Good morning, ladies and gentlemen. My name is Einar Bonnevie, and I'm the CFO of CSAM Health. It's my great pleasure of welcoming you to this presentation of the third quarter. The presentation will last for approximately 30 minutes. You can type in any questions you might have at any time, and they will be addressed in the Q&A session later. Now it's my pleasure to give the word to our CEO, Mr. Sverre Flatby.
Thank you, Einar, and thank you for getting up this morning. Welcome everybody. It's a pleasure for me to present to you a quarter with a beautiful combination of growth and profitability. Before we go into the specifics, I would like to repeat some of the basic things that actually creates our success. eHealth specialist and software, those three words are important to understand CSAM. I think that differentiates us very much from other players in the market. Our focus on these niches has given us the opportunity to become the leading player in the Nordics. As you will see from the numbers, we are also growing globally outside the Nordics, which is part of the plan.
That is an important thing to start with because the strategy is what creates the success. Then also, most importantly, our people, when we work together every day, we of course think about the purpose of the company. Most of our solutions are small components that are really doing critical work for healthcare personnel and also, of course, ultimately for the patient. Whether this couple in the picture here want a child or somebody in their family had this incident with an acute situation, or somebody got cancer, in all of those specialized situations, some kind of CSAM component will be at work. This is, you know, maybe one of the most important thing with CSAM in the first place, is that we come from a national hospital.
We were created based on the patient treatment processes and not as a technology company as such. I think to understand us, you have to understand this fundamental part of CSAM. Then, of course, based on this, we have created a business, we have created business areas, and within all these business areas, we have different components and products. Obviously when you look at our products, they are different in many ways. You can ask yourself, what is the similarity? Well, the similarity is, of course, that these support highly specialized workflow processes inside complex environments. That is also the reason why our business is so stable, predictable, and over a long-term period, you can see that the recurring revenue streams in this business is of course stable, predictable over time.
That is the fundamental thing with our growth strategy as well. When we acquire new companies, we acquire new products, new customer segments, we put everything together. There's always within these types of business areas, either is an existing one or new ones. Through the third quarter, I think we have had a lot of things to tell you about that's going on, which is part of our value creation. It could be things within, for instance, blood management here, that we have huge tenders, we have a huge order backlog, and operationally, it's of course challenging. On the other hand, it creates a lot of opportunities. When things like that happen, it also gives us the possibility to grow further, not quarter by quarter, but also long-term.
When it comes to value creation, these type of business areas is really the thing that makes CSAM different. I would like to go through, more specifically, what happened in the third quarter. Before that, it's very important if you wanna understand CSAM, what is really the thing here. If you look at this very simple slide, we have always told people about CSAM, starting from the bottom here, about the green platform. Healthcare is not dependent on oil prices or financial crisis, for that matter. The stability of healthcare itself and the growth there is obvious. People get sick. The same thing happened with cancer, whether you have a financial crisis or COVID happens. The good thing here, obviously, it's a stable market in itself.
Secondly, if you look at the blue platform, we have chosen a strategy that is explicitly focused on highly specialized workflow processes. These are long-term, and they stay there for a long time inside hospitals. That means also our solutions are there for decades. To put those two together, the green and the blue, it creates the gray one, current long-term recurring revenues with almost no churn at all. This together is the platform. On top of that, our business model is extremely simple. We have some organic growth, 5%-10% normally, which is add-on sales mostly to current customers. To grow faster, as you obviously wanna do, we have the acquired revenue process on top. Our simple goal, we have communicated that for a long time, NOK 1 billion in 2025.
That, of course, requires about 40% annual growth, and that's what we have to do to reach that target. We are there. Actually, we are ahead of that target. That is important to understand. This is how we do it. If you look at the third quarter is a fantastic growth quarter, 64% reported revenue growth. Of course, it's also our first clean quarter, meaning we didn't do any acquisitions this quarter. If you compare it, you compare apples with apples. It's a fantastic business performance. I think most of you will believe that this is according to plan and a bit ahead. More importantly, the growth is also when it comes to value creation related to recurring revenue streams as well. When recurring revenue streams are growing, the stability, predictability is also there.
I think that is also measured in this quarter a fantastic performance. Then in the third quarter, we also were able to have a margin of 23% EBITDA margin, which is very, very good because we acquired four companies just months before the first half year. Of course, they were sub-performing as they normally are when we acquire companies. On average, when you put that together with our profitable business, we dilute the margin temporarily. However, it's not that much. As you can see, 23% is actually very good. In that sense, we are performing well also when it comes to profitability. That is not because the CapEx is high.
On the contrary, you can see it's lower, significantly lower actually, 6%, meaning that we also invest less this quarter in software development than our average on 10%, which we have guided before. Also of course, when it comes to operations and sales, it's a very important thing that happened in the third quarter. We are winning a national tender within one of our specialized areas, and of course, that creates not only a sustainable market share of 100% in the Danish market, but also since we have that from earlier in the Swedish market, the strength of the Nordic position is very high.
That is also creating a platform for further growth, further organic growth, and that is what's going to happen because this also makes it possible for us to combine offerings with different types of customer structures in different countries, in different entities, in different regions. That is also very good news, not only as a contract itself. Then of course, we need people. We have added two persons to our management team, which is highly important when it comes to our performance in the future.
As you can see, these two people, Kjetil, which is the one to the left, the Chief HR Officer, has come in to the team, and of course, he will help us make sure that our next integration projects, our recruitment when we grow organically is of course handled properly as a company-wide service. Secondly, Anna Karin to the right, she's also taking care of a portfolio of our niches and making sure that these are run with more organic growth and a business-like drive. I think the combination of those two added to our current team is making it possible for us to further grow and create profitability. We're quite happy with the milestones this quarter.
If you see them together, I think we all agree that this is good news. We think that performance this quarter is actually proving our business model. What is going to happen in the future is doing exactly the same, and we see the results measured this quarter clearly. To further look at the specifics, what is actually creating growth and profitability? If you look at an acquisition we did just the day before New Year's Eve last year, this of course is a thing that adds something to our value chain within women and children's health. But it's an acquisition and you have to work, as our model says, 24 months to make sure it's fully integrated. That is one thing I'm going to talk a bit about.
Secondly, we acquired a company in May this year, which is also an ongoing integration, and that is a new business area with huge possibilities and add-on possibilities with other types of components in other niches. Put together, that is a synergy on the income side that is quite important for CSAM. In the first quarter, Carmenta, which was a quite big acquisition. In June we also acquired Optima. That combination added to our two current business areas, AMIS and also Paratus. Those four together has created our public safety sector, which is now becoming the biggest one, and a successful European one as well. We are growing outside the Nordics, and we are very strong in the Nordics.
Together, these four acquisitions all over is of course a work we have to do as we go when it comes to integration. Always I need to explain how is that happening. If you want to understand CSAM, you have to understand buy, integrate, and build. Buy, integrate, and build, that is simply a project model methodology on how to integrate companies in parallel. These three milestones, M1, M2, and M3, if you want to understand us every quarter, every year, you have to think about that. When we acquire something, it will take 24 months. So, how do we apply this in real life? Well, it's quite simple. This is illustrating those four acquisitions that are ongoing because the integration here is of course, during the third quarter, they are fully integrated when it comes to reporting and our business as such.
Of course, the synergies over time, this is a structured model working in parallel. You will see, if you look at this, until the first half part of 2023, those four integrations will be finished. That means, yes, we have a very good quarter this year, third quarter 2021. The full, value creation of these acquisitions will be finalized in the first half, part of 2023. This is how we do it. It's quite simple, although there are a lot of complex activities on the income side, on the cost side. Still, it's a structured model, and we've trained for 10 years. This is what we're doing, and this is part of the success and also part of why this quarter is a successful growth and profitability quarter.
Of course, performing well, we have ambitions, and we think our history shows that we have actually been able to grow. We've been able to grow fast enough. I would say we have grown about 30%-40% on average the last 5 years, and that's what we're going to do the next five years. In that sense, our ambition when it comes to growth, we are quite comfortable that is possible. On the other side, in the markets, our strategy is quite special. I think so far we have not so many competitors doing exactly what we are doing. That means we are the leading one in the Nordics. We are gradually going into Europe and other places in the world.
We think we are going to be a notable player in Europe and the rest of the world over the next years as well. That is not only because we have had an ambition to do it, but it's also specifically we have done it already. If you look at the numbers this quarter and compare it to last year in 2020, you will see that with a small distribution to Europe, 1%, last year, of course, through this year and specifically in the third quarter, 2021, you see that 8% of our business is now in the rest of the world. Also, as you can see, the percentages in the Nordics, it's more and more mirroring the geographics and the population also in the Nordic area.
I think the diversification of the company, how this is spread with many contracts, many different countries, many regions, many hospitals, departments, specialties, creates a very stable future for us and also a growing future and also now outside the Nordics as well. All in all, I think to summarize the first or the third quarter this year, we think the performance on the growth side, on the profitability side, and also here when it comes to the market growth and the possibilities in the future for international growth, I think we really show the value of our business model and the possibilities of value creation. Having said that, I would like to give the word to my colleague, Einar, again, who will give you more specifically some of our numbers and details for the quarter. Einar.
Thank you. Right. Let's have a look at the numbers. Highlights for the quarter. The reported revenue increased to more than NOK 86 million, and that was a growth of more than 64% quarter-over-quarter from last year. The reported recurring revenue grew to almost NOK 68 million. That's a new record, growing at a high speed of 58% and comprising 75% of total sales. The reported EBITDA came in above NOK 20 million, well above last year, and with a margin of 23%. As Sverre mentioned, modest CapEx in the quarter, only around 6%, a meager NOK 5 million. The profitability improved markedly from the second quarter this year in spite of costs related to integration activities of the acquired businesses.
If you take a look at the revenue composition, its highest sale of software, recurring revenue, but also the sale of new licenses are higher than last quarter and last quarter, same quarter last year. If we look at the professional services, they are higher as well, and there's also some other income. If you look at the recurring revenue, it's a healthy development, again from NOK 43 million-NOK 68 million, and as I said, comprising 75% of total sales. Speaking of recurring revenues, that is the backbone of CSAM, and it's attractive to bondholders and to equity investors.
You see that based on the run rate, based on the last four quarters, we are more than NOK 220 million, and the run rate is even higher, almost NOK 270 million. Same customers as before, the public sector, a very limited churn, and very high predictability. If we look at the cost base, the cost base is of course higher and is impacted by the acquisitions we have done, as you would expect. Looking at its salary and personnel, of course, that is, we're a human capital business, so that increases. The other cost is also increasing, and that is increasing very much as a consequence of the acquisitions.
There are some costs related to the acquisitions, but everything is expensed, everything is hitting the P&L, nothing is normalized. Also, we have a very positive COGS development in the quarter, and that is mainly related to the fact that of the income composition, namely we are selling more software, more of our own software and less third party. All in all, this is what gives a good EBITDA. We see that the EBITDA is more than NOK 20 million, representing 23% of margin, and in spite of costs related to M&A. Again, CapEx is modest, down from 9%, same quarter last year, to 6%, the third quarter this year.
You could say the cash earnings are strong and approaching our target of 30%. Again, as I said, the margins are diluted temporarily, but during the buy, integrate and build process, we are working to bring them up to 30% as we go along. We are all in all performing not only according to, but actually ahead of our growth plan, growing 64%. When we IPO-ed last year, we said that our target is to reach NOK 1 billion in sales within 2025. In order to do that, we would have to grow on average 40% per annum. We're currently growing faster than that, we are ahead of the plan.
We will continue to grow this in this order, and we will be based on the same stable recurring revenues. We'll continue to be within eHealth, and we'll continue to focus on the niches. Now we are ready for the Q&A. Before we enter into the Q&A, just want to, if you want to follow CSAM and the news of CSAM, you can either follow us on LinkedIn or Twitter, or you can go into the news section of our web page and subscribe to our news. All right. Let's move on to the Q&A session. There have been a number of questions coming in, Sverre, so I'll address them and I'll take them in turn.
The first question here is related to M&A, and it's for you. Could you shed some light on your M&A pipeline?
No. Well, we cannot, of course, publish any specifics. On the other hand, I think most of you understand how we the company was created. We were founded by a national hospital, where 3,000 clinical system was the platform for a national hospital. Based on that, in 2005, we created a database of not only the systems, but also vendors. We've been working systematically to look at those over time and see what are the viable types of softwares and also companies that will fit into a strategy that we have. Based on that, we have a lot of companies in that database. To define a pipeline, well, it has to do with how many dialogues do you have in parallel, et cetera, et cetera.
We cannot disclose all of that. What I can say is, of course, we did acquisition the first half year this year that comprises more than our average growth target. It's possible to do it. The pipeline is still based on the same approach. We have dialogues going on for many, many years, actually. I think we are comfortable, but we can't disclose any details, obviously.
Okay. Next question here is probably relate more for me than for you, and that is related to net debt versus EBITDA. What is your net debt EBITDA target for the coming years? Is there any preference to get cash with debt or issuing stock? Yeah, if you ask many investors whether you are a bond investor or if you're an equity investor, the exact and the ideal net debt level is very hard, so hard to define, and it also comes down to your risk tolerance and your risk preference. As a starting point, I'd say maybe 5x EBITDA would be, you know, a starting point, and you could be higher or lower. Preference with respect to cash.
Currently, we have almost NOK 300 million still on the bank account, so it's not very, it's not a theme currently. Again, it will depend, you know, on the stock price, on the cost of capital, on what we would need the cash for. Really contingent upon a number of things. Currently, there's no plan or need to raise any cash. Right. Let's take the next one, this is from Oliver. I guess this one is for me as well. Oliver saying, Strong gross margin in the third quarter. Is this level sustainable, or is there anything particular that affects COGS in Q3? This level is sustainable. Why it's higher, it's you have to look at the income composition.
You see that the sale of recurring revenue, 75%, and if you add the sale of new licenses, it brings the quality earnings or software-related income to almost 85%. Very limited sales of hardware and other income in the quarter. The low COGS is sustainable from a software perspective, that is, and nothing particular in the quarter. It's the income composition. Okay, here is another question related to acquisitions, and it's, If you're gonna acquire in Europe, why don't you list in the European stock exchange to raise capital directly in euros? It's. We could be listed in Europe. Actually, through the Euronext Growth, our share is available to be traded on various platforms.
Again, whether we list in euros or acquire in euros, we wouldn't really need to raise cash in euro. We can manage the cash, you know, very easily in simpler ways than to raise cash in the currency that we would need for acquisitions. That said, we have income, and we have cost in multiple currencies, so pretty good natural hedge there for CSAM. Okay, and then it's one related to competition. I think this is maybe for you, Sverre, to answer. What other companies do you see as heavy competitors for CSAM?
Yeah, that's a good question. Competition is in our sense two, in two dimensions. One is, of course, the ordinary competition when it comes to selling software. That is, I would say, different in this niche business than people think often because normally these systems are there for decades, meaning that both the competitors and ourselves, we are there with our own customers for many years. The competition is quite low in these system areas as such, and hence that's why we also have this growth approach through acquisitions because there's few things happening there when it comes to changes. In that sense, the competition there is not really affecting us so much. However, competition is of course in the CSAM story based on acquisitions.
There you have two types of competitors or potential competitors. One is of course the people that wanna invest in eHealth companies, like a private equity firm, et cetera. Some of those will be in the same area. Also, of course, we have the industrial players that are of course also running a Pac-Man game as we do. There are a few of those. However, I think when you ask about competition, that the types of acquisitions that we do, if you look at those last four I presented a few minutes ago, you can see that either they are a bit small, maybe not so relevant, or they might be a bit complex, like a carve-out, which we have done two times this year. One was Carmenta.
It's a complex carve-out, and also Optima, which we carved out from, R1 RCM, which is a big company. It's not very much competition in these types of dialogues. Mainly the complexity is one thing, but also it's not that normal for, like, private equity companies to do transactions like that. Also, when you look at competitors in the eHealth market as such, normally they are looking for bigger targets than we do. In our growth strategy, the sizes that we have demonstrated through the first half year this year will give us enough to continue to focus on our plan to get to NOK 1 billion. In that period, from now to 2025, we don't see the competition as very strong, although there are some players out there.
All right. Thank you. Thank you, Sverre. And then from Carlos, a question about recurring revenue. If recurring revenue is so important and now is 75%, while before it was 95%, is it worse than before? I wish, but actually we have never had recurring revenue, you know, at 95%. So maybe a little mix-up of definitions here. But 75% is very good and very high by any standard. It's actually improvement from the second quarter when it was 74%. This is, I would say, a good sound level. Again, look at the recurring revenues together with the sale of new licenses, and you have a good grip of the income coming directly from software.
I think just to add to that, I think the 95% is coming from the fact that 95% of our income is based on sales to governmental public sector. That is where the 95% comes from.
That is 95%, and that is a very, very good client base to have. That's correct. All right. Now a question related to spin-offs. Will there be spin-offs when a branch of your business gets mature, such as Constellation Software did with Topicus?
Yeah, that's theoretically possible. We haven't, you know, planned or specifically thought of it that way, but obviously, when it comes to volume over time, it's possible because we have companies that we put together. We always put all acquisitions into one organization. That is an important part of how we create value. On the other hand, when the volume increases within these niches over time, it might happen. It's a good question, but if you look at our five-year plan, we don't think that is going to happen. Over time, yes, that's possible.
Okay. There's another question here related to listing. If you list only in OSE, Oslo Stock Exchange, why is there a stock of CSAM in Munich and Frankfurt Stock Exchange? That is really related to the fact that Oslo Stock Exchange is owned by Euronext, and Euronext offers their services to many of their platforms. So it's not a co-listing as such. It's then offered by Oslo Stock Exchange. Okay. Then there's a question related to our holding companies, where Equilibrium. You only have stock through Equilibrium AS. Do you plan to acquire more stock? Let's not speculate on acquisitions, but we, Sverre and myself, we own shares jointly in our investment company called Equilibrium. We have done so for many years.
We already hold almost 20% of the shares in CSAM, so I would say we are indeed putting our money where our mouths are. That is what I will say. We are long-term investors in CSAM. That is what I will say. Okay. The next question is related to also stocks. Is there any incentive for you as managers in stock or stock options for milestones reached? Like I say, again related to the stocks, we own shares in CSAM through our common holding company. We have no stock options, nothing else. We are investors like anyone else. No preferred stocks, no sweet equity, nothing funny. We are just shareholders. One class of shares in CSAM, and we own exactly the same shares.
We have exactly the same incentives as any other shareholder in the company. Keep it simple. All right. Another question related to acquisitions. Would you accept an acquisition offer from a bigger player like Constellation Software or other? Again, if there should be an offer for the company, that is really up to the board to recommend and up to all investors to decide. But right now we are focusing on developing the company, growing the company according to the communicated plan, and that is what we do day in and day out, and actually what we enjoy doing. We have no other plans than to develop the company. A question related to competitors or almost competitors. Which are your strengths and weaknesses against some competitors such as Carasent and Nordhealth?
Well, it's a good question. I would say that it's peers in that sense that these companies mentioned there are in the same eHealth market, but really not in the same sector within the eHealth market that we are. Those companies, we don't meet them in the regular business that we have, since our focus specifically is mostly inside complex environments in hospitals and highly specialized components. Most of our business is different from those two. In that sense, we don't see that as a real competition. However, over time, it might be theoretically, of course, a competition about acquiring companies. So far, we haven't met those two in that type of process in the future. Who knows?
So far, it's not really a competition as I see it.
Okay. Speaking of acquisitions, another question related to that. What do you look for when you do an acquisition? Do you prefer quality over price, turnaround cases or well-established companies?
Yeah, let's start with the industrial logic behind our business model and the success it brings. Of course, that is the three Cs, customer, code, and competence. As long as we stick to those, we only acquire things that, you know, has recurring revenue streams over time from customers. And we have to own the software, and then we have the relevant competence to make sure that this software is handled properly with high quality in the future. As we stick to that, I think the definition of quality or turnaround is it doesn't really matter so much because if we acquire a company, normally they are sub-performing, and that is because a smaller company it's difficult for them to create a profit mostly within these specialized areas.
What we look for is obviously those three things. If they are present, it could be a turnaround case. It can be a company that performs well. It doesn't really matter. The good thing is that most of them are in a state that have these long-term recurring revenue streams, and that means there will be a stable possibility to handle that type of companies in the future, whether they are performing bad or good, as we speak.
Okay. Thank you, Sverre. There's a question from Oscar related to the organic growth. Can you please specify the organic growth in the third quarter?
Yeah, we have gotten that question, of course, 100 times, and obviously we are thinking about talking about internally and to start measuring that more specifically. The reason why we haven't done that specifically is obviously there, the growth of 40 and then this time 64% in a quarter, it really doesn't matter too much to us whether it's 6% or 8% in that quarter. That is one thing. Secondly, when we acquire something and put it together, many of our successes of course put things together, and then you have to rip it apart again to try to say, "Is that an organic growth or was that acquired growth?" It's not that simple.
However, what you can say, which is very simple, the healthcare market over the last 10 years and also if you look at reports in the future that describes what's going on, the growth is between 5%-10%. Our businesses, most of our different types of niches are growing in that interval between 5%-10%. That is what's going on. I've heard the questions many enough times that we will definitely look at in the future to maybe be a bit more specific over time. That's what I can say today.
Okay. There's a question here related to valuation, and that is: What would be the best multiple to value the company 25 times EV over free cash flow, et cetera, et cetera? There are many ways to skin a cat, so to speak. I will not, you know, advise you on any one thing. What I will say is that typically when software companies like ours, I mean, you will, I guess, value the growth. You will value our ability to be profitable, the stability in our income, and also our geographical diversification, which takes down the risk.
Exactly what level to use, I'll leave that up to you all of you, or you can take a look at the analyst following CSAM. Technology companies typically EV sales typical parameter I'd say. Okay. Another question related to cost and to the P&L. I appreciate that you don't give an exact number, but can you give a rough estimate on M&A cost in the third quarter? This is from Oscar.
You're right, we haven't revealed that number specifically, but what I can say is that there were generally very high costs related to M&A in the second quarter as we, you know, did the Carmenta in mid-February, and a lot of costs coming into the second quarter as well related to that acquisition, which was the biggest acquisition to date. Then we did MedSciNet in May, and we did Optima in June. The second quarter was a very active quarter for CSAM-related acquisitions, and there were a lot of costs in that quarter related to acquisitions. As you have noticed, we haven't presented or announced any acquisitions in the third quarter, so one can assume that the M&A cost, direct M&A costs were less in the third quarter than in the second quarter. Okay.
A question about shares and the buyback program. Is there any repurchase or buyback programs in your plans? I can say no, there is not. We IPO'd and we also used the tap issue on the bond to raise cash in order to acquire companies. We do not plan to buy back shares, and we do not plan to make any dividends. We plan to use the cash to buy companies. The only exception, I guess, would be to acquire own shares and use them to pay for an acquisition, but it would be in that type of setting and not to buy back shares and delete them. Okay.
There is a question about the various niches, and I guess this one is for you, Sverre. Are there niches that you think are more important or interesting than others?
Well, define important. If you look at from a patient side or the provider side or from a business side, there are different elements on how to look at those niches. Something is about life and death, something is more relevant, ordinary treatments. You know, they are important in their way anyway. That's, you know, seen from the functional side of what it's doing. If you look at the business side, they are quite similar. Completely different in function, but similar in business wise, because these types of softwares are, you know, connected to or used in complex workflows. As long as these software are tied to these, they are similar in many ways.
That means that, if you look at the growth possibilities, the stability, it's almost the same. In that sense, I don't want to say that, you know, they're so different. However, when we have a roll-up story, as we have, based on a solid recurring revenue platform in the bottom here, when we acquire, of course, we end up in acquiring more within one segment than another. For instance, looking at the third quarter, the Public Safety area is more than 40% of the business at the moment. If you're talking about importance, size matters, obviously. But if you look at us in two and a half or three years, then maybe that's completely different. I would say business-wise, there are size that would matter, but not so much the content of the business.
Okay. Thank you. Thank you, Sverre. Another question related to acquisitions. I think we can follow up a little. The previous question was from Stockholm, and we're actually going to Stockholm on Monday to speak to and address the Swedish investors. This question relates to the specific part of acquisitions. What prerequisites does a management member of an acquired company need to stay in his or her position?
I think first of all, when you look at the types of software and companies that we acquire, they are completely different types of companies. Some run over time, let's say created 25 years ago by two professors and then they're retiring over 70 years, you know it's an obvious thing that we don't end up creating a situation where somebody's going to stay on. It's not a type of, you know, carry on with the current owners. In other situations, like the Carmenta situation, where you have a management team in the company that we carved out, those are there over time.
Of course, then you have a situation where they have been there for years, they have experience, and we take over an ongoing business. That's, you know, in a way not a typical acquisition, but those two approaches are completely different. We have to answer that type of question as a case by case. In that sense, the last four acquisitions we have kept all our key persons necessary. I think that the way we do it is not other than the incentives we use as the other shareholders. You buy shares in CSAM. That is how we incentivize people, and that is how we're going to do it in the future as well.
Right. Pretty pragmatic approach.
Yes.
If it makes sense, we'll do it. Right? Okay. Questions are drawing to an end. There's one question left. If you still have any, you can submit them while we address this one. That is, the question is, your accounts payable are less than your accounts receivable. Do you plan to change this? I interpret that as a question related to our working capital and working capital policy. What I can say is that, CSAM, we have had and we will continue to have a very active view on capital management and net working capital. A lot of the recurring revenues, they are pre-invoiced, and typically, you know, invoiced upfront annually or maybe semi-annually or quarterly.
That is really what creates a very, you know, beneficial net working capital situation for a company like CSAM. We will continue to focus on that and also in companies that we have acquired or businesses that we have acquired to continue to improve that situation, as much as we can. It will always be, you know, in dialogue with the customer again. It isn't done overnight. It is a long-term thinking. Okay. That really, I believe, was the very last question. I will thank you all for submitting your questions and thank you for having this dialogue with us. I will leave it to you, Sverre, to round it off.
Thank you. Thank you everyone for watching. As we approach Christmas, I would like to wish you all a Merry Christmas. At the same time, hopefully you enjoyed the summary here of a very nice quarter, actually a beautiful combination of growth and profitability. Hopefully, we will see you in the next presentation. Until then, stay healthy.