Nordhealth AS ($NORDH)

Hi, everyone, and welcome to the Q1 2025 presentation. We'll start with introductions for those of you that are new, I'm Charles MacBain. I'm the CEO of Nordhealth; and I'm joined by my colleague, Alex Cram, who's our CFO. So similar to previous presentations, we'll go through a company update in general, then we'll deep dive into a Veterinary BU update, then a Therapy BU update. Then we'll go into a deep dive into our AI Developments that we're making. And then Alex will go through the financial results, guidance, and we'll leave some time at the end for Q&A. So if you have any Q&A, please hold them until the end. Starting with the company update. So I just wanted to remind everyone of the objectives that we've got for 2026 to unlock profitable growth. Number one is what we're trying to do is to build a world-leading AI practice management software across both Therapy & Veterinary. Second is we're trying to radically reduce the time it takes to go from signed to onboarding, especially for enterprise on the veterinary side. Third, we got a big initiative now to localize Provet for the German market. Our first German customer went live a couple of weeks ago. And so that's a very exciting development for us. Fourth is we want to complete the migrations on the therapy side of Aspit Desktop users to the unified platform. And fifth, if we want to achieve these things with a low growth in cost, right, by not adding net new headcount to be able to improve profitability. Let's take a look at how we've been doing over the years. And I always like to go through this chart. So since I purchased the company in November 2018, we've grown from EUR 3.4 million of ARR to almost EUR 50 million of ARR, which is a 44% CAGR. We have made acquisitions in 2019, some in 2020 and some in 2022 to help us grow, but the majority of the growth has come from organic growth. Now, let's break down the growth over the last 12 months. So in Q1 2025, the reported ARR was EUR 41.5 million. Every year, we do a reset to make sure that we measure on a stable currency basis to not have any of that fluctuation. So you can see that the Q1 2025 with the 2020 end of 2025 exchange rates is 41.2%. We've been able to grow 12.2% in the last 12 months to 46.3%. This entails a net retention rate of 108%, and our churn has been 3.3%. In addition, we still have a backlog of EUR 1.7 million in signed non-implemented ARR and our other businesses beyond Veterinary Therapy, PMS still account for EUR 1 million. If we look at the cloud business for Veterinary & Therapy specifically, which is the platforms that we're building, they're growing at a significantly higher pace at 25%. The churn rate is 2.2% and net retention is around 16%. We can also see that we've migrated in the last 12 months of EUR 1 million of ARR over to the new platform. Now going deeper into veterinary. Starting with the business update. We've got 3 primary missions. The first is continue the expansion in the U.K., U.S. and Germany. We signed EUR 733,000 of new ARR in Q1 only. We implemented our first clinic in Germany. And we are focused and we have a dedicated team on German localization to be able to unlock Vetera's 1,500 clinics and migrate those over to Provet and also unlock new enterprise opportunities. In addition, to be able to improve our product positioning in the U.S., we built a new omnichannel messaging feature, which allows you at first to do 2-way SMS and MMS, soon WhatsApp and VoIP and so on, which is a key requirement for the U.S. The second is that we're trying to build an AI PMS. And I'll deep dive into what that means later in the presentation as that applies to both Veterinary & Therapy. But we are continuing our investment in iterating our AI Scribe, which is -- which I'll show you in the latter part of the presentation and also launching a lot of new AI products. AI Scribe, for example, is available now on mobile, or AI Actions, which I'll show you, allows you to automatically bill customers using voice. And we're also finalizing building Provet AI Agent, which I'll show you and an MCP for Provet so that clinic can access all of their data from whichever that they want. The third is reduced time to value, which is the time from signing to implementing. This is one of the big bottlenecks to growth that we've got. And so we've launched new data migration tooling powered by AI to be able that compresses the onboarding time by over 25%. And there are significantly more opportunities to be able to reduce this time to value, which I'm very excited about, especially on the enterprise side. So looking at the results year-over-year, we've grown 13%. Our net retention rate was around 110% and churn was very low at 2.6%. We still have a backlog, as I mentioned, of EUR 1.7 million of ARR, which is yet to be implemented. This is the bottleneck I was talking about. If we look just at Provet Cloud, which is the flagship software, we've been growing 26.4%. We added EUR 0.8 million of new customer ARR. We had huge upsell. And there's 2 drivers of -- or 3 drivers of this upsell. One, is the fact that our customers are buying more clinics and migrating them over to Provet. Two is we are getting more and more customers that are signing up to our AI Scribes and also our Provet Pay solution. Churn is incredibly low, below 1%, which shows that we've got a product which is incredibly mission-critical and sticky and has been improving quality. And we've also migrated around 400,000 clinics, mostly from Sanimalis and some from Vetvision in Norway and this one clinic in Germany from Vetera. Now, let's look at the breakdown of the growth. In -- the story here is that at the end of 2025, which is the penultimate board as you see, where we ended at 26.3%, you can see the U.K. has been growing nicely. The U.S. has been growing, but less than the U.K. We've had in Southern Europe some significant growth as customers are implementing and buying new clinics. And in the DACH region, we're seeing some growth on Vetera, but we expect a lot of growth to come once we launch Provet formally in the market and exit the pilot stage. The Nordics, the customer count has increased slightly, and so has the average revenue per customer. You can see that's in the growth that we've been seeing. As you can see from here, there's a huge opportunity to localize Provet in the DACH region in addition to the U.S. and U.K. Now breaking down the composition of our revenue, right? Enterprise now makes up 12.7%. Independent clinics make up 12.1%. And we've been growing the payments and partner revenue that we've been making to 3.7%. So the important thing to mention here as well is that despite our focus on enterprise, and you can see that there's been a huge growth driver for us over the last few years, our top 3 customers make up less than 20% of our ARR. So we don't have a high customer concentration risk either. Now on the therapy side. We've got 3 missions on therapy too. First, same as Provet to build a leading AI PMS. In Q1, we've achieved a total of almost 90,000 hours of transcription and 175 patient summaries generated. Summaries are patient history summaries, be precise. We shipped new features such as custom templates, which allow therapists to be able to create their own templates through which the scribe creates notes from. And we've also had AI treatment series creation plans, which enables you to create a series of appointments and assign a content those appointment automatically. We've also unlocked new specialties for AI Scribe in Psychiatry and Speech therapy, not just psychologists and physiotherapists. And we will continue to expand the new specialties that we offer. Second, the asset migration. We had 815 users, which have migrated at the end of Q1 2025. And we've built now best-in-class Norwegian financial workflows. So we can differentiate with our integrations with HELFO, which is the Norwegian government integration for reimbursements, but also with the insurance companies. Third, on the growth side, we were able to sign just under EUR 800,000 in new ARR in Q1 2026 from new business and also AI Upsell. Significantly, this is 41% higher than what we signed in Q1 2025. So you can see the investments in our product are creating net new opportunities for us. Year-over-year, therapy ARR has grown 11.2%. The net retention has been around 106%, and the gross churn has reduced to 4.4%. This net retention has been boosted quite a bit by our AI Scribe initial adoptions. If we look just at our cloud platforms, we've grown 21.5% and our churn rate is 5.3%. We've also migrated 600,000 in the last 12 months of ARR. Now as you can see, the share of cloud revenue continues to increase as we migrate, but also grow the cloud revenue. Now, I want to go into the AI strategy because it applies to both products. So one is that we want to build the world-leading, not just a good for the Nordics AI platform for both Veterinary & Therapy. And we've got a huge amount of defensibility relative to new players as we already have very robust security, compliance and auditability built in our PMS. We already have a very large depth of important integrations that are not only difficult to develop even with AI, but also difficult to negotiate, maintain. And the third is the workflow density in that -- when you vibe code a practice management software, and I do every time there's a release to try to see where the limit is, what you can see is that it doesn't handle the edge cases. And that is the important thing. There's continuously cases through this very broad app that we've got. And our job is to continue to solve these cases one after the next. And that's what makes it complex. The third is when we thought about AI and the tools that we're building, we saw that there will be fewer users in clinics versus in the past. So this user seat erosion would be an issue. However, there are still practitioner doing the work and doing it more efficiently. So we've shifted from user pricing to practitioner pricing for independents. And for corporates, we still have either practitioner pricing or percent of revenue pricing. So as they get more efficient and unlock more growth, we can take advantage of that. And the fourth, and this is the very important one is that we are rebuilding and we have built now a world-class product and AI development team, which -- and you can see the rapid progress that we make in our road map. Let me deep dive in some of the progress that we've made. So first is, this is the most common problem that we see is the notes problem. Normally, the practitioner finishes their last consultation around -- at the end of the day, around 6:00 p.m., then they write the notes for 40 minutes, before they can go home or they write in the next day, or on the weekend, or even the next week sometimes, every day. That's a big problem to solve in that they want to be present with the patient in the room and then only they want to do the notes. So what we've done on the therapy side, as you can see, we've got an AI Scribe that automatically generates the client overview, but also the notes from the clients. And the notes are very thorough. It's not just here's what was said, it also creates a plan for you. On the vet side, we've got the notes, so you can record your conversation. You can see how that looks here. And just like every other Scribe in the market, we do record the notes, but we also do more than just record the notes. As you can see here at the bottom -- well, at the top, there's a button called AI Actions. You can see the full transcription here. You can add these clinical notes, but you can also see the action that's been generated. And you can see that we've added, for example, diagnosis. We've added medications automatically. We've -- and that is automatically being built. And you can have all of these -- this AI assistant enables you to not only provide clinical notes, but all the other information required. So voice-first consultation fully. It's very exciting for our customers. In addition, we've also had the AI Discharge instructions, which is a lot of the time, there's a gap, especially on the veterinary side with what happened in the room and what the client needs to know. And that takes a long time to create an e-mail to the customer, which -- about what happened and so on. And so with AI discharge notes, we enable that to be created automatically. We see very few edits and the number of edits are going down and down the more we learn about which edits are being made. The second problem is the visibility. So I'll give you an example. So currently, if you want to know about the number of health plan subscriptions that we have in the clinic, right, you normally ask your operations manager to export the revenue data paced into Excel, create reports. And maybe in the next couple of days, they'll share it with you. But imagine you've got follow-up questions that can't be answered by a report. You have to go through a whole process again. So what we've built is something we call Ask Provet, where you can see here, the first one is AI patient history, where you can see the full patient history summary, right, and ask questions to it. And the second is what is the beginning of what we call the agentic PMS, where you've got some questions that are pre asked, but you can ask your own questions about the health plans, for example, like how many of our current clients are on health plans. And -- it's not a perfect question, but it understands the question, and you can see the answer, 658. But it also gives you additional data on new enrollment this month, cancellation this month. Here's how much MRR this generates, right? And it suggests follow-up questions, like what is our MRR? And that was -- and it shows you the trend of MRR over time. And the graph format, you didn't have to say it. It just understood the best way to display this data. And we've taught this Ask Provet to be able to figure out what's the best way to show each data at a different data point that they may ask. The great thing is that we can learn as well about all the questions they're asking, and that can help us in guiding additional use cases. And -- this is the result. As we've been continuously improving product, right, we have more and more paying users of AI. We've got around 1,600, and that number is continuously growing, right? We expect it to continue to grow over the next following quarters, right? And this is only just a small, small part of our current user base. So over time, we can see that growing to 90% plus of our user base using it. Now, I'll hand over to Alex for the financial results.

Thanks, Charles, and hello, everyone. So starting with reported revenue. In Q1 2026, we did EUR 13.5 million of revenue, which is a 7.9% increase versus the same quarter last year. Our underlying recurring revenue growth was 11.4%, going from EUR 11.1 million in Q1 2025 to EUR 12.3 million in Q1 2026. It's worth highlighting that this is an increase in the growth rate compared to Q4 2025 year-on-year, and this is because we had a strong quarter of growth in Q1 2026. ARR in our core vet plus therapy businesses grew by 6.6% in Q1 alone, which is a 26.4% annualized growth. Other one-off revenues slightly reduced versus Q1 last year. As a result, Q1 2026 share of recurring revenue is 91.4%, up from 88.6% in Q1 2025. On to the next slide. Before jumping straight into EBITDA minus CapEx, I thought it would be useful to provide a bit of context about how we're thinking about profitability. As we've made clear in past announcements and presentations, in 2025, we took the opportunity to step up investments in product development, notably for AI and DACH localization. The graph here shows total headcount by quarter, where in 2025, we grew the team by 13% from 411 people to 464 people. Today, we feel the team is in good shape, including great product and engineering leadership in both business units. So in 2026, we will not be increasing the team size in the same way. In fact, in Q1, we reduced headcount by 2%. We will also be reducing growth in costs more generally. This will allow revenue increases during 2026 to translate into improved EBITDA minus CapEx as the year progresses. So looking at the quarterly adjusted EBITDA minus CapEx. As you can see, our quarterly adjusted EBITDA minus CapEx in Q1, we reduced by EUR 0.6 million year-on-year to negative EUR 1.5 million. But as explained on the previous slide, the reduction year-on-year is due to the increased investments made in 2025, particularly in product development. And as the year progresses, we will allow growth in revenues to translate into improving EBITDA minus CapEx in 2026. Looking now at Q1 2026 cash flow. In 2026 -- in Q1, we had a net cash inflow of EUR 1.5 million, which is EUR 1.3 million lower than 2024. Q1 is typically a good month for cash flow as Vetera clients pay annually upfront, and this is why we have a positive adjusted cash flow. The variance versus Q1 last year is primarily driven by the EUR 0.6 million difference in adjusted net result, the one-off collection of a backlog of invoices that we had in Q1 of last year, which totaled EUR 1.1 million and then EUR 0.4 million of other favorable working capital changes. Finally, looking at the March 2026 balance sheet. Cash as at March is at EUR 15 million. There were no changes to goodwill in Q1, except for amortization and FX changes. There was no external financing taken, no material equity transactions in Q1. There were some movements in treasury shares. So in Q1, we granted our annual performance share plan bonuses to employees, and this was a total of approximately 74,000 shares. Nordhealth's equity balance remains healthy at EUR 58.3 million, and the company continues to have no interest-bearing debt. Full detailed financial statements for Q1 2026, including the P&L, balance sheet and cash flow are all in the appendices. Now on to guidance. So there are no changes to the 2026 guidance we provided at the last call. For full year 2026, we are reiterating a full year guidance for recurring revenue of between EUR 50 million and EUR 53 million, excluding acquisitions. Our Q1 actual was EUR 12.3 million, which annualizes EUR 49.2 million, so on track. Similarly, for adjusted EBITDA minus CapEx, we are reiterating our full year guidance of between negative EUR 4 million and negative EUR 1 million. Our Q1 actual was negative EUR 1.5 million. But as previously mentioned, we'll be improving EBITDA minus CapEx as the year progresses. So here as well, we are on track. I'd also like to highlight that since the last call on the 10th of April, we published our annual report for 2025. The financial results for 2025 were audited by KPMG, and the report provides a more detailed view of our financials. It's available to download on the Nordhealth website. Finally, looking at our financial calendar, the Q2 2026 results presentation and the H1 2026 interim report will be on the 18th of August 2026. We'll be presenting these as part of a larger Capital Markets Day, which we'll provide more details about in due course. And as always, the full financial calendar is available on the website. I'll now turn back over to Charles for Q&A.

Thanks, Alex. So for Q&A, if people have questions, please feel free to add the questions in the chat. I'll wait to see if anyone has questions. No questions. Okay. No questions seem to be coming. I'll wait a couple more. Let's hope there's one question from Martin. Can you please publish gross margins for the Veterinary & Therapy businesses or any other indicators that showcase the inherent profitability of the underlying businesses? Alex?

Thanks for the question, Martin. So we have shared these in the past, and it's very likely that we'll do so again in the future. So I mean, the short answer is, yes, in future quarters, we will reshare the profitability of the individual business units.

Another question from Guillaume. We're seeing ARR growth in therapy reaccelerate in Q1 and noticed several commercial development hires being posted on LinkedIn for that division. Is that a strategic inflection point for therapy? Are you shifting to a more active growth mode? There's a couple more questions. I'll answer the first one here. So we've the therapy business unit has built a great AI Scribe. And so the number of customers that we've been able to recruit is quite steady, but it's been boosted by the AI scribe. So yes, we have hired additional salespeople to be able to upsell our AI Scribe to different customers in Finland, Denmark and also in Norway. So we try to focus on one big mission at a time on this one. So the big mission for therapy is still the migration for this year. As soon as that's done, we will be unlocked both in terms of the cash flow available from the migration savings, but also to take on a new mission. And so on the engineering side, we foresee that, that should be done probably around the latter half of this year. And so that we'll be able to take on a new challenge. So active growth mode will be resumed at some point in a more aggressive way as well. The second is, can you elaborate on the long-term strategic vision for the therapy division in the context of AI? Do you have significant growth opportunity, expansion in other country? So -- on this one, as I mentioned in the previous question, it's -- we want to take on one mission at a time and the current mission is the Aspit migration and the AI Upsells in our current markets. We have not yet made a decision on whether we're going to go to new markets or whether we will continue to operate and expand our current markets. But once we have made that decision, we will inform the market. You've been fairly quiet on specific enterprise deals, new logos, ongoing rollouts. Is that a deliberate choice for competitive reasons? Can we expect a significant new logo wins in the coming quarters? So on the enterprise deals, we actually changed our definition in that we want to make it quite steady in that we only announce deals once they passed 50 locations. And so that's probably why we've been a little bit more quiet on it because we're waiting it for rollout. And as I mentioned before, one of the key bottlenecks I need to solve is how fast we go from signing to go live for these enterprises and also for SMEs, but particularly for enterprises. And so that's why we've been a bit quiet about it. We've got -- in our Capital Markets Day, we can deep dive a bit more in terms of this. As well, the enterprises that we've got, we are expanding into net new countries. So we also signed -- these are not officially signed so they're already our customer, but they're just expanding in net new countries. Another question from Martin. Can you please elaborate on what localized Provet in Germany entails? Given that GDPR and German regulation prevent running client data in the cloud, what is the future operating model for Vetera? Do you implement AI features? So if only German localization was GDPR, it would be easy. We're already fully GDPR compliant. But we are -- similar to other countries, we are localizing one, the language, which is an easy part. Second is all the integrations needed to the labs, the insurance company and also for regulatory purposes. So for example, the integration to the national register of pricing because in Germany, the price for vet services are set, right? And also to cash registers similar to Sweden, where all transactions have to go through a certain cash register software. On the cloud part, that's not correct actually that client data can be in the cloud. And actually, one of the main human providers, open as well is on the cloud, right? So you just have to make sure we take a decision to actually keep the data in the -- being hosted in the EU, but that is not even a requirement on that side. It's more for a personal preference. What's the future operating model for Vetera? It will just be a new country like every other country that we've got. And similar to the U.S., which is a bigger market, we can have a team lead specific for that country. And then how do we implement AI features? It's Vetera and Provet, even though it's different branding will be the same product in the DACH region as we roll out. We are not implementing AI features in Vetra because we want a nice reason for people to switch to. We got a question from Arne. How does your AI solution compare to those of Vetnio? So to be fully frank, we were late on AI in that that's one of the reasons I took over product in the veterinary side in June 2025. Now we are surpassing those. We do have inherent benefits in that relying on a third-party solution versus doing it natively in the PIMS is a better experience for the customer. And so that being said, we are an open platform. So always, we want to provide people the choice whether you can use our AI Scribe or third parties. And because I don't want to be a local monopoly for my teams and not let them compete in the real world. So they need to compete. Currently, our -- the pace at which our AI Scribe has been improving has been huge. And you can see we're more advanced in some areas, for example, the AI actions, which is a truly differentiated offering in the market now. The question from Mathieu. New AI native competitors are promising a 1-day clinic migration. Is it very different from what you can offer? So there's -- the migration part, as I mentioned in the presentation, is one of the big areas I'm trying to tackle. So our approach historically has been to -- that we're a tailored software that's tailored for you, right? When I took over products in -- on the vet side, at least on the -- in June 2025, I changed that direction in that what we realized is that the majority of small opinion, small animal first opinion, for example, practice in the U.K. have all the same settings, right? And every -- and they can change it. So it's a 2-way door decision. So we've shifted from bespoke implementation to an implementation, which is much more structured. And so every -- we started first with the data migration part where we've got a great data migration team, and Janne is actually focusing on the founder of Provets to be able to dramatically reduce the amount of not only time but the extent to which we can migrate data and normalize that data with AI for. So I'll give you a good example. One of the requirements when you were implementing is to be able to get the list of items and services and then you have to classify the items by type. Now we -- that's fully automated and by AI. So one after the next, we're tackling each bottleneck. And yes, the goal is less than 1 day migration per clinic. I think that there is no block -- there's no physical blockers for us to be able to do that and also do it with great quality. The next is Guillaume Bezie. Can you comment on the Aspit migration dynamic that seem to have reduced in its growth pace in Q1 2026 from 333 in September 2025 to 800 in full year 2025 to 815 in Q1 2026. Yes. So in Q1, we did not actually migrate as many as we wanted because we decided to pause to make the financial workflows great. And so that's what I highlighted, and now we are unblocked on that. And the way we go about migration that we focus on a specific user segments, and we try to really build a great product for them, then we migrate that whole segment, right? The next -- we shifted from one segment to the next. And so in Q1, we were developing for that next new segment based on pilot feedback, and we will be continuing to roll out those after. And what's really important is reputation. So we've done a few migrations now, and we've had a few potholes when we've been doing them. So one, the -- if you have to force the migration and your product is not ready, word-of-mouth spreads really quickly. So we've been very, very cautious when it comes to making sure we build a great product and getting feedback early. The pace between feedback to production has decreased so much that there's no excuse now to not be able to provide a great product experience. and that will help you squeeze out the last 20%, which are normally the hardest. Let's see if there's any question. Question from Mathieu. Do you have any evidence that PMS software company valuations have compressed due to AI disruption? I think a lot of SaaS companies have depressed due to AI disruption and people are being packaged all the same, right? So when I look at, for example, the software stack that we have in our company, there are some softwares which we are no longer using and building our own tools internally, right? But there are some softwares where we're using more. And so the system of records is one of them, especially in regulated areas. So the key thing what I mentioned in my last presentation was like -- if you are a vet, you need to know and have certainty that the -- you gave a medicine at that time to that patient, and that has to be auditable. And so the full -- especially in the age where you do things by different modes, you could do it via an LLM or do it in the UI. And so the -- and then there's agents which will work on your behalf, but you still have to approve. And so in this word, the auditability and the system of record is incredibly important. And so -- and then the second thing is that the LLMs are not the most cost-efficient way to do all operations in that there are some things like the medicine is -- should be 2 milligrams. You shouldn't use an LLM to give that instruction. That's a very expensive way to do it. So I feel quite strong that like system of record, specifically for regulated industries like health care are in a great position. The key -- for us, it's a sustaining innovation. And the key is just to make sure we can adapt quite quickly. And so that's why one of the reason I took over by product, we've got Karan, who's from a product background as a CEO on the therapy side, and we're doing massive changes to the product. And I'm very excited about the revenue opportunities that come with it as well because by -- we are unlocking a huge amount of value in the clinic. And so we'll be able to capture some of that value at some point. Let me see if there's any other question. From Martin, can you please decompose net upsell in veterinary volume, price, change in pricing model, enterprise client penetration? I don't have that data off the top of my hand, but we can consider doing the drivers of growth in the Capital Markets Day or latter presentation. If we -- I give the rough answer on this, it's -- pricing is a small part. The majority of the veterinary upsell historically has been our enterprise customers bought new clinics, and we're expanding to new countries, and they've migrated those. That's been the biggest one. And then what we're trying to do, which on the therapy side, they have been very -- they were very successful with the AI Upsell. We're trying to do the same thing as well on the veterinary side. So we're hoping that average revenue per user or per vet or per clinic will be able to increase as well driven by this. We've had success historically in the past, specifically in 2025 with upselling Provet Pay, for example. And over 90% of new customers are actually adopting Provet Pay. So why can't our current customer base is the same. Please disaggregate the drivers of lackluster growth in Nordhealth's core other Nordic markets over the last years, assuming the market has not been shrinking. Subsequently, Nordhealth is losing market shares. If we look at the slide, we -- the number of -- the churn rate has not been very high. There is always churn in some markets when we do migrate. But as you see, overall, the churn rate has not been very high in the Nordics. So we're not really losing market share in them. Our market share is quite stable, and we're investing there. The growth in the Nordics, there are some start-up clinics that we acquire every year, but will mostly come from upsells. So getting Nordic customers to adopt our AI solutions, to adopt our new feature that we develop, for example, omnichannel communications and also our AI features. In the end, there's only so many clinics we can sell to. And at some point, we sort of saturate the market. That's why we have to go into new markets, if we want to maintain that growth. Great. Thank you very much, everyone. Thank you for your time. I hope you have a very nice day. Thank you.