CARASENT ASA Q1 2024
Interim Report
1
Table | |||
of contents | |||
Overview | |||
Carasent at a glance | 3 | ||
Highlights | 4 | ||
Letter to our shareholders | 7 | ||
Key Figures | 9 | ||
Financial | |||
Statements | |||
Financial results | 12 | ||
Consolidated statement of income | 14 | ||
Consolidated statement of comprehensive income | 15 | ||
Consolidated statement of financial position | 16 | ||
Consolidated statement of cash flows | 18 | ||
Consolidated statement of changes in equity | 19 | ||
Notes | |||
Note 1 - General information | 20 | ||
Note 2 - Segment Reporting | 21 | ||
Note 3 - Other operating expenses | 22 | ||
Note 4 - Impairment of intangible assets | 22 | ||
Note 5 - Employee investment matching program | 22 | ||
Note 6 - Events after the balance sheet date | 23 | ||
Alternative Performance Measures | 24 |
2
Carasent
at a glance
251 MNOK | 246 MNOK |
Revenue | ARR |
LTM Q1 2024 | March 2024 |
19% | 10% |
YoY growth | Adjusted EBITDA |
LTM Q1 2024 | margin |
LTM Q1 2024 |
Operations
Presence
Carasent delivers cloud based EHR solutions, with Webdoc as the leading platform, and a broad ecosystem of platform services, including solutions for patient communication and business intelligence. Since 2020 five acquisitions have been completed, adding new products to our portfolio, including the EHR solutions Metodika, Ad Curis and Ad Opus, the business intelligence software Medrave and occupational care platform HPI. This provides customers with a full service offering within our systems.
Our ecosystem of solutions makes Carasent unique. Carasent is a one-stop shop for clinics and can cover all needs. We believe in innovation that offers a new kind of accessibility and availability for patients and practices.
Carasent is on a very exciting journey within the e-health sector, and our ambition is to continue to expand our business both organically and through acquisitions. Our growth strategy is built on expanding our business through three main dimensions: new products and services, new customer segments and new geographic areas.
3
Q1 Highlights
Financials
Revenue
MNOK
+12%
59.966.9
Q1 2023 | Q1 2024 |
Revenue up 12% to NOK 66.9 million. The divestment of Confrere impacted year-over-year growth with NOK -1.6 million
Organic growth
12% 15%
Organic YoY revenue growth of 12% in Q1, with constant currency rates
Organic YoY recurring revenue growth of 15% in Q1, with constant currency rates
Margins
12%
9.2
Adjusted EBITDA of NOK
8.0 million and margin of 12% in Q1 2024
-7%
Adjusted EBITDA-Capex1 of NOK -4.9 million and margin of -7% in Q1 2024
1: See Alternative Performance Measures | 4 |
Q1 Highlights
Other
1
Sale of Confrere customer agreements and brand. On February 5th 2024, Carasent sold the Confrere brand and customer contracts to Compodium AB. The sale resulted in an impairment of NOK 5.2 million in Q1 2024.
2
Rapidly growing revenue backlog driven by strong
order inflow. Revenue backlog of NOK 14 million signed not implemented ARR compared to NOK 2 million Q1 2023.
5
Events after Q1
1
Signed contract to supply Medrave M4 to VGR. Västra
Götalands Regionen entered into an agreement to implement Medrave M4 to the EHR system Millennium. The annual recurring revenue from the contract is NOK 11 million, where NOK 6 million is new revenue as VGR is an existing customer.
6
Letter
to our shareholders
In this quarter, we prove that Carasent is indeed on the right track. Recurring revenue growth has increased to 15% organically, and, more importantly, new sales is significantly up. This makes us confident that next year's growth will be considerably higher than this year's. Within Webdoc a customer is typically implemented within 1 week to 3 months from signing. In several of our other products, which typically target fewer but larger clients, the implementation time is considerably longer. Our improved new sales will translate into increased revenue next year, as illustrated by our signed but not implemented ARR, which has grown from NOK 2 million in Q1 2023 to NOK 14 million now. We have in a short period of time secured the two largest deals in Carasent's history, with expectations to secure another significant deal in the coming months. For 2023 we did not have, and for the remainder of 2024 we will not have, any such large new customers contracts from previous years to implement. This addition of large contracts to the underlying growth, explains why we expect organic growth to accelerate from c.15% in 2024 to above 20% in 2025.
We continue to focus on ARR over consultancy revenue. The long-term effects will be attractive, but it will hurt our short-term revenues as NOK 1 of consultancy typically becomes NOK 0.3 ARR. The customer generally prefers higher upfront cost while we prefer recurring revenues. Given our low churn it is an easy trade-off for us. We see this effect in both our smaller and large implementation projects.
On the cost side, we have managed better than planned as we have further reduced staffing during the quarter, resulting in one-time costs of NOK 1.7 million this quarter. The adjusted EBITDA margin is now up to 12% compared to 8% in the same quarter last year. Furthermore, we will already in Q2 be close to generating a sufficient profit in our operations to cover all our cost for the German expansion project, meaning we are close to cash flow (EBITDA - capex) neutrality overall. We are also working to reduce COGS through procurement, where we have reduced hosting costs in Norway by almost 50% since the turn of the year and will reduce Webdoc hosting costs by about 30% from the summer onwards.
The strength of a business like ours, with minimal churn, strong growth and cost control, is that bottom line scales rapidly as revenues grow. The additional deals and cost reductions lead us to believe that it is time to update our financial goals. For 2024, we now target revenue of NOK 270 million, EBITDA of NOK 40 million, and EBITDA - capex from ongoing operations of NOK 20 million. Additionally, investments in our new product for Germany amount to NOK 20 million. For 2025, growth is strengthened by our new deals.
7
We target revenue of more than NOK 320 million (20% organic growth), EBITDA of NOK 80 million, and EBITDA - capex from ongoing operations of approximately NOK 60 million. This does not include investments in Germany amounting to approximately NOK 20 million, although we are aiming for an acquisition to accelerate growth and contribute with a healthy cash flow.
Even though we have increased savings, we continue to invest in the business. The most important expansion project is Webdoc X for Germany. We are currently spending a lot of time on-site and in dialogue with various market players. Every interaction strengthens our belief that our product is right for the market and that it is the perfect time to introduce this type of EHR system. Over time, there is great potential for this product to be worth more than the rest of Carasent combined. However, the build-up will take time, as it always does with new products, especially in healthcare. The goal this year is to certify the system and initiate local pilots. Furthermore, in all our products, we have a relatively aggressive roadmap with a lot of new functionality to strengthen new sales and pricing power. Additionally, we have started the process of ISO 27001 certification, aiming to complete it within 12 months. We also continue to invest in new websites and marketing to strengthen organic growth.
The relisting process continues at a good pace, and we aim for the first trading day on the Stockholm Stock Exchange in Q4 2024. We have a good foundation since we are already listed on a marketplace with similar requirements.
Overall I look to a year where we start reaping the rewards from all the hard work last year. We always had strong products but now it is complemented with efficient structures, financial control and a clear aim.
Daniel Öhman
CEO
8
Key Figures
Q1 | Q1 | |
NOK million | 2024 | 2023 |
Revenue | ||
66.9 | 59.9 | |
Revenue growth | 12% | 46% |
Organic growth2 | 12% | 16% |
Reported EBITDA | 6.3 | 2.3 |
Non-recurring expenses | 1.7 | 2.6 |
Adj. EBITDA1 | 8.0 | 4.9 |
Adj. EBITDA margin | 12.0 % | 8.1 % |
Adj. EBIT1 | -5.8 | -6.6 |
Adj. EBIT margin | -8.6 % | -11.0 % |
Capitalized development | -12.9 | -23.1 |
Adj. EBITDA - capex1 | -4.9 | -18.2 |
Growth Metrics
Total revenues grew by 12% in Q1
We grew total revenues to NOK 66.9 (59.9) million in Q1 2024, up 12% from Q1 last year. Organic growth year-over-year (YoY) amounted to 12% (16%)2 in Q1 2024. Organic growth was driven by recurring revenue growth. Organic growth excludes Confrere, which was sold in Q1 2024.
We grew our recurring revenues by 15%, reaching NOK 61.6 million in Q1 2024 compared to NOK
53.8 million the same quarter last year. The organic recurring revenue growth was 15%, which is higher than previous quarters. The growth composed of net retention rates2 at 110% and growth from new customers of 5%. Growing our recurring revenue base from existing and new customers is a key strategic focus.
Currency differences affected revenues positively with NOK 1.7 million compared to Q1 2023. The average SEK/NOK currency exchange rate was 1.01 in Q1 2024 vs. 0.98 in Q1 2023.
New revenue reporting split
We have in 2024 updated our reporting with new product categories. The change is done to make it easier to follow the different product categories underlying growth and profitability. See note 2 for further details and explanation.
1: See Alternative Performance Measures | 9 |
2: With constant currency rates | |
Webdoc grew 25% YoY to NOK 33.5 million (21% excluding fx effects) driven by strong upsell and also growth from new customers. Revenues from our other EHRs increased 9% YoY to NOK 14.7 million (7% excluding fx effects). Other EHR includes recurring revenues from Metodika, Ad Curis and Ad Opus.
Platform products declined 1% to NOK 13.4 million. The decline was related to the divestment of Confrere, which had a net negative effect of NOK 1.6 million. Platform products grew 10% excluding Confrere and fx effects. Platform products includes recurring revenues from HPI, Medrave and Confrere.
Consulting and other revenues continued to decline as our focus is on generating long term recurring revenues. Consulting and other revenues decreased 13% to NOK 5.3 million in Q1 2024.
Q1 | Q1 | FY | FY | |
NOK million | 2024 | 2023 | 2023 | 2022 |
Webdoc | 33.5 | 26.8 | 112.1 | 92.8 |
Other EHR | 14.7 | 13.4 | 55.9 | 51.0 |
Platform Products | 13.4 | 13.6 | 53.9 | 31.6 |
Consulting & Other | 5.3 | 6.1 | 22.1 | 19.8 |
Total revenue | 66.9 | 59.9 | 244.0 | 195.3 |
Annual Recurring Revenue (ARR) growth of 12%
Annual Recurring Revenues (ARR) grew to NOK 246 (219) million in Q1 2024, corresponding to a growth of 12%.
Quarterly ARR1 (MNOK) | |||||||||
219 | 221 | 222 | 239 | 246 | |||||
202 | |||||||||
185 | |||||||||
168 | 169 | ||||||||
142 | 142 |
Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024
1: With constant currency rates | 10 |
2: See Alternative Performance Measures. |
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Disclaimer
Carasent ASA published this content on 24 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 April 2024 05:13:05 UTC.
