Hello and welcome to today's webcast. We're gonna present the report for the third quarter. With us, we have CEO Kristoffer Cassel and CFO Martin Bäuml. After the presentation, there will be a Q&A, so stay back to watch it. My name is Ludvig Sjöström, and I work with Finwire. Having that said, I will hand over the floor to you guys.
Thank you, Ludvig. My name is Kristoffer Cassel. I'm the CEO and Co-Founder of Checkin. I think we'll run the same agenda as previous quarterly presentations, which is I'll dig in a bit into how the business has developed during the third quarter. Martin, who is the CFO, will take over and look into some of the financial numbers. We will also leave plenty of time for questions at the end. We assume that you guys who are listening know the company to some extent and that you have read the report. I'll try to get straight to the point. I think the overall impression of quarter three confirms our thesis about scalability.
Basically that as we grow as a company, the margins and the profitability and the cash flow gradually increases over time. I think it also confirms the synergies that we identified when we did the acquisitions that we have done last year and early this year. Not only on the commercial side, where we previously have seen the good results of combining the softwares and the technologies, but also on the efficiency side now, where we really materialize some of the synergies we previously just saw the potential for. This leads to strongly improved profitability. Our gross margin of 85%, combined with these synergies, strengthens the overall profitability. The gross profit rises with 92% year-on-year.
The EBITDA margin is up 30 percentage points the last year, and almost half of that improvement came from Q2 to Q3 this year. The operational cash flow also follows, and is positive. As I write in the CEO letter that the revenues now exceeds SEK 75 million on an annualized basis at the time of writing. We have decent growth, 78% year-on-year growth. We managed to achieve this despite that we have some tough development of our clients in the regulated German gambling sector. We flagged this already last quarter, and the slide is reused. Basically, there's heavy regulation on our clients, which make them sometimes pull out of that market, but at least not invest as much, which in turn hits our volumes.
The revenue from the Germany focused customers decreased with almost SEK 1.5 million compared to Q2. The total NRRs or net revenue retention decreased to 132%, and that's a rolling measurement as well. The revenue share of the German iGaming market has decreased from 36% down to 13% in one year. These clients are developing quite negatively, but we feel that a lot of that development has already been taken, and that was mainly early in the quarter three. We feel quite well-positioned once the market turns. Hopefully, the German iGaming market can again become a driver of our growth instead of working against us. Of course, this characterized the quarter in terms of revenue.
Although we lose a lot in this customer segment, we still manage to close the quarter at SEK 17.1 million in net revenues. As I pointed out in my CEO letter, both September and October, both these months were all-time high in terms of revenues for us, and we look positively at the year ahead of us. Something I also think I would like to focus a bit on is the operating cash flow and why it's important that the cash flow follows with the profitability. Because now we're very close to be able to fully finance our long-term investments with our ongoing operations. The cash flow we generate from our business, we can use to finance R&D and sales and marketing activities for the long run.
I think we have sharpened our efficiency in these investments for the last couple of quarters. Marketing and sales levels flattens out a bit. We have previously guided for around 25% of the revenue going back into sales and marketing. With some luck, I think we might be able to push that, the, that cost down slightly under 25%, if we can be really efficient. But let's see. I think you should expect around 25% as a guideline for the future in terms of sales and marketing. We also continue to invest heavily in R&D. This is long-term software development that I think will materialize in the next couple of years in terms of launches and growth.
Here also it's important to notice that when we say invest heavily, we will continue to invest heavily, especially in absolute numbers. This should also lead to, as we scale, the EBITDA should gradually improve both in absolute numbers and as the margin. We have said that a couple of quarters back now, and we have delivered on that, and our expectation is to continue to deliver strengthened EBITDA numbers going forward. A lot of these investments go into North America. We believe that this is one of our biggest future markets. It's a market where we currently have low penetration. In the quarter, we hired our first local sales representative.
We have also gone live with some clients, and our hope is that already in Q4 there will be some revenue at least from the North American market. This is something to keep track of for the coming quarters and next year. We believe that's hopefully a big part of our future success. The experience we have had from the two acquisitions we have done, that we early on saw commercial synergies by combining the softwares and producing this hybrid software, as I call it, using the best strength from all the different parts, that we saw early. Now we are also starting to see the efficiency gains and the cost synergies of developing software together in a smarter way.
Me and Martin is putting down a lot of work in trying to find the next acquisition. Unfortunately, we can only speak publicly about the acquisition that we follow through with. I hope now with a more stabilized market and stabilized valuations, that we have a bigger chance to come back to you guys with some new acquisitions. We're looking for leading technology within niche areas. We look for excellence in the teams that builds our long-term innovation power. We look for strong product-driven companies that has sort of a strong momentum and growth, but where we can help commercialize, add value to our customers, and realize synergies as well.
We think if this is rightly done, we will create material shareholder value by doing this. Hopefully we can come back on the acquisition part. The strategy otherwise remains. If you have listened to us previous quarters, you have seen this slide before. It's new clients, adding new customers. Here, as I said, North America is a market to look at a bit in the future. It's existing customers to continue deliver positive net retention, making sure that our customers grows with us. The drop in MRR that comes from Germany this quarter, as I said, that's a rolling 12 months measurement, which means that the effect in short term has been bigger. Over time, we of course hope to come back to high MRR numbers.
That's a big part of the driver of our growth. Also acquisitions. We believe there's a lot of good technology out there. We see a lot of potential, and we're working very hard on this. The targets for 2025 remains, and the target is to reach half a billion SEK in net revenue year 2025. This means that we need to grow 86% annually, organically, and through acquisitions. This is the aim we have, and we feel quite confident with that target, especially now if the markets stabilize and that we can continue with the acquisition agenda as well. With that, I leave it over to Martin for some of the financial numbers.
Yeah. So as you've seen in the report, it's a lot of numbers, and we have all the details in the report, but I'll go through the highlights here. So as Kristoffer already alluded to, net sales increased 78% compared to the same quarter last year and ended at SEK 17.1 million. Organic growth was 52%, which corresponds to almost exactly 2/3 of the total growth. Gross profit grew by just over 90%, and the gross margin was 85% in the quarter, in line with previous quarters. After a few quarters of large investments and negative cash flows, we saw a lot of scalability and efficiency improvements already in the last quarter where we reached break even on EBITDA level.
This quarter, we ended at an EBITDA margin of plus 14%, which is up 30 percentage points from the same period last year. Cash flow from operating activities follows that as well and ended at SEK 3.2 million positive in the quarter. We ended the quarter with a cash position of SEK 47.5 million and an equity ratio of 83%. If we go into the net revenue details here, you might recognize this chart from previous quarterly presentations where we once again add a big building block to the 2022 column. SEK 17.1 million. Up 78% from last year.
As you can also see in this picture, we already in July beat last year's full-year revenue of SEK 38.9 million. As Kristoffer already mentioned, we are now having a run rate revenues of SEK 75 million, which is actually almost twice as much as we had in 2021. Going further to the gross profit, that also grew with 92% in the quarter to SEK 14.4 million, which corresponds to a margin of 85%, which is in line with our previous quarters and slightly up from full-year 2021.
As we said previously, it's the high gross margins that enable us to invest a lot in growth-generating activities, mostly product development but also sales and marketing. If we go into the sales and marketing, we are continuing to invest in that area. Efficiency gains and scalability is helping us with the number in relation to net revenues. We had 20% of our net revenues in the quarter and 23% of net revenues year to date we invested in sales and marketing activities. That's also in line with what we have guided before, with around 25% in this area.
Going to EBITDA, we've had a few quarters with large investments and negative cash flows. Already in the last quarter, in Q2, we saw the scalability and efficiency improvements, which helped us reach a break-even EBITDA margin. We have continued on that path also in this quarter, where we saw continued profit improvements through these efficiencies and scalability. We had EBITDA of SEK 2.3 million in the quarter, which corresponds to 14%. Year to date, the margin is 3%. This is something that we expect to gradually improve over time also in the future quarters.
Going to the last slide on my slides, we ended the quarter with a cash position of SEK 47.5 million and an equity ratio of 83%. Just looking at the development of the cash position here, it's increased a lot since last year where we had a little bit less than SEK 28 million . Obviously we've done one acquisition and a connected share issue in connection with that acquisition. That disturbs the comparison a little bit.
If we instead compare this number to where we ended quarter two, i.e., 30th of June, then we had a cash position of SEK 50.1 million, which implies then that the cash burn or the decrease in cash was SEK 2.6 million in quarter three this year. With that, I'll hand it back over to Kristoffer for some final remarks.
Thank you. Thank you, Martin. I think to try to summarize the quarter, what characterized it is that we had decent turnover figures despite these challenges that our German-facing clients have. We have high gross margins, and we realize or realized some clear synergies, and we're quite efficient in our operations. Also, this means strong improved profitability figures and metrics throughout basically the whole report, from the gross margin down to the cash flow. We also have a strong financial position, which is quite nice to end this year and start next year with this solid position that we're in. We look forward to the rest of the year and to go into 2023 in a strong way.
With that, I hand back to Ludvig for some questions.
Thanks. Thanks so much for the presentation. The first question is, growth was a bit lower in Q3 compared to Q2. Will it continue downward, or what is your predictions there?
The growth in Q2 was 111%, and this quarter it was 78%. Indeed, that is lower. I think the long-term expectation, as we said, is to have 86% growth, including acquisitions. The way that Q3 ended and Q4 has started, it give us some comfort in that. I think the long-term growth is our long-term target, which is 86%.
Can you tell us a little bit about what is driving NRR in the quarter?
It's a bit of a mixed picture, to be honest. I've already talked about the regulated German gambling market, which penalizes the net revenue retention in total quite a lot, so it's very negative in that market. The other markets develop quite good, and other sectors and markets. It's quite a mixed picture, and as it is a rolling measurement, I think, how should I say? We think it will recover and go up in the long term, but we will be penalized by Germany this quarter and maybe even coming quarter.
Speaking about Germany, for how long do you believe Germany will continue to be a weak market?
It's quite hard to say. We saw a very, very strong headwind in the beginning of Q3 that has slowed down. We don't feel as strong negative. It's more of a neutral situation right now. We've also managed to get new contracts, for example, bet-at-home.com, who's a big German player. We have other few forward-looking contracts that indicates that we're at least in a good position once the market turns. When that happens, I don't know. The hope is, of course, that it at least can be neutral for the growth, but hopefully even a growth engine rather than working against us.
North America is highlighted as an important future market for you, but when will the revenue come?
The short answer there I think is Q4. It of course depends on how material the revenues from this market will be. We are focusing a lot, and I think we will have excellent growth numbers, of course, but it's from low base numbers. We have said previously that during Q4, I think you should expect that North America contributes to our overall growth to some extent, at least. For us, this is a long-term thing. We're trying to do this gradually step by step and build a presence. I think it's something to return to for the next year and we're trying to build something very long term.
You mentioned a bit about acquisitions earlier. Do you have anything in the works right now?
For natural reasons, I can't really answer that question in a good way. What I can say is that we believe there's a lot of opportunities, and me and Martin is working hard on this. Unfortunately, we can only communicate once it's really done and once we finalize something and all the deals we don't finalize, you guys don't see. We believe there's a lot of good technology and companies out there that we could combine with our software and create really good shareholder value. Hopefully, the macro stabilizes and that we can get some stability in the valuation metrics to be able to proceed and come back with some concrete news in that area.
Moving on to the last questions. Are new customers in the quarter all in iGaming, or are they also in different industries, so to speak?
I don't think we have published that in the quarter. I think it might even be the opposite, that the majority of them are not in iGaming. We have quite a good mix, and I think this is something to come back to and share some more information on because we have quite a nice split and we're not that sector dependent. We didn't publish the exact split, but it's something we probably should add. It's not all iGaming.
Thanks so much for the presentation and good luck going forward, and thank you all for tuning in.
Thank you.