Physitrack PLC (PTRK) Q4 FY2025 Earnings Call Transcript & Summary

Welcome to Physitrack's Q4 2025 Results Webcast. I'm Henrik Molin. I'm the CEO and Founder of Physitrack, and I'm joined today by Matt Poulter, our CFO. Let's kick this off. We will start by taking a little look at the financial consolidation for the fiscal year, and we'll go through business updates from the two divisions. Matt will take you through the financials in detail, and then I'll come back to strategy and outlook before we open up for Q&A. [Operator Instructions] All right, let's do this. 2025, as you know, was very much a financial consolidation year for us. We improved a lot of things structurally in the business. So if you look at the headline numbers, adjusted EBITDA is up 21% year-on-year. Adjusted EBITDA margin now sits at 35%. And we delivered a EUR 2 million free cash flow swing year-on-year. So we've simplified the business, we've cleaned up and profitable revenue streams. We stepped away from areas that were not accretive. So overall, it's a leaner, it's a meaner SaaS business. We spent a lot of time on that in 2025. Now growth did slow as a consequence. Revenue for the year was broadly flat. We had contraction in Wellness as we exited low-margin contracts, but ARR has remained very stable. And as we exit 2025, 92% of our Q4 2025 revenue is subscription-based. Now that's the holy grail for a SaaS business. This is predictable, stable recurring cash flows with a higher margin structure. We're also really well positioned for North American acceleration, thanks to our New York-based team, which actually is not only a commercial push into the U.S. and north of the border, it's also a cultural dynamo for the wider organization. Now if we look at financial highlights, pro forma revenue is EUR 13.5 million. Free cash flow has improved materially over the last several quarters, as we've seen, the trend continues. Recurring revenue now represents [ 22% ] of the business that we just said. EBITDA less CapEx has improved dramatically, close to 200% improvement in Q4 2025. Full year adjusted EBITDA less CapEx growth is 277%. So these are really big structural numbers, nice big swings. Adjusted EBITDA margin for the full year is 35%. EBITDA less CapEx margin is 11% for the quarter and 14% for the fiscal year. So we're seeing real operational leverage here. If you look at the divisional split, 83% of the business is now Lifecare. That's where we put tools into the hands of health care providers around the world so they can make their patients feel better, faster. And 17% is Wellness, where we put tools into the hands of employers so that their employees are healthier, happier and more productive. Now let's take a look at Lifecare. Revenue is EUR 11.3 million, up 7% year-on-year. ARR is also EUR 11.8 million, up 9% year-on-year, reflecting a very stable customer base. Adjusted EBITDA is EUR 5.5 million or 49% margin. Adjusted EBITDA less CapEx is EUR 2.9 million or 25%. So these are very strong SaaS numbers. ARPL is up 6% year-on-year to EUR 171, driven by pricing optimization and exiting low-margin contracts. SaaS gross margin sits at 86%. Churn remains stable on a 12-month look-back basis at around 1%. Customer lifetime values continue to expand. Q4 adjusted EBITDA less CapEx of EUR 0.7 million is helping fund group investment in a very disciplined way. Moving to Wellness. Pro forma revenue contracted 13% year-on-year as we exited physical care delivery and legacy low-margin contracts. What remains? So a very focused enterprise SaaS business with care escalated through partners rather than delivered by us. ARR is EUR 0.9 million. ARPL is up 56% year-on-year, reflecting the shift towards higher-value enterprise relationships, of course. Adjusted EBITDA margin is 5%. Adjusted EBITDA less CapEx margin is minus 4%. So this has been a restructuring year for Wellness. That work is largely complete. We've merged teams into unified structures. We've reduced operational complexity. We improved the SaaS gross margins versus last year, and we materially reduced costs without compromising workflow or velocity. So entering 2026 as a leaner and meaner fighting machine. We are more sustainable, we're more scalable, and we're better positioned for commercial upside. Execution priorities then on this slide is pretty busy. But North America is central for many reasons. We have a couple of million dollars of revenue in the U.S. today. That should have been double-digit million 8 years ago, and I believe it will be over time. Having a dedicated team on the ground in New York with geographical proximity and customer access is really, really key. But it's not just about North America. The New York team acts as a cultural dynamo for the group. And so the intensity, the workflow discipline, the energy, that spreads globally. And importantly, we did this on a largely cost-neutral basis. So we've recycled headcounts, we have not compromised cash flow to build this presence in the greatest city in the world, well, after [indiscernible] in Sweden, of course. Now on product unification and value expansion, you've seen early examples of Champion Health and Physitrack cross-fertilizing. Champion is becoming a preventative ecosystem of care element. Physitrack is incorporating emotional well-being and preventative components into the offering. So it strengthens the ability to expand revenue within existing customers and not just to sell more licenses, but to sell more value. Now we're also focusing on bundling Physitrack more coherently this year. We're looking at continuing education through Physicourses joining up right next to home exercise prescription and remote therapeutic monitoring in the U.S. So these bundled offerings, they strengthen our competitive positioning, and it gives us more firepower against players like Medbridge, and it also creates more revenue expansion potential. Now on financial strength, 2025 has given us a real springboard. Strong free cash flow means we can invest in innovation, people, commercial separation. And it also means that we can invest in shareholder value. Now on that subject, Matt is going to dig more deeply into the share buyback program. We announced that last week. We've had AGM authorization for years. But now we have the cash flow to use it. So it provides liquidity support in the microcap setting, and we can also use treasury shares for equity-based incentive schemes. So we now can align shareholders and the teams and we preserve liquidity. So it's a sensible tool to have in the toolkit. Now finally, on Wellness, we reset the business, it's focused on enterprise SaaS. We've exited the legacy lower-margin contracts. We simplified the product, refined the commercial methodology, we reduced the complexity and improved margins. So the plan from here is to rebuild revenue growth from simplified higher-quality base. So 2025, it was about doing more with less, cleaning up, strengthening margins, securing predictable revenue streams, cash flows and building a foundation for acceleration. I'm going to hand over to Matt now to walk you through the financials more in detail. Matt, over to you.

Thanks, Henrik, and good afternoon, everyone. So let me take you through the numbers. FY '25 was a year where we made a lot of the right call structurally. We simplified the portfolio. We drove profitability significantly higher and turned free cash flow decisively positive. Those are real achievements. But on the top line, we didn't grow at the rate we set out to. And that's something we're not satisfied with. Henrik touched on it, and it's important I acknowledge it too, growth below our own expectations is not something we cross over. So let's look at what the year actually delivered. Reported revenue came in at EUR 13.5 million, down 3% on a reported basis. Now some of that decline is intentional. We exited revenue that was diluting our margins that required disproportionate management attention. And frankly, it just wasn't a business we wanted to be. On a pro forma basis, stripping those disposals out, revenue grew 3% to EUR 13.5 million from EUR 13.1 million. That's the underlying trajectory, and we're moving in the right direction, but not fast enough, and that's what 2026 is about. Where the year really delivered was profitability. We managed to expand our margins by 7% up to 35%. And also that, in turn, improved our cash position. And that's probably the number that we're most proud of. Free cash flow from continuing operations went from negative EUR 1.6 million to positive EUR 1.2 million, a swing of around EUR 1.8 million on a like-for-like continuing basis. But if you compare the total reported cash outflow we disclosed last year of a negative EUR 1.8 million, which included the [ Physiotest ] and the Wellness disposed businesses, the full swing is closer to EUR 2 million. And that matters because it reinforces that those divestments were absolutely the right call, not just strategically, but from a pure cash perspective. We're carrying businesses that were consuming cash. We stopped, and the results speak for themselves. Next slide, please, Henrik. So let me give you the full revenue picture because there's a few layers we need to unpack here. At the reported level, revenue was down 3% for the year and 8% in Q4. As I said a moment ago, the reported number is distorted by the deliberate actions we took. We [ now Physiotest ] and the exit of the lower-margin wellness clinic contracts. These were planned exits, so not revenue we lost through competitive failures. The cleaner read is pro forma, which was up 3% for the full year, but minus 3% for Q4. Q4 being negative is something we're keeping a very close eye on, but it more reflects the Wellness reset still working its way through. And we expect to see this to stabilize and improve through 2026. Now on FX, there's an important nuance here. On a constant currency basis, pro forma revenue grew 6% for the full year. That's a 3 percentage point gap between reported and constant currency, which is driven through USD and GBP movements against the euro. The good news is that because we operate as a global business, there does become a degree of natural hedging. Our cost base in those same markets offset a meaningful portion of the top line FX impact. So while it shows up in the revenue line, the EBITDA impact is a lot more muted. That said, FX is an area we monitor continuously, and we're making sure that we have the right protocols in place so that we're not caught out by significant swings in either direction. Looking ahead, how do we get the growth rate moving? Henrik touched on it, but the short answer is several things working together. North America is the single biggest opportunity, and we're investing there with dedicated commercial hubs in New York as well as creating a hub in London to speed the EMEA sales. We're also focused on cross-selling between Lifecare and Champion Health. These are complementary propositions that we haven't fully levered. Platform enhancements across both products are creating higher-value bundles and improving our competitive position in enterprise tenders. And specifically in Champion Health, we're refining the go-to-market approach, moving more towards preventative health care positioning that we believe resonates strongly with large enterprise buyers. We're increasingly thinking about employee health as a strategic priority and not just as a benefit. That shift in framing opens up a different and larger conversation with HR and decision makers. Next slide, please, Henrik. Before I get into the profitability charts, a brief note on the statutory reported position. The business showed a loss for the year at the reported level, but this is almost entirely driven by noncash charges, impairments, disposal costs and transactional costs associated with the portfolio rationalization. These are the costs of onetime cost of doing the right structural work. They are real accounting entries that don't reflect the underlying earnings power of the business we're left with, which is why the adjusted metrics are the right lens here and the operating model is genuinely in good shape. The left-hand chart hand chart shows our quarterly EBITDA margin trend going back to 2023. What you see is the business has structurally re-rated from a 28% to 32% EBITDA band to now a run rate firmly in the mid-30s. Q4 came in at 34%, and the full year for '25 is 35%. The right-hand chart shows EBITDA less CapEx by division, and this is where it gets really interesting. Lifecare delivered EUR 2.9 million of EBITDA less CapEx, up from EUR 1.9 million in the prior year on an [ 86% ] SaaS gross margin. It's a cash engine, it's funding everything else. Wellness moved from a negative [ 1.5 ] to a negative [ 1.1 ], and the restructuring is nearly complete, and we expect continued improvement from here. And at the group level, adjusted EBITDA less CapEx grew [ 277% ]. Our platform is maturing, and we're doing more with less capital plus the trajectory. Next slide, please, Henrik. I said earlier that cash was the #1 figure I'm most proud of this year, and let me show you why. This chart shows a story that I think is really, really powerful. [ Cash flow ] right back to 2022 and early '23, and you can see a period of consistent cash consumption as we're investing in the platform and integrating our acquisitions. Then through 2024, you see a mixed picture, partly because of legacy entities that were consuming cash. But from Q4 2024 onwards, we're now looking at 5 consecutive quarters of positive free cash flow and firmly upward. To put some numbers on it, free cash flow from continuing operations for the full year came in at positive EUR 1.2 million versus negative EUR 1.6 million in FY '24. And that's on a like-for-like basis. But as I noted on the previous slide, if you compare the total reported FY '24 cash outflow, which is EUR 1.8 million, including Physiotest and Well, the year-on-year improvement is much closer to EUR 2 million. And that's a meaningful inflection and validates the portfolio decisions we made. On the balance sheet, we're in a much more solid position with cash of EUR 0.7 million at year-end. RCF now is drawn at EUR 4.2 million, down from EUR 4.9 million last year, and we've been able to pay that facility down rather than drawing on it this year. And that's obviously increased our headroom from EUR 0.9 million last year to EUR 1.5 million this year. Net debt is also down from EUR 4.1 million to EUR 3.3 million. So we're deleveraging organically. There's no equity dilution, there's no financial engineering. It's just cash generation, paying down debt. And crucially, cash generation now exceeds CapEx, which is an important milestone because it means the platform is no longer a net consumer of capital, is a net producer. And that changes the conversation about what we do next with the cash we generate. Next slide, please, Henrik. So what do we do with that capital? Our priorities are sequenced deliberately maintain liquidity and covenant headroom first, then fund organic growth second, North America product, commercial expansion. Selective deleverage is the RCF, third. And then fourth is a return of surplus capital to our shareholders to yourselves. So last week, we announced the buyback. The Board has approved a program of up to 10% of shares under our existing AGM authority, and that's going to be funded entirely from operating cash flows. So no RCF drawings. The rationale is straightforward. We've got confidence in our cash generation, and we think buying back our own stock is a sensible use of surplus capital at current levels, alongside providing our teams with an opportunity to be rewarded in the overall company's success through an employee share scheme. A few of you already asked some questions about the mechanics of this. So I need to kind of address a few nuances here. Physitrack, whilst listed on the NASDAQ North Stock Exchange, is a U.K. registered company, and we're governed by U.K. corporate law rather than Swedish company law. And that's a really important distinction here because in Sweden, only synthetic buybacks are permitted, whereas under U.K. law, we have the option of either synthetic or classic market buyback structure. So we are favoring the classic market buyback route executed under safe harbor laws. But before we launch this and before we finalize the mechanics, there's also a few steps that we need to work through. So we're working with Santander to get consent for the RCF facility. We don't foresee that being an issue. We also need to complete a capital reduction exercise to ensure we've got sufficient distributable reserves, which is a U.K. companies requirement. We're actively progressing both. And once we've got a definitive plan, we'll communicate that clearly to the market. But this is something we're prioritizing as a business. Henrik, back to you.

Thanks, Matt. That's great. So as we look ahead, we believe we're very well positioned to accelerate from a durable high-margin recurring revenue base with a really, really nice financial springboard. And so we are reiterating our financial goals. And as you can see here, we also added share buybacks as part of our shareholder-friendly toolkit supported by positive free cash flow. So we're really excited about the future of this business and wait for what lies ahead. [Operator Instructions] Let's open it up for questions.

All right. Good stuff. Let's get cracking with a number of questions that have come in. So first up, can you comment on sales momentum and the outlook for top line growth? So we measure sales activity and momentum extremely closely. And so these are some -- it's very KPI-driven. It's very data-driven. We use systems like HubSpot, which is sort of the ground zero for everything that we do data-wise. There are also tools that we use that is in front of the sales team as they work with customers. So systems like [ Gong ], for example, that takes apart every single conversation that a customer will have with a salesperson when they're on a call together. For example, you get some really interesting KPIs there in terms of how a salesperson is performing what percentage that he's speaking during a sales call, for example, and also what the customers are asking stuff that I can feed into product development, and then we can make product calls on that. So it's very data-driven, and this is where we look at what momentum we have. We look at the sales pipelines, we look at the probability of closing, we look at the length of the sales cycles, and we break that down into what is then a forecast on where we're going to end up. So we have reason to believe that we have really good momentum. We look at it very, very closely and not just reported revenue. And it's a high quality of deals in the pipelines. The conclusion is that we are returning to stronger top line growth based on that data. So it's not based on hope, wishing and pray, it's based on what's actually sitting in the funnel today and how those deals are progressing through the different stages. So from a visibility perspective, we feel really, really confident about the trajectory of where this is going. Another question, how would you characterize your pipeline today? So the pipeline is very strong. It's quite enterprise heavy. That means larger, more strategic deals and they have longer sales cycles. The upside is that even if you land just a handful of these deals, they meaningfully move the needle for us. And the challenge is that these initiatives are large in scope and they're often quite strategic for our customers. So that means that there are multiple levels of decision-making at their end and decisions can take longer than expected. So we work strategically with not just the people who are running tenders or that are the operational people behind the implementation of the technology. We also work with the end decision makers, the CFOs and the CEOs, at an early stage so that we can get sign-offs. But that said, the level of interest is really high and the deal sizes are substantial. So while timing can vary, the underlying opportunity is very real. Now I had a question on mix and match a little bit. I had a question, did we change our go-to-market approach in the recent years? Or are you largely selling in the same way as before? So this is something that's evolved a lot over the years. And so the sophistication of our counterparties is higher. The way that they take a part and opportunity, especially if it's on a strategic level, it's a big investment, it is very different. I think there's a whole other body of knowledge out there around systems and tendering and how things fit in an organization. There are also a high degree of sophistication in terms of building for your own benefit using your own tools and your own teams. And so we are in competition with customers' internal teams and their desire to maybe build something that's proprietary. So things have changed quite drastically. I'd say so it's very, very far from how we've done things before. In terms of our go-to-market for product-led growth, that's obviously something that's in constant evolution to make sure that you fit the pallet of the end buyer of that. And so you can see how we've changed the way that just visually, if you look at our campaigns, how we communicate in our newsletters, how we communicate on social media, it's a very, very drastic change. And also the methodology, the underlying tools that underpin the PLG funnels, they've changed, and they keep evolving and changing. So yes, you can't expect the same results by doing things the same way. I think that's the definition of madness. I think I was paraphrasing Einstein. All right. Are there any specific large deals that could impact performance in the near term? Yes, there are specific -- there are some several high-volume enterprise opportunities in negotiation or formal RFP processes. In America, for example, we have been approached by some very, very major players, which is [ we gate ] on the back of having a strong brand with the big hospital systems, notably in New York. And a number of these could materially move the needle for the region over the coming months. And also, that will have an impact on the wider organization. So it's not just a U.S. success story if they close as expected. But as always, we remain really prudent in our assumptions around timing, but these are meaningful contracts that have the potential to significantly impact growth. All right. There's a question on AI versus CapEx. So do AI initiatives require additional CapEx? No, not from where we are sitting now. So there are no material changes to CapEx requirements in relation to AI. We've had a number of R&D initiatives underway for a very long time. Actually, we started with AI development already 2019. That's the furthest that we go back, but in a big way in 2022 as we got the first API into ChatGPT before it was even a consumer product. And what it boils down to is not so much resourcing, it's about prioritizations. And we have to prioritize things in the road map rather than look at incremental spend. So there are things that touch on UI/UX for both the Physitrack platform and the related [ Physiapp ], for example, and other projects in there that are non-AI in nature, but they move the needle for certain customers. And so it's a matter of just shifting resources around in a dynamic way. We are reallocating focus towards AI where it's appropriate. But we already have a very significant effort in that space and have had for a long time. So it's not a matter of stepping up or having new capital outlays to execute on those plans. Next question here. How should we think about net revenue retention and the new U.S. CSM hire? Well, the CSM hire in the U.S. is -- has been very successful. We have a strong presence on the ground there. And it's very much focused on expanding revenue within existing North American accounts. And there are, I think, 18 accounts that are really high priority for this. And so the objective is to drive deeper adoption inside of these ecosystems. In some cases, we only just scratched the surface in terms of usage. We want to scratch the surface in terms of cross-pollination between the different components we have both in the Physitrack platform and also with Champion Health. And so there are additional modules. There's an overall account growth that has very, very high potential just with existing relationships. And that systematic approach to it, which we actually never really had in North America, will be a very important lever in pushing NRR above 100% again. So it's about being more proactive. We need to be closer to the customer. And obviously, that geographical proximity is really, really important. So when we work on these key accounts, just having somebody that is actually in the geo, actually in the same city is also very helpful when you want to work with companies like NYU Langone and's HSS that are actually on the ground in the U.S. And we can now systematically identify expansion opportunities within the installed base in a very, very different way. And so the U.S. is not a greenfield opportunity for us at all. So we've had a presence in the U.S. for about 10 years, but we haven't done it systematically, we haven't done it in the right way. And so we can have a lot more success with having boots on the ground, and it's a very, very exciting initiative. And as we said, the New York team is actually very, very accretive for the rest of the business as well that culture, the intensity, the way that they do business, the way that they're more plugged in, the way that the regulation in the American market is different from what it is in Europe, keeps the rest of the business on their toes when they have exposure to that dream team that's in the New York office. Question #6 here or 7, depending on how you see it. How do you reconcile a share buyback with incentivizing key team members? Well, so the -- and there was a question here as well that said that why are you implementing a share buyback when you need to invest money in R&D and maintain the momentum? Well, they're not mutually exclusive. And that's the key here. They work really well together because the model that we intend to apply is to use treasury shares for equity incentive programs. So we mentioned that a few times during this call and also on the interview I did in our spotlight segment. So instead of paying cash bonuses, we can use shares. And that strengthens the alignment and the momentum, the intensity with our team vis-a-vis our shareholders. And so it also conserves capital. So it's a great way of using cash flow and making sure that you actually invest in innovation and momentum and you can still do something really, really good for your shareholders. So this provides us with a lot of flexibility. And I think we can do some really, really great things in a long-term way. The presence of the New York office has increased the appetite for more share-based incentives. And so it's not just an initiative that we've had in looking at what's going on with our shares and our valuation. But really, there's a real momentum behind that team, and we want to do whatever we can here to make sure that they are supported on the journey to do some really, really great things. Next question, what's the opportunity from cross-selling? Now we haven't attached a specific percentage target to cross-selling at this stage, but we do believe it can be quite substantial. And the reason is quite simple. We have some really big trusted relationships in place. And so introducing products that can genuinely help health care providers to stay healthy, happy, more productive. That's highly relevant to existing customers, the health care industry and the way that these very, very brave men and women who do great things for their patients and their clients, that's a very high-pressure environment. There's a lot of stress, there's a lot of burnout, there's a lot of worker absences, there's a lot of attrition. And something like Champion Health can really, really come in and help with that. We have some interesting work that we're doing with companies that are supporting this. And there will be some interesting things happening on that front, both in North America and elsewhere as well. So we think it's pretty low-hanging fruit from a commercial perspective. And it should be really accretive for customers in terms of outcomes and at the same time, great incremental revenue for us. Okay. Let's see what else we have here. It's a good one. From your perspective, what are the main reasons the company is not currently growing at the same pace, I think, the same space, the same pace as the broader industry? Well, I think there are a couple of things in play here. I don't believe that we have the right team and the right efforts to lead sales for a period. I believe that we had a work-from-home culture in the commercial team that wasn't accretive for us in terms of us having that sales momentum and the intensity that was needed. This is obviously something that's behind also the push in investing in New York and making sure that you have individuals that are -- that have that type of high-intensity situation. Having the office hubs in London and New York are really important for us in terms of just getting back to the momentum that we initially had when we had founder-led sales back in the early days. And there's -- I think there's a lot to do there in terms of just coming back to that high-intensity culture. And of course, we -- when you're in the process of restructuring, when you have essentially two separated divisions and businesses; it's -- you dilute yourself in terms of the momentum you can have. And so the combination that you have between this shall we call it half complacent work-from-home culture when it comes to commercial with restructuring didn't do some great things for us in terms of making sure that we can just keep momentum up there. But that's something that's been remedied. It's something that's very much a new initiative for us. And we're very, very confident that you're going to see some interesting deal activity very, very soon. Okay. Do you believe that the current size and structure of your U.S. organization is sufficient to support your ambitions in that market? I think we are well placed in terms of that team that will be -- I think there are going to be 5 people by early Q2. And we think that, that supported with the systems that we have, the way that we can accelerate and have leverage with really, really smart technology that is enough for the time being. And just note that we have one part-time guy on the ground in Houston working the American market for many, many years, and we still were able to build quite an interesting portfolio. And so just multiplying that, adding the interest to the New York office, I'm very confident that we have the right green team in place to make that happen. Let's see. A question here on the Board. How effectively does the Board support you in your role? And do you feel that your Board has the right mix of expertise for the challenges over the next few years? I think if you look at it specifically, having somebody that lectures on AI at Oxford and is right at the front end of the development of AI is a great force of nature to have on the Board in the form of Dr. [ Paul ]. If you have a person that is in charge of a multi-hundred million hedge fund with a lot of experience with active investing and looking at a company from a critical point of view in terms of how you should run things to make it more palatable for investors. And also somebody that's very, very R&D heavy in terms of her own portfolio companies with a great team supporting her in many, many big ways. That is a great person to have on Board in the shape of our Chair, Anne-Sophie d'Andlau, somebody that's very, very skilled in terms of making sure that we can be compliant; and have a great process around finances with Jasper Zwartendijk and making sure that we have that interaction between leadership from a financial point of view and what's needed for investors to feel that we are a safe investment. I think that's very, very powerful. We are looking at what to do with the fifth board seat. And this is something that we are keen on looking closely at from American and American point of view to see if we can have something that can open doors and to be at the forefront of what's going on in the North American market. And -- but we have a great interaction between the Board. They keep management on their toes in terms of what's needed to be done. And I'm very, very happy with that collaboration. It's evolved quite a lot over the years in terms of how we work together day-to-day. How is the culture managed between a CEO in New York City, a CFO in London and an engineer in Poland? Well, we have, I think, 35 engineers in Poland, and we also have our COO in London. And the answer is with the focus that we have on great technology, and we have had a culture based on remote working for a very, very long time ever since we were founded. So we have a fluidity in the collaboration between our team members, and it's not something that we are concerned about. The -- I think the exception is the commercial team. So we do want those teams to be physically present in our offices, in our hubs just to make sure that they can keep the momentum going. But in terms of leadership, I couldn't be happier with the fluidity and the way that we keep each other on our toes and we make sure that the business is pushed on a daily basis with what we're doing. According to Note 6 in the year-end report during 2025, you paid out EUR 317,619 to a Monaco company where Henrik Molin is a member of the Board of Directors. What is this payment for? That is my salary. So I think that answers that question. Let's see. Regarding the EUR 1.1 million deal early 2025, how is this progressing? Will it provide growth going forward? Good question. Yes. It's one of the most exciting things that we ever did for Wellness overall and to bring Champion Health up to an enterprise-level product. And it's been a fruitful collaboration. They've certainly kept us on our toes in terms of the stability and the -- and also the -- some of the more detailed things that you have to do to provide your technology to governmental and counterparties. But that's something that it's going well. It's growing, and it's something that will be accretive to revenue as well, and it's a great proxy customers for others doing the same thing. So on the back of that deal, there are a number of deals that we are involved in that can replicate that in size and scope. Let's see. Is license growth for Lifecare business indicative of future sales growth? Or is the size of each license too different to make that analysis? Well, yes and no. I mean, license growth is an important part of it, but there's a lot more in the toolkit in terms of cross-selling opportunities of the components that we have on our shelves, our virtual store shelves that can boost revenue and per customer. So it's not something that brings revenue in isolation. It's not a B2C business where you look at sales growth and revenue growth on the basis of the installed base. So they are connected, of course, because we do get paid per license, but there's a lot more to that story as well with what we do with things like remote therapeutic monitoring as part of it, the data components and -- there are some other things as well that are under development with the new AI toolkits and things like that. So it is important, but it's not the sole contributor. So don't look at it too closely to draw conclusions about where this is going. Let's see. Lifecare is easy to see as a SaaS. However, wellness is a bit more mystical. Can you share how this service is delivered? Well, that's a SaaS as well. It's -- you have yearly recurring revenue. You have subscriptions to components. There's a basic version and there's a pro version of Champion Health, where depending on what the HR team needs in terms of transparency and data management, and then the revenue model depends on that. So it is actually -- it is very similar. Then you have some components on top there, which are related to care delivery through our partnership network. So you have fees for managing a body of workers inside of a company in relation to what care they can get escalated to for MSK care, so physical therapy, virtual physical therapy that can then be referred to an actual physical therapist in a network that I think encompasses like 900 clinics across the U.K. But it's very much a SaaS model with recurring revenue. And I hope that demystifies things a little bit. So -- but it's very straightforward. I appreciate that we don't have the same availability for Champion Health to just play around with that and to sign up and look at it with product like growth like we do for Lifecare. So it's more of an enterprise type product where you actually have to have an account and a relationship and you need to set that up. And -- but I hope that we can just fix that in the future just so that investors can take a little closer look at that and just make sure it doesn't come across as a mysterious entity. Question here. Is the listing in Sweden something that keeps U.K. and U.S.-based employees from buying the share? Yes. Yes, 1,000 times, yes. It's actually from time to time, it's very annoying. It's not just about employees. It's not just about our customers, it's about investors as well. The status of Nasdaq First North, I think, as a growth market and it's a marketplace rather than an exchange; is preventing people from actually fluidly being able to acquire shares. It's definitely something that NASDAQ should take a look at. The availability of these shares outside of Sweden is not as easy as it could be, should be. And the -- yes, just the fact that you can't -- in the U.K., it's very, very hard to go on online brokerage platforms of buying the shares; you have to actually call up a broker in a lot of cases, pay a pretty hefty commission just to do it. That keeps people away. And yes, I would love to be on share platforms like the Schwabs and the other type of platforms where people can just press a button and just buy Physitrack shares, but that's not something that's currently possible. But I hope that will change over time. Do you feel any concern about AI in relation to the company's future? Well, that's a really relevant question. And we've obviously seen a lot of turbulence around that in the markets with a lot of nice market caps being wiped out across the board for SaaS companies in the last few weeks and months. I do a slightly deeper dive on that in the Spotlight segment that was published alongside the report this morning. But I think there are two sides to that story. I'm very excited about the AI because it makes it possible to do more with less, so you can accelerate the team and you can provide resources in the form of technology without actually having too many people populate that. So the way that we do product development, for example, is vastly different today from what it was a couple of years ago with our ability to bring up concepts and prototypes that are applicable, workable that you can put in front of customers, for example, and they can have a go at stuff and give you conclusions about what they actually need to -- well, acquire your technology or to evolve with you or to grow with you. And you don't actually have to do anything on the engineering side until you are 100% sure what you want to do. And so the product team carries a heavier load in terms of that, but supported with vibe coding, it's something that is highly efficient and it's low cost. And you only really develop stuff with an engineering team when you are certain of what you want to do. So that means that the road map is really very tight in terms of priorities. You don't do stuff on speculation with the road map with the engineering team. It's a very big change from what it used to be because you used to think something up, you would design something on the product side of things, have a simple prototype and then hand it over to engineering to build it to be clickable and workable. You show it to a customer if they reject it, well, then you just spent like months working on something in your road map that just doesn't work, right? So this is -- that's super exciting. When it comes to competition, there's something that certainly keeps us on our toes. I mean I've heard this now for years that AI is going to come and eat the lunch of every single SaaS company out there. I think there's a nuance in that. I think there are some companies that should be worried about that in terms of like how do they deliver value to customers and how easy is it to replicate that. Now we have to remember that we are inside of closed ecosystems when you look at health care, and it is a much bigger hurdle for companies like that to swap out your technology for AI-based stuff that somebody will tinker together themselves with the development team, stuff like information security, patient data management and some of those big things and also EMR integrations. You have some of the biggest EMRs in the world, the Epics and the Cerners of this world, where it's not that easy just to swap something like that out. And I think while that's the case and you're integrated into that, you have a lower probability of being eaten as lunch by AI-based initiatives. But it's certainly something that we look at very, very closely, and we look at value delivery for our customers and what we can do to make sure we're at the forefront of innovation for them so that we have a lower probability of being traded for AI. But that's -- but yes, so I do think that the world will keep evolving when it comes to AI, it's very important that we stay on our toes with that. But in the meanwhile, we're actually benefiting hugely from the revolution that we've seen in AI for workflows across the whole group. And that's something that also explains the cash position and the fact that we can actually continue to do more with a lot less. That's not just about restructuring and carving out businesses that are unprofitable, it's about how we can deploy our people into doing things that make money without actually having to spend too much in terms of the team sizes. Right, let's see. The fintech company Block recently announced a 40% reduction in staff. Okay. Do you see similar development for the Physitrack teams going forward? Well, we cut a significant amount of staff in the last sort of 13, 14 months. We went from a total headcount, I think, of -- was it 160, something like that, and now we're like 70 or something like that. So accounting consultants and people that are attached with third-party contracts. And so we've done a journey like that. So if you look at the numbers, I think you might get a number that's similar to what block has. Of course, there was stuff that we didn't want to do with physical care deliveries. It was a physical care delivery network that we owned, that we put a ways with. But a lot of what happened at Champion Health, for example, was the fact that we had doubled up in terms of staff. We doubled up in terms of processes and people, and that meant that we could cut. And I mean I think we slashed that business with -- I'm not going to put a number on it, but we had very, very minimal retention after we were done with the restructuring because we can integrate everything in the wider teams and just have 1 team work with 2 products. And so yes, we're probably in the same bus Block with that. Going forward, I don't think so. I think we have a really lean business. And what you would see for engineering, for example, is that you might have an evolution of how the composition is between senior and junior engineers, for example. And we've already seen that a lot of the product work that you do now is done in the product team, which means that you don't really have the need for junior engineers that build prototypes. What you do have a need for is senior engineers that can make sure stuff is just safe and secure and shippable and something that can be deployed in an enterprise environment. So you see a shift in the composition rather than reducing headcounts. But it's some very interesting times going on, which has also been fueled by the AI revolution. Let's see. Do we have any numbers regarding how big the buyback program should be? I'll pass it over to Matt. But I mean, there's obviously a provision from the AGM that limits us to 10% of the share capital. There's also the safe harbor rules and the size that you can be in relation to the turnover. But Matt, why don't you comment on that?

Yes. I don't think there's an exact figure that we can put on it or that we're going to go out and say we're going to buy x amount of shares. What I think just should be -- everyone should have in mind that this is a long-term capital program for us. It's not sort of something short and happy, it's something that we plan to sort of do over the long term to -- I mean, not starting long term, we will progress. This will be part of our capital allocation policy, but more to sort of return capital to shareholders as well as incentivizing staff, as Henrik said, with the treasury shares as well.

There's a balance. We want to see what is the actual need for a share incentive program. And so we're going to try to balance that because we don't want to erode cash flow ideally. So if you know kind of how much you want to deploy in bonuses at year-end, and you can apply that to the share buyback program, and it creates a nice dynamic there with that alignment that you want without eating capital. So there's some stuff that plays into that as well. And obviously, we wanted to turn it to a champagne problem because the more successful that New York team is in building revenue momentum. And of course, there's some great people in London as well. It's not just about New York, but the better they are and the faster they move, the more revenue they generate, the more we will be in the pot for them in terms of these type of incentives. And that will go hand-in-hand with the share buyback for us. So yes, revenue is actually -- revenue has actually a direct connection with the size of the buyback as well and not just for the traditional reasons for doing these things, which is to deploy free cash flow into the financial markets just to support investors. It has a connection with the team and the team incentives. Okay. I think we have a last question. What is your market penetration percentage-wise in the U.S./other markets? I'd say U.S., between the thumb and the forefinger as to say in Sweden, we're probably single-digit percentage in terms of market penetration in our segment. We should be well above EUR 100 million potential for that market. It depends on how you count. But just for -- in this segment with physical therapy as a focus, that's -- so we are very small in relation to that, a couple of million in relation to that. The -- if you look at Wellness and Champion Health, et cetera, I mean, you just take your pick; I mean, we have zero penetration in the American market now. So -- but the potential is several billion if you do that right, in terms of these big providers. Similar -- so there are providers similar to the deal that we did in Europe, where you have a company that will deal with employee wellness as well as employee care. So you have the equivalence of these type of counterparties in the U.S. they do pretty much the same thing. And -- but just for bigger customers, Fortune 500 versus U.K., FTSE 500 kind of and just the scope and the size of those type of deals, it's just the miles apart in terms of potential. And because we have some of those counterparties as customers, I think there's some interesting things that we can do once that platform is localized properly for the U.S. market. There are some trademark-related things that we took care over the years ago in terms of launching Champion Health in the U.S. market. So just a nomenclature piece, we have to call it Champion Life in the U.S. versus Champion Health in the U.K., for example. And -- but yes, it's interesting. And then if you look market by market, if you look at the U.K., I think U.K. enterprise, we're above 90% for home [ access ] prescription with these in the insurance-backed segment. I think for the NHS, we're probably like, I don't know, it's hard to say, between [ Physiotools ] and Physitrack, we're probably like 30%, 40% market share. Australia for the smaller -- it is a smaller, it's a cottage industry, there's more widespread. I think we are probably like, I'd say, 60%, 65% of that market. And so depending on where we are, Netherlands, also a very high share. France, we nowhere that they don't have a culture of using home access prescription systems. They like the pen and paper. They like people to come back for more treatments so that they can get the maximum number of appointments out, for example. varies by market. But yes, there's still a lot of potential here with this business, and it's very exciting to be part of that. All right. With that, I don't see any more questions unless something comes in on the Q&A. I wish you a lovely rest of the day and keep following the story. Have a great rest of the day, and we'll see you soon. Bye-bye.