportunity that Charles was mentioning is really big in the U.K., and we're really excited of that. Then next, we've got the DACH region where we have about 1,600 clinics and a market share of 12%, which is sitting on Vetera, the platform we acquired last year. And in the DACH region, we are going to see a very fragmented market in the veterinary clinic. So there's a lot of independence there. Consolidation is not as high. So in the U.K., we actually have also 6 companies controlling 60% of the market, so it's very consolidated. But not in the DACH region. There, it's much more fragmented. And when you look at the software side, you're going to see that there's very legacy solutions out there. So it's, again, a lot of server base, even more legacy software, that you will see in the other markets. So there is going to be a very big migration opportunity there for us. Then we've got the U.S. where we're proud to say we're getting close to 200 clinics. It's, of course, only 1% of the market share there, but that just means that there's ample room to grow. And there, we're going to see the same competitors we had in the U.K. So ezyVet owned by IDEXX is one of the key competitors there and then some other products as well. But there's one key consideration here, which is that even though the market is very consolidated, you've got 50% when it comes to revenues in the veterinary space here. We've got a lot of different enterprise players. So the amount of them is quite massive. And they have learned also from what's happening in other markets and understand that this software is extremely mission-critical. It's very sticky. So they are considering to themselves, "What are my options here right now?" And when you look at our competitors, you've got essentially 3 main groups. One is the software is going to be owned by a competing clinical chain. So that's not ideal. You don't want necessarily your data being controlled by a competitor, and they're being a software that's extremely sticky and mission-critical. Secondly, you're going to have IDEXX and Covetrus, the main wholesalers and the main laboratory diagnostic provider in the space who are already controlling a massive amount of their spend. So software is only a small, small fraction of that, and they are controlling a much bigger spend. So you don't necessarily want to have that supplier concentration risk. And third, you're going to have companies that are actually working on something completely else than software, like Shepherd, that's owned by an insurance company, looking to sell insurances. Or you've got Rhapsody that's owned by Chewy that had actually taken away a lot of the revenues of veterinary clinics because they're moving supplies and food sales over to their website. So we stand actually unique in terms of our independence and also in the fact that we are only looking to do software here and that we are giving them more control of their data in that sense as well. So that's a difference between us and the other competing players out there. Then we've got the Southern European market. There, we have about 10% overall, and we are very strong, specifically in the enterprise segment, which is key for us. And then you've got some local providers that are very cheap but are, in terms of product, significantly behind us, in terms of its capabilities. So there, we are very much focusing on continuing to expand with our enterprise partners. So then let's look at the performance we've seen so far. So in the end of 2018, we had an ARR of EUR 1.7 million which has now grown with an ARR CAGR of 67% in essentially 5 years. So now we're standing at a signed ARR of EUR 19.7 million. That is actually currently still missing the EUR 4 million that we highlighted earlier coming from the signed enterprise agreements that are currently in pilot phase. Now we've seen organic growth rate on average here of 24% per year. But I'm proud to say that in the last 12 months, we've actually increased that organic growth rate to 32.3%. Now the organic growth rate has been essential in our ability also to do good acquisitions because as we've been able to enter those markets organically, that has changed the narrative for these local players that this is going to bode well for us, so they have been selling out as well at a good valuation. So the acquisitions have boosted our growth from 24% to 67%. Next, let's look at some of the health metrics of the veterinary business. So when it comes to churn, we are standing very well here with less than 2% on average over the last 5 years. So of course, there's exceptionally low churn that we are seeing in the veterinary business. It's also supporting the lifetime value of this ARR base that is growing. Secondly, we've got the net retention rate, which is also, of course, benefiting from this low churn. And our average net retention stood at about 115% over the last 5 years. It's more volatile, as Charles mentioned earlier, than churn. But overall, we expect that our churn is going to remain below 3% and our net retention rate above 110% going forward. So let's talk a little bit about the enterprise customers and why that's just a key element of our strategy. So here, we've taken some case example of actual customers of ours. I've indexed them at 100 to show their growth rates as we've been working with them. So you can see that we see a CAGR of 106% or 22% or 28%, that they are growing much, much faster than the average market. So as they are acquiring new clinics, we're benefiting from that as they're rolling out the software, and they are having organic growth by being more operationally efficient. We are benefiting from that. And also when they're doing price increases, we are benefiting from that. And a key element of that is that with these enterprises, we are usually doing a share of revenue agreement. So essentially, we get a small, small fraction of their revenues and then we get to tag along when they do, for instance, price increases or other growth. But it's also in their benefit because they're incentivizing us to be continuously focusing on how to make them more effective, how to grow their top line, how we can benefit that because, of course, if we can bring efficiency into their clinics, they're going to be able to, well, essentially deliver better care and grow their business. And that's what we're here to do. So let's look at our profitability here on the veterinary side. Now we are proud to say that we now have the fifth consecutive quarter of improved profitability. And we actually were EBITDA positive. We're not considering group allocations on the veterinary side here as well. So what has been driving this has been the increasing organic growth. But then also, we've initiated some cost-saving initiatives during last year. We've been restructuring our sales and marketing organizations for efficiency. And additionally, after having those front-heavy investments, as we've been going into these markets, we're seeing an improved rate of CAC to new ARR, which has yielded 5 consecutive quarters of improved profitability. So when you look at the revenue growth at constant currency, it's 25%. We are less focusing on the onetime revenues, to be fair. So what's important for us is the recurring revenues that are growing at 28% year-over-year. Our head count stood stable at 226, similar as in the quarter before, and we expect our revenues to continue growing faster than our head count. So as Charles was highlighting earlier, it's about scaling the organization, the platform, the group we're building. Okay. Thank you. Charles?

Thank you. Now on to therapy. So let's talk about the therapy markets. There's many different areas of therapy, but our main target within therapy are basically physical therapy clinics and also behavioral and mental health clinics. So the global market for software for physiotherapy is just over $1 billion and it's just over $4.5 billion for behavioral and mental health. These are growing really, really fast. Because whereas in veterinary, the majority of clinics currently are on software, for these markets, there's also digitalization which is pushing it up. So a lot of people were on paper and pen before and regulation is pushing them to, for example, integrated government. And so in a lot of countries, the digitization is also speeding this up. So you can see a 10.1% increase for physiotherapy software and 17.4% for the global behavioral and mental health market. So very, very, very fast growth rates. Our strategy. We've got 4 different key levers. Number one, in contrast to veterinary, we are focusing way more on profitability on the therapy business unit. The main lever of that is migration where we made a big acquisition post-IPO of Aspit, which is the leading therapy practice management software in Norway. And we're focusing on migrating all those customers, and we've started already migrating them to EasyPractice this year. And that will result in over a EUR 4 million cost saving, that migration. Most of that EUR 4 million comes from Aspit, EUR 0.5 billion of that comes from Diarium. So that time line for both will be 3 to 4 years. The nice thing about it, when we do migrations, even though -- to make it less confusing for you, I've called it separate things. I called it EasyPractice. But in Norway, when we go to market, it is the same name as it is today. So Aspit, they've got 2 products, Physica and Psykbase. And we call it Physica and Psykbase. So it's just an upgrade from version 3.1 to like version 4. So it's a very smooth migration, a fully automated migration. And so it's quite a different dynamic than veterinary, in that it's very, very easy once you have the software localized to be able to migrate customers. So instead of they have to migrate one by one, we can migrate 100 a day because it's a fully automated solution. The next is Danish expansion. So 70% of Danish therapy clinics are using legacy on-premise and service, so the same theory is before. And we're looking to migrate those over to EasyPractice. It is the most advanced cloud-based software in Denmark. So we're in a prime position today to be able to capture that shift to the cloud. The third is, on the latter half of the third year strategy, we will be focusing on a new country. Migration is taking the priority. But after those are completed, we'll be focusing on going to a new country. We haven't selected a new country yet but that will be one that we will go after. And that entrance to a new market will be done either organically as we've done success in the past, for example, in Sweden, or by acquisition. It depends which one is cheaper. And the fourth is we are expanding our product base where we've created a booking portal. In the U.S., there's Zocdoc or Doctolib, which are basically consumer portals, where you can find and book a therapist online. And so we've launched our beta version of that in Finland now. And that will be rolled out throughout Finland to all of our customers and then to Norway and Denmark. What's nice about this is that anyone who uses the booking portal, it roughly doubles our average revenue per user. So that's a nice low uptick. And there's a big pain point in these markets for finding some therapy niches, finding good appointments and so on. And if you look at the current state of the websites for a lot of these smaller clinics, they're quite dire. So this will help them with sales and marketing on their services. So talking about the market a little bit. So in Finland we've got 80% market share. So there was a company here before called [ Akute ]. It's still a very, very small company, so that's why we didn't add it here now. But we did the same thing in Norway that we're looking to do in Denmark, which is we came in with a low price offer with Diarium. And over time, we captured market share from this current competitor called [ Akute ]. We do have some smaller companies as well like Ajas, Mindu or Vello, which are probably less than 10 employees in those companies, which are competing for it. But there's a lot of sensitivity in Finland for data security because there is a case where a clinic had created their own software, called Vastaamo, and there was a massive data leak. So it's top of mind data security. So do you really want to trust the data security of all your patient notes, which includes all the different relationships that people have outside their marriage, everything, very personal notes, do you really want to have those stored in a system with 2 developers? So that's the big risk that they don't want to take anymore. And then another one is Dynamic Health, which is basically a software that does both GP and therapy software. We've seen that again and again. [ Akute ] was the same. PatientSky is the same. It's very, very complex to be able to have a workflow that accommodates both GPs and therapists in 1 software. It's much more complex to have therapy a GP software because you have to prescribe medicines. You have to have lab tests and all that versus the much more sort of streamlined workflow for therapists. So that's the situation in Finland. In Norway, we've got around 85% market share. The rest is shared between Hano, which is owned by EG, which is owned by a private equity fund. PatientSky, it's also owned by EG currently. And Konfidens was a new startup. Hano's quite a legacy software. PatientSky is a modern software, a cloud-based software. But again, they've got the same problem as Dynamic Health and [ Akute ] beforehand. They focus on both GPs and therapists. Konfidens is a very small startup, but it's focused on one specific area. What we see is that in Norway, we haven't had much churn even from Aspit, which is a legacy software, and the migration has been going quite well at the new software. In Denmark, so we acquired EasyPractice for a reason that we're a fully product-led company. What that means is that they didn't have any salespeople, no implementation at all. You go online, you sign up for a product, you do your data integration fully automatically without actually speaking or needing someone to come on site. And so at first in Denmark they're focusing on the low end of the market. So think about like a massage therapist or like a single physiotherapist, osteopath. But over time, they've been developing the product as more and more customers request more advanced features, so they're a multi-person therapy clinic or a small corporate chain. And so they've gone upmarket in terms of features, but that reputation in the market has not come yet. So although the product-led motion works really well for us to be able to capture the tech-savvy initial ones, we're also supplementing that with salespeople to be able to tell our story faster. And that's the way we were successful in Finland, and that's the way we were successful in Norway in capturing the market. Because these larger players, there's a disconnect between the person using the software and the person making the decision. So a practice owner with 20 different therapies is not going to sign up to a software and try it out on a free trial. We've grown quite fast over the last couple of years. And we made big acquisitions, bigger acquisitions than we have on the veterinary sector. That's why we are looking to focus a lot more of our efforts on migrations because these numbers, we can have a much more significant profitability than we have today once they're all migrated. We spend a huge amount on maintaining these softwares to make sure that we've got good data security and so on. We keep up with the modules that are needed according to regulation. And the support is also very expensive. And Microsoft fees and Citrix license fees are very expensive. So if we look here, we've had also an accelerating organic growth rates despite the fact that we lost one of our major customers in Finland that we'll discuss next, but from 10% to 12%. And you can see the average organic growth has been around 28% historically. So let's talk a little bit about the churn rate. Historically, it's been below 3%. There's one event here that is worth noting, one of our customers, our second largest customer in Finland, got acquired by a GP company. And so now they had both GP and therapists under the same company, and they want to have one software to run both. We do not want to be a GP software. And so as a result, they've shifted over to Dynamic health. So that was a onetime churn event that we saw in 2023. And you can see the impact of those in 2023 on net retention and churn rate. Still, we expect that churn will remain around 3%. It's slightly higher in 2022 than historically because the fact that EasyPractice has a very different go-to-market model where it's product-led, which means that we spend much less in customer acquisition, an EasyPractice customer because you can just sign up online within 5 minutes and start using it. And so a lot of people churn within the first few days is they tried it out and decided not to use it. So it's sort of comparing a bit apples and oranges. But still, we expect it to be around 3% as well as EasyPractice goes upmarket, and we already see it today, as the average revenue per customer increases in EasyPractice, we see the same churn rate as in Aspit or Diarium. So as they continue growing upmarket, we'll see similar churn rates. What we're trying to find is can we have that similar churn rate with the really cheap cap as well, so that's the exciting part of it. Now as we said, we are really focusing on profitability on the therapy business unit. It goes up and down every quarter because, for example, in Q3, the summer months, we have SIM-less SMS and so on. But you can see a consistent positive trend. We'll continue to improve the profitability in the therapy business unit as we do more and more of these migrations. That EUR 4 million that I discussed before, some of which is released as we migrate. So it's license fees. Every time we migrate our customer, we can take out those license fees, some of which are fixed, for example. It's only when the last customer migrates that we actually get the full benefit because we can let go of the development team. Good. So another thing to note, both in my slides and in Valter slides, the majority of our costs are in euros. Most of our revenues are in Norwegian Krona and also SEK. So this is actual currency rate. So despite the fact that there's been a very negative impact from the weak SEK and NOK, we're still seeing in euro an improvement in profitability. So that reverse, we'll see quite a nice little effect there. And you can also see that our head count in Q4 was about 140. We've decreased that slightly to 128, as we've been getting more and more efficiencies. Good. Now the Q3 performance. So as we stated before, last 12 months ending Q3 2023, we grew around 22%. That was driven by net retention of around 112%, gross churn of 4.6%, higher than 2.5%. But as I said, that's mostly driven by the Fysios churn. And then we can see a very attractive CAC to new ARR of 1.8. This is attractive clearly given the fact that our churn rate is so low. Every year, we see this going down though, which is quite good. Then we can see quarter-over-quarter 1.3% ARR growth. So we've got implemented ARR at EUR 34.6 million, signed ARR at EUR 36.2 million and again, excluding the EUR 4 million here. So our ARR per share is around EUR 0.43. As I said before, ARR per share is the best measure that we have before profitability to be able to assess the quality of the business because in the long term, the amount of ARR that we have multiplied by this normalized profit margin actually gets to the cash flow per share. So looking quarter-over-quarter, we ended Q2 2023 with an ARR of around EUR 34.1 million. We recruited around EUR 600,000 of additional ARR from new customers. So that is going quite well, despite the fact it being summer. We were able to get a net upsell of EUR 0.3 million, but a churn you see from Fysios of EUR 0.4 million. So that was impacting net retention. Again, we still have a big backlog, excluding the enterprise customers, of around EUR 1.6 million. So we're signing up lots of customers. And we just need more to implement them, which is good news as well. Around 50% of the ARR is now on Cloud Provet (sic) [ Provet Cloud ]. Now year-over-year, and this is a better metric because if you look back here, it goes up and down quite a bit because, for example, here is the summer months. So in summer, there are fewer appointments, and there's fewer staff members. And so for us, people take holiday in July and August, so there's less salespeople that work. Here, the net upsell is impacted quite a bit by the fact that like there's fewer text messages or transaction revenues in Q3 than they were in Q2, for example. And you see that every year. So there's some seasonality. So I always prefer to look at it over a year-over-year because you can see a much better picture and less seasonality. As you can see, we've grown around 22%. So we ended Q3 2022 with EUR 28.4 million, and we were able to recruit EUR 2.8 million worth of new customers. Net upsell of EUR 4.7 million, we invested a lot in new products this year, so we're able to get great net upsell. And churn is EUR 1.3 million, again, slightly higher due to the Fysios churn. So we ended Q3 2023 with around EUR 34.6 million and the same number of signed ARR backlog to get us at EUR 36.2 million. So new customer acquisitions at EUR 2.8 million account for roughly 45% of the growth. Now on to veterinary. Veterinary grew quite well despite the summer. We had a 5% growth rate quarter-over-quarter. Our net upsell was EUR 0.7 million. New customers acquisition was roughly 39% of that growth, and we had quite low churn. Looking year-over-year, 32.3% growth. So strong performance on new customers, EUR 1.2 million. And if you see, every year, we've been improving the amount that we've been able to -- a lot of customers we've been able to recruit. And you can see the clear improvement that we made on developing and selling new products for our existing customer base within net upsell, EUR 3.5 million, and very low churn. On the therapy side. So this was the quarter of Fysios churn. So that led to quite a high churn and the Q3 normally is also a time where most people are on holidays in our clinic. So we've got a lot of percentage of revenue agreements, so the revenue is lower in Q3 and we get less SMS charges. But year-over-year, we've still been growing 12.2% despite the fact that we've had the sort of once in a couple of years' churn. So we moved from EUR 14.7 million to EUR 16.5 million, despite a 7.3% churn rate for that specific year. We expect to grow between 10% and 15% over the next few years, while we're focusing on migration, post focus on migration, excluding the impact of the booking portal. So financial update. Mari?

Thank you, Charles. Okay. So I think we've looked at all these KPIs, financial metrics and the historical financial performance now over the last 5-year period quite a lot. So I will be more focusing on where we are now, on the last quarter and on the last 4 quarters' financial performance. But before we go into that, just a little update, kind of what we've been up to over the year or 2. When I joined the company, as the company had been through a lot of acquisitions and the financial landscape was quite varied, so we had a lot of different accounting systems, other financial systems and many different banks. And we've been consolidating all that now over the past year or 2. So we started this journey beginning of this year, and now we have all of our 16 legal entities. Actually, as of the beginning of this month, we have implemented NetSuite in all our entities. And that will actually enable us now to have a very harmonized billing processes for all of our entities, all of our products, and also enable us to integrate any potential new companies into the group very effectively and pretty immediately, if that was the case. Also, we have consolidated all of our daily banking relationships into one bank that will enable us also not only to manage our cash flows more effectively but also managing our net working capital needs more effectively going forward. So a lot of things have been happening on that front as well. But if we now take a look at the results over the past year or so, our total reported revenues have grown 10% over the last year, and the share of recurring revenues have increased from 90% to 94%. And as already you've seen throughout this presentation, our profitability has improved quite significantly, especially over the last year. In the third quarter '22, we were at minus 16% adjusted EBITDA margin, and now we are at plus 8%. That has come through two factors, not only have the revenues increase but also our cost base has decreased. As Valter mentioned, we have initiated some cost savings measures in the company. And not only in the BUs, we are also looking for any efficiencies across all of our functions as we speak. So both improved revenues and a more streamlined cost base is improving our profitability. Also over the summer period, we have the impact of vacations, so that is impacting mostly our third quarter results. So it's worth noting that even with this onetime impact or annual impact of summer vacations, our adjusted EBITDA would have been positive over the third quarter anyhow. So the total revenue growth year-on-year was 10%, but our recurring revenue growth rate is 14% year-on-year. So that is clearly growing faster than our total revenue. Also, as already mentioned, the currencies have had a really significant impact on our revenues. And had we reported our revenues on a constant currency rate, the growth rate would have been 24% as opposed to 14%. So it really has a really significant impact here. In terms of euros on a year-to-date basis, that amounts to about EUR 1.6 million. Whereas we also have some of our salaries denominated in Norwegian krona, Swedish krona, that has then, of course, decreased our cost base a little bit. But the net impact there is about EUR 1 million. So that is impacting our profitability during this year. So we are really looking to see some future profitability impacts to the opposite direction going forward. Our head count has decreased some 6% from its peak. So that is obviously impacting the profitability quite significantly. Overall, the head count has decreased by approximately 20 people from the end of the year. Looking into our cash flows, we can see that our cash spend has quite dramatically decreased over the last year. And as discussed throughout the presentation, we were investing a lot into product development, our market entry after the IPO, and this is now stabilizing. Our free cash flow now has improved from the third quarter of '22 to the third quarter of '23 by EUR 3.1 million, and this is, of course, now due to the higher growth or high growth but also to the lower cost base that we have. And we are not really looking into increasing our head count, and also our support functions are now scaled so that we are able to grow without growing our cost in support function. So not only have we made this renewal of the financial systems landscape, we have also harmonized some of our other support, tooling and processes, for example, in our people operations. So where does that lead us then in terms of the balance sheet? Our cash position is strong at EUR 27.5 million. And as we have guided, we are looking at our EBITDA minus CapEx to become positive quarter 1 2025. So we not looking to increase our cash spend on that, but we're in a really good position to invest in our product development and any potential M&A going forward. Intangible assets, we have this EUR 12.2 million on our balance sheet. That is mainly the development costs that we have capitalized. Our current rate of CapEx is about EUR 1.4 million, EUR 1.5 million per quarter, and we depreciate that over 5 years. Equity is very strong at EUR 88 million. Earlier on this year, we completed a share buyback program. We acquired company shares for about approximately EUR 300,000 to EUR 400,000. And that buyback program was initiated as we also implemented a performance share program, whereby we took this program to our key employees and invite our key employees to become owners of the company as we are granting employee shares as they vest over a 4-year period. The company has no interest-bearing debt. So all the liabilities that we have on our balance sheet, they relate to operative items such as accounts payable, accruals and advances received. So with a strong balance sheet, strong cash, strong equity, no liabilities, the company is in a really, really good place on their journey to continue their growth path. So what's there to remain then is the financial calendar. We will be issuing our fourth quarter results and our second half results, March 5. We have our financial calendar published on the company web page, so the full year calendar can be found there. And details on the third quarter financial results can be found in the appendices to this presentation. I'm happy to answer any questions regarding that after the presentation.

Thank you very much. So now we'll quickly conclude, and then we'll go into Q&A. So just for a lot of different information. So here's the top things where -- I actually have bought back quite a lot of the shares over the last year is that we're focusing after growing end markets. Those are consolidating, shifting to the cloud. And we foresee those continuing to do so for the next few years. And the shift to the cloud is quite imminent. Second is we've got a good track record of growing both organically and through acquisitions, right, in the last 5 years. And I foresee us giving them got strong footholds, for example, in new markets where we're seeing CAC improvement as well, and we'll continue to be able to grow at a strong pace over the next 3 years, right, where we're looking at around 20% recurring revenue growth for those next 3 years. Our recurring revenue full year 2023 was at -- we're predicting it to be at the top of the 15% to 20% guidance. And we are also looking at the profitability to be around 20% with a breakeven in Q1 2025. So those are the reasons why I think it's quite an interesting time for us. And we're finally have a scale where we have spectacular people. And we -- Mari and her team have been building to the infrastructure behind for billing, accounting, all the basics that we need to be able to make acquisition, quickly integrate them. And on the R&D side, we've got a wonderful team to be able to dramatically improve the product, which was not the case at the beginning when we first started where we couldn't afford a great designer. Now we can afford wonderful people and take big leads that we weren't ever able to do so before. So -- and what's wonderful about it is that a lot of our competitors are local competitors for every small and one country. So they don't have the scale to be able to make the investments -- we grow, we just compound the difference. And every year, we spend more and more in R&D than our competitors that are now compounding the difference between us and them. Okay. So now off the Q&A.

So we've got -- if you want to ask a question here in the room, please, I can hand you the mic. And then we've got some questions as well from the online. Do you want to start one here? Yes, one second.

The 10% uplift in margin that's going to come over the next years from the customer acquisition cost benefits, how is that possible when COE to CAC is 31? It's so little CAC to take from.

So it's because if I've got quite a long lifetime. That's why. So the drivers of that improvement are, one, is professional, we're actually using money in professional services today on the veterinary side. So that's a big driver of it. Second is, as I mentioned before, the amount we spent on CAC when we're in a new country from the start is quite high. Because we don't have reference customers, we don't have a good brand there. And that goes down as we get a strong market position. And we've seen that again and again in previous markets. So those are the two main drivers of it. And then the third slight driver would probably be as well, the fact that we have -- when we have sales teams to jump ahead of sales, and these have fewer sales people, so there's some leverage there as well. Those are three drivers. Question?

So with 70% of your addressable market not on cloud, I guess it's quite a fierce battle. So you have competitors, obviously. And how does their product -- in your opinion, rank up against yours? And secondly, is price vary -- is that a big topic, for example, when you won this customer in the U.K. just recently?

Yes. So I think one of the really interesting things about this business is that we're not -- yes, we're in many countries, but we're not a global company. So Finnish veterinary provider like, let's say, clinical can't just work in Sweden, they have to do a lot work. So it's very much a country-based system that is dominating unless you localize. So we've got very different battlegrounds in different countries. So Finland, Norway, Sweden, and somewhat Denmark, were less competitive markets. So the competitors are small, 5- to 10-person companies. So relative to us, they cannot do the developments that's needed. And we always up to bar with security requirements and so on. So like the bar set so high that it's almost impossible for them to compete now. It's a different market situation in, for example, the U.S. or U.K., where we've got all other cloud players, which are strong. But even in those, the -- on the veterinary side, the market is quite small. So when a start-up has a very tough time getting financing in order to start from scratch, that's why they're all selling to these corporates because the fact that they can't raise money to be able to build this massive ERP that there is needed for such a small market. And VC companies don't invest very much in the veterinary practice management. So if you're looking at the U.S. and it's probably like a $400 million market. So that's not -- no one has a -- gets excited by a $400 million market. So there's -- even though we've got some stronger patents in the U.S., the majority will be owned or are currently owned by companies which are not focused on software like IDEXX which does diagnostic devices, but they have 2%, 3% of revenue on software or Covetrus which is a wholesaler, which has 2%, 3% of the revenue on software. And we've seen time and time again where IDEXX acquired the best cloud-based software in the U.K. Animana, few years ago. It's not even in our list now. It's completely out of the market. They acquired the best cloud software and they were able to screw it up. Because like what happens is that they try to manage a software company in the same way they're managing a wholesale business. And so like you actually want to make one change to a software like the three forms after get approved from 10 people all the way up the chain. So that's why we're quite on the veterinary side, I think we're well positioned. On the therapy side, in the [indiscernible] we're clearly in a very dominant position, and we're -- what we like about maintaining that dominance is this booking portal. Because yes, price is more of an issue on therapy than this is in veterinary. And so how do we make sure that like if ever a cheaper competitor comes into the market, that they won't switch. And I like this idea of the booking portal to have a consumer lock-in. So basically, if 20%, 30%, 40% of your bookings are coming from the booking portal, which is only available if you use the software that dual locking is very powerful to maintain that market share right? But in Norway, we have our probably primary competitor is a PatientSky, on the therapy market. And we have some smaller one like Konfidens. Again, the playbook we're going after is the same playbook that we have in Denmark and in Finland is really focusing on therapists and making the workflow for therapists really, really smooth. And so I think we're not turning much to PatientSky and we're actually still recruiting customers from PatientSky. We're really happy actually that PatientSky was acquired by EG, because of the fact that EG is purely focused on short-term profitability because they want to sell EG very soon. They've got probably a 2, 3 years left. And so they don't want to make big investments in the product, which is wonderful for us because that would be a danger when you're migrating people. So to answer your question shortly, very different situations in local markets. I think that the -- in these niche markets, despite the fact that even in the U.S., which is a big market, we do have competitors, we were quite well positioned to be able to compete. And also, we're the largest ones in this very, very small niche of this cloud based software veterinarians.

Okay. So in the more consolidated markets, should you push even harder? I mean, do you have the necessary resources in order to capture the market, which is up for grab now and not in 5 or 10 years.

In the consolidated ones?

Yes, like the U.S. and the U.K.

Okay. So the ones where we don't. So the U.K. is quite consolidated, but actually the most consolidated market in terms of market share actually is the Nordics where roughly 50% of the vets is consolidated on therapy, it's consolidated in Finland, but not so much in Norway and Sweden. But if we're talking about the markets where -- the U.K., 40% is consolidated, in U.S., it's probably around 20% to 30%. So less consolidations, but we are focusing the majority of our sales efforts on the U.S. and U.K. I mean, if we look at 3 years ago, the U.K. was not at 25%, it was at [ 0.5% ] of our market share. So we've made a big improvement there. And as well, this is a market where you don't want to take the new start-up because like you really want all your data and your whole business to be running on the startup, which could fail at any time, you want to go with the choice that everyone else makes. So for example, in Norway, or in Finland, when they're calling for it to buy software, they don't want to buy practice management software for vet, they want to buy a Provet, or [ Diarium ] or Aspit. So they use the name as a veterinary competitor, like I want Provet which is maybe a clinical. So that's the interesting dynamic in there. So the U.S. will be -- it is still a battle, and we're fighting. And it's the most competitive market in the world. But the nice thing about it is, well, every single development we make for the U.S. is mostly work for improvements, which also benefits the Nordics. So by having a really tough competitors here, it's like Microsoft, Microsoft started by going after Japan, which is the most fussy customers. And the reason -- fussy customers are great because it ups your game everywhere else, where you can be way more competitive than less competitive markets then.

And secondly, if I may, on the churn and the net retention, the split between what you have on cloud and the other, is that materially different?

We have a -- oops we've got the slide -- oops maybe, we have a slide we did present, we didn't see the breakdown between vet and therapy, between cloud and not. We don't see -- when you -- they know they're going to migrate somewhere. Like, for example, in Aspits. We don't see a very high churn because they know they're going to migrate to -- oops oh sorry, okay -- they know they're going to migrate to the new cloud software so that we're not making a new choice. We don't see very much difference in churn. And it's much more -- the churn is more determined by the market, for example, Vetera, how many customers did they lose this year?

Not a single one.

So it's a really old software. And they haven't lost one customer. That means not one veterinary clinic even when bankrupt there. So no, we don't see a big difference. We do doing migration, though. So if we're like -- we've done a few migrations. And the first one I did with Trofast, I was really aggressive. I'd like increased prices 2x to 3x at the same time as doing the migration. And so as a result, 15% of the ARR base, the original ARR base actually left. Even though the -- and they amount was like 2x to 3x larger. there was some churn there. So I've learned from that mistake. Now we actually increased the prices of the legacy software first until it matches the new pricing, then we migrate them over at the same price. But no, we don't see significant ones, and oops, there should be -- you can see it in the appendix here. There we go. So you can see here the churn. So actually, it's slightly higher for veterinary on the hosted, but it's actually slightly lower here for therapy because of this onetime churn from Fysios and also the fact that EasyPractice has a higher churn.

I think we saw on Slide 32 that the Finnish market therapy is much larger than the Norwegian about 40% larger. I know Finns can be a bit pessimistic, but is there any reason for that big change in the market size?

You're talking in terms of the...

The users.

Users...

Population is about the same, I guess.

Yes, it's slightly -- it's larger, we've got in terms of user account, Finland than Norway. But actually, Norway is -- the price we charge for the software in Norway is quite a bit more because costs are also higher here for customer service support. So even though the user count is quite similar, the actual revenue that we make from the Norwegian therapy customers is went double.

Yes. My question is more the Norwegian market growth to the same size as Finland in terms of users? Or is there any structural reason for the difference?

No, I don't think that the growth is dramatically different in both markets. It's normally slightly higher than population growth. You've got similar demographics, so there's not a big difference in growth rates.

I think you mentioned that you could double the ARPU on by using the booking portal. So could you talk a bit about the revenue model for that? And if you see sort of scope to roll that out globally?

Yes, sure. So the booking portal, we're starting with -- in Finland with therapists, and we're going to do a booking portal for both therapists and veterinarians. What we see from a lot of other SaaS companies is the closer you are to sales, the more people are willing to pay. So for example, they just come like online booking companies can charge almost just as much per user as a full PMS software. Even though with like online booking for us, our feature, it's probably 1% of our total code base. So like the -- there's no real relation between the amount of work required to be able -- versus the math you can -- you charge for a software. And so the booking portal, and you see this with Doctolib, with Zocdoc. You can charge between EUR 20, up to EUR 40 per therapist. for it, at least in Finland. That's what we're guiding towards. A therapist in Finland, probably we charge them EUR 20, Euro 25.

And that is a fee...

Per user per month. And it's a little bit of a chicken or the egg as well where like we're building a 2-sided marketplace. So we've already controlled the users for our PMS like but it's the first time us going to consumer. So that's a new market for us which will be a quite different dynamics in terms of marketing than the B2B markets. But if we can get this right, there will be -- there's -- it's impossible for someone to dislodge us this, if you have both the consumer side and also the PMS. And we're not coming this by ourselves. Like we're just replicating strategies of tried and tested other SaaS companies who have done this in other verticals. You see OpenTable, for example, in the restaurant industry, you can see Doctolib in the health care industry did in this, so.

And then on CVS and Vets4Pets, you have EUR 4 million that just don't have included in signed ARR. What's the time line for those rollouts, sort of plus/minus?

This is why we don't include it. It's really hard to say because a lot of these companies have been focusing on acquisitions a lot. And now they can't, especially in the U.K. where the anti-competition authority is quite strict now, they no longer can grow through acquisitions, it's like, oh, max leverage operational improvement. So rolling out the PMS is the main lever to be able to do that. So the -- for -- the phases are basically piloted. For roughly a period of 6 months, we started the pilots a couple of months, I think, 2 months ago for CVS. 2, 3 months ago for CVS. And that will take another probably 3, 4 months before they decide to do the full rollout. Once they do the full rollout, it probably takes around 12 months to do it to -- if they want to be aggressive, most, that's what they want to do, most likely it will take roughly 24 months because what happens in practice is that like, oh, they want to do it, but they like the Internet provider that they were going to upgrade they are like they want to upgrade their IT systems, so things that take time. So I think that from the time the pilot is done, I would expect a 2-year horizon to be able to implement 400 clinics for CVS. Pets at Home, they want to do it even more aggressively, but I assume they will also take around 24 months.

And then perhaps the last one for me. You're guiding now on 20% EBITDA minus CapEx margin for 2027. So do you see that as sort of a mature state of the business where you will be running at a mature margin level or do you think there could be further upside beyond that?

No, no. I think this is on the next -- by 2027. We still want to invest quite a bit in R&D. And also be quite aggressive with growth. So as a result, CAC will still be quite high, development as a percent of revenue will be quite high. There's also things which are like not included in this forecast, which we're quite excited about. Like for example, there are some companies which are for -- one of our main COGS is customer support -- sorry, cost is customer support. And a lot of companies now have been automating that fully with AI tools. So there's a lot of efficiency gains that you can get that we haven't included that in this forecast that can go beyond that. But no, we should look at the run rates one in the longer term should be much higher. The way I look at it, though, is the guidance, but the -- I know we look at EBITDA minus CapEx. I take out R&D and CAC. And then I look at the IRR that -- or the return on investment that I make from that R&D and CAC investments. So I split out, that's how I think about things because -- and if I can make 20% to 25% return on that, that it's worth doing. I don't know what else they can do with my money. It's better used by one and putting in other companies, I don't know. So that's the way I sort of think about it. So it's -- this is a guidance on EBITDA minus CapEx, but the way I think about it, if you've got a great opportunity, for example, if a huge corporate in the U.S. than what also rolls out like, but they want X number of features, but like [ Mars ]. We're not being like, oh, sorry, we want to beat our target. No, we're going to go after that corporate because it makes a huge amount of sense. So -- but it should be higher in the next -- if we continue to grow by 20%. I think at least over the Rule of 40.

So in the U.K. on the veterinary side, the EUR 4 million, would you agree that this -- given that they're actually doing the rollout, is that quite a conservative assumption and no transactional revenue is included in that estimate?

Correct. Go ahead.

No. Absolutely, you're completely correct there that it does not include the transactional revenues, SMS and other similar to that effect. Additionally, there are, of course, having, as we've seen before in the slide, having much more aggressive growth targets themselves. So this is the current as you state, but we expect that they're actually going to be continue growing as well at a much higher growth rate. So that's actually quite exciting.

And related to that, the big six corporates and enterprises just or potential customers in the U.K., of which now you have two down. So how about the other four? Could you just, let's say, is there any opportunity left?

Yes. I mean, I certainly do think so. I mean the momentum is quite significant right now. I don't think that there's anybody else that can show a similar situation in Europe for us than what we had right now. So some of them are building their own system, which is -- it's another strategy that we believe in too much. Because we think that it's not their core business. We've seen that in many other situations, many other companies. And actually, we don't know if anyone that have been really successful in anything like that. So we do believe that there could be an opportunity that some of them realize that they have a much better ability to actually work with a system that's already proven to work for everybody else. So that's the key thing we're expecting. Additionally, we are working with IVC Evidensia in other countries. We've been expanding with them. We are not working with them in the U.K. But of course, we are extremely -- been very happy with the collaboration we've had. So any time that any opportunity there might arise, would be very interested as well.

So related to that, looking at your European corporates and then including their private equity owners. Some of them have clinics and assets in the U.S. as well. Would -- is there an opportunity that you could have a route to the U.S. market by showing your, let's say, value in Europe to expand to the U.S.?

Yes. That's an excellent question. Firstly, due to the fact that they are actually expanding into other markets because the competitive authorities are, of course, somewhat restricting now their ability to grow in the U.K., so we can also have that opportunity to grow with them in new markets as we're already seeing and in discussions with. In North America that could become an opportunity. We do see if there's an opportunity at some point for that. We're not having it right now. Another element where there's a big difference between Europe and the U.S. is that in the U.S., the consolidators have been completely focused on just acquiring clinics and just having also some multiple arbitrages there and working that strategy. And they might be sitting on 16 or 15 different systems currently. This is a huge topic in North America, and not at all similar in Europe where they're all unifying their system that they're focusing already on the next phase of that strategy of operational efficiency. So in the U.S., that is just going to be happening in the future when they're going to look at, okay, who is out there, who has done this successfully, and that's when we believe they're going to be looking also to Europe, where they're going to see some case examples.

So it's basically two phases. Phase one is buy as many things as you want to get multiple arbitration and of size. And then phase two is like, okay, we've got all these clinics now, which have been running independently on separate accounting. So we know the pain of buying companies with different accounting software different systems like cleaning that all up and making sure you can get good efficiencies in the next phase.

Yes. Another [indiscernible] is also data security. If you have 15 different practice management softwares in your estate, how can you make sure that you have got good security on your data. That's something that they're starting to think about now perhaps more and more, which is really important, of course. Another element, how do you train your staff because there is high turnover in staff in the veterinary space. How do you make sure that they understand all these different systems, if you've got 60 in them in our estate.

Yes. Just a very high-level question. With a high market shares, why is like profitability not higher?

Profitability is quite high in those individual markets.

Yes. So do you explain the 10% is like -- the 10% cost -- the CAC efficiency is like the cost you have and expand into a new market.

Yes.

That's the right way to think about it. So why is the profitability difference between a mature market, the Nordics where you have such a high market share and the U.K. or some other country, so little. Why does it give you so little extra profitability to [indiscernible] the market leader.

Because we -- there's quite a significant difference. If we look at EBITDA minus CapEx for like -- probably it's hard to allocate R&D because like if you do one work from hood, who do you allocate with. But like -- if we look at the profitability by markets, like our mature markets like Finland for therapy, like veterinary, with 55% EBITDA minus CapEx, that's versus [ negative 60 ]. So there's a massive difference overall. It's because of the fact we're investing a huge amount in R&D and also CAC in those new markets. So there's a dramatic difference. And so hypothetically over time, all those converge towards what Finland is today.

And what's the overall in Nordics? Profitability in Nordic, not just Finland. What's Norway?

I don't have that off hand, but it's -- because there's two aspects. I think Finland is probably the best way to look at it because they are cloud softwares in both. There are so many efficient still because of the fact they're legacy cloud software, some of them, and that need to be migrated. But it's roughly around 50% from that.

I mean, you invested heavily in '21 and net retention disappointed a bit in '22, and you're back on track in '23, I would say, what's the learnings from that? What did you do wrong? What did you do right and how did you come back again?

I think it's differences in focus. So basically, sometimes we focus, we believe that there's a better opportunity to be able to invest our R&D resources into new product development that we can do the upsell our customer base. And sometimes, it's better to invest in, let's say, localizing for the U.S. to be able to get more users. So just different trade-offs. So -- but I think the best way to look at is to look at overall growth because some years it will make more sense to go after, and we need to go after new markets, so go after user counts or new user growth versus net retention would be -- or net upsell, which would be driver for the add-on sales. And then there's a 2020 -- we normally do price increases based on the previous year. So that means that 2021 we had less inflation as well than 2022 and 2023. So and 2022 inflation was based on 2021.

And '22, that was probably a transition when you firstly entered U.K., U.S., Spain with [indiscernible].

Yes. So that we will be focused a lot on new markets then. So that's why net retention was a bit less. But -- and also, it's hard to look at these like just on an annual year because like 1 year, we could just be rolling out a corporate in that cycle. The initial value of that is very low because it was just a pilot, but then net retention goes up because they're actually increasing the amount of clinics that they have over time. So there's some timing issues as well, if that makes sense.

Yes, definitely. And second for me, I mean, you're still guiding on EBITDA minus CapEx positive in Q1 '25. And at least looking at the simple math, you probably need to increase quarterly revenue by EUR 1 million approximately. Is that a fair assumption? Which means that you will need to grow by 10% to 15%. Is your guidance a bit conservative?

I mean, there's also -- we do have increased salaries of people, so there's that impact as well on the cost side. And also we are looking to ramp up EasyPractice's development as well, slightly, so there's some cost impacts as well. But we're trying to be low by conservative with that Q1 2025, but we have not yet changed it.

And one more from me, if that's okay. So I mean, what you have done in the U.K. that's very impressive, I would say. Can you give a bit more flavor like how did you enter the market, what's the learnings? It will be very useful to get maybe, Valter, you telling a bit more about like how has the U.K. journey been? How transferable is it to other countries? I mean it's not that in Nordic software countries or companies that are actually successful entering outside Nordics. So to get a bit more flavor on the U.K. [indiscernible].

I'll start with the history and then Valter can continue with the recurrent. So we made a lot of mistakes. So to be fully franked. So we started with Edinburgh which was the university and the university clients are the most complex clients ever. And also, they don't work the same as normal clinics. So that first clinic was a very complex implementation that took place. The second thing is that we had -- could you market research, and then you say, oh, you're localized once you have all these features based on the market research, we developed those features somewhat in -- without too much involvement of clients. And as a result. they -- once we actually were in clinic, there were a lot of gaps like, oh, I assumed you had this feature, this workflow and so on that we didn't actually have. So it took us some time to be able to properly localized for the U.K. And now we've learned our lesson from that. We've done it after that mistake. In that you just have to go into a few clinics, work with them to create the software. When they're happy, then you get expanded. So that's why it took us a bit longer to be able to localize for the U.K. Then we started -- we hired from a local companies like local salesperson from our competitors to try to gain market share. We did a lot of cold calling and then the corporates, I can -- how do we get the corporates?

Yes. I mean, overall, I would say that we had a lot of learnings also when we hire from our competitors, though, too, because they are very different companies. If you look at IDEXX, obviously a key player there. They're going to have a very different kind of a mindset and some individuals then work out very well, but we have to also do quite a bit of changes in the initial team. We've been also focusing a lot on getting veterinary professionals into the implementation team because they really value that to get actually somebody into the clinic implementing software that knows what you're doing there. And that's actually not as common as you think. Usually, you'll get somebody who doesn't understand at all how the clinic practice works. So we're really, really focused on that. Another element that frankly, I can't emphasize too much is the fact that we are just focusing on software. We're focusing on the road map. When you're asking about the profitability and why don't we see more scale, because we're investing so much in product, frankly. We have been investing a lot. And to enter these markets has demanded a lot on that as well. But now we're in the situation, we can prove that we have the market penetration in those markets, we can be successful and we are going to see improved yields continuously out of that. On the corporate, of course, a key element of that is always going to be references. So the fact that we have these references, we've been working with IVC Evidensia, with AniCura and so on are so important because if you're a decision-maker in one of those corporates, who do you go with? The proven quantity where you know that this project that might become a massive disaster, difficult and fails or something new? And that's why right now, as we have this momentum, we are really excited that we can sort of have this unique track record.

Good. And just last one. I mean, in the IPO, we looked at the cost per clinic like how much -- how large or small part of the cost of a clinic will Nordhealth be. What's that number now? And how do you think it's going to develop? Like what do you think is the potential...?

I don't have the exact number now, but if we look at percentage of revenue, it's normally around 1% for an average clinic. And if we add payments, it would be up to 2%. And then if we add additional services, you can have it north of that. So up to probably 4% is the total potential -- market potential of that. We're in the very early phases now. So even though that we've just developed the payment solution which we've rolled out to a small percentage of our client base. There's a lot of more room to grow on that. So if you look at our average revenue per user. And we didn't actually probably calculate it, we've got a graph at the end, which shows you the user counts in the appendix. A lot of the slides -- we got somewhere else, sorry. In future presentation, we can show the development of ARPU, but there's been a much faster development of ARPU than there has been of user count. So as we've been able to increase value for that.

[indiscernible] geography, then the numbers would be very different.

Very different. Yes, because in Spain, for example, they're not...

[indiscernible] grow as profitable... [indiscernible]

Some a little bit, but not that much because our main costs are probably support costs, implementation costs. And those are local. So -- and I haven't yet seen a Norwegian that's willing to work for Spanish wages. So there's some -- the gross margins are a bit lower as well -- sorry, a bit lower in Spain but not significantly so. And over time, I think it's a...

Let's look at your growth [indiscernible]. If you look at the growth for 2024, what is the gross margin on that growth?

The gross margin on the growth for 2024 would be around 75%.

That's not bad, but how can...

And by the way -- this is real gross margin. I know you've got like gross margin for the financial statement, which is just COGS. I don't know. It's COGS and customer support for us. We add customer support because that's a real variable cost. So that's the variable cost. And also SMS fees and all that. So that's a proper cost gross margin. If that makes sense.

So how come EBITDA minus CapEx is not even higher then? When you're growing like this, I would imagine that in 3 years, your EBITDA minus CapEx would be much higher.

But we also want to continue growing and continue being aggressive with new market expansion. That's why.

And the product investments are extremely significant. Of course, we really are committed to also what we're saying here, and when it comes to our enterprise partners. And yes, we have a road map that is going to continue developing. We're spending a multitude in product today than what we spent 3 years ago.

But can you subtract the growth investments from your earnings, just to illustrate it?

Yes. We -- I think we have done that historically, and we [indiscernible] that. But if we want to -- it's a little bit a difference of time horizon. As the owner of this company, I want to run this because I think there's a massive opportunity for the next 10-plus years. And if I wanted to sell this in 3 years, the number 20% would be closer to 50%. We could like -- we could run this like at the bone, and no one would quit for many, many years, and we can run this at even higher margins probably then 50%. If we really wanted to and show a spectacular cash flow margin. But that's at the expense of then competitors will actually like slowly -- very slowly, probably over 10, 12 years would slowly take us over. But we would earn a huge amount of cash during that period. The second thing as well is that the -- there is this window of opportunity of 5 years, where like we've seen before, like once they switch, they won't switch again. So we want to get them early. Because if we don't get them, it's going to be way more expensive to get them to switch when they're already on another cloud software. So that's what we're spending now versus later. If I wanted to not -- like if I wanted to go for this cash flow strategy, I wouldn't have gone public, and I would just stay private and earned the whole with myself with these dynamics. But there's this massive leverage you can get by being a bigger player because like there's only so much you can invest in a calendar, and we can have great people working just in the calendar versus that is the same size team as like the whole amount of people that work on our competitor in Finland, for example. Does that make sense. Did I answer your question a little bit?

Congratulations on the new design and you had the signed rollout of Provet cloud. How has that been received by, let's say, website users and is that rolled out to the actual software as well?

Yes, absolutely. We're extremely excited about the new brand, but it's also going in conjunction with the new UI. So we have improved the application shell and the look of the software. And we've been almost surprised about how positive the feedback has been. So of course, always when you do change, even if somebody would change Excel basic UI for, you would always have some questions and the amount of support tickets we have seen has been extremely limited, almost seen no ticket. So it seems that we've been able to bring this change without bringing friction. And that's what we're really, really obsessed about because in reality, a lot of our product investments are also going into areas where we are doing something that we already have, like the consultation page. We were redoing the consultation page to bring in more efficiency and make them more effective when they're working. So this is a proving point that we can do that.

And the second thing about that, which is really cool is not only the -- yes, it looks nicer, but it's also fast. It's 10x faster. So the speed -- so when you -- a lot of people sometimes complaining that, oh, there's too many clicks, it takes too long, we can't do it. Now you click and take one second, it'll take 10 milliseconds to be able to load that page. So it's really much faster because it's a server-based [ loading ] solution. And I mean, on the flip side, yes, we got to support tickets, maybe we could have been more aggressive with that. So that's a thing we should review as well is like we've been very, very careful about releasing new features. And so one improvement area is maybe let's take a bit more risk, right on these things. I'm almost pushing as thew entrepreneur here, but...

So related to that, does this, let's say, milestone in terms of improving the user interface and the design upgrade, does that free up some resources to prioritize other revenue opportunities, localizations, migrations?

Yes, absolutely, it does. So the resources that have been working on that can now be focusing on improving other areas where we can bring efficiency. And the interesting thing is that when you back calculate of saving 5 minutes per day per veterinary professional, we're talking about a massive amount of value in all of this. And the one thing to keep in mind, specifically now talking about the veterinary space is that there's a huge shortage in staff so they are really yearning for tools to make themselves more efficient because there's a prediction that by the end of 2030, there's going to be a shortage of 15,000 veterinarians in the U.S. alone. So how are you going to cover that? The only way is to bring in efficiency.

And also, we've updated the top and the side bar, but the middle part has not yet been updated and the additional benefit of this is that the reason we did this as well, not only to have better UX and so on is the speed of development. We separated our front end and back end, thereby, if we wanted to change something, instead of taking a couple of days, it could take a couple of minutes to do it which is a massive improvement in productivity from developers. So yes, we're excited.

Just one question. I mean, you've spoken a bit about migrations, but could you talk a bit more about how far you've come on the migrating the different user bases of the different companies?

Yes. So I'll start with veterinary therapy, and you can do veterinary. So on the therapy side, Aspit has one product, which they named, two different names and have two separate brand names, Psykbase and Physica. Those are being migrated to EasyPractice, which is also the [indiscernible], a bit confusing. But -- and we started that migration about a few months ago. And the way we're going about the migration is that we first need to -- we target those customers, which have the least requirements in terms of development needs. We've developed those. Once they're happy, then we migrate more complex therapists that require, for example, [ Health Net ] integration and so on. So currently, I think we've got around 25 clinics and we've been able to migrate out of the pool of like 100 in the first one. We've got 8,000 to migrate. It will take us about 2 years to be able to migrate all of them. Again the nice thing about therapy is that as soon as our approach is, first, you should think about like osteopaths. Osteopaths don't need [ Health Net ] and so as a result, we can migrate them all as soon as the first few are happy. So we trial it with the first few. Once they're happy or if they're not happy, they give us feedback, we resolved the feedback, once they're happy, we migrate all on 1 day or 2 days. So -- and the biggest blocker we have is the [ Health's Net ] integration. which is currently being developed. So as soon as that unblocks, it like 5,000 users gets unblocked. So that's the main blocker that we have. And then on veterinary?

Yes, on the veterinary side, so we're talking in the Nordics about five products, of which two essentially are going end of life by the end of this year. So we announced end of life for [ Provet Net ] and for Vetserve, so one product in Finland, another one in Norway. So what is left? We have Sanimalis that's in Norway and in Sweden, but all the Swedish customers have been migrated. So it's only in Norway. Then we've got Provet Net that's in Finland and Vetvision in Denmark. So these three are left. In terms of the total estate, we've migrated by the end of this year, about 20% of the [indiscernible]. So we still have 80% left. So that's quite a bit ahead of us. Now what's quite important here is also that some of them are behind an enterprise customer. So actually quite a significant amount of then they are still on a legacy system. So when they shift, that's going to be a bit of a different migration because they're going to have a staff of their own as well, which is great, where they bring them in and they do that migration at a really fast pace. So that's something that we're going to be benefiting from.

Perfect. And then just a follow-up. You spoke a bit about how you have some kind of favorable costs on fixed costs related to -- that you can extract over time. But also at the end, could you talk a bit more about how we should kind of think about the cost synergies related to migrations.

Yes. So if we think about the roughly on Aspits. It's EUR 3.5 million of cost. That is sort of stuck until we migrate them. Roughly 2/3 of that is variable. So as we migrate that we should get those savings away. And then 1/3 of that is -- will be a fixed cost, which only once the last person migrates, we'll be able to get rid of it. So think about the development team on the latter part and on the earlier part figure about like Citrix and Microsoft license fees and customer support, sadly.

So very impressive growth on the veterinary side this quarter. And I assume there is not a lot of contribution from the two corporates in the U.K. So could you just, as a highlight some of the main contributors to that 32% year-over-year growth in types of geographies, small clinics or enterprise customers? Where are you growing?

Yes. Well, we're growing, of course, in relative terms, fastest, obviously, in our growth market. So in Southern Europe, we're growing very fast. There, the consolidation rate is significantly lower than in the U.K. and in the Nordics. So we're working with enterprise players there who are buying up clinics, rolling out the software. They're growing organically as well, so that's benefiting us. Then we've got, of course, new customer acquisitions that we have done a lot in the U.K. and in the U.S. and some in Europe also on the independent side. But then we've been happy to also see that net retention in the Nordics has been very high. So we've been able to get high net upsell, specifically there that is driving also growth for us. So those are the key levers essentially that are coming to play here.

So what is the -- what are the upsells? Is that payments or...?

Payments is one important element of that, that we are seeing, then we're also seeing those Nordic customers having organic growth of their own. We have a percentage of revenue model there. It's benefiting us. If we've seen they're growing much faster than the average market, and then additionally, we are bringing right now with the digital whiteboard and referral portal. So we expect that we can still maintain also new product add-on sales there.

And lastly to Charles, are you happy with the liquidity of the share traded currently? And if not, what actions are you taking to improve it?

So no, I'm not very happy with the liquidity. It's very low liquidity, if not in the share currently. One is doing Capital Markets Day like this to be able to tell our story. Also on the retail side, currently happy organized a meeting on the [ Borsh Morgan ] this morning right, to be able to talk to the -- a bit more retail customer base. And then third, I think, will be like we'll be going to a few more conferences to get our name out there a bit more.

And one last question from me as well. You spoke about how you would kind of increase the price and legacy solutions up to the kind of the new solution. Has that had a large contribution to growth over the kind of the past years? Or is that an effect that's going to be more prevalent going forward?

Pricing, it has had a contribution historically. I think that there's still some room to move, for example, in Vetera, we still have some price increases to be done. But a lot -- the reason we do that is that at first, we realized that people -- they've been using a software for like 10, 20 years, they never want to switch. So both given another reason in terms of price to not switch. So we decided to pre increase the prices of those legacy solutions, so the price is not an issue. So for example, like the price of EasyPractice and the price of Aspit now are the same exactly. So we should see -- I think on the therapy side, I don't think we'll see much more net price increase, just pure price increases of the legacy ones. But as they migrate, we'll see them add new add-ons. And on the veterinary side?

Yes. I mean, in the Nordics, we are getting to a similar price parity in most markets between product cloud and legacy products. Then we've got Vetera, as mentioned. So you saw that there's over 1,600 clinics in the DACH region working on that. And there's a big difference in terms of the pricing that they are paying for their system versus our flagship product and we have done some price increases. And as we mentioned earlier, not a single clinic quit, which, of course, highlights the stickiness and mission-critical aspect of the software and as Charles said, there is going to be a route to make sure that there is a price parity between those and that should be benefiting us financially as well.

And just to emphasize that, I think that we increased price is 25% this year and zero people churned. And maybe we got a couple of customer service questions but probably very few. [indiscernible] doesn't mean.

Yes. In reality, of course, there's also a lot of growth happening there in their market. The need for veterinary services is really big. The shortage of staff is really significant. So this is one of the least issues because I said we're talking about sometimes less than 1%, certainly in Germany, way less than 1% of their clinics revenues here. But for us, of course, it's very significant.

We have no questions.

Good. Any final questions? perfect. Thank you very much for your time, everyone, and we'll see you next quarter. Thanks.