Good morning, everyone, and welcome to the earnings call for the third quarter for Upsales. My name is Daniel Wikberg. I'm the CEO and founder of Upsales, and today I'm joined by Elin Lundström, our CFO. Our agenda today is I will talk about our growth strategy, our product, and the overall development for Upsales. Then Elin will talk about the financials from our latest report. If you want to ask a question, you can use the Q&A button available in the toolbar at the bottom in your Zoom window. You can ask questions during the entire presentation, and we will answer the questions at the end in the Q&A section. Introducing Upsales, we are a software as a service company.
We have a very long track record of profitable organic growth with more than 90% recurring revenue share of total revenue. We are a net cash company with zero debt with SEK 48.9 million in net cash. The third quarter is our 78th consecutive quarter with growth. 51% of the company is still management owned. Trailing twelve months, we have 17% free cash flow margin. The product and what we do for our customers, Upsales is a sales and marketing platform that is used by fast-growing small and medium-sized B2B companies to...
with the aim of finding new leads to the sales team to become better at winning deals and more effective in driving the pipeline and to grow existing customers and existing accounts. It's also used as a reporting and management tool with the help of the analytics and the reporting features inside Upsales. These are some of the reasons our customers come to us. Companies that want to scale their sales organization and want to increase sales, it's hard work.
You need to find ways to be effective in directing the efforts of the sales team, making sure you're reaching out to the right type of customers, and spending your time with the right type of deals. These are the core problems we address with our product, and the core problems our customers have, leading them to buy our products, essentially. These are some examples of companies that use Upsales. Although we have companies ranging from one employee up to several thousand employees, our sweet spot is companies between 50 employees and 2,000 employees.
They all have in common that they have an active B2B selling process that they need to manage and an active sales organization that they need to manage using Upsales. We have customers in more than 10 countries. The product is available in several languages and is used by people all over Europe. We have around 1,800 customers at the moment using Upsales. When we do the analysis to try to find out what's the impact our customers get by as a result of buying Upsales, we find that our customers increase their sales by on average 22% in the first year of using Upsales.
This is something we obsess over here at Upsales, helping our customers figuring out ways of helping them get more value and more better results out from Upsales. Our philosophy when it comes to building the product and why we are competitive and why we win in competition with huge international competitors. Most of our competitors, especially if you're a larger sales team, requires you to spend a lot of money and time in long implementation projects. A lot of our competitors also sell their products through some kind of partnership channel.
These partners are usually consulting companies, and their business is to sell consulting hours leading to these large projects. Our way is to build a scalable product. That's why we have more than 90% recurring revenue that doesn't require these long consulting projects. Customers can get started in a matter of days with a four-hour onboarding. We put a lot of focus on making the product scalable and making the way we implement the product scalable. This is an ongoing process which probably will never end. We always try to find ways to make this better and more effective. Our business model, our customers pay a per user per year fee for the basic CRM or sales product.
They can add as they grow and as their needs become more complex, they can add different add-ons, extra features that they can buy from us. Some examples of this is our marketing product is a popular add-on. If you want to do more advanced reporting than what you get in the basic package, you can buy add-ons related to that. There's in total 20 different add-ons our customers can buy. This is also a part of our... We have a very deliberate land and expand sales model.
We want customers to be able to get started quickly without trying to solve everything from the beginning and grow with us as their needs become more complex. Building the product and building more add-ons is also an important part for supporting our future growth to have more features and more add-ons to sell to the existing customer base. Looking at our growth drivers, our ARR is currently at SEK 135 million. We believe the existing customer base can take up sales to SEK 500 million. There's a huge potential within the existing customer base.
Looking at our market share, there's no exact data available on this. In our analysis, when we look at our primary target customers, and then we look at how many of these type of customers are there out there, our market share is still very small, somewhere around 5% , 6% or 7%. There's still a huge opportunity acquiring more customers in Sweden. The third area, we've been working for around 18 months now with our international expansion to the U.K. market, which is estimated to be worth SEK 24 billion as a whole. The international expansion is still at an early stage.
It's something very exciting and in the long term, something that will contribute a lot to the overall growth at Upsales. I also want to address our resilience and how we are affected by the current turbulence in the market. We think that sales effectiveness, which is the core area we address with our customers, is a very high priority, even more so in challenging economic times. When times are tougher, it's more important to keep track of what's going on with your customers. It's more important to keep the cost of sales under control and make sure that what you're doing in the sales organization has the best possible impact.
We believe that getting rid of your CRM system is not like the first thing you do if you encounter problems in your business. There are other areas that are affected before you come to such a decision. We also see that the scalability of our product makes us even more attractive for a certain segment of the market. We're talking to several customers now who bought these huge systems from some of our international competitors, and they're looking to reduce the cost. Upsales is a very attractive alternative for those companies. On the financial side, 92% of our revenue is recurring revenue.
Our contracts also have clauses that is connected with inflation. As I mentioned, we are net cash, we are profitable, and we have zero debt. Having said that, obviously, we probably will be affected in some way. We track the trend every week. We look at how many contracts are being canceled, which is the first indication of customer churn. We haven't yet seen any negative effect in terms of increased churn or you know harder to close new deals. But we try to have a healthy dose of paranoia when we run the business. That was all for me. I will now hand over to Elin for the financial highlights.
Thank you, Daniel, and good morning, everyone. Let's look at our ARR and revenue. The annual recurring revenue grew by 31.6% compared to the third quarter of 2021. ARR as of the end of this period was SEK 136.3 million, compared to SEK 103.6 million during the same period last year. Net sales increased by 46% to SEK 32.7 million compared to SEK 22.4 million in Q3 2021. Let's continue and look at profitability. In terms of profitability, we have previously talked about that we have increased our cost base, and a lot of that was coming from us moving to a larger head office in Stockholm.
We predicted that we would grow into this larger cost base during 2022, and this is what we're seeing right now. In Q3, we have the most vacation days of the year, which we're seeing an effect from on our personnel costs. We also have a positive effect this quarter from currency fluctuations of SEK 1.8 million. EBITDA of this quarter was SEK 13.1 million compared to SEK 4.4 million in Q3 2021. EBITDA margin was 40.2% compared to 19.5% during the same period last year. EBIT was SEK 11.3 million compared to SEK 2.8 million in Q3 2021. Net income of this quarter was SEK 9 million. Let's continue to look at our cash flow.
During this quarter, we had an operating cash flow of SEK 7.3 million compared to SEK 3.4 million during the same period last year. Total cash flow of the quarter was SEK 5.3 million. We're continuing to grow without any debt, as Daniel mentioned, with net cash at the end of Q3 of SEK 48.9 million, slightly lower than the SEK 52.6 million that we had at the end of Q3 in 2021. We also paid a dividend of SEK 34 million in May this year. It's a lot due to that. That was it for the financial highlights. Thank you. Let's continue to the Q&A section.
Again, if you want to ask a question, you can use the Q&A button in the Zoom toolbar. Okay, let's start. We have a question from Per: Can you talk about the problems you had in the DACH market and why Upsales has withdrawn from this market? We had a project and initiative focusing on the DACH market. This was actually many years ago now. I think we focused around nine or 12 months on that market with very little success. At the same time, we were experimenting with the U.K market. In the DACH market, we had some traction in Switzerland, basically zero traction in Germany.
At the same time, we saw even more traction in the U.K. market. All in all, doing our analysis, we decided that the U.K. market is, I mean, language-wise, it's obviously easier to approach a market like that. And also I think that if you compare the U.K. to Germany, it's more of an international market. Yeah. All right, another question. What country is next in line for expansion? Do you have any thoughts on launching in the U.S.? We don't, actually. Right now we are focusing on Sweden and the U.K.
I'm a strong believer in having a strong focus on not doing too many things at the same time. In our expansion to the U.K., we have put quite a lot of effort into tailoring the product to be the best possible offering for our segment of the market in the U.K. We also try to tailor the marketing and the messaging and how we position ourselves towards these customers. I would say that in the foreseeable future, our focus will be on Sweden and the U.K. Next question. Can you please describe the mix between new customers and growth on existing customers?
Typically, historically, around half of our growth has come from new clients, and half has come from existing clients. In the last four quarters, it has shifted somewhat towards growth from existing customers. This is not because we are closing fewer new customers. It's more that we are having a lot of success, especially with our larger customers, where we're seeing an increased demand, and we're able to grow these accounts quite aggressively. We also increased our customer base with many customers overnight when we renegotiated our partnership with Fortnox a while back.
A lot of these customers are also driving the growth as they add more services and more users when they're using the larger Upsales product. Yes, we had another question on the exact same topic on the split between new and existing customers. All right, that was all the questions we had for now. Again, if you want to ask a question, you can use the Q&A button available in the Zoom bar. Okay, as we have no more question, we would like to thank you all for joining us this morning, and hope to see you next time.