Good morning, ladies and gentlemen, and welcome to the presentation of Omda's Achievements for the Second Quarter of this Year. The report and a copy of this presentation are available on YousWeb and on omda.com. The webcast will consist of a presentation of approximately 30 minutes, followed by a live Q&A session. You can type in your questions at any time during the presentation, and we will attend to the questions immediately after we have finished the presentation. Recording of this webcast will be made available on our website, and soon thereafter, also a transcription. We have an exciting agenda today. We will look at the highlights for the quarter. We will revisit the outlook for the rest of this year and for next year. We will take a deep dive into the financials, and before we head into the Q&A, we will sum it up.
As always, I'm here together with my partner and long-term friend and colleague, Sverre Flatby. The stage is yours.
Thank you, and good morning, everyone. We are here to present the best mid-year report since Omda was listed on Euronext Growth in 2020. Numbers are exactly as planned and strong, which shouldn't surprise anyone. Before we dive into margins and growth, let's pause and reflect on what's really driving them. I think if you look at this situation, I hope you'll never get there, but as we speak, calls are coming in in many countries, and Omda's role in this situation is supporting quietly millions of people every single day. Whether it is an acute call center or a maternity ward, a cancer clinic, or many other types of highly specialized types of services, our role is to secure that every second, every minute, and every hour is used the best possible way for the patients that rely on these services.
Now, more than 750 contracts, active contracts, in 26 countries. Our business is built up on several smaller revenue streams, together forming a resilient whole. In our report, we have mentioned a few of the important smaller steps. For instance, the fertility area, where we now reached a milestone where all the public hospital delivering fertility services in Sweden are using Omda software. Another example was the cardio team, which delivered a much larger solution, but then again, highly specialized with 20,000 users. The summary of all of these smaller things happening is what creates the diversification, and the diversification is the reason why the first quarter and the second quarter are following the guidance we gave you in December 2024. Let's now talk about the key takeaways in the report before our resident numbers enthusiast happily drowns you in details. First up, revenue growth.
Reported revenue growth 16% this quarter, and I think you all will see that the revenue growth itself is important. However, what's inside here and what is the quality of the growth? As you know, our counterparties are publicly funded or public organizations behind these recurring revenue streams that also increased 16%. I think you all would understand with the low churn we have, lower than 2%, that the value creation underneath based on this recurring revenue is very, very important. Also, a year ago, we announced measures to increase professional services and to also increase the billable utilization. With 35% growth, we can tick that box as another success. As always, the lumpiness is the one-time income, normally decided and determined on the customer side, milestones where we have the licensed sales. Not so many this quarter compared to the same quarter last year.
However, 16% growth and our true recurring and semi-recurring is high growth and a success. Organic growth then, in constant currency, 7%, nicely within our guided range of 5%- 10%. The income side here, to sum it up, this is the value creation. 79% recurring revenues, and as you will see, the 19% professional services, the combination of those two is very strong and is the foundation for the future when you look at what's going on when we guide further on what's going on in 2025, 2026, and the years to come. Let's go back to the margin. What's happened with the margin? In the second quarter, 19% margin, and in year to date, 20% margin. It stands there, and for us, this is exactly like plan, exactly like communicated. This should also strengthen our view to the guiding going forward.
Talking about guiding and our next steps, what's going to happen in 2025 and what's going to happen in 2026, based on the strong numbers in the first half year. First, let's look at the revenue developments. If you take this simple jump with 16% from $210 million to $243 million, a very simple calculation could be two times the sales in the first half year. You would see on the right-hand side our guiding. First, there you have 2024, the actuals. You have our guiding for 2025, and also we reiterate what we think about 2026. We stick to that top-line guiding we presented to you in December 2024. If you look at that, you'll see that the growth in the first quarter combined with what we see in the growth in recurring revenue going forward and professional services, we will stick to that guiding. What about margins?
One thing is it stands at 20%, jumping from 12%, 8% at this point, better than the same quarter last year. It stands there, yes, but what is really important here is the way it travels going forward. We have to go from 20% and + 3% or +7% to reach to our interval that we have guided to all of you recently. How do we do that? The main thing here is actually the actions taken that will bring us there. I will try to explain how are we going to perform between 23% and 27% EBITDA in 2025 as a whole. Three things matter. One thing is the income that we just presented and the way that run rate is. That is one thing that gives us comfort that the top line is good enough to secure this.
Secondly, we have told you before in December and also previously, the divestment of our Philippine development center is reducing the number of FTEs. That happens in the second half year of this year. Number three, we have made three acquisitions, but if you look at the business before the acquisitions, you'll see that the number of FTEs are also reduced according to plan. If you combine the actual actions now made and put that together, you will reach exactly in between the guiding here on the EBITDA margin. We stick to that and comfortably want to say that we will say what we do and do what we say and expect now the 23% to 27% margin for 2025. I would also like to actually reiterate what's going to happen in 2026.
What you will see is that in 2026, we have the margin that comes from the second half of 2025. Of course, since we stand at 20% in the first half year, we have to perform roughly around plus minus 30% EBITDA in the second half to have the same and the right run rate into 2026. We stick to that guiding as well, a top line of more than $500 million and a 28% to 32% EBITDA in 2026. That should give you quite a good understanding of what's going on in 2025 and 2026 when it comes to our organic business. Not only that, what's going on with Omda in the future and from 2026 and onwards is not only focusing on the organic business. However, I think it's very important to repeat three things about Omda. Number one, probably the most important one, what makes Omda unique?
We deliver new software powering specialized healthcare and emergency response value chains. This is very, very important. We are not a serial acquirer. We are not a generic vendor selling software within healthcare. We only do these things. Supporting these complex value chains, that is what we do. That means, based on that, number one, we have two other things that are important to understand to see what type of value creation will we give our customers and shareholders the years to come. First of all, we have an organic business, and we have proven the organic growth between 5% and 10% is what we also expect years to come in all of these types of value chain supportive software. We are now entering a half year, we are in it actually, where we will perform with the EBITDA margin around 30%, which we also guide you for 2026.
That should be the basic profitability platform for our current organic business going forward as well. Also, CAPEX, 10% of revenue. CAPEX, what is it? It's actually business cases developing smart components that could be added to current customers' value chains and then increase recurring revenue further. This is our organic business inside this emergency response and specialized healthcare area. On top of that, not saying that we are a generic serial acquirer, but we are using serial acquirer mechanisms to add growth on top of our organic business. We think probably around 10%- 20% should be expected from us, 2026 and the years ahead, when it comes to added software recurring revenues coming into our current businesses that has a value chain position or create a new value chain within the same areas.
What we do is actually to acquire customers' code and competence, meaning recurring revenue streams based on software that we can own and also competence in these specialized areas to support it. As long as we do that, we can continue without disturbing the one to the left, the organic business too much. All in all, that will be our current strategy, and we think that will be the best balance between growth and profitability and predictability, scalability going forward. The acquisitions we will do have to be based on a sound business case, and it has to comply with the specialized healthcare and emergency response value chains. All in all, I'm quite happy to summarize that we have had a strong mid-year report here and also looking very good for this year and 2026.
Having said that, Einar, the audience has now actually seen a strong first half, and maybe you can either confirm with the details that that's correct or maybe leave us all completely confused.
I think I'll go for the confirmation bit. All right, let's have a deep dive and look into the financials. Let's start with the revenue diversification. As always, Omda is a very diversified business, and the biggest business area is the emergency. Strong growth there, and also that's where we have made two of the three latest acquisitions also within that business area. Six acquisitions altogether in Omda's history. We made another acquisition related to connected imaging that also enhances that business area's part of the slice of the pie. Still very diversified, and we are still very much based on Nordics. Again, the last three acquisitions were all Nordic, all Swedish, all from Gothenburg, actually.
That, of course, further enhances our presence in Sweden, both on the customer side and also where most of the employees are. You see that Norway is number two, and the rest of the world seems to have shrunk a little bit, but it hasn't. It's just that Norway and Sweden have grown more. Very diversified. We are present in more than 26 countries, more than 750 unique contracts, and we are located in 10 countries. Okay, one of my favorite slides, ladies and gentlemen, the recurring revenue. We see, going back from the first quarter in 2017, each and every quarter, the recurring revenue increases, reaching SEK 96 million in the second quarter, a new record. The run rate, SEK 384 million. We are approaching SEK 400 million in run rate. The counterpart is here, public sector or public sector-like companies, and less than 2% churn per annum.
This is really the beauty. Very favorable revenue mix. If you look at the mix there, you see that software-related revenues comprise more than 80% of total sales. That said, the recurring revenue being the highest ever, and we're close to covering all fixed costs, mind you, with recurring revenue alone. I also like to point out the strong sales of professional services. A little more than a year ago, we communicated that we had identified that there was a huge potential to increase the professional services, not by employing more people or establishing a consultant department, but just making sure that invoiceable hours are indeed invoiced, and when they are, they're invoiced at the right hourly price. We said there was a substantial potential there. From SEK 17 million in the last quarter, same quarter last year, to SEK 23 million in the second quarter this year.
We have not said that there is not a further potential to be realized. The cost, the FDA cost base, we look at, we divide the cost in three, COGS, salary personnel, and everything else. If you look at the COGS, our target is to bring the COGS down to 5%. We're seeing the number five, starting with the five now, 5.8%. We are approaching a gross margin of 95%. Since we IPOed, it was around 11%. We have taken it down a little each and every quarter, and we think that there is more to come. The 5% target, which you know when we first launched it, it would mean that we would more than halve the COGS. We're almost there. Other OPEX, our target was 15% or below, and we are below 15% for the second quarter in a row. We are there.
Also, in actual numbers, you see from the second quarter last year, 17 to 18, almost the same number, even though we have done three acquisitions since that time. The revenue has grown more than 16%. Salary personnel, we are around 60%. Our target is 50%, so still a little above. Keep in mind that it's not even distributed over the year. Some quarters are lower, so on average, it is below the 60. A number of FTEs, remember to compare apples and apples here because again, the 293 compared to the 287 in the second quarter of 2024. Keep in mind we have done three acquisitions, customer code and competence, and there is some competence associated with those. There is still, this is the last quarter where we still have the agreement with the former colleagues in Cebu.
We have done some selective hiring in the Nordics to ensure a smooth transition there. Overall, the cost initiatives, they work. They lead to good visibility heading into the third quarter and the second half of this year. EBITDA, not only is it in line with our guidance, but it's a strong increase from last year, more than doubles from 10.4% to 23% and almost doubles in percentage points. Nine percentage points increase, almost double there as well. Q1 surely wasn't a one-hit wonder. Very strong sales of recurring revenue, very strong sales of professional services. We see the impact from the strict cost discipline, again providing very good visibility for the second half of this year. CAPEX, most of the CAPEX is the investment in our own software. That is where a lot of the organic growth comes from.
When we sell new modules to current customers related to current installations, the new modules, the new software must come from somewhere, and it comes from the in-house development that is capitalized. That is most of it. We see that in, and there's also some PP&E, not very much. Altogether, combined, we see that there's a slight decrease from the same quarter last year, both in total and in percent. The CAPEX related to software development, approximately the same. PP&E is down to more from 3.6 to 0.6, which is a more sustainable level, a more level you should expect. All in all, all around 10%, the CAPEX. What is also good, the networking capital. Again, we had the best quarter ever in the fourth quarter last year, and then a record high or low, depending on how you view it, minus 23% in the second quarter.
We are repeating that in the first quarter, and repeating that in the second quarter. This is the best networking capital second quarter we have ever had. Again, we have communicated, you know, - 10% or better. We had minus 23% in the second quarter. People, we are approaching 500 million in sales, - 23% networking capital. Do the math. Associated with networking capital is, of course, cash, and we'll continue to focus on cash, you know, going forward and heading into the third quarter. We're actually there and heading into the fourth quarter at the end of this year. We will continue to focus on cash and be very, very strict on that. Different business areas, they were all performing well this quarter, just as they were in the first quarter this year. There are some individual variations. There will always be. We've said it before.
Don't look too closely on the quarterly variations. You see that on some of the business areas, and not only do they pass the rule of 40 test, they are, you know, even beyond that. It shows you the potential that is inherent in the business areas. Some, when you looked at them a couple of quarters ago, we had questions, you know, is this too small? Is it sustainable? What will happen? We see it now. There is a strong potential in the business areas, and that is what they have in common. In emergency and also connected imaging, you will remember that is where we have made some new acquisitions. By integrate and build, there is always something to do. It impacts, you know, the margins slightly short-term.
That is what we do to unchain and release and unleash the long-term potential that we and the synergies that are, you know, identified during the due diligence process. That is what we do. Just a reminder also, how do we calculate, you know, organic growth, et cetera? Here you see that on the income side, all businesses included as it is on EBITDA, but on organic growth, we exclude the last three acquisitions. The reason is we don't have really reliable data from last year. Until we've owned them for a year and reported them for a year, we exclude them from the organic growth calculation. Okay, let's wrap it up before we head into the Q&A. Again, the key numbers in line with our guidance and maybe then some. We will continue to focus on organic growth.
It's now set at 7% this quarter and year to date, which is spot on in the middle of our guidance of 5%- 10%. We will continue to focus on the margin. We will ensure that acquired entities are being incorporated efficiently, again, to realize the potential synergies that are identified during the acquisition and during the DD process. We will continue to focus on relevant M&A opportunities. There are several opportunities identified, but we are in no rush to do a silly deal. If it makes sense strategically and financially, we will act on it. If it doesn't, we won't. It's all about creating value and enhancing value and doing a smart deal. We will continue to work diligently to reveal the true value of Omda to the benefit of all stakeholders.
We are heading into a territory with almost 500 million in top line, and we are guiding on between 25% and 35% EBITDA for the second half. You can always do your own calculations and compare the results of your calculations of intrinsic value to the current share price.
That was the presentation. Let's head into Q&A. I think we have received some questions already. Thank you very much. Thank you. Just keep them coming. Type them in as we address them, and we will attend to them. We have 11 questions so far. One of the first questions is related to ProSang, and it goes to you, Sverre.
The question is, and I'll read it up for you, with regards to the ProSang contract extension with the Karolinska University Hospital, do you know who you were competing against and what were the determining factors that resulted in Omda winning the contract? Why us?
Yeah, that's a very good question, actually. I think it lies in the generic strategy we have when it comes to these very specialized areas where limbs or blood establishment business is one of them. If you look at the history, I think the answer lies there. It started in 1965 and has had the same type of customer dialogues with all these managers of blood establishment institutions in the Nordics.
When they work together, and we've done that for decades, finding all the important smaller details, entering a process together with us as a vendor to secure that all these details, quality management elements, and procedures are handled according to important regulations, I would say that this process has made it possible for us to have a product that has become probably one of the best in the world. I think also institutions like Karolinska University Hospital or Oslo University Hospital, for that matter, or in Denmark, I think that you will see that the strong position we have is what creates that situation. Competition then coming from the outside, trying to get into a 40-year history of detailed software development, I think that's the answer. A long answer to a very important question.
Okay, thank you, Sverre. We will continue on the markets there. It's from Torbjörn. Looking forward, if acquiring a company in a geography where you are not present, to what extent can you leverage existing software platforms and support infrastructure to generate synergies? Which elements of the cost base will be R&D, hosting support, sales, or whatever? It is about the current platform and potential acquisitions in geographies elsewhere.
Yeah, and I think most importantly, when it comes to geographies, we have to make sure that if we go into another geography, it has to be within one of the specialties that we already have competence and solutions. We can go to add new specialties, but we will not do the same, both of them at the same time. That is the first thing. However, I don't think in our experience that the synergies between systems, for instance, the different types of platforms, is the way that we get our profits. What we do is making sure that we have a software delivery and not a platform delivery as such. For instance, we do not serve the market with services. Normally, the on-prem strategy of these complex hospitals is handled by their IT organizations.
From our side, it's more about the medical procedures or the routines in the emergency sector, how to add components together in that country. This is how we do it. If we acquire something, we increase our value chain components and put that together and increase the offering and then sell it as a software and not as a service. I think that will be the primary strategy and the way we get synergies on the income side, which is the most important synergy.
Okay, thank you, Sverre. Continuing with customers' market, there's a question about churn here. The question is, can you provide more insight into why some customers, although very few, churn? What happens? Why would anyone leave Omda?
Everyone would like to have a 0% churn, which probably won't be possible. We have examples of having a specialized component in one entity and then somebody is merging with another entity, having another system, which obviously leads to, depending on which is the biggest one and who is the strongest one. Stuff like that happens with some of our components over time. Of course, there are some of the systems that have been there for many, many years, maybe also have some bespoke development that is not viable over the next decades. That might also be phased out, also deliberately by us. However, since the last 10 years, it has been below 2%. I think it's just still going to be types of happenings like that that will also be the next type of churn, but still below 2%.
Okay. There's a question from Matthew here. I mean, there's a lot of things we could want and wish for. I think this was a good one. I don't know what my answer would be, but if you had a magic wand, or maybe if we had it, and wanted to get rid of just one problem today, what would it be?
To get rid of one problem, I like you, so I don't want to get rid of you first.
You don't have anything that's bothering you at the moment?
No, actually not. I would say that the business is very resilient. As you all know, whether things are happening in the world, a financial crisis, or things happening like with people discussing Trump and changes going on, nothing affects us. As you know, as Einar mentioned, when the recurring revenues actually are now started touching the same level as our fixed costs, with that low churn, I think everybody now sees that we have a very, very, very strong position. No, actually, we don't need a magic wand. That's the answer.
Okay. I mean, running a business, there are always challenges and things you could want to improve. I think it's important to reflect on the fact that, in this world, with war, tariffs, customs, shipping, constraints, et cetera, Omda is very, the underlying demand and our reason to be here, it doesn't really change very much. Market tariffs, et cetera, it doesn't impact the number of accidents, births, cancer, et cetera. The underlying demand for Omda's software and services is really very untouched by all the other events that we read about in the paper every day. Speaking of understanding the company, is there anything that we would want the, or you should want, Sverre, the investors to understand better about Omda? I mean, is it something that we think or you think that this should be obvious for all? I mean, why don't they get this?
Maybe then, if the answer is yes, if there's something that we would like them to understand better, maybe we haven't been good at communicating it. Is there anything?
Yeah, I think two things we have not been good at communicating. I think the difference between a target margin talked about a few years ago and guiding. Our first guiding was actually to reach our target margin, was done in December 2024. I think that has created some misunderstandings and expectations and impatience, so that people actually didn't see the underlying value creation. That is one thing. I think the other is the point I was into about what we are. We are actually having a very unique strategy. It's unique in that sense, highly specialized components within specialized healthcare and emergency response. When we do that and have not only the very strong organic growth potential there, but also, and profitability, but also the add-on mechanism where we have a database of many, many relevant targets for us.
I think to understand that this is not a serial acquirer that just acquires companies, but to really understand what we are doing. As I initially came up with, the role we have in society is why every employee in Omda actually gets up in the morning. We're quite proud of that, that the service delivered. This is the reason why the resilience and stability, predictability is there in the recurring revenues. I think to understand more about that read, probably more about our type of businesses is relevant to all, in addition to probably understand what we're now saying, crystal clear, we are guiding. We started that in December last year. I think that is important for you to understand. It's crystal clear. We are guiding these intervals, and we stand for that. We're going to do that for 2025 and 2026 going forward as well.
Very clear. Let's continue with the operations. There's a question here about artificial intelligence. The question is, are you seeking to utilize AI within other areas than development? If yes, which ones? Is AI-driven efficiency a key driver to reach your employee cost targets of around 50% of sales, or does it come on top of any other efficiency initiatives?
Yeah, that was a long, but very relevant and good question. I think the most important thing when it comes to AI is, of course, there are two major areas. One thing is the AI on the customer side, which is the delivery of AI or machine learning elements in our own solutions. For instance, back to what I mentioned, the every second counts in an emergency setting. Imagine just what we're now cooperating with the University of Valencia, creating a machine learning engine that helps the operator actually make the decision faster by using all the data. Of course, that type of functionality is probably both a value creation on the customer side, but a value creation for us, adding new types of modules that is also increasing our recurring revenues. AI in that sense, on our product side, is important.
It's not a fast-moving AI market for us, it's slow-moving. All of our customers have actually some kind of AI roadmap in their planning. That is one thing. Secondly, when it comes to efficiency, we did last year announce the phase out of a lot of FTEs in the Philippines, and also the insuring mechanism for Omda, is already done by a lot of processes with AI tools like ChatGPT and Copilot. What they've been doing, we have an example from Finland where we estimated thousands of hours to convert a service stack with old code to new code, which actually was done with 10% of the estimated time using AI tools. In some areas, there are huge potentials. In other areas, for a vendor like us, it's much more complicated.
For instance, algorithms related to calculating a cure, for instance, for cancer medication, we cannot just rely on elements like that. We have to keep our IP, intellectual property, and handle that differently. There are ongoing many, many activities, and part of them are also based on the fact that we have this guiding on the cost side. I think there are a lot more potential in the years to come based on completely changed routines around not only developing, but also testing, documentation, et cetera. Long answer, hopefully a good one.
I think it made sense. Continuing on, the effects of AI and the number of FTEs, et cetera, a question here. How many FTEs from recent acquisitions are included in the 293 base? How large is the opportunity for efficiency gains as we integrate these businesses? I think I'll answer that one myself. Of the three latest acquisitions, around 20. That is the number. Efficiency gains, of course, there is a scope for efficiency gains. When we do acquisitions, we look at both the cost base and the income side. There's always a combination there. We see that very often. We have opportunities when we acquire a business. There are opportunities on the cost base, on the FTEs, on other costs, but first and foremost related to the income side. We utilize opportunities in existing contracts. Further on the FTE side, there's a question here related to the Filipino consultants.
The question is, the Philippine consultants comprise around 10% of the employee base. What is their contribution to the employee cost base? That is less than 10%, but not so very much less. It's probably less than 5%, but maybe more than 3%. Somewhere around there. The efficiency there is all, one thing is to reduce the use of external consultants, but there are other costs there. The hidden cost is the efficiency in development. It's more than just the math is a bit more advanced. One question about the margin. One question is about the 2024 reported versus the Q4 report last year. The difference there was just we made a reassessment of the tax refund arrangement in Sweden that was mentioned in the Q4 and also described in the annual report. The difference is just our assessment of that status. That was the difference.
I think it's very well described in the report. Now there's a question about growth and organic growth, inorganic growth, in other words, acquisitions. The question is, how do you balance inorganic growth with maintaining strong liquidity? This question is also related to another question on the multiples. I think I'll try to address both of them at the same time. Inorganic, organic growth and liquidity, i.e. cash. The other question here is very similar. With 30% EBITDA margin, 10% CAPEX, and interest cost at 10% of revenue, you have about 10% free cash flow margin for M&A. True. At an average two times EV sales multiple, this 10% free cash flow only buys around 5% organic growth. How will you reach 10 to 20% inorganic growth? Relevant question. There are several things here on the balance. One is, of course, we are growing, so take growth into perspective.
With 5 to 10% organic growth, that increases. We are setting between one and two per time sales. That is where we historically have been paying. We are not using sales as a multiple. We are always doing a DCF, but it translates into an EV sales and sometimes an EV EBITDA. That is the second thing. It may not necessarily be two times. Third, we are not necessarily paying everything with cash upfront. We have used several methods. It can be some cash, it can be seller credits, it can be earnouts. There are many ways to skin a cat. That is the third answer. The fourth one is there are other ways of financing this. We have access to the bond market. We can borrow money as well.
All in all, the 10 to 20% inorganic growth guidance or target is absolutely manageable with the current and future cash position. Again, a long answer, but I think it's pretty precise. Speaking of M&A, it's also about the terms here. I think I'll address that one also myself. The question is, the latest M&As seem to be closed at more favorable terms. Lower multiples paid, less cash upfront relates to the previous question. What drives this? Is this a result of the evolution in your M&A philosophy or market conditions are more favorable for M&A transactions? Very good question, very relevant. I think what we have seen, let's say, let's go back three or four years, was the market went a bit crazy. You saw that we, Omda, we actually withdrew from that because people were just paying too much. We still have the old version of Excel.
It needs to, as I said previously, it needs to make sense strategically and financially, not to either or, but both of them at the same time. We think there's more prudence there with sellers. We also see that the market all in all is more prudent, more sensible. A lot of discussions we have had, we've had them with some of the targets for many years, actually. We learned them, they learned about us, and we find ways. It isn't necessarily always, you know, cash upfront. Maybe it's a better deal for Omda, but also for the seller. I must stress this, to take some of the years as a sell the credit or as an earnout. If you strongly believe in something, let's share the joy when we get there. When we have an earnout situation, it will be very good for the seller.
Those earnouts, the max earnouts are also the best business cases for Omda. We share the success. A long answer, but the market is more prudent. Speaking of M&A, you can acquire something or you can build something. We very much have a build or buy strategy, Sverre. We are a bit indifferent and agnostic, where do we buy it or where do we build it? What is the best business case? The question here from Matthew is that Omda invests in organic CAPEX for additional modules for customers. Are these developments based on what customers explicitly request for? If so, do they ever co-fund development or commit to purchasing the module ahead of time? Do you just do this at random or is there a plan or actually real demand out there?
First of all, it's of course always a business case. A business case means you have to have one of those, either some customers in a row that want a module before we start developing it. There is always a business case. Sometimes it's a single customer also funding specific modules. If they're funding it, we will still have the requirement to create not a bespoke development for the customer, but create a product that we can copy-paste, to put it that way, and sell it going forward to other customers. Most of these components that we have, or even you might say even those acquisitions we do, might come from a customer as well because they want something added onto their value chain. Both the CAPEX business cases and the acquired acquisitions business cases are both doing the same.
Yes, co-funding is also an ordinary way of cooperating with the customer.
Okay, thank you. We have five minutes and two questions pending. Let's quickly address them. What net debt to EBITDA ratios are you expecting for 2025 year end and 2026? I think you can do the math quite simply. If, again, NOK 500 million in sales, which you're guiding, we are approaching that, and that is where we're guiding into 2026. 30% EBITDA margin. That should yield NOK 150 million. NOK 500 million in gross debt. At the year end, we had around NOK 100 million or maybe some more in cash in the bank. Net debt of NOK 400 million. NOK 400 million in net debt and NOK 150 million in EBITDA. That would be the metric. The question then about another one on M&A. As we calculate return on investment by utilizing a DCF, how do acquisition targets screen on valuation relative to Omda buybacks versus acquisitions?
There's always the targets, how to screen on valuation. You can look at the past and then we screen and show one result. You can look at the present where they are actually the current trading. They can look at the predictions and budgets and dreams and hopes in the future. Sometimes people seem to be a more hockey stick-like approach to the future. It really depends on very often looking at the past, the present, or the future. By and large, I'd say that it makes a terrific sense for us to acquire them. If it doesn't make sense financially, we won't do it. The last question, and that's about revenue. The question is, would you be able to double your current revenue within the existing countries you currently operate? I'd say yes. It would absolutely be possible.
If we look back into 2015, when Omda was a smaller company, we had sales of approximately NOK 50 million. We are approaching NOK 500 million. We are almost in the same countries. When we IPOed, we had NOK 200 million in sales, a Nordic company, and we are approximately 15% in the rest of the world. The Nordics, at least, NOK 400 million. We've more than doubled in the Nordics already since we IPOed. I can't see why we couldn't do it again. It isn't done overnight. It will take some time. Okay. There seems to be no more questions. I've learned that I should wait just a few seconds and refresh some latency. No, there's nothing more. Okay. We hope you have enjoyed this presentation as much as we have.
Tune in again on the 14th of November when we will present the results for the third quarter of 2025. What a lovely summer it has been. Last time I checked, the weather forecast for this fall looks good as well. Thanks for watching. Doomo arigato. Take care. Do your math and stay safe.