Omda AS ($OMDA)

Good morning, everyone, and welcome. We will go through the key highlights from the first quarter 2026, and we will also go through the guidance. As you see here in the agenda, it's all connected, the Q1 results, the guidance, the AI aspects that is important to any business today, and we have done some deliveries in the first quarter. Then you have my colleague, Einar, who will go through the financials. And of course, the status within M&A and also connected to that, the leverage and financing. So all in all, we have an exciting agenda, and let me start with the key highlights when it comes to the first quarter. First of all, NOK 119 million is the sales, slightly lower than the first quarter in the previous year. However, as usual, the recurring revenue is growing normally, which is probably the most important thing when it comes to our top line. And then when it comes to our income composition, it's important to understand the difference between if you compare the first quarter 2025 to the first quarter 2026. As you will see here on the first line on the top there, last year, the first quarter, we had 77% of our income as recurring, while in the first quarter, 82%. So that says something about the income composition. And those 2 lines that are relevant to look at that makes the difference between the first quarter '25 and '26 would be the Professional Services and the license sale. And the license aspects of our income is related to customer milestones. So they're always lumpy. So there's no surprises there. And then when it comes to Professional Services, most of it is recurring, some of it's related to customer milestones decided by the customers. And also, we've used a lot of hours in the first quarter to prepare AI, which is a good thing, and I will go through that in detail. So then you understand the top line. When it comes to the EBITDA, NOK 24 million, 20% EBITDA margin, slightly also below same quarter last year. However, that is not affecting our plans. This is, of course, the same reason why this is slightly lower as with the income, the top line and the income composition. So having said that, let's go through what does it mean that's what matters. What does the first quarter highlights mean. Our guidance, we guided last year for this year, and we said NOK 500 million to NOK 525 million in the top line. And at that point in time, the currency were different than today. So of course, we cannot control how the currency is running through the year. However, we stick to our guiding. And I think, this slide gives you the overview of what's going on in 2026. And let me be specific when it comes to our current organic business. We expect still the NOK 500 million to NOK 525 million to be our top line this year. We expect that the EBITDA will still be in the interval between 28% and 32%. And on top of that, we are an acquiring company, as you all know, this is how Omda has been growing, the last 20 years, and we will continue to do that. And especially now in '26 and '27 when the profitability is in place, we will continue to grow through M&A. And the progress and the mature dialogues and projects we are in gives us the comfort that we now also could confirm that we will add business so that we can exit this year with closer to NOK 600 million rather than NOK 500 million in 2026 and into 2027. And similarly, and even more importantly, we have other dialogues going on to give us possibilities for '27. And most of you have been discussing with us in recent years that the dilution of our EBITDA margin has been a problem. And there are two things that is different going forward, and that is the size of Omda compared to those we acquire and also the type of acquisition targets we have at hand. That means we also think that for '27, we will stick to the fact that the current business, including that we acquired in '26, will save in the interval between 28% and 32%. So that is what's going on in the short term. Slightly more long term. We have actuals from -- you remember from last year, and then we have a guidance for this year. But of course, we will now get back on track and secure continued growth. So follow our plan. And my colleague, Einar, will go through some of the status actions on the M&A side and of course, the funding side, which is a part of the whole thing to get there. So we're quite happy entering now in the middle of the second quarter and see our guidance are in place and that we have the long-term strategy and actions going forward. What is important to every company in the world and every company has to do its own unique thing to handle artificial intelligence. I think the first quarter, we have delivered a lot, which is very, very important. And you cannot take it lightly and especially like a company as Omda is with a huge responsibility when it comes to life critical systems, when it comes to regulations, certifications, it's not an easy task. However, it is a good thing. AI is a fantastic thing for Omda and for our customers if it's handled in the right way. And that was really what it was about in the first quarter 2026. So let me just repeat what I said before when it comes to our position, when you look at AI as a threat. Of course, it looks like a threat when it comes to how can code and products change, which is a fair thing to estimate that it will, code will be created. There are millions of different codes in the world, and they will change faster and faster every day because of AI. However, in this situation, it is difficult to think that the code itself is what matters. What matters is the patient and the process around the patient. That means AI increases our productivity. It doesn't reduce our systems relevance. So when we do like every software company in the world are doing these days, we are, of course, make a completely different approach to development. And we have to do that simply because the tool sets that are available has changed even just a few -- couple of months back. So what we have been doing is, of course, what you see here in those two pictures is the transition from manual work on many of our processes over to agent-based AI development. And what does that mean? Does it mean that our people are irrelevant and we use agents instead? No, that does not mean that. Quite the opposite, the heads, the people, those that really understand the complexity of the processes inside specialized health care and emergency, those people that are prompting the correct way, using the agents and designing new agents the correct way, those are the valuable people here. It is not an AI task to get to produce that on its own. That is not going to happen based on the criticality. So what we've been doing in the first quarter is important. That's why I would like to explain it properly. We have an AI governance framework established in the first quarter, which is probably one of the most important things to do in these days when things are happening so fast. So the key achievements, some of those. First of all, we have put together this governance framework group-wide. And what it matters? Well, we support then a scalable AI adoption, meaning that all our 10 business units, they have tools, they have rules, they have a governance platform. They have everything they can share to do things the right way. That is very, very important. That is the first quarter delivery. And similarly, there are specifics in our quality management system and also when it comes to our certifications that the governance around these rules, GDPR, MDR, IVR, EU Act, et cetera, all of those are important. And that matters much because it gives us the ability to strengthen our compliance position and our readiness when it comes to certifications. This is important to our customers. That's why we have to do it this way. And also, internally, we have established formal bodies that handles this across the company-wide situation we're in. And that also reduces operational regulatory risk, important to the business as well. And then we are a development company, and we have development cycles in different -- 10 different business units. And of course, to manage that in a standardized way is very important. So that enables us not only to do it the right way, but also to innovate by having rules on how to do it in the proper way. And that also brings me to -- when it comes to innovation, of course, there has to be excitement around AI and all the possibilities on the product side, efficiency side and also on the customer side when it comes to develop software. So we have also launched an AI champion network to make sure that across all the business units, we could share all the exciting things that goes on. So that reinforces Omda's position when it comes to also developing our mission-critical software further. So I'm really happy to say that this has been one of the most exciting quarters in our history, although it doesn't show in the numbers because many of our people centrally, and of course, many people in the business units have been doing this rather than, for instance, increasing Professional Services, which is one of the reasons why Professional Services is slightly lower in the first quarter than some of you might expect. So I suppose, Einar, when you look at these things that my key takeaways here, the numbers, NOK 24 million EBITDA, then the guidance, we are sticking to that. And then the inorganic growth, M&A and of course, that we have done the AI governance framework. Do you think it's important as well?

Yes. Thank you, Sverre. I must say I don't think AI is important, but again, human intelligence, I think, is still needed. So maybe a blend of the two is really what really matters. But if I understand it correctly, it's also that it's not like you can have an AI project or you can postpone it because it's also part of -- you mentioned the EU AI Regulation Act. It comes into effect in the 1st of August this year. And so that is comply. I mean, so it's not like you can choose to be compliant or not, we -- in our line of business, we have to.

Exactly. And I think it's a good business position to be in. It's actually a good thing for us. So all the AI hype and the AI threat is really not a hype and it's really not a threat.

Not a hype, not a threats, but possibilities. Okay. Let's take a look at the numbers, go through the financials. And before I go through them, please keep in mind that you can -- if you have any questions, type them in, and we will attend to them after my presentation. Okay. Let's take a look at the financials. We said in the report that this was an eventful quarter, and you can see that. The income is more or less on par with the same quarter last year. What you see is that the recurring revenue keeps growing. And those part of the business that are more lumpy License sales, that's always lumpy. And also, you see Professional Services, they are lower this quarter than the same quarter last year. We have -- in the past, we have said that a large part of the Professional Services are also recurring or semi-recurring, if you like. And the recurring part is still there. The nonrecurring part is there this quarter. And as I said, for two reasons. One is a lot of the people that have been billing hours, they have been occupied with AI. We think that will pay enormous dividends in the future because that is the -- to be really good at AI and to utilize that in not only in an efficient way, but in a secure and safe and compliant way is key to increasing efficiency and lowering CapEx, getting more out of the resources you have. So it's an investment for the future. The other part of the Professional Services, seasonality, project come and go. But you see that we haven't changed our guiding. So take that as a hint. On the right there, I have a new pie chart for your information. You can see in the report, we have the typical where are our customers, where are our people. But this is also in what currencies does the income, it comes in different currencies. And that is not a unique one-to-one related to the countries and where the customers are. You have customers in one country and it can be income in a different currency. But what you see is that in Swedish krona and euro and pounds, all those currencies, 80% of currencies, you see that, that is where the Norwegian kroner has appreciated tremendously this year, huge movements in currency. And in Norwegian kroner, only 17% of income is actually in Norwegian kroner. So just keep that in mind that when there are huge currency fluctuations, it impacts the top line. What isn't impacted, and this is the old favorite of mine, the recurring software revenues, and this chart goes back to the first quarter 2017, 9 years before. And you see they have been increasing steadily each and every quarter, amounting to NOK 98 million in the last 4 quarters -- in this quarter and NOK 392 million on an annual run rate. So we're close to NOK 400 million before, isn't this a beauty. Okay. I'd like to just -- we presented this in the last presentation when we presented the fourth quarter results. I'd just like to restate our targets. Guidance is one thing. A guidance we guide for the current year, but we have long-term targets. These are our 5-year targets. Organic growth of 5% to 10%, and you can see that it was lower this quarter. Don't put too much into statistical outliers. I guess that's what I'm saying. We maintain that target. We absolutely maintain our target of acquired growth, 10% to 20% per annum. And an EBITDA of more than 30% over the long haul. CapEx to reduce the CapEx from 10% to 5%. The last years, we have been around 10%. You see that the first quarter this year, we are around 9%. And we have said that we will try to reduce CapEx by approximately 1 percentage point per year. So we are on route for that. COGS from 6% of total revenue down to 5%. You see that it's -- we're having an effect in the first quarter as well. We're heading in the right direction. Salary and personnel expenses, of course, you see it's actually reduced from the first quarter last year and from the fourth quarter last year, but still in percentage points higher than where we would like it to be, but there's no drama there. So it's more about the income should have been higher than the cost, is out of control. Other costs, again, it's slightly higher the OpEx, the other costs this quarter than we would like it to be, still below the previous target of 15%, but we're not there at 10%, so a little higher than that. Again, there are seasonalities there, but also some is linked to certification MDR, EU Act, ISO 27001 cybersecurity and the list goes on. So there's been a lot of extra costs related to that in this -- we've taken this quarter. And last but absolutely not least, we have a bond loan of NOK 500 million. We have said that we think that the price on that should be lower. We think we should, going forward long term, have an interest rate of closer to 5% than 10%. And before I continue, on that note, let me take a little dive into M&A. We continue to have, as Sverre said, very high activity on the area. We have more than 400 targets in our database. It's our proprietary database. We do most of it -- most of the deal sourcing ourselves, if not all of it. We have several dialogues going on. I know that we have been repeating this message for some quarters. That doesn't mean that it's untrue on the contrary, I'd like to say. But things are announceable when they are. So once the babies are born, you will be invited to take a look. In short, again, we restate and reiterate our target of 10% to 20% inorganic growth per annum. We will continue to evaluate should it be smaller bolt-ons or larger more transformative deals. We are opportunistic. We can do them both. Sometimes you can do the bolt-ons like the 3 most recent acquisitions were all bolt-on acquisitions. But that is not to say that we're not working on and interested in the larger more transformative deals, but the terms have to be right. And when they are, we will strike. We see that the current market provides opportunities. We think all the uncertainty, especially also related to AI has created uncertainties and opportunities, and more opportunities than challenges from an M&A perspective. And again, we are long-term thinkers. We create value for the long term. And if we can utilize on the short-term noise to do deals that create long-term value, we will. Again, speaking of M&A, if I were an outsider, I would see that taking a look at Omda, I would say that there's value there to do calculation of what is the price and what is the intrinsic value. So we will continue to evaluate share buybacks. As you noted on the last AGM, we were granted the proxy to do share buybacks. So as soon as we can, we will evaluate that. At the end of the day, it's all about capital allocation, where should we invest our money. And because we are now moving into a territory where we have positive EBITDA, positive cash EBITDA and maybe also more attractive funding, we see that we are collecting cash on their own balance sheet, and we can probably do some of the smaller acquisitions with cash from operations or maybe using some other kind of facility. Okay. That was M&A. Back to funding and that also relates to M&A because it's really -- they are interlinked. You can do acquisitions, but you need to finance the acquisitions, especially the larger ones. Leverage, we continue to delever. You see here from the fourth quarter '24, where we are definitely in high-yield territory. And you see the 3 lines here. The top line is really where -- approximately where high yield is on leverage that is scale from 1 to 7 here on this graph. So we put high yield around 5x. And then I've introduced the BB+, so when you start to be more bankable. And the lower line, the purple line, around 2x EBITDA leverage, where you are moving into investment grade. So you see that we are heading for a kind of investment-grade leverage situation in a couple of quarters. So that is where we currently are, and we are heading in the right direction. And this should give us opportunities to evaluate financing alternatives to the current bond loan. So again, lower leverage and strong performance, continued strong performance that opens up the opportunities. Again, interest rate is the single largest cost of cash item in the P&L. For those who haven't followed us, the bond is callable in December at 104.3. It's a make-whole until then. We're currently trading below 200 bps, and that always signal to us that we should absolutely put refinancing on the agenda and on agenda, it is. And again, I showed you the graph where is the income and what kind of currency do we get our income, the revenue. And we absolutely think that the currency on the bond or financing should be linked to where we have the income. I guess that's what you call a natural hedge. Okay. To sum it up, Q1 it's a profitable quarter and an uneventful one. So it came and went, but we're still profitable. The 2026, the guidance, we reiterate the guidance. So that means that -- but again, take into account the FX impact on everything, but still, we reiterate the guidance, both organically and inorganically. So again, so that means we have a high activity on M&A. Our long-term growth ambitions, they are maintained, and we reiterate those as well. And last but not least, we are actively considering and working on refinancing. So don't be surprised if something happens there.

Okay. Now it's time for Q&A, and let me see if there are any questions. There isn't any questions at the moment. So at least that on my screen here. So it doesn't seem like there are any questions. Okay, just one pop in right now. There's one question here. And again, if you have any questions, please type them in, and we will attend to them. There is a little delay from when you type in your questions to when they appear on my screen, approximately 20 seconds or so. So that's why I will leave it a little time. Okay. But the first question here. And I guess this goes to you, Sverre's, it's about the 2026 guiding is from [indiscernible] and he says, can you give some more substance to why you keep full year 2026 guiding? The first quarter was soft. So why do we maintain the guiding?

Yes. The point is normally, if you look at the order intake in a company like Omda, it will always be things that might have happened even years ago when it was ordered. So projects are going on and some projects might pop in, in one quarter and some projects in another quarter. So we are quite comfortable with what's coming and when it comes, although it doesn't come in the first quarter, especially the lumpy part of licenses. So that is one thing. And secondly, the same thing happens with milestones with also with the recurring part of -- or the nonrecurring part of Professional Services because they are linked to milestones as well. And if you look at the milestones, how we come back to our guidance when the first quarter is soft. The simple answer is we compile all these milestones from 10 different business units into one separate latest forecast, and that stays the same. So that is the real answer on how the predictability is still there or we have these lumpiness between quarters. Isn't that right?

That is right. And here is a question -- a question from [indiscernible]. He says, could you share with us the constant currency revenue you had in 2026? Not exactly sure what you asked for there, but if you asked about the impact in the first quarter, we saw that we were starting at the end of the year with the euro and Swedish krona closer to NOK 12 and closer to NOK 1.10, and we are ending the quarter substantially lower, and we're now at NOK 10.7 at the euro and NOK 0.98 on the Swedish krona. But it wasn't the elevator. They have been taking -- going -- walking down the stairs. So the average on the quarter is that dramatic, but it's heading in that direction. Okay. And another one on finance since I'm at it. This -- we have 2 questions pending. This is one of them. And it's related to leverage. And I think that's a very interesting question. The question is, what is your thinking around the trade-off between keeping the leverage around investment-grade levels with lower cost versus higher leverage and more investment opportunity. That is, of course, a balance. And I guess it's -- at the end of the day, it comes down to what kind of leverage is that ideal balance. What I can say is that, we do not foresee that we are going back to leverage where we were in the past above 5x. That is -- will be a stretch. The cost of capital is high, probably too high. And so that comes to a point where the cost of capital actually limits the opportunities more than open up for them because the cost of capital and the discount rate would have to be much higher in order to take on and do the acquisition. So that's kind of -- that is where that stops from a financial perspective. On the other hand, if we were to stop acquisitions, we could not only move to investment grade, but -- or closer to investment grade, but well below that, and have less than 2x. And so we would actually delever very quickly if we stopped acquiring and just focus on optimizing the current business. But that would mean that we wouldn't be a collector. We wouldn't be an acquirer. We wouldn't be following the strategy that we have communicated. So that would stop that. We have to find a balance between insanely fast growth and having a very high leverage and then almost no leverage at all and just have the organic growth. To sum it up, the reason why we have communicated 10% to 20% inorganic growth is that we see that, that is where we probably have -- we can strike the balance between a reasonable leverage and an attractive cost of capital and at the same time, having a growth that is well above what we can do organically. That is also to say that if we have an acquisition that represents 10% to 20% and even if they are turnaround or better candidates, which they very often are, they will not impact the EBITDA substantially. You can experience speed bumps and maybe a quarter or 2, you get a hit on the profitability, but it will not be by a huge magnitude that will move us into a very high leverage territory, smaller speed bumps. So that is also why we have this target 10% to 20%. But again, there isn't a textbook where you can just look it up to find the answer to this question. It's all about also to see opportunities out there. But we think this is how we found the balance. Okay. And this is another question about AI, Sverre. And the AI, are costs related to AI implementation mostly behind us? Or do you see them as a steady or accelerating?

Yes. That's a very good question. If you look at the pricing model for many of those companies that delivers the engine behind this, some of those are expensive, some of those are maybe unpredictable in a way. So what we've done is to create some rules, as I mentioned, during the first quarter and also a set of methodologies and components and solutions that we have control over. That means also we have control over the cost when it comes to how these systems are paid for. So that's one thing on the other cost side and the software side. And when it comes to using hours, I think we are now entering and in the second quarter and forward, we are entering a completely different day-to-day work because now we have in place using the internal approach to create this platform. And then now it's -- we see that is behind us. So I would rather say it will be the opposite going forward that we will see more efficiency and also according to what Einar said, it will also help the CapEx versus sales over time, starting this year and gradually be lower over time because of the efficiency behind these tools. So yes, most of that is behind us. That was the short answer to a very good question, and I used even shorter time than you did on the last question because that was a very long answer.

That was a very long answer, but it was also a very complex question. Okay. See how long you -- much time you're going to spend the next question, Sverre.

Yes, we'll see.

Okay.

It's depends on the question.

Yes. It's actually -- it's a long question. It's divided into 2 parts.

Okay. Let's have the first one first then.

Yes, the first one first. And it relates to medical imaging or Connected Imaging, as we call it. Connected Imaging represents approximately 20% of your revenues. That is correct. Premium assets in this space like Sectra, Pro Medicus, Intelerad trade at very high multiples, about 20x EBITDA. And the question is, how do your products compare to theirs? And what is your perspective on, and this is continuous. What is your perspective on the strategic value of this division?

Yes. That's one thing that is important when it comes to our position versus the bigger players in different areas. And one very important thing is that if you compare us in general to, for instance, EPR vendors when it comes to how you deliver the central systems in many of the regions, especially here in the Nordics. They have vendors delivering those standardized systems in the middle. And there's also what's happening when it comes to commodities or like MIRs and MRIs and then, of course, everything that has to do with hardware as well, and software connected to that. So the bigger vendors there are, in that sense, not -- none of those are in real life, our competitors. Some components might compete, but normally, we are the specialized one. So that means, for instance, if you look at an area like cardio, we have mechanisms or functionalities that are deep diving into processes. That will be our focus and rather integrate and share things with companies like Sectra, so the one I mentioned. But of course, we have other components in that area like a stack of XDS storaging and orchestrating and sharing mechanisms for when you share images, and that could be integrated with every vendor. So that is other types. So all in all, strategically, I think our focus will still be to focus on the specialized integratable component as the main priority, while we also share integration components and storage components, which partly overlap and partly compete with the bigger vendors.

Okay. Thank you, Sverre. And I'll cover this one. And then it's a question is about other operating costs. In Q4, you specifically highlighted costs not related to operational activities. Were these at a similar level in Q1? And should we expect any further nonoperational costs in the coming quarters? That is correct, but it's also a relatively minor. So the biggest part of other operational costs, they are software for internal use, it's office lease, it's legal assistance, audit and things like that. And then you have the bumpiness like, as I mentioned, certification, MDR, et cetera, and maybe some short-term things related to -- for acquisitions, et cetera, that can be a bit lumpy. But I think it's fair to say it's not an enormous amount. But yes, that can vary in the quarters. And then it's a Norwegian, this seems more like an observation. It says, income measured in constant currency. shows that the company has a growth in revenues without the effect of currency if you have a constant currency. And I guess this links to an advice. This should be calculated and reported. If you don't do this today, is this possible to do going forward? Thank you for that. Let me -- let us take a look at that and see if we can come back to that one. Okay. And then it's the last question here. There's one more question pending. This is the last one. I'll refresh. But again, it will take approximately 20 seconds from when you type in a question until I see it here. But the question is what is in the other net financial costs? Is it mainly FX or something else as well? Yes, it's mainly FX. You see it in the P&L there, and it varies from quarter-to-quarter. And if you have a huge effect on movement in FX, you see typically a huge movement here as well. Okay. So that was the last question here. Let me just give it 1 second or 2. Anything more you would like to add, Sverre, before we round it out? Anything we have forgotten to answer any questions we should have received that we haven't?

No, I don't think so. Maybe that if you look at some of you that are -- might be concerned that it is an uneventful first quarter. If you look at '24, the first half year of '24, the first half year of '25, and the first half year of '26, you will see that the second half year is always the best. That is one thing. And for those of you that calculate, you will, of course, see that the second quarter is going to be much better profitability than the first quarter, obviously, given the fact that we have guided. So I think it's fair to say that we are quite comfortable when it comes to our guiding. I think that is important to say. And you agree, probably, you are the numbers guy.

Yes. It's hard to disagree. Okay. Let me check to see if there are any more questions. No, we have -- here, we have reached the end. Okay. Time to round it off then, we'll get back to work. So we are releasing our Q2 numbers on the 27th of August. So you can join in then and see what if -- and if something happens before, we will give you a heads up. So until we speak again, please enjoy summer. Take care, and stay safe.