Good morning and welcome to Sectra's nine-month interim report presentation with CEO Torbjörn Kronander and CFO Jessica Holmquist. My name is Helena Pettersson, Investor Relations Officer, and I will be the moderator of the Q&A session later. You are most welcome to write your questions in the chat function. It's open from start. With that, I hand over to you, Torbjörn.
All right, thank you very much. So our nine-month presentation will do intro and highlights by me, then Jessica will talk about financial development, we'll talk a little about our way forward, and then we'll do a Q&A session at the end. And you can also email during the presentation or via the chat function to give questions on during while we talk; we'll reply to them after the session. Sectra is doing business in three major areas, of which one is subdivided. We have imaging IT, which is taking care of images in hospitals, mainly radiology, X-rays and MR, etc., but increasingly also other images. Some of the largest contracts we have received lately are all image management in the entire hospital system. That includes then pathology and other things as well. And then we have Secure Communications, where we do, that's where our name actually originates.
We were doing encryption technologies before we started medical. We do very high-level and advanced encryption systems. These are on the governmental, military and governmental levels, classified information at the secret levels and the restricted levels. That has now been begun, growing much more than before, as you will see later in the presentation. Then we have Business Innovation, which is our greenhouse for new ideas. That doesn't really fit into one of the major cash-generating businesses, things that might be profitable already but they're not big enough to motivate becoming a real business line, or they are growth areas where we are not yet profitable at all. One such is Genomics IT. We do, increasingly, we are becoming a diagnostics company. We have been a radiology imaging company, then we're a general imaging company, but the images are mainly used for diagnostics.
We have concentrated on the diseases of the aging person, which will have a big underlying growth because of demographics in the entire Western world. Oncology, cancer diseases, is one of those areas where aging people get sick. If you do oncology today, you also want to handle genomics, which is sequencing of the tumor and the germline DNA of the people, of the patients, and that is used for precision medicine. We've got an increasing wish from our customer base mainly in pathology, digital pathology, to also have them out with genomics IT. There were no production systems for genomics IT. Sectra is a company who is specializing in production. Hospitals must become much more industrialized than they have been. They have increasing workloads, and it's got to be run efficiently.
Genomics is a rapidly increasing area which has not yet had any production IT support. We are developing such a system together with the University of Pennsylvania in the United States. That development is just now going to clinical tests. We don't have to do clinical trials for it. It's exempt from that type of FDA approval. But we need to do clinical tests, of course, in the live environment if the customer is happy with it. It's been one and a half -year development, and it looks very promising, and it will be integrated together with pathology and radiology for oncology diagnostics. Highlights from the quarter that passed. We have strong performance in all operating areas right now. It's very nice to see that we have very high customer satisfaction. I'll come back to that in a while. We are experiencing growth phases in several areas.
We are doing large investments, which can be seen in our costs, but there will be paybacks on these in the coming years. And we have rapid progress in the transition to as-a-service model. And that also drives upfront costs, as in such a process, you get paid when people begin to use the systems, not when they decide to buy it, as we got paid before with licenses. Yet you have to take it live. You have to implement it and run the product. That drives costs while the income is deferred to later. We see that clearly on the margins this year. And again, transforming as a delivery as a service. Our net sales last year increased by 20%. The first nine months increased by 27%. That is high growth. It's demanding, but it's also very nice to have it. Our profit per share increased by 23%.
Recurring revenue, which is an increasingly important thing in this world where we are moving over to deliver as a service organization, increased even more by 28%. And the churn of recurring revenue, the number of customer contracts we—not the number, but the amount of money that we lose from recurring revenue every year. It's low, meaning it's getting a new recurring revenue contract in if you lose it two quarters later. That is extremely low. It's 0.4%. Customers are happy, and they stay with us. And of course, that is a very important aspect if you want to become a services company because if you lose customers, you lose that revenue. But people like us, and they stay with us. We also won our Best in KLAS award.
Best in KLAS is an organization in the U.S. who does customer surveys and, of course, they sell these reports to customers who want to buy systems in the future. They do this independently of all the vendors. They ask customers, mainly starting in the U.S., "What do you think of their vendors you have?" Then they rank all the vendors. It produces very interesting reports, both for vendors. We can learn from competition and also know where we're good and where we need to improve. It drives quality in the entire business. But it's also good for customers because they see what vendors out there that have had the customers. Of course, that increases likability. They will be happy themselves if they buy that product. We have now won U.S. PACS in large hospitals. PACS is Picture Archiving and Communication Systems.
That's our main business line, mainly in radiology, 11 years in a row. That makes us very, very proud. We are a small company in Sweden who wins the most important award you can have for customer satisfaction in U.S. medical IT. Now, there are more categories, of course, and we only compete in one of these categories. The one where we are in, we have now had the happiest customers 11 years in a row. And we have quite a good margin to the second one. Now, large hospitals in the U.S. is our main target in the U.S., but we also have some smaller hospitals, and we won that as well. We won both large and small hospitals in the U.S. We won in Canada, and there we have a huge gap to the second one.
For the fifth year in a row, we won Northern Europe. Europe before was one region. They have now split it up in Northern European, Southern European, and one is DACH, one is France, and one is U.K. We are second in DACH and U.K. We need to improve that. We like to compete, but we're number one in Northern and Southern Europe. In France, we're too small in radiology to be ranked. Very often, we run by partnerships. Genomics, we're developing things in partnerships. The ideal situation for development for us is that we scale, we prepare to do something, and then customers come with a problem to us, or we find a problem together with the customer that they have, and then we solve it.
Genomics IT is a very good example where we actually saw many years ago that we will need to do something in genomics because it's a need in oncology and cancer care. We staffed up bio informatics PhDs who know that. We didn't start the development until we got the customer who wanted to develop together with us. That has now been done together with the University of Pennsylvania. As I said before, we're going to clinical tests, which means they try out this in the normal clinical setting. Not trials. It's not an FDA. It's not clinical trials. It's a clinical test. Right about now, we do also another partnership. We can partner both with vendors and customers. This is when hospitals want to use AI.
We have decided that our strategy is better done where we have more or less an app store, as Apple have it, for AI than actually developing this ourselves. So we have a very good offering in app store for AI for hospitals around the world, where they either can develop their own AI based on the archive. AI is really looking glass into an archive, if you look at with their size. But it's also possible for vendors, AI vendors, who use us to come into the hospital. And then we take part of their revenue, but we also take care of the security vetting, etc., for hospitals. And we also very often do integration and exchange of information between various healthcare systems. We are kind of where we are the middleman in this exchange.
The financial targets for the group are fulfilled, and they are in order equity to assets ratio, which is if our systems fail, the hospital is, or the customer in communications is in a dire position. We have heard from customers that they consider our system to be the most important IT system of the entire hospital, which is important. Then you don't buy that from a vendor you don't trust. And financial stability is, of course, very important. They don't want the vendor to go under. So equity to assets ratio is something we value. It should be above 30%. It's a hygiene measure. It's not what our main goal is, to have this as high as possible, but it should be above 30%. We are currently at 49%. The other hygiene measure, and people sometimes don't see that we see this as a hygiene measure, margin.
If you have a good margin, we said that is above 15%, then it's a good thing. Then we can also invest. If we get excess margin ways above this, we have run out of good ideas for the future. So the hygiene level of this target is 15%. We're currently at 19%. And then the real main target is to grow EBIT per share over five years. And there the target is 50%, and we are ways above that now at 132% EBIT per share growth over the five years. Some highlights in Secure Communications. This has been a problematic area for us for several years. We have now a completely changed market situation. We have a new management, and we see considerably improved sales and earnings. This is now a growth area that is profitable to that. Very strong order intake. And we also have new offerings.
We have been in the developing phase for several years, and we have now new products that are shipped to customers, mainly in mobile phones, encrypted mobile phones, but also increasingly very high-speed network devices on the highest possible approval levels for secrets. As an example, we won a large customer win that we got an increased business together with the Swedish authorities for a fixed phone, not a mobile phone, but a fixed phone that follows the secret level functionality of classified information. In Business Innovation, we have Orthopedics IT, which is steadily growing. We have Medical Education, which is also steadily growing. We have genomics IT. As I said before, genomics IT is going to clinical tests in the University of Pennsylvania just about now.
We are beginning to prepare to sell that to a wider market, but right now we want to see that we can make the University of Pennsylvania happy first. We have Orthopedics IT, which is mainly sold through Imaging IT, special applications for orthopedics. We have Medical Education, which is not a medical device. So this can be sold without approvals, but it's based on the same software to a large extent as IMIT. This is sold for teaching both basic medical students in medical schools, but also continued education of medical and veterinary professionals because they now live in a world which is changing very rapidly, and they need to keep up to speed. That is a rapidly increasing area as well.
One example of Medical Education here, we got an order for the University of Saarland in Germany, where we are helping out with the teaching of radiographer students. So they are the people who are going to run, operate the radiology devices and MRs and CTs in the future. And they need tools. They want to understand how images look like. And this is a complete cloud-based offering where they can access this both on the big kind of big, big device, but also on their iPads and PCs at home. Imaging IT solution highlights cloud recurring revenue. This is the main business of Sectra. And our cloud recurring revenue, which is the revenue that we are doing in the cloud. So, I mean, recurring revenue is both service agreement that we always had.
The cloud recurring revenue, that is the replacement of the initial licensing, as I said before. That is increasing a whopping 57%. Very low recurring revenue churn, as we said before. We have there achieved Best in KLAS because that is the part who achieves that for 11th year in a row, that I said before. One win there that is interesting is NHS Scotland. Scotland has their own NHS. There are different national health systems for England and Scotland and Northern Ireland in the U.K. They had one purchase for PACS systems for the entire country. They do about five million radiologic exams per year, which were awarded to us. We replaced the incumbent there, and it's now in production to be delivered. They're not yet in a phase where they pay. This is a pay-per-month or pay-per-usage situation, but they're not yet paying.
We have investments in getting them live. That was a large order. I will leave over to Jessica, who will tell you about the financials.
Thank you. Good morning and welcome to the presentation of the financial development nine months into our fiscal year. We see high demand for our offerings with contracted order bookings surpassing SEK 5 billion for the nine-month period, of which roughly SEK 2.5 billion is guaranteed order intake. The largest contract secured in the period remains the 10-year Sectra One Cloud with the U.S. hospital chain, which we received in the first quarter. During the third quarter, we received several significant orders. Torbjörn spoke about the order from the agreement with NHS, National Health Services in Scotland, and also the order from the Swedish authorities for systems and solutions for secure communication.
We also received an order for cloud-based enterprise imaging from a network of U.S. hospitals and outpatient clinics. We remind you that the size of individual orders creates quarterly variations in reported order numbers. Our sales are steadily growing, up 27% to SEK 2,066 million for the nine-month period. Satisfied customers, underlying growth, and also a favorable currency development in the nine-month period together drive the overall sales growth. Adjusting for currency impact, sales grew by 24%. The SaaS transition is driving recurring revenue growth, and the cloud recurring revenue part increased by 56% versus the comparable period. As Torbjörn also pointed out, happy customers keep our recurring revenue churn at a low level, currently at 0.4% on a rolling 12-month basis. In the third quarter, we increased sales by 20% to SEK 694 million.
Although we are transitioning into more predictable revenue streams, which will decrease quarterly variations over time, we can continue to expect fluctuations in growth and profit levels as long as we have both on-prem and cloud deliveries. All business sectors increase sales year-over-year. Imaging IT keeps growing as we continuously add and deploy new customers, and also as existing customers are increasing the use of installed solutions. Secure communications increase year-over-year by 43% and surpasses SEK 300 million on a rolling 12-month basis. And this is a result of good order inflow during the year. In business innovation, we increased sales by 25% and driven by the development both within Medical Education and the orthopedics area. We are growing sales in all of Sectra's geographic markets, a stable trend confirmed in this report.
We see the highest growth in the U.K., the U.S., and the Swedish markets. The growth in the U.K. market stands out and is a result of successful contract additions over the past years. Denmark, Canada, and Australia exhibit the highest growth in Europe and rest of the world. Operating profit rose 24% year-over-year to SEK 320 million. This is a result of growing sales, favorable currency development, and also increased contribution from Secure Communications to the group operating profit. Our operating profit margin was at 15.5% in the period or 18.5% rolling 12%. Continued investments in SaaS and cloud deliveries, as well as new major contracts that initially increased cost, are impacting profitability in the period and in the third quarter. In the third quarter, our operating profit declined by 14.5% to SEK 74 million.
I repeat that as long as we have both on-prem and cloud deliveries, we will continue to have fluctuations in profit levels between individual quarters. All business segments also increased operating profit year-over-year. Imaging IT, which is up 11%, carries implementation costs for new major contracts, as mentioned, whereas revenues from these contracts will grow gradually over the coming years as the customers become fully operational in the installed systems. Secure communication showed a significant uplift versus last year. This is driven by the higher volume of business. Cash flow in the nine-month period, cash flow from operations in the nine-month period amounted to SEK 193 million. Cash flow generation from operations was strong in the third quarter, explained by advanced invoicing of support agreements and also less outflow from settlement of current liabilities than in the comparable quarter.
At the end of the period, our cash balance amounted to SEK 689 million. That was the end of my part of the presentation.
Thank you, Jessica. Then I will continue with our way forward as we'll see it today. We are definitely transforming into a SaaS service company, mainly in imaging IT. That's where the impact is largest because of its size. But for instance, Medical Education is already there. We have also orthopedics, which is more or less already there fully. And we have an increasing portion of it also in communications, though less, because there we get an order for a number of security devices they're delivered, and normally they are paid for. But communications is a smaller part of the company. As we said before, we have an increasing recurring revenue.
We have a large interest in pay-per usage in all product areas, as said before, less so in communications, but still also there for some types of devices. Then it's more or less a rental of a hardware device and that they pay for usage from it. If you are going to become a successful recurring revenue company, you need low churn. We have a very low churn below 1%. Revenue and profit growth will temporarily be changed smaller while we flip those initial large sales of initial income from a license sale to becoming revenue over the years instead. After four, five, six years, of course, it will be grossly profitable compared to having initial sales and just service income after that.
We are also seeing that we have an increasing interest from existing customers who paid a license fee earlier to become a software as a service customer. And if they do that, we give them initial discounts for four years about to kind of pay them back for the license that they own. But we gradually take them up to full payment. Our new products are very often only developed for a software as a service environment. And so even existing customers are converting over to this. And that, of course, will be a growth immediately when they change because they will pay from day one more than the service contract. After five years, they pay as much as any Sectra One customer. But we need to take the investments upfront. So we got some really huge orders here during the year, as we know.
We have told you and informed you about them. But they are now in implementation phase. We need to invest. We don't get paid as we did before upfront. We get paid when they begin to use it, which means that we have, as Jessica also said, large upfront costs that we have to take. Long-term, the financial effects from this will be strongly positive. It's one of the few things where both customers and vendors feel good about it. Most of us like to pay this if we have a feeling we can stop paying if it doesn't work. Of course, the vendors get more money long-term. In medical IT, these are the growth areas I spoke a little about in the beginning. With the demographics of the world today, the diseases of the aging person is the most important to invest in.
It's said that about half of the cost of healthcare in a Western country is done for the last year of living. So it's a huge kind of weight on cost for the aging people. That's where society has to invest. And when society has to invest, it will be a growth area. Disregarding if it's a low tide or high tide in the economy as general, society has to invest here. Those five are neurodegenerative disease, Alzheimer's costing very much, Parkinson, MS, cardiovascular disease like chronic heart failure, etc., cancer diseases, musculoskeletal diseases, and vision. These areas where we are working a lot in delivering very good solutions based on medical imaging historically. But now with genomics, we are also increasing diagnostic capability for cancer outside of pure imaging. It's very closely related to imaging.
It goes together with pathology, but it is not images that we are dealing with. This is new, as I said before. The vision for medical imaging is collecting all images related to diagnostic data in one single system for the hospitals. This is better care for patients, but it's also lower cost for the hospitals. Having many IT systems, I know of a customer in the U.S. that have 1,000 that is not a huge hospital. They have 1,000 IT systems. This is a huge cost driver, not only for buying them, but just having competence to maintain them. They want to reduce that. There's a huge consolidation going on now in imaging and in IT in general in the U.S. market.
It's also a security risk, which also drives hospitals to having fewer systems because every single system is a potential threat vector for getting bad stuff into their IT systems. So it's reduced complexity, but also higher security if you do fewer systems. We are the only vendor today that can do all the medical images in one single IT system. There is no other vendor who can do this in one system. The other vendors that will sell it, but they cannot have it in one system. Then they sell parallel systems, and then you're back. Then you just get one invoice, but it's several systems still. So we're still the only one who can do all of this in one system. So we have radiology pathology and cancer care going together. We saw that eight years ago when we digitized the Linköping University hospitals here in Sweden.
Now, Sweden is by far the world leader in digital pathology. We have that in the same system. Now we're adding also genomics into that, the only vendor with all of these in one system. They're built for production. We are not mainly a research company. We are a company who deliver industrial production systems for healthcare because that is what healthcare needs to go through in order to cope with the explosion in cost we see. From research IT tools to production, and as I said before, we're now doing that transition with genomics IT. The hospitals have been increasingly doing sequencing and DNA sequencing for cancer, especially. But they've done that on research systems. We are now introducing one of the first real production systems for genomics IT, an area with huge growth.
So genomics is estimated to grow about 90% per year for the foreseeable future, while imaging is about 10%, 90%. In cybersecurity, we live in a new digital reality. There is an increasing international tension that we are aware of all of us. We also see increasing cybercrime, not the least against healthcare because healthcare pays out a ransomware attack because otherwise patients die. Why many companies simply swallow the grievances about it and do not pay out. They are not going to pay to customers or to criminals, but hospitals have to pay. And that means that healthcare is a very strong target. And we synergize there from our security knowledge into medical. We are very well positioned in security, and we have a very strong brand name in that area, which is required. That's another area where brand is crucially important. Threats are expanding. Attackers are getting smarter.
An example is that these new large language models, GPTs, as you probably all are aware of, they can also be used on the attacker side. They can build an attack software in a fraction of the time it took before when a vulnerability was discovered. The crooks are also using much more advanced psychology. They're doing phishing emails that look very similar to reality. The threats are expanding a lot. It's larger and larger impact as well of these because the society is more and more digital. That demands more and more countermeasures and thus investments from society. One of those investments is, of course, encrypted channels and encrypted traffic. Why should you invest in Sectra going forward? We are positioned in markets that are by external factors forced to grow.
It's nice to be in a growth market, but it's even nicer to be in a growth market that has to grow even in a low tide in society. Both healthcare and cybersecurity will grow. It has to grow. That, of course, is a nice market to be in. We have a high customer satisfaction and a very strong brand where brand is crucial. If our IT systems stop, the hospitals come to a grinding halt. If our IT security systems do not function, bad things will happen to the people who talk over that phone. It requires a very strong brand. That makes huge barriers of entry for three guys in the garage type of operations. It's a very difficult market to enter, but when you're in it, of course, it's a good situation.
We have a rapidly increasing recurring revenue and very low churn, which provides good prospects for the long term. Yet we have very exciting self-finance prospects for future growth in our business innovation. All of these can become major. Not all of them will be. We have had several there. We have shut down a few of them historically. We have sold one of them. But all of them have potential. Then if that comes to fruition or not, we will see. But it's an interesting area. And in Sectra, all management own shares. We like that to be a fact. So you know we have our kind of mind where our work is. And the upcoming financial events going forward is our annual meeting in September and the year-end report in June.
You're all, of course, most welcome to attend the annual general meeting if you have own shares. That will be held in Linköping. Also, these meetings are important for us. We want them to be productive for you as viewers, as the same way we think about our product with customers. So if you have any suggestions, anything you want us to change or modify in these, please send an email to info.investor@sectra.com and suggest how we can make them better. Any questions, if you follow online, please use the chat function. Helena, we'll read the questions for you.
Yes. Thank you, Torbjörn and Jessica. We have a number of questions. I will start with the ones that arrived before the meeting from ABG and Nikola Kalanoski.
The first question is, given the recently strong performance in the Secure Communications segment, could you help us understand how the general business momentum has changed in the Secure Communications segment in the last year?
On that, it's mainly due to the tensions in Europe, I would say. It's also a common completion of our products that we've been developing a long time. But the increasing tensions and the awareness of cybersecurity warfare, which is happening in Ukraine, has driven demand a lot.
The guaranteed order bookings of nearly SEK 1.76 billion was very strong. Could you please help us unpack that figure in terms of which orders have had the largest contribution?
Well, the guaranteed order intake of SEK 1.7 billion in the quarter is spread over Scotland, the two no-name U.S. contracts, and also the order intake in Secure Communications.
We note that you continue to sell the traditional license model in the U.S. Could you please help us understand what types of U.S. clients prefer Sectra One rather than Sectra One Cloud and what might be the practical reasons for this preference?
It's like all transitions of a new kind of paradigm. Not everyone jumped as well at once, right? When people got mobile phones, some people had them earlier and some people got them very late. That might be because of the policies of the IT department of the hospital. It might also be because of the external network. If you're going to work with a public cloud solution, you need a very high-speed network into the servers of the cloud operators. If you don't have that, you need to have them on-prem.
So we will see, but they are getting fewer and fewer public or on-prem installations also going forward. But they are few.
And the final question here is, could you please provide us with some color on what markets in Europe face a large replacement cycle of legacy PACS?
It's very difficult to say. It's very different for different markets. And there's two reasons why people change PACS. One is that the developer has not kept up development with the new technologies. Images from radiology CT, for instance, get larger and larger and bigger and bigger data. If they haven't built the IT system to cope with these very large images, the system will become slow. So that's one reason why people exchange them. Another one is consolidation. And in areas of countries where we have a huge consolidation, customers, they merge the hospital into larger entities.
That will drive needs to have one IT system for all the group together. Some of the old systems will not cope with that environment. If you look into where this is happening right, it has happened a lot in the U.K. All the hospitals were owned by the NHS, of course, or not all, but almost all in England. They have consolidated into consortiums, which buy IT together. Then the legacy systems have not been able to cope with that. The U.K. is almost through it, but we see other countries. There's a lot of countries in Europe which still have a very, very diversified and fragmented healthcare market. I will not give examples, but there are large companies, countries in Europe where this is the case.
I will move on to questions from Kristofer Liljeberg at Carnegie.
Could you explain which contracts are driving the strong sales growth in the U.K. last two quarters?
Several contracts are contributing, but Scotland is, of course, one.
Are costs for implementing new contracts mainly on the personnel and external cost line or also impact on gross margin?
Yes, mainly on the personnel cost line at this point in time.
When could we expect costs to peak for implementing large recently signed contracts?
I can't take that. We don't like it to peak because if we continue to grow, the cost will increase. The transition into software service, that will peak now over the next or within two years. Cost for implementation, we like that to increase because that drives future business.
Part of order intake this quarter to be delivered within the next 12 months is that mainly related to Secure Communications?
No. It's on the medical side is the majority.
Okay. Then I will move over to questions that we have received in the chat function. The first one is, just to be clear regarding the recurring revenue within Imaging IT Solutions in Q3, does that mean you have SEK 98 million recurring revenue from software as a service, and around SEK 307 million recurring revenue from service/consulting sales?
Well, yes, if by software as a service we mean the part that is cloud-based. Because that's cloud recurring revenue is the recurring revenue from cloud-delivered projects.
Could you please talk a bit about the split between software as a service and cloud revenues and service consulting revenue from the larger orders in the quarter?
Could you repeat that, please?
The question is if you could talk a bit about the split between SaaS/cloud revenues and service/consulting revenue from the larger orders in the quarter.
I mean, if we sell Sectra One Cloud or cloud-based systems, it will end up in the cloud recurring revenue stream of revenues. I don't know if I fully understand that question.
No, I think it was more about the split in the order intake if I interpret the question.
Most of the current order intake is for future recurring revenue.
And the next question is from David Mignon at Stifel. And the first question is, the growth in average number of employees has been slowing down since the first quarter, and the number of employees has been growing at a slower pace than revenue for a while now.
Are you happy with the size of the team, or are there areas in which you expect to hire significantly more in the coming quarters?
That is a figure we can't reveal. But in general, we had to invest earlier on with people. It takes time to get people up to speed. We got some massively large order that we had to invest to be able to implement. And you saw that a little bit earlier this year.
And the next question is about the other side of the costs. On the contrary, your other external costs have been growing fast this year. What's the biggest driver behind this?
I would say it's divided in many things. One, of course, is cloud costs. We pay now our cloud providers. They need kind of the platform cost is increasing. We have a good margin above that, but it's still costs that we have to do. We also have consultants in some areas, and we have hardware that some customers still buy from us.
And the third question from David is, could you give us more details on the attachment rate you're seeing with existing customers for your other modalities besides radiology and breast imaging?
Quite good. When people who are a radiology customer want to have a new pathology system, for instance, of course, we are in a pole position. It would be much cheaper buying that from us because they already have all the basic infrastructure. They can start paying just for the pathology exams they do. So that attachment rate is quite high.
Is this contributing to your growth, or is growth still materially skewed towards radiology?
It's materially larger in radiology, but the otherologies are growing faster, I would say.
Then I'll just check so we haven't received any more questions by email. And that is not, and that is the case. So I have a final question then. I think if no one else online has a question, can you comment on the large quarterly variation? Can you give a bit more flavor on that?
Well, there's two things driving what we see now in the kind of model change. One is, of course, moving licenses to recurring revenue. The other one is that the consolidation in the hospitals is increasing. So the orders get much bigger because there's now many hospitals or even countries buying one system, as we saw in Scotland. That means the deal size gets bigger, but things are also spreading out.
Now, the deal size drives, of course, if one of those are on-prem or license-based, that's a huge order. And when that is recognized, it makes a huge impact. So even though you could think that it will decrease with increasing revenue, we will keep the large variations, mainly because the order size of also the other ones are increasing a lot. So we will continue. And we normally say that you have to look at Sectra on a rolling 12 basis because you cannot predict the next quarter from one quarter because it goes up and down depending on when these are realized.
Okay. I think that was the final question.
All right. Then we thank you very much and look forward to hear or see you again on June 5th. Thank you.