Carasent (Stockholm:CARA) Q3 2026 Earnings Call

0:00 Welcome to Kerasent Q3 report for 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Daniel Omen and CFO Sven Martin Bjornsted. Please go ahead.

0:24 Good morning and welcome to our presentation of the third quarter. We'll start with me giving a company update and so Martin will take over to give a financial update. Just a brief view of our history where you can see a strong record of growth with small churn. So going into the third quarter and the highlights of the third quarter, we continue to have strong sales. This quarter we're especially happy about bringing Falk Norway on board. Occupational health is an area which we believe strongly in and that we have a good position to grow. There are many large occupational health care providers which we aim to grow with. Also, I'm curious that you've done good work in Norway.

1:13 And we continue to have good sales on our AI assistant, MedSapp. But I'll come back to that. Also, our recent acquisition, InfoSolution. is developing very well. If it's going according to plan, Infosolutions will next year be among our top companies when it comes to rule of 40. So that means growth and profit margin. So that acquisition is going very well. And I think the management is doing a great job in that part of our business. Germany is now entering a new phase. I'll come back to that, but we now are setting up to rapidly start selling our new product. But I'll come back to that.

2:01 And looking at growth, we're at 29%. The organic area of growth is at 14%. And the 12% organic revenue growth is a bit lower. And it has a lot to do with Germany, which I will come back to. Well, an EBITDA of 21 million in the quarter and a margin of 20%. So if I start with MedSum, so that's our AI system that we build into our softwares. And what it does at the moment is that it listens in on the conversation between the caregivers or the doctor or physiotherapist or so, and the patient. And it automatically proposes clinical notes based on that conversation. So it saves really a lot of time for the caregiver, bringing up time to see more patients.

2:53 And we are now close to 400 active users at the end of September. We have 300 paid users, so it's grown quite rapidly. And what's really fun to see is that the customers really like this functionality. I think all of us use different types of software where they kind of built in AI systems that doesn't really do anything useful. Doctors, nurses, physiotherapists, they have a lot of administrative tasks to do. around each and every patient they meet every day. So they're sitting a lot of time doing quite basic documentation, which we now can do for them. So it really saves them a lot of time and they really love this type of functionality. And we have very limited churn on the product.

3:40 So that's also good. We will now soon launch more functionality and we'll also update the entire UX So to have the AI even more embedded into the experience and make sure that it's one experience, the UX and AI. So I'll show you some pictures of that within short. We're doing an MDR certification. So Läkemedelsverket, the governing body in Sweden for this type of products, have said that this type of solutions need to be certified according to MDR. So that's quite a big project because it's class 2A. which means that we're spending a couple of million in Q4 to get it done. And we're already spending a lot of time preparing all the documentation and doing tests and verifying different types of scenarios.

4:31 So that's an important project going on this year. It does take some time, make it slower to get other functionalities out, but over time it will help us because there will be fewer ambient scribes on the market because of this type of regulation. And We are also allowed, after we've done this, to do much more than we do today. So that will really be good. In general, in the rollout of the AI assistant in our softwares, the aim now is to get as many early adopters in different clinics to start using it. So most customers, when we have a new customer, a customer for us is usually it's one organization. So one customer can be one clinic or it can be like Capio or it can be Aleris and so on.

5:18 And what we're aiming for at the moment is to get many early adopters to start using it in different clinics. So one or two users in each clinic is what we're aiming for so that they then can spread the word to all the other ones working in those clinics. So this is really about getting people to start using it to see that it's really useful. Many are a bit skeptical and also healthcare is a really slow market. I've never seen technology spread very quickly in this market. And this is the quickest I've seen, I would say, in all my years in this sector. So we're really trying to get many users to start testing it in different clinics so they can talk to their colleagues. And we will then grow within each clinic, each customer, and also with new customers over time.

6:07 So yes, looking a little bit what we're doing with this, what we're doing. This is from WebDoc. So it's our largest product. And sorry for the Swedish, but it's a Swedish product. So it says main content on the left. So that's where you will be looking at the medical records. You will be looking at calendar or whatever. And here on the right is the assistant as it works today. It doesn't look exactly like this. This is how it will look by around Christmas. But it works like this today. So you're recording the meeting with the patient. Or you can also do what the second one is there, dictate. So you can, after the patient has left, you can add some more notes, just with speaking them out. Or you can only do dictation if you want to, and just talk to the, to a doc and it will propose a medical note, like you used to do with the medical secretary.

7:02 What's coming next is this functionality. So while you're talking to the patient, we will look at everything that all administrative tasks you will have to do after the patient has left. So here I'm talking with the patient that has pain in the foot. So the first one there, and sorry for Swedish again, it's a note to försäkringskassan. So that's this patient is going to go on sick leave. Then the doctor has to fill out a really long form. There's a lot of text there. And if you don't do it properly, the försäkringskassan will send it back to you and you have to do it again and so on. So you really want to do that well. but it's really not a fun task and it takes a lot of time. So here we have caught from the conversation that they're going to do that, that the doctor has told the patient that I will put you on cichlid.

7:59 And then he has said to the patient, I will book a revisit in four weeks. And I will also send a referral to orthopedic surgeon. And I will write some medicine for your naproxen. And all of these things popped up here. And that's the easy part. But what we also will do is that we will pre-fill all these things. So after a visit or university, if you want to, this pops up as you talk, you can click on these things and it will take you to the right place in the system. And with basically everything you need already filled in, except for medication, because we're not allowed to do that here. We can do certain things, but not everything. So this will really save a lot of time for that. Make sure that you just go to the right place at the right time, everything is pre-filled. Our aim is also that you shouldn't even have to wait for the LLM model to work, because we can do this in the background while you say goodbye to the patient. So this, I think, will really add a lot of value.

8:54 We've been discussing it a lot with our customers, and this is the functionality they want to see and the type of work they want to offload. So this is coming around Christmas and then it will help grow sales even more. We will not increase the price. The price will stay with this at roughly 750 kronor per user and month. So looking at Germany, it has been going a bit slower than we expected to bring WebCore, our new system, to the market. Even with AI, it still takes a lot of time to really make a software which fits the user's needs. But we're getting there.

9:40 Pilots are happy. The customers we show it to are happy. So we're now preparing to push it really into the market. There's been one big project that's been holding it back somewhat, and that's been the reporting of public patients. But that's almost done now also. So now we're really setting up to push it. But in the meantime, until this, you can see that we have churn in Germany, quite big. That's mostly with the old, it's only with the old product and it's usually doctors retiring and the one taking over the clinic wants to see a new system than the old system of data.

10:26 So that's why we have quite a big churn that will take, it's a large part of the churn for the entire group. So the churn in the Nordics is really low. And as you can see also the organic revenue growth in the group, if you take them out of this 15% and the impact margin of the group is 25% without Germany. Why we really believe in Germany? It's a really large market. Most customers are on really old on-prem solutions, nothing close to what we have. And what required 8L was to really get an organization in place, which we can build upon. It's really hard making greenfield with a startup in a new country. I think that's really unwise to do. So it's important to have something to build upon.

11:13 That's why we required 8L. And now to really have this push into the market, we have a new CEO in place since September. He has a strong background in sales and marketing within this sector. We have also replaced parts of the sales team and also added new salespeople and also changed the product management team to really increase the speed and get to the market quickly. So we will really start pushing this now in Q4. It will mean in the short term that our costs go up somewhat, but we believe strongly in both the product and the market. And the last point on this slide is a bit interesting. So I mentioned this, the chairman of the data and the old product.

12:01 As you all know, our plan was to close that product down eventually and to try to move as many of them as possible to our new product once the new product has all the functionality that the old one has. But with the help of, now that we have such high speed in development, and especially since DataL is a product we already have, it's quite easy to work with AI on it to modernize it. So we're doing also push to modernize that product to decrease churn and possibly to keep that product alive. We'll see. It's a bit early days if we go on pilot thing now. But when you have the tire in the code, we basically have all the answers to what the customers want and which has been tested together with their customers over many years.

12:53 So it's a good foundation for actually modernizing a product with the help of AI. Looking forward, we will continue to grow strongly, especially Nordic Water to do, and we'll pick up the pace in Germany. We continue to have strong cost control, make sure that a large part of the growth falls down to the bottom line, and we're pushing WebQ into the market. So we look forward to Q4 and next year. With those words, I will hand over to Martin.

13:28 Thank you. From the financial side, the Q3 came in strongly. Growth was maintained at a good level and margins continue to improve on EBITDA side. So we basically continue to deliver on our plan of profitable growth. As you see here, Contracted ARR was 424 million at the end of the quarter, where 8 million was signed, not implemented contracts. It grew 14% organically. And then InfoSolutions also added a bit more than 40 million of ARR. InfoSolutions has developed very strongly, as Daniel mentioned.

14:23 both good underlying organic growth and now after the cost savings good profitability and then we do the price increases by by new year so in the plans for next year it will be one of the top performers top performing products in the group from a real afford perspective which is very very positive EBITDA margin 25%, EBITDA 20%. We keep converting most of the extra revenue into profits. And then we also had a net retention of 110%, which is in line with what we normally see.

15:14 Looking at the P&L, our revenues grew from 82 to 108 billion, 12% organic growth. You see here that on the revenue categories, consulting more than doubled, and that's mainly because InfoSolution has a bit of a different revenue mix than the other parts of the group. Gross margins was slightly diluted from 85% to 84%. And then the cost base increased a bit on the personnel and OPEC side. This is mainly driven by the addition of InfoSolution and also by a lower degree of capitalization than we had the previous year.

16:08 But on the EBITDA side, which is the metric we focus on, on the profitability, it improved from 15% margin to 20%, which was a growth of 75%. And there was no one-offs this quarter either. Then the last 0.5 there on the slide. I want to spend a couple of minutes on. So Q3 is seasonally our strongest quarter on the margin side because personnel cost is lower because of the holidays. Revenues are also a bit lower, but in total the effect is positive on the margins, which of course does not carry into Q4, where the cost and revenues normalize. And then we also will have some extra costs in Q4 related to the MDR certification of MedSum, and that we are stepping up the sales and marketing in Germany.

17:18 Also, It's important to bear in mind when we compared to Q4 last year, it was a very special quarter. So to repeat what I said on that conference call in Q4, we had very high consulting revenues, including a big one-off revenue in Germany. and the positive one-off effect on the cost side related to the Skattefund grant that reduced cost. So I said already on that call last year that it's not something that comes regularly and these effects won't come back in Q4 this year. So the improvements that we see here in Q3 will be smaller in Q4.

18:06 And Q4 will have a lot of noise in the comparison. But it's important to note that most of this is temporary and the underlying trend here is the one that we see in this quarter and that does not change. And from Q1 next year again, the comparison is more clean and the temporary cost has been taken. So we will get back to the big improvements that we have seen over the last few years. The ARR bridge is where we see the growth here is more or less in line with what we're used to. The net EPSL is strong, 13%, 42 million.

18:55 This is driven by the same factors as normally. We add more clinics and at existing customers, our customers have volume growth and we also sell new modules. It's worth mentioning that Volvat or Capio Norway is an important contributor to this bucket, given that it was on board during Q4 last year. And it was also a major part of the backlog that you saw there in Q3 last year. MedSum is also starting to show up here with now 3 million in ARR and will be an important driver going forward.

19:45 Next bucket there, churn, 9 million, 3%, or 2.8%. The Nordics is still below 2%, so the German business is... contributing a lot to that churn, unfortunately. And then we have new customer sales of 13 million, taking the organic growth to 14% for the group and 15% in the Nordics isolated. You see that the backlog is now 8 billion. That was six in Q2, so it has grown quite a bit. And we did have a very large backlog compared to normal for WebDoc in Q2. And part of that backlog we have kept because there is fewer implementations during the summer. But then we have also added these big contracts that Daniel mentioned for Falk and Fred Sarman.

20:50 So Q3, as it was in Q2, Q3 was also a very strong quarter actually on the sales side for the group. So the scalability slide shows our focus and how the business works. So you see that over time revenues has grown from 245 to 390. It's partly due to acquisitions, but also a very strong organic growth. And then the costs you see below there on the organic side has been basically flat over this period.

21:44 So in the same period, we have had an EBITDA improvement of around 100 million and this is because we have been able to keep that dark blue part flat and Yeah, we have taken on costs many places, such as AI costs and different roles, but taken out costs on other places. So this is a very important part of that we have been able to increase our profits so rapidly. Finally, on the cash flow, we do have the third quarter is seasonally weak on the working capital side.

22:35 You see here that the change in working capital was minus 22 million. This year, minus 21. Last year, it's because we pay out holiday salaries and we don't have any big annual invoicing in this quarter. So operational cash flow was 5 million but in the year to date figures you see a better picture of the working capital model that we have so there is the operational cash flow 74 million and free cash flow after CapEx is 48 so it's also quite a bit higher than the EBITDA, because the working capital is supportive as we charge upfront in the majority of the cases and pay invoices after the period. So a very strong cash flow so far this year. We did not have, on the capital allocation, we did not have share buybacks this quarter, but we have repurchased 40 million in the beginning of the year. And the cash position remains at 47 million SEK.

24:01 So that was all from me and let's open up for questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Fredrik Nielsen from Red Eye. Please go ahead.

24:26 Thank you. Good morning, Daniel and Sven-Martin. Good morning. Regarding Germany and the initiatives to mitigate shown in data, should we view that as mainly a short-term initiative or is there a potential for a long-term shift in strategy in Germany?

24:51 Yeah, so I think there might be potential for long-term shift. I think in these times, it's important to stay flexible and nimble, not to get stuck in plans. It has nothing to do with our beliefs in WebCore. It's unchanged, but it's our belief that we can do so much more with our software now. And we know that it's always, it's so difficult to get customers to change. So if we can renew the present product, then that will really make it much easier to just keep the customer and start growing with them. So we're testing it. We'll see if it works.

25:37 It seems promising. And because the most difficult part with developing software, and it has always been, it's not really to write the code. It is to really understand the customer's need. show them what you've done, re-change after you talk to them, understand what the different integrators need, understand what the public need, the regulation need. All these needs adds up to one software, so to speak. And all those needs is what makes it quite difficult to develop a new software. That's why your web is not moving according to plan, really. It's a bit after. But in a product that you already have, you have sold all those needs.

26:26 The problem used to be that if you have sold all those needs and then the technology gets outdated, you kind of, there's no way to take all that code and just start transferring it to a new language. It would take so many years. So you don't do that. But now with AI, there is potential to renew legacy products much quicker in a way that wasn't possible before because you have all those needs describing that code and you have sold all those parts. So it's, you just need to move the code from one language and one architecture to another. So that's what we're testing. It's not, I'm not saying that we will, what we will do with StudyWise, but I think it's worth mentioning.

27:12 I think it has the potential to lower the churn in Germany and potentially to kind of shift and maybe we'll have two products. It's not as difficult to have two products as it used to be either. Did that answer your question Fredrik?

27:29 Yeah, I think it was a clear answer. Thank you. And obviously you have an impressive pace in the medsum area currently. Could you share your expectations for next year? Do you think you can accelerate the pace in net new users in absolute terms further?

27:50 Yeah, so I'm very close to this product, so I'm extremely optimistic about it. But I think that healthcare is really slow. So I mentioned this many times, and I think it's worth mentioning again. So all the doctors and nurses, and we love this in Sweden, so remember that, but this goes for a large part of Europe. All the doctors, nurses, physiotherapists, they're educated in the public system, they've lived large part of their lives in the public system before going private. So they work in a way that has had very little change. They're working basically the same way as they did 20 years ago. And this means that that's what they used to ready to change.

28:36 They also are trained not to make mistakes. You can be reported if you make a mistake, you can lose your license to actually give care as a person, as a doctor or a nurse. if you commit mistakes. So healthcare is very slow to change by nature. And that might be good in certain ways, but when driving a new technology, that's really a hinder. But I expect over time that it will be a really big product. If you look at the US, to me, most statistics looks like 70 to 80% of all outpatient visits in the US use ambient scribes. So in the US you have much more commercial healthcare. So it's much more pushed towards efficiency and you're much, much less regulation.

29:23 So you can't give the customer this type of functionality. So in Europe, it's obviously moving way slower. I think that our expectation is that today five to 10% of our users use this type of technology either from us or from a competitor or a partner in some cases. So I think it will not go as quickly as it should because this saves so much time. When we talk to users, they already now say they save one hour per day or they save half of their administration, this type of things they say. And with the new functionality that they have coming out, with even better integration into the software, it will save even more time and make the user experience even better.

30:13 So It can go quite quickly, but we don't see it yet, I would say. But over time, I think this will be used by most users in our software.

30:27 I see. Great. Could you give us an update about your progression in region Stockholm? Is the solid momentum still there? And could a potentially less left-leaning new regional government be a positive factor going forward?

30:45 Can it be, did you say positive factor? Or less left than, okay, sorry. Yeah, exactly, yeah. Yeah, so yeah, Redis.com is moving forward well. We have finalized e-referrals going in, so we have a number of clinics that started during the summer, which has our e-referral solution. Referrals going out will happen We will do end-to-end tests. I think it's next week it is. So then we can launch also that to our customers. So Stockholm is going well. It's, you know, as you know, by far the largest market. If the new region will be less left-leaning then, yeah, it will probably be positive.

31:35 But I think it's likely because the region will be dependent on Centerpartiet. and what they've done so far, this coalition has not worked very well. So I think that they've destroyed quite a lot of well-functioning private care. So I think that that has probably come to an end. I think they feel that themselves actually. Usually when a region changes party color, I mean, I've been in this industry since 2006. Usually when you change color, it doesn't really, change that much for the caregiver. It's just usually a lot of talk before the election and then nothing happens. The right usually do a little more reforms and the left kind of don't care about the private rights, usually. After the last election, so the last four years, Stockholm has behaved a bit differently.

32:32 I think it's because all the politicians on the left side, almost all of them were new. So they hadn't been in power before. because it was eight years since the last time. So I think that's why they did kind of a lot of naive things, which I don't think they will repeat. But they will have the same language before the election and also after as they usually have. But usually very little happens. And I expect that to be the case when it comes to changes for private care providers.

33:05 Okay, I see. And one last question from me. Could you give us an update on the surgery offering?

33:13 Yeah. So surgery is, it's a great module. We're showing it to a lot of potential customers at the moment. We also have a lot of customers using it. Those are still the really big customers. So they come in, it's quite long process to convince them to change. We are in a number of them. And so far this year in WebDoc, we have had quite few big, really big units changing to WebDoc. We have a large number of small ones and small startups and so on. And then we grow with them. So that's kind of fine. But we're looking forward to get some bigger ones also into our books.

34:00 But it's well functioning. It's well appreciated by the users who use it. And we will continue to grow with that functionality.

34:10 I see. That's all. Thank you very much. Thank you. The next question comes from Elvin Roelder from DNB Carnegie. Please go ahead.

34:23 Yes, good morning Daniel and Martin. I hope you are well. I have a couple of questions from my side as well. Perhaps beginning with WebDoc and the more AI-integrated workflow. Can you tell us a little bit about how these features have been received in pilots? And is this something you expect to gain broad-based usage? amongst clinics, so it's kind of like similar to MedSum in the beginning, be more of early adopters before gaining the bigger end of the tail. And then I don't know if it was my line that was bad, but I believe you mentioned price. Can you just reiterate what you said, the economics behind it? Will it be an increase in price based on this, or will you kind of more bake in these feature upgrades into kind of yearly price adjustments?

35:17 Yeah, so yeah, this functionality, the new ones with where we have multiple agent loops, looking into the conversation and finding actions and then from the actions we trigger, for example, the sickly note and so on. That functionality is not on pilot yet. And I think we will just pilot it for like a week and then we bring it out because it works well in our internal testing and we have done the really messy part with doing medical notes. The medical notes are difficult because everyone of our users or many of our users use completely different structures and they use different words and they use different if they have a field called status for example it's very different what each users want to have in that field but they want to have it their way so the normal thing we do is really really messy so for each user the system it's not training but the system learns how that user want their medical notes when it comes to sick leaves and the other things they kind of they just wanted to pass . So we expect that to be so much easier. So we'll just add those functional functions as we go.

36:40 We'll also add the normal speech to text in the entire system. So we'll just add functions. So far also the costs for this, because I mean, the costs for this type of solutions are a bit higher than in the normal case, but it's still not high. good margins on the product. We charge 750 kronor per user a month and we aim to continue to charge 750 kronor per user even with the new functionality and it will be included. So we use these new features to drive up demand. So it will be really like you have your personal secretary doing everything for you. And it will be much quicker than if you use your secretary.

37:26 So we will use it to grow quicker. Because 750 kronor per user, it almost doubles our revenue per user on average. So I mean, it's a great business for us to add this functionality. So we just want it to spread quickly. We're using quite a lot of costs to just get it out there. We just want as many as possible to test it in as many clinics as possible to test it. It doesn't have to be many users in each clinic, but many clinics to test it. We prefer actually maybe one or two who really are interested in it. And then they can kind of spread the word internally because usually the ones that start using it, they get very positive and then they bring the others on board. So at the moment, our focus on sales in this is just to talk to as many clinics as possible to start getting one test user, so to speak.

38:21 Okay, perfect. Thank you. Maybe moving on a bit to Germany, I guess, related to what you're mentioning on the modernization potential for the legacy DataL products. Is this something that you're is this something that you're also seeing more more kind of incumbents in Germany also pursuing giving that they're able to to kind of use AI to modernize their products or are they still still kind of lagging in. Do you expect kind of their products to be better and perhaps that new customer service for Webcur could become a bit more difficult than perhaps initially perceived if they're able to modernize the product or how do you view that?

39:08 Yeah, so that's really interesting. I think that's why we need to keep a very open mind because What we have been worrying the last couple of years about is that AI will make it easier for someone to launch completely new products and compete with us, for example. And that's why we've done acquisitions to strengthen our position. We have increased development pace so that we kind of keep the same distance between the competition and us. And then we have seen it most as a gain as we start moving much, much faster than before. And we are moving much faster than before.

39:54 And the larger legacy systems, as of yet, they still aren't really moving as we see it. So that's how we've been looking at it so far. Now, given that customers really don't like the change, that's a potential that we'll see that... older software can be more nice, much cheaper. It used to be that you let them die. I think that if you've gone too far down that route, it might be difficult to turn back. But there is a risk for that. But it also seems to me like the really big players with legacy systems And they don't really seem to get going, as of yet at least.

40:49 But we'll see. As they could say, I think that what we will see in general is that the amounts of software will be much, much higher than before. And complex software as we sell, with a lot of functionality, and where users have a lot of, really a lot of different wishes. means that we will need to have our software much more adapted to each users and each customer's needs. I think that in a couple of years, our softwares will look very different depending on what type of users you are, what type of care you give and so on. So that's where I expect it to go. I think that our customers are fine spending 1% to 2% of their revenue on HR systems. And if we can help them, help more patients, it really pays for itself.

41:40 So I expect a lot of the pain to disappear in healthcare, thanks to systems like ours going forward in a much higher pace. But I think it's very important that we stay nimble, open to not get stuck in strategies and take the opportunities that are out there now.

42:02 Great, thank you. The final question for me, perhaps relating a bit to costs. I believe in Q2 you mentioned 2 million in MDR costs during H2. Has any of that been affected here in Q3 or will all of that or another amount if that has come in Q4? And then can you give perhaps some color on the degree of costs for kind of the increased sales and marketing in Germany?

42:32 Yes, so related to the MDR, we have done some preparatory work in Q3, but the far majority of the costs will come in next quarter. Yeah, and then on the sales and marketing side, it's a mix. We have added quite a few salespeople. and three, four salespeople that didn't really have effect on the costs in this quarter, but we'll have in the next. And then we also do some more one-off related initiatives that will drive costs. So in total, around three to four million extra cost in the quarter compared to this one, I would say.

43:21 Okay, great. Thank you so much, guys. I will get back in the queue. Sure. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Victor Lindstrom from SB1 Markets. Please go ahead.

43:39 Hi Daniel and Martin. Thanks for taking my questions. I have a few ones. Starting out on the contribution from new sales to organic AR growth here. a bit lower compared to previous quarters, but would say that this is most like a timing effect given the contracted ARR backlog?

44:04 Yes, it's a mix. It's a bit due to the, we had a few large new customers start Q3 last year, so they drop out. And then you have We have had big new contracts, such as I mentioned Volvo, for example, that gets put in the upsell bucket because we had a very small part of their business from before. So I would say that the sales has been very strong so far this year, both in Q2 and Q3 particularly. But I would say it's a bit of a categorization as well, given that we sign a lot of clinics that we have an existing customer relationship with in the chain or the group.

45:05 So that's the main reason.

45:08 Okay. And then apart from the new Fog contract, do you expect the majority of the backlog to be implemented by Q4 or I mean should we expect that to have a larger contribution in 2027 instead?

45:25 Yeah, the backlog is mainly composed of Falk, Felsermann and Webdoc customers and the plan is to implement I think almost all the WebDoc part within this year. But then the FALC and Ferris Admin will be next year and Ferris Admin will be a bit this year and a bit next year. So the majority of the backlog will be implemented in Q4.

45:58 Right, thanks. And then I have a question on the gross margin. I mean, it was slightly higher than in Q2, despite that InfoSolutions I'm curious, could you quantify the gross margin that InfoSolutions currently operate

46:18 at? Yes, so they have a gross margin that's around 70% approximately, so a bit lower than the group. But then we also have InfoSolutions had quite some revenues from WebDoc, which now after we consolidate them in, that revenue is eliminated from revenues from institutions and COGs on WebDoc. So that has a positive effect on the margin. So it doesn't dilute that much.

46:58 All right. I guess, I mean, with the coming price hikes, you will also see additional support from DAOE.

47:07 Yes. Yeah. It's important to note on the price increases there on InfoSolution. We do it on, like we said in Q2, we do it on the ARR. So InfoSolutions has, yeah, a bit higher non-recurring revenues than the rest of the group. And there we don't see the price increase. Yeah.

47:37 All right. Thanks. That was all for me. Thank you. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

47:54 Okay, we have a few questionnaires in the chat. First one from Marcus Farnberg. What is the percentage of users paying for the AI functions at present out of the total users? Yeah, so... As we illustrate on the slide, we only have about 300 users paying for it to date. We do have in the EHR systems, we have a lot of users, maybe around 30, 40,000 active users in total. So the potential is big, but of course, not all of them will use this functionality, There is a potential to keep, and there is quite few of them that are using these types of solutions so far.

48:57 Then from Jakob Gravdal, can you share some more on the customer perspective of Medsem? What is the quality of the transcripts now compared to the first generation products you implemented? When you look at cost savings for your customers, what is the payback? time for your average client?

49:17 Yeah, so the first generation of MedSun we tried to avoid being in US-owned clouds, even if they were in Europe. So then we used open source models. At that point in time, we could not get the quality where we wanted it at all, or where the customer demanded. So then it was quite bad compared to now. But having said that, you have to be 99% right. If they have to change more than maybe one or two words, they don't like it well enough. So it's really easy getting a product to where it seems like it's really good.

50:02 And then when you bring it to users, I want to use this word, I want to use that word. And many users, so doctors, for example, when talking to a patient, they use language the patient understands. but then in the medical records, they want to use more medical, the correct medical terms. So there's a lot of work making sure that we don't use the words that they use in the conversation. We use the medical terms and that we don't use the wrong medical terms. So it's really a lot of work in the margin to get really, really, really good. But out of the box, they are really good, but it's not good enough. So the difference is not, huge, but what we have is much, much more personalization.

50:48 So it fits how you want it done. So that's the big difference. And the payback time for them is, so if they save an hour per day at the moment, so that will give them easily time to have one extra patient. One extra patient is on average, I would say around a thousand kroner of revenue. So, and the cost for the solution is 750 kroner per month. So if they have, most doctors don't have sick patients, maybe five days a week, let's say four days a week. So then you have 4,000 per week in extra revenues or 16,000 per month, roughly. And the cost is 750. So the payback is really easy, but healthcare is really slow to change. And that's the problem.

51:42 And we cannot price it to the value we provide them because there are other solutions out there. So we have a really strong position because it's fully built into the system and we have access to information that external ones don't have. So our solution is and will be better for most users. But anyway, we want it to grow really quickly and that's what we price it for.

52:11 Next one, R&D headcount decreased in the quarter. Does this relate to the restructuring of InfoSolutions? Yes, it does. Then one from Janik Jokil. Sorry if I missed your comments regarding cost in Q4, but what will be the extra cost you expect to have? or MDR, professional service, IT service, how much of these will be recurring? Ask more simply, what are your expectations for the recurring cost base going out of Q1 next year? So it's a mix regarding the increased cost, and it's also related to The comparison, as I mentioned, where we had a bit of reduced one-off cost last year. So it's tough comparables. But yeah, out of the sales and marketing costs, the personnel I mentioned will naturally come back.

53:18 So that will increase the cost base by a couple of million in Q1. But other than that, it's mostly temporary effects. Final question we have gotten in the chat from Rasmus Persson. Good morning. I noticed Aleris has taken over several nærsykehusmottagninger from September and onwards. Has those revenue gone live for you yet?

53:50 Yeah, good, Rasmus. So we are... I think these are probably eye clinics you're referring to. So we have a number of eye clinics that they won the contracts in Stockholm and those are the ones who started using e-referrals. So we had to really push because Stockholm closed down their case choice around eye surgery and then it went on tender instead. And so a lot of present clinic had to kind of close down or change what they did. And then you can start it. And that's great for us. Then we just need to win the competition.

54:35 We don't need to convince someone to change system. So that's why Aleris and or some others use said that we want to use WebDoc. And we would love it if you get irrefers working by that point in time, because there will be a lot of referrals coming in. So so that's what we really pushed for in Q2 in development to get it out and tested and especially Yeah, Stockholm was really great in helping us in that. So they got up and running. So yeah, a couple of Valeria's clinic has gone live. But that being said, I don't think there's been so much revenues from them this in Q3. And that's the reason is that I don't remember exactly the date when they start seeing patients, but referrals started coming in the summer. But I think they start seeing patients in the end of Q3 or if it's early Q4.

55:24 It's part of the backlog as well, some of those clinics. Yeah, so they haven't started yet.

55:29 That was the final one. Okay, then. Thank you all for today, and have a good day. Just reach out if you have any more questions. We're always available. Thank you.