Hello all, and welcome to this presentation of the Q3 report of Carasent. Today we will go through some highlights of the quarter and give you a brief update of our business and the market and also look into the financials of course, which is when Martin will go over and also talk a little bit about the outlooks for the company onwards. A quick summary of our Q3. We had a revenue growth of 20% year-over-year and whereof 12% of this came from organic initiatives. Figure that had a hiccup during the quarter. We will get back a little bit to that onwards, but it's mainly because some of our variable revenues comparable to last year's figures is down a bit due to a COVID boost.
Martin will talk a little bit more about that later on. We have seen some revenue synergy materialized from our Medrave acquisition, where we have developed a version which can address the customers which our Norwegian product, Acus, is addressing, which is great to see, our strategy is working. We had strong new sales for Webdoc within the Q3, even though it was a vacation period during the Q3, where we signed 26 new clinics. We have done two acquisitions, one of the Norwegian video company, Confrere, where we acquired the brand and the customer agreements. We will talk a little bit more about that during the presentation.
Also HPI, which we announced last week, which is a great acquisition for us to strengthen our position within the occupational health segment. We still have a strong balance sheet of NOK 751 million in order to continue to execute on our onward growing plan. Just a brief overview of our track record, where we had a great track record of growth, which we aim to continue to execute on and also to add new services to our Carasent group in order to expand our product offer and our market position within the healthcare segment. We had a net retention rate which still remains strong, which increased a little bit this quarter compared to last quarter.
Just a brief overview where we come from, where we are, and where we are heading. We come from a position where we only were the Swedish company Evimeria within the group. Now we consist of more companies within the group in order to expand our product portfolio and also expand our market which we address our products to in order to increase the possibilities to create synergies throughout our different services to different market segments.
In the future, and actually something that we are executing as of now, we want to make those synergies possible in a higher way, where we want to create new and add new services which we can address to our complete market, targeted market, that we have. We can go to the next slide. A few words about Confrere. We announced this during the summer, and Confrere is a Norwegian video platform vendor which is the market leader. What we did was basically that we acquired the brand and the agreements of this service since they won't continue to deliver this service to the customers in the long term.
What we saw in this acquisition was, of course, that we get all the customers on our own customer list, which will help us a lot in order to address our own products to the customers within Norway. We also got a video solution within Carasent today, the Swedish product, the Digital Care Room, which we will address to those customers as a potential replacement. Of course we see potential in doing upsales of both Webdoc, which we aim to launch within Norway in the upcoming weeks, where we are launching our first customer within Norway. Also we see potential in adding Medrave to those customers as well.
We can go to the next slide. A few words about HPI, which we announced last week. HPI is the market leader within Sweden for software that provides health profiles to the occupational health segment. You could say that HPI, most of the situation within occupational health is the main offer to the companies. They have a very sticky product. It's comparable with Medrave, but within the segment occupational health. They are 11 employees as of today and have approximately 200 customers, which is potential Webdoc users as well. You can go to the next slide, and we can talk a little bit about the rationale, which where this is one of the rationales, of course.
We get almost all of the occupational health care clinics in Sweden on our customer list. There are still more customers, of course, but some of those customers have 50, 60, 70 clinics. I would say it's approximately 400 clinics that's on our potential target list for Webdoc. HPI also have a large potential to grow in Norway as well, where we are heading with most of our product portfolio. We can go hand in hand and create a stronger offer when we are entering Norway together with HPI.
Not to say the least, one of the biggest components for us to succeed within the new segments and what have made us successful historically is the competence of the customer in order to create the best solution for the customers. HPI has lots of experience within the occupational health segment, which will contribute a lot to Carasent onwards. Carasent path to growth we are continuing to execute on. Of course, we continue to grow organically. We are investing heavily at the moment in order to continue to execute on this plan for many years onwards, where we have great potential in doing up sale on existing customers through new products and services and also onboarding new customers to our various platforms.
Also throughout M&A, where we want to add new products and services and broaden our market position. Through those two combined, we want to extract the synergies that we see where we get new customers on the list and new products which we can upsell to our customers. With that said, I pass over to you, Svein Martin, to go over some financials.
Thank you, Dennis. Looking at the key metrics for the quarter, we had the revenue growth of 28%. Of that, the organic growth was 12%, which was driven by our recurring revenues primarily, where the recurring revenues grew 14% with the 109% net retention rates, which we will look into a bit more detail. We had EBITDA margins of 23% in Q3 and the ARR at the end of the quarter of NOK 185 million. If we look at the quarter in a historical context, we can see that we have consistently delivered a growth quarter-over-quarter, and this was no exception. The total growth of 28% was driven by both acquisitions and organically, as mentioned.
We see it as another step on the long-term growth plan, even though we had some road bumps related to the growth rates in the quarter, which we can address later in the presentation. Our margins was 23% in Q3 on EBITDA level. So the organic growth on the recurring revenues was 14%, as mentioned. We had, if we break down the growth, we had that growth of NOK 2.7 million from our existing customers driving the net retention rates. That is typically driven by a combination of underlying market growth and also from upsell of add-ons basically to our customers.
What we have seen there is that these variable add-on services such as SMS that were boosted a bit in the pandemic related to pandemic vaccinations etcetera was at a higher level in 2021 than we had foreseen. We have seen a bit of a drop there in this year, which also caused us to basically revise the guidance, which we will get back to for the 2022. We also have a good traction on the new sales side, where we grew the revenues by NOK 1.8 million corresponding to 6% growth. There also we continue to sign a lot of new customers.
Customers we have signed that have been a bit smaller than historically, given that larger customers have been more cautious during these latter periods and also decided to focus on the pandemic activities last year. That is also affecting the growth rates a bit. We see that there is huge potential in the group and revenues, synergies, and cross-sale potential was validated in Q3 as a first step. There we see that this Medrave product that we sold to Aleris's customer, Oslo Kommune, has a lot more potential on the existing customer base as well, and we will focus on driving that upsell going forward as well. Looking at the annual recurring revenue, it was grow...
It grew by 31% year-over-year, which 12% was organic, and we had net retention rates in September of 106%. The drivers for this is similar to what we explained on the previous page. If we take a bit closer look on the margin side of it, we have the EBITDA margins of 23%, as mentioned, down from 35% last year. That decrease was driven by a few different factors. The main factor is that we are in a phase where we are doing quite heavy investments into management capacity and basically structure and infrastructure that can facilitate long-term growth.
We are doing quite big investments into this now that will not be needed going forward as our revenue start to grow. The cost base is very scalable in nature, but of course affects the short-term margins when we do it now. The acquisitions we have done has the dilutive impact on the operating margins in the short term. The Confrere transaction, for example, we have basically close to 100% COGS in the short term until we change the product to our own Digital Care Room in the short term. Our balance sheet enables us to be able to invest now when we see great potential internationally as well.
We are investing quite heavily into Webdoc expansion, both in Norway but also in Europe in general, our new product, Webdoc X. These initiatives don't generate any revenues as of now, but we view it as a great potential to drive the long-term organic growth. This is organic investments, of course, and we see that these initiatives has a great potential and that our balance sheet is really an asset now in the current times when we are able to invest when other companies are not. Dennis, if you want to wrap up.
Yes. Thank you, Svein Martin. We did present a new guidance for the year, which were reversed due to those hiccups that we have talked about during the presentation. Although if you look a little bit ahead and what the prospect of Carasent exist of, we sit on a very large balance sheet in order to be able to invest into a market which is heavily underinvested and where when the investment is needed the most. We are a vendor that is able to do the investment needed in order to provide the solutions that the market is demanding, and we are continuing to grow. We also show profits in our normal operation. The prospect of Carasent onward is looking very good.
We are one of the few vendors that's actually both have a growth profitability and a large balance sheet and is continuing to execute on the plan. We have been investing heavily during the year that we have been through during the presentation in order to continue to do this for many, many years ahead. We're not looking into the next year. We are looking into the five-10-year plan, where we want to continue to be the main innovator of this market and the main consolidator and the most growing and profitable vendor within the segment. With that said, I say thank you for listening, and maybe we can open up some Q&As.
Sure. We have gotten a few questions here, first from Mark at Redeye. First question, could you comment on the political risk following the general election in Sweden? What are your thoughts when it comes to centralizing parts of the healthcare? Could you talk a bit about this and how it might affect Carasent in the medium to long term?
Sure. I can elaborate a little bit about that. First of all those initiatives always takes time, but if you look into the initiatives that they want to do within the new government, within Sweden, that's a very good thing for a vendor like Carasent. What they aim to achieve is they want to centralize how the healthcare is provided to the citizens. With that comes also a centralized way to exchange data between caregivers, which is a huge problem within healthcare in general. What you have seen until this day is that every region want to solve this problem themselves. Some other regions is doing it by just implementing one big EHR, which, on the bad part, it's.
First of all, it's a very hard thing to do and also you're providing the same kind of processes to different kind of segments which need different kind of solutions. If this is to succeed what they aim to do, you will see the market will open up more for a vendor like Carasent since it will be more based upon standards.
Sure. Great. Next question, I think you covered it, Dennis, but could you comment on the rationale of acquiring HPI and what synergies do you expect from this?
Sure. If you are to look at where we have market shares today with Webdoc, we have specialist care, we have paramedical care, we have primary care, and we also have occupational health care. We have quite a small part of the occupational health care segment today. HPI sits on most of the customers within this segment. Of course, it's a great opportunity for us to have HPI as the door breaker for upselling Webdoc, since they have a very likable solution to occupational health today. Our products combined and integrated to this segment will be a very strong offer. That's the main synergy rationale, I would say.
Also we get the competence, as I mentioned earlier, which we make use of when we are developing our own Webdoc solution into the occupational health segment.
Thanks. Next question, I can take that one. Are private multiples starting to decline thanks to downturn in the public markets? How are your M&A discussions going in general?
We see that we of course have commented about this lag effect between public and private markets during the year and we see that at least for specific cases that is changing a bit. We see that there is attractive opportunities that arise and within the smaller companies that has potential attractive complementary products with the cross-sale potential. We see a lot of interesting opportunities such as the HPI acquisition. There we also saw, of course, that the transaction was executed at multiples lower than what we have done previously.
That's a good signal as well. Same with the Confrere, I would say. Next question. How are the dialogues with the Confrere customers going? When can we expect to see revenues from this? Maybe you can take that one, Dennis.
Yes, sure. As of now, we have started to talk with the customers, although not in a broader way. We are building a communication plan toward the customers. The first step that we want to do is to introduce our own solution in order to exchange the solution that they are using today to our own Digital Care Room. With that comes the possibility to also speak about other services like Medrave and also Webdoc. We will probably see those things start to materialize.
Yeah, it could be worth mentioning as well that we do have revenues from the acquisition, but pretty big up there. Next question for you, Dennis, as well. Can you talk a bit about your workforce and hiring in general? Do you have the team needed now, or do you have to add to certain areas? How should we view the larger R&D force, workforce?
Yeah, sure. What we see today, we have no more need to hire management. That's what we have been focusing during the year. Also R&D, we will continue to need good personnel within R&D and within all our functions, but not in the upscaling way that we have done during this year. I can't say more to that than this yet.
If you could also comment on the Norwegian rollout, how it's progressing, what's the response from customers, et cetera.
Sure. We have been in dialogue with the Norwegian market since the beginning, actually. We have some customers that we are in close dialogue with. Of course they like what they see in our progression, even though we have some more things to do before we can address the full amount of segments that we are addressing within Sweden. We are to launch the first customers, as mentioned during the presentation in the upcoming weeks. That will help us a lot in order to confirm the features and the integrations that we have built.
When we feel comfortable with the solution at those customers, of course we will start to onboard new early adopters, more early adopters in order to build the reference into the Norwegian market.
Great. You mentioned that customers are cautious in the current macroeconomic environment. How is this impacting your, customer intake going forward? Do you see it go down, be stable or still grow?
We haven't seen any effects of this yet, and we are in the business segment where the need for investments remains intact even during a shaky period of time. We will always have to continue to deliver healthcare to the citizens. Everyone will get affected somehow, but we will get affected less than compared to others due to the need of healthcare.
Yeah. The main effects, as you mentioned, been on the large customer processes. There we of course have a strong focus on converting those as soon as possible. We have not lost any processes. How sure are you to make the new guidance of under NOK 90 million to under NOK 95 million? It seems like Q4 must be very strong in order for that to materialize. This is our new guidance for the year, and we are of course believe in that, given that we posted now in after Q3. It's worth noting that that guidance is as we write the excluding currency effects and the effects of acquisitions.
That as per Q3 had a year-to-date effect of negative NOK 4.7 million in 2022 this far. Sorry, could you talk about the choice of Petri Niemi as Chairman?
Sure. I can elaborate a little bit about that, although I have not been in the committee to do that choice, even though I have been asked and involved. If you are to, this will be the last presentation that I will give you, the last report that I will give you since Daniel Öhman is starting as the new CEO for the group next week, the 1st of November. If you are to look at the background of Daniel, he come from the caregiver perspective, which will be a very good thing, for us onwards since he sits on the demand and the need of the customers, within the segment that we are addressing.
What we wanted a person in as chairman of the board that can complement what Daniel is bringing to the table. Petri has experience from board work and operations of the various kind of SaaS businesses and also expanding SaaS businesses internationally. Those two combined will make a great team in order to execute on the strategy which we have within Carasent onwards.
Okay. We have a couple more questions we can take. How is the status on the Mindler partnership? When do you expect to launch Webdoc X in 2023?
The collaboration together with Mindler is proceeding very well. They are happy with what we are developing and providing to them. We haven't done any new guidance on when we aim to launch Webdoc X during next year other than we are aiming to launch it during next year. That's what I can say as of now.
Sure. Final question here. In what range do you expect organic growth rates for 2023 and forward? We haven't provided any guidance related to that, but we have an initial goal of reaching NOK 1 billion in revenues in 2026, and there we model organic growth rates in the range of 20%, I would say, in the long term. We of course have these near-term effects now that is bringing the growth rates down.
Just to make sure that's not the guidance.
No
internal goals.
Internal goal. Okay. What final question we can take, what would be a contract in terms of size Carasent will consider notifiable to the market? I think that's customer contract, I guess. We can say that of course large contracts will be, we might consider disclosing, such as Aleris was disclosed in spring of 2021, when we signed a framework agreement with Aleris in Sweden. That's an example. Okay. With that, there's no more questions, so I think we can wrap up.
Thank you, everybody. I will continue to follow this company by your side onwards with the excitement. Thank you all for this presentation, and bye-bye. If you have any follow-ups, don't hesitate to contact us.