Hi, everyone. Everyone is doing well. As per usual, this is the Q4 2024 presentation for Nordhealth. As usual, I'd like to start with introductions. I'm Charles MacBain. I'm the CEO of Nordhealth. I also want to introduce Alex. Alex, maybe go ahead. You're muted.
Thanks, Charles. Hello, everyone. I'm pleased to be on this call with you today. I'm Alex. I'm the new CFO at Nordhealth. I'm British, and my background is in fast-growing technology companies. Most recently, I was CFO of the Norwegian-American creative services company, Superside. Before that, I was CFO of the Belgian e-bike maker, Cowboy. I joined Nordhealth because I think it's an exciting time for practice management software.
There's an increasing consolidation of practices, creating more large enterprise clients who require more sophisticated systems. I think Nordhealth has the best team, the best product, and the best strategy to be the winner in this space and deliver the best experience for healthcare professionals and ultimately for patients. I very much look forward to working with Charles and the rest of the team to grow this business. I'll now hand it back over to Charles for the company update.
Thanks, Alex. As usual, we will start with the company updates. Then we'll dive into a Veterinary BU-specific update, then a Therapist BU-specific update. I will hand it over to Alex for a financial update. As usual, we will do a Q&A at the end. Please hold off your questions to the end, and you'll be able to use the Q&A feature to be able to ask questions. Starting with the company update. In Q4 2024, year- over- year, we've been able to grow our ARR organically by over 20%. That growth was driven by a net retention rate of 113%, a churn of 5.1%, so still quite low churn. Also, we've been able to recruit net new customers with sales and marketing efficiency, as you can see from the CAC to new ARR being 0.7.
These numbers coincide to get us to 19.6 LTV to CAC over the last 12 months ending 2024 Q4. At the end of Q4, we had an implemented ARR of EUR 42.3 million and assigned ARR of EUR 44.3 million. What's important to us is the value per share, right? The ARR per share is currently EUR 0.53 per share. Looking back, as we do normally, right? In 2018, when I joined the company and we bought Nordhealth, the recurring revenue was EUR 3.4 million, right? Today, it's EUR 44.3 million, right? Which is a CAGR of 53%. In that EUR 44.3 million, we do not include Vets for Pets and the U.S. enterprise chain post-rollouts. Only once rollouts and pilots are successful do we actually include those in our signed ARR to be conservative. This is a different way of looking at the chart.
This shows the change in ARR year- over- year. As you can see, every year, we've actually been able to acquire more, or to grow ARR by a larger amount. Now, if we look at how we grew in 2024, we started the year at EUR 33.9 million. We were able to get EUR 2.6 million in new customers. Also, we were able to upsell our current customers by EUR 6.2 million. Important to note here is that this is primarily driven by the CVS implementation, given that they were previously a new customer, but as they were a current customer now, a lot of the growth and expansion from as they rolled out new clinics was in that upsell. The second primary driver of that is our Provet Cloud ARPU user growth. Our churn was 5.1% over the last 12 months.
Important to note on this one is that churn always goes slightly high when we're migrating, and we're sunsetting individual products, as the last few users actually decide not to migrate are now considered churn. We ended 2024 with EUR 40.8 million of ARR. We've got EUR 2.1 million of signed but not implemented ARR, which leads us to EUR 42.9 million of ARR. Our other businesses, which are Training business and also IT operations business, legacy businesses, ARR was EUR 1.5 million. That's how we get to our EUR 44.3 million. Moving on to the next slide, this is a slide that we brought back in that I want to help investors understand how we spend money and what our targets are. When I look at the business, I'm always looking at the ROI that we have on our investments.
That's how I figure out how much to invest in different initiatives. Let me walk through this slide with you. As you can see, recurring revenue has grown from around EUR 16.8 million in 2021 to EUR 37.4 million, right? You can see the growth rates over there. What we do is we actually look at the contribution margin. How much cash have we actually generated despite the fact that we've been increasing the revenue? The contribution margin is the best proxy for pre-growth investment cash flow, right? The way we get the contribution margin is we take the recurring revenue, we remove the COGS, customer service, maintenance R&D. This is all the development costs to maintain the legacy products, which we've acquired but have not yet migrated. We also take out G&A costs.
The only thing which is not included there relative to EBITDA minus CapEx is investments in acquisitions, CAC, and R&D. That is what we call total investments. How we make decisions is we look at how much we invest in those three areas, acquisitions, CAC, and R&D, relative to the change in contribution margin over the years. It is really hard to be able to look at this in one year because a lot of times these acquisitions pay back over a multi-year period. The reason why is when we buy a company, immediately when we buy them, we do not migrate them over. It takes sometimes two, three years to be able to migrate those customers over and see the benefits of that migration in the contribution margin.
As you can see, over the last three years, we've invested almost EUR 65 million in CAC, R&D, and acquisitions. We've been able to have a change in contribution margin of almost EUR 13 million, which is an ROI of 20%. That being said, a lot of the we can see the ROI trending up in 2024. We foresee that over time, as we migrate more, we will see that ROI actually increase relative to the 20% average over the last three years. That's how we look at the business in the long term, the amount that we invest in either of those three growth investments relative to the change contribution margin. Now, let's deep dive into veterinary. Veterinary had a spectacular year with almost 30% year- over- year implemented ARR growth.
The particular reason why we grew was, one, we successfully recruited new customers for EUR 1.3 million, but also we were successful with the rollout of CVS and other enterprise clients. In addition, our churn, although it was 4.8% overall for the year, if we exclude the impact that I mentioned previously, which was the impact of Provet Win and VetServe end-of-life leading to one-time churn, the churn rate would have been 2.9%. It is a very, very, very low churn on Provet Cloud that we can see in other legacy products that were not end-of-life. Important to note is that in these numbers, Vets for Pets and the U.S. enterprise post-pilot rollout ARR are not included.
Looking at profitability, we have been able to improve profitability year- over- year, where in 2022, the Veterinary BU was losing almost EUR 3 million in Q4 2022 as we were investing into the product very aggressively. We reduced that to -EUR 1.1 million in 2023. You can see that we have a EUR 1.5 million improvement in 2024 Q4 relative to the previous year. The drivers of that have been, one, we've been able to grow recurring revenue. The second is that we've been more efficient with professional services. The profitability of those professional services has increased. We're still investing more and more in product development, which tampers this improvement. We've also been more efficient in other costs as we're seeing product developments yield more efficiency through automation.
There's a small restructuring cost, which I'll also submit from here, which you can see are around EUR 100,000 in Q4 2024 and similar amounts in 2023. Now, I want to break up the growth of veterinary a little bit more to show you what the drivers of growth are. In 2021, at the end of that year, which is the year of our IPO, we had roughly EUR 10.8 million of implemented ARR. The majority of that came from the Nordics. 94% of our ARR came from the Nordics. The Nordics has been growing fine over the last few years. However, the majority of our growth has been boosted by our success in international markets. In 2024, 46% of ARR at the end of the year came from outside the Nordics. That contrasted to the 6% that we had in 2021.
Interestingly, 32% of the ARR came from what we call our growth markets, which is the U.K., U.S., and Southern Europe. You can see some quite nice figures here which display our success of organically conquering new markets. You can see the U.K. is now at EUR 4.3 million of ARR, right? The U.S. grew very well in 2024 and is now at EUR 1.5 million. We are continuing to grow as well in Southern Europe, which is now at EUR 1.8 million. Interesting as well is that this is implemented ARR. However, we do have EUR 2.1 million signed ARR that's not yet implemented. 90% of that actually comes from growth markets. If we looked at signed ARR, this would be even more acute. The second driver of our growth in veterinary has been our success with enterprise.
Provet Cloud is a very good solution for enterprise. We are very well positioned to capture the enterprise opportunity, as we call it, which is the opportunity to acquire or to provide the PMS for companies which are currently doing the consolidation in countries. If we look at in 2021, right, we were the number one provider of PMS to enterprise in the Nordics. Now, in 2024, we are now the number one provider of PMS to enterprise in Europe. We can see that our share, the enterprise share of total ARR, has grown from 21% in 2021 to 41%. Enterprise is a bigger and bigger part of our business.
We can also see, just like in the previous slide, international was driving our growth, that enterprise is also driving our growth, where 57% of ARR growth in the last three years has come from enterprise clients. What's also important to note in an enterprise strategy is the customer concentration, in that despite our focus on enterprise, our customer concentration remains low, and our top three customers together compose less than 21% of our ARR. Our next project is obviously we grow organically, but we also grow via acquisition. The key to making sure those acquisitions are successful is the migration. Our cloud, so basically the percentage of ARR which was on cloud products, Provet Cloud, was 37% in 2021. Now it's 74%. In 2024 specifically, EUR 1 million of ARR was migrated from legacy to Provet Cloud.
The churn rate for non-cloud products was 9% in 2024, which is a good result relative to the previous migrations. We were successfully able to sunset VetServe and Provet Win. Now we're working on migrating Provet Net in Finland, Sanimalis in Norway, and VetVision in Denmark. Now onto the therapy updates. Therapy, the focus of therapy has been to build a unified platform based on the EasyPractice software that we can migrate all Aspit customers to. Despite our focus on migration, we were still able to grow our ARR around 9.2%. As you can see, our net retention rate, including price increases, was 101%.
The reason why is that our churn was 5.4%, which was quite good churn for therapy, given that we've got EasyPractice and we're doing migration. That was a lower churn than in 2023, which was 7.8%. We can see our improvements in products are yielding less churn on EasyPractice. Also, we do not have the one-off effect of physio churn for the iron. Looking at profitability, our adjusted Therapy BU, EBITDA minus CapEx remained positive in 2024. We slightly grew our profitability, and the drivers of that were one, recurring revenue growth, EUR 0.4 million.
That was offset by an increase in product development of EUR 0.4 million. That product development increase is mostly targeted at additional recruitment of engineers and product managers and designers for the unified platform. We were also slightly more efficient with a decrease in other costs of around EUR 100,000. We emitted around EUR 400,000 in restructuring costs in 2022, none in 2023, none in 2024. Similar to the country breakdown for veterinary, we can see the country breakdown for therapy, where we have been able to grow in therapy by going international.
In the therapy case, though, we have grown mostly through acquisitions in those markets. We have not gone into net new markets organically, with the exception of Finland and other markets. You can see here on the graph that the 7.6 is mostly Aspit, which was acquired in 2021. We can see then the addition of Denmark and other in 2022, the acquisition of EasyPractice. As mentioned on my first slide from therapy, the current focus is migration. That is why we have been seeing slower growth in 2024. We should, of course, see slower growth as well in 2025 due to migration.
Once migration is completed, we will resume work on add-ons and potentially new country expansion as well. Now, let's take a look at the therapy migration. In 2021, 30% of our ARR was on our child products, and today it's 45%. We have only begun the migration of Aspit with EUR 100,000 of ARR migrated in 2024. What's very impressive is that churn for non-cloud products was actually quite low at 2.5%. The approach we're taking is to make sure that we keep that churn as low as possible by having a wonderful migration experience and to make sure there's good feature overlap between the legacy platform and the new platform. In 2025, we'll be focused on this migration. We'll see significant strides towards migration being in progress. Now, I'll hand it over to Alex for the financial update. Hello again.
Hello again. Turning our attention to reported revenues, in Q4 2024, we did EUR 12.1 million of revenue, which is a 19.5% increase versus the same quarter last year. It's encouraging that the majority of that growth has been in our recurring revenues, which grew by 22.4% from EUR 8.7 million in Q4 2023- EUR 10.7 million in Q4 2024. The largest items contributing to that growth in recurring revenue are the rollout of CVS in 2024 and the growth in ARPU and new users in Provet Cloud. The share of recurring revenues in Q4 2024 was 88.5%, up from 86.4% in Q4 2023. On the next slide, we see that for the full year 2024, reported revenues grew by 24% from EUR 36.8 million- EUR 45.7 million. Recurring revenue grew at a healthy rate of 21.5% from EUR 33.1 million in 2023- EUR 40.2 million in 2024.
We also had a large amount of other revenue in 2024, totaling EUR 5.5 million. This is primarily related to the implementation work for our large enterprise deals. Therefore, that other revenue should ultimately translate to increased recurring revenue as those clients roll us out into their clinics. The share of recurring revenue in 2024 was 88% versus 89.8% in 2023. Looking now at quarterly adjusted EBITDA minus CapEx, we've seen significant improvements from Q4 2023- Q4 2024, with it improving from -EUR 2 million to - EUR 0.5 million. The primary improvement has been the increase in revenues by EUR 2 million versus Q4 last year.
Of that, we reinvested EUR 0.6 million into increased product development spend. As a reminder, adjusted EBITDA - CapEx for us means that we remove any non-recurring items from the standard EBITDA - CapEx. In Q4 2024, this adjustment was EUR 0.1 million. Onto the next slide, we see a similar story for the full year adjusted EBITDA - CapEx. This improved from EUR -6.1 million in 2023 to EUR -1.2 million in 2024. The biggest driver of this improvement is the annual increase in revenues of EUR 8.8 million. We reinvested EUR 2.7 million of this into increased product development and other costs, including sales and marketing and G&A, increased by EUR 1.2 million.
Looking now at cash flow, in Q4 2024, we had a cash outflow of EUR 0.5 million, which is an improvement of EUR 2.7 million compared to Q4 2023. The drivers of this improvement are an increase in profitability of EUR 1.3 million versus Q4 last year. We also had a good quarter for cash receivables collection in Q4 2024, which meant our decrease in trade debtors was EUR 0.8 million better than it was in Q4 2023.
Other working capital changes amounted to a EUR 0.6 million improvement versus Q4 last year. Looking at cash flow annually, the annual adjusted cash flow in 2024 was -EUR 2.6 million, which is a EUR 8 million improvement versus 2023. The main driver of this was the improvement in profitability by EUR 4.2 million. The other big item was a one-off working capital change in 2023. Here in 2023, we gave certain clients reduced upfront billing terms in exchange for larger-than-inflation price increases. This created a EUR 3.8 million adverse working capital impact in 2023, which impacted the net cash flow for that year.
Finally, looking at the December 2024 balance sheet, we see very few changes to the balance sheet in September 2024. There were no changes in goodwill in Q4 except amortization. There were no material equity transactions in Q4. There were no movements in treasury shares in Q4, and we didn't take any financing in Q4. Cash as of December is EUR 19.6 million, of which EUR 15.5 million is invested in money market funds. The intangible assets are primarily capitalized R&D, and Nordhealth's equity balance is healthy at EUR 73.6 million.
Full detailed financial statements, including P&L, balance sheet, and cash flow, are in the appendices. I'll now turn over to Charles to talk about 2025.
Thank you very much. Looking ahead to 2025, I want to highlight a few different initiatives that we have ongoing. On the veterinary side, the primary one is to complete the CVS rollouts. We have migrated the small animal first opinion clinics, and we're now migrating the referral hospitals and the equine hospitals, at some point as well to farm animal clinics.
The second is we have signed up Vets for Pets and also this American corporate. We want to make sure that the pilot, and also we've got looking to recruit additional, but for now, we are looking for pilot success on those two corporates and to begin implementing these customers in the U.K. and U.S. The third is we want to be able to sign net new enterprise customers, given our success with previous enterprise engagements.
On the therapy side, the main focus is to migrate the majority of Aspit customers to a unified platform. The unified platform is the renamed name for EasyPractice. The actual name of the platform differs depending on country and depending on specialty, but the software is actually called Unified Platform. You'll see us mentioning that a few times.
The second one is that we're launching our AI Dictation and Clinical Notes in 2025, which has the potential also to increase the average revenue per user as we have provided more value for the users. Now, on the guidance, in 2024, our recurring revenue grew 21.8% versus 2023 with December 31, 2023, constant currency. This is at the top end of our guidance, so we're happy about that. Adjusted EBITDA - CapEx improved from negative EUR 6.1 million in 2023 to negative EUR 1.2 million in 2024. We did not have a guidance on that, but it is nice to see a good improvement in our profitability. Looking forward to 2025, we are guiding a 12%-17% organic growth in recurring revenues with December 31, 2024, constant currency, excluding acquisitions. Acquisition would be on top.
In addition, our adjusted EBITDA - CapEx, we're looking for roughly breakeven, ± EUR 2 million, excluding acquisitions. This provides some flexibility to be able to be more aggressive in case we have a faster rollout or in case there's a great R&D initiative that we want to take advantage of. Otherwise, the next meeting, which will be for the Q1 2025 results, will be on the 13th of May, 2025. As Alex mentioned, our four-year financial calendar can be found on our company website as well as the full financials. Now, on to Q&A. If anyone has questions, please use the Q&A functionality. Please raise your hand. Oops. Stop sharing. All right. Oops. We've got a question on why lower growth guidance expectation compared to 2024. Thank you for the question.
The reason why we have lower growth guidance and expectation compared to 2024 is that we see on the therapy side that the focus is mostly on migration. We want to continue that focus more aggressively than we did in 2024. We divided our investments partly on growth, partly on migration. In 2025, we want to fully focus on migration. We do not see we will see the top line actually growing less fast on the therapy side than last year, most likely. In addition, on the veterinary side, we had a rapid acceleration with CVS. We have a broader range because of the fact that it is hard to predict the pace at which enterprise customers will actually be implemented.
It could be that they decide to implement quickly, but it could also be that given circumstances out of control, that they decide to implement slower. That is why we've got a larger spread. Any other questions? Wait. Wait a minute. Another minute or so. See if there's any other questions. We've got another question. I'll repeat the question. Can you tell us more about the American new customer? No, not yet is the answer. The current American customer is in pilot phase. Until they have succeeded with the pilot, they have not yet allowed us to release the full name of the customer. The reason for that is that they want us to ensure that their current software supplier is informed before making the change. The second question is, what are your expectations for the US in the coming couple of years given the announced pilot?
If the pilot is successful, when do you expect the rollout? As you can see in the slide, we have been quite successful in the U.S. in 2024. We are now $1.5 million of recurring revenue. The U.S. is a very competitive market relative to other markets. There are some good competitors there. We have to execute very well in terms of product development, support quality, and implementation quality in order to be successful in the U.S. I foresee us continuing to be successful with enterprises, especially if we're successful with this pilot, as it will be a very good reference point for us to be able to use to attract other enterprise customers. In terms of the second part of the questions, if the pilot is successful, when do you expect the rollout? That's always a very hard one.
Usually, the pilot can last between 3 months- 12 months. Post-pilots, depending on the number of clinics and also the speed at which the customer wants to implement, it can be between 6 months and even 24 months. That is the rough timelines for an average customer. That being said, implementing a PMS software is a big amount of work. Not just the work that's involved in the implementation, but also it's a time at which they want to have a digital transformation. We are one part of that digital transformation. A lot of the times, as part of this rollout, they also, for example, change their pricing, their IT coding, they change their suppliers, they also build apps on top of our software.
That is the real blocker for the implementation, not so much our ability to implement or the software itself. Any other questions? Great. Thank you very much for everyone's time. Have a nice day. We will see you again in the Q1 2025 report. Thanks, everyone.