Thank you. Good morning, everybody, and welcome to the call for Upsales' Third Quarter Results. The agenda for today, I will do a short presentation about Upsales and our growth strategy. After that, we will talk a little bit about the financial highlights from the third quarter. Next slide number two. Upsales, short introduction. What we do is that we help B2B companies find new opportunities and win more deals. We do this by providing a sales and marketing platform software to our customers, which we sell as a subscription service. The product consists of a combination of CRM, marketing, and analytics. The company has been around since 2003. Our head office is in Stockholm, we just passed 700 active customers, we are currently a team of around 50 people. Next slide, looking at the business model for Upsales.
The last quarter, we almost had 95% of the revenue as subscription revenue. We sell our service as a subscription where our clients pay a per user per month fee, and they are also able to purchase additional add-ons such as integrations and then more advanced features. The core strength of our business model is that the dynamic and scalable platform enables us to deliver very fast to all of our clients. Even larger clients are able to get up and running rather quickly without the need for consulting work, which is usually the case with the more traditional software sold by our competitors. Next slide. There are actually three components of our strategy which we focus on.
The first one is to build the world's best B2B sales software, which enables us to develop additional add-ons and features, which we can sell to existing clients to increase contract values. The second part, which is also a critical part of our efforts right now, is to scale our sales team to be able to win more contracts and to get more clients. The third part is to invest in customer success, to keep our churn low and to grow our existing contracts, our existing clients. We usually talk about Upsales having a land and expand strategy. The most important part when finding new clients is not to maximize the deal size. It's just to get the client on board, and then they can grow by collaborating with our customer success team and add more features as they evolve their usage of the platform.
Next slide. Short overview of what we actually do. There are actually five parts of the Upsales platform which we usually talk about. The core part is the CRM and the sales, which our clients use to manage their opportunities and their prospects and their contact information and their to-dos and so on. The reason why we are able to deliver so quickly to so many clients is because of the second part, which we call rich data integration, where we use third-party data, and we build plug-and-play integration to the most common ERP and other systems that our clients use. They can get their data into Upsales as fast as possible. On the left side, we have the marketing aspects of Upsales.
Marketing automation is used by our clients to generate leads and to create an effective way of ranking and scoring leads, making sure that the sales team is focusing on the most relevant prospects at all times. Similar to on the CRM side, we have something we call the campaign engine, which is also one of the reasons why you can get up and running rather quickly with Upsales. Using the campaign engine, our clients get access to ready-made templates for email campaigns, for landing pages, even for online ads, which they can launch in just a matter of hours rather than days or weeks, which is usually the case with other platforms. The fifth part is where we tie it all together with Upsales Insights, our analytics offering.
Where our clients are able to use all the data that they generate in the CRM and also on the marketing side to make better decisions and to find more profitable business opportunities. Let's go to slide six. We want to build the best sales and marketing software in the world. We have seen historically that investing in the product leads to increased average contract values. We have increased our average contract value every year, the last five years. The feedback we get from our clients is that these off-the-shelf add-ons we have to integrate to other systems. It's very attractive because you can get started quickly. The risk is a lot lower and very few clients are interested in doing large bespoke consulting work. We usually like to highlight that we do this even for larger sales teams.
Our largest client has 300 sales reps in 10 countries. This is not something we are only able to do for smaller clients. Next slide. The second part of our growth strategy, scaling the sales team. The main benefit of our sales model that we deploy is that it's very effective in terms of cash. The money we invest in sales and marketing, we have an ROI on that in a matter of months instead of years. This, of course, reduces the need for external capital. We have seen, we added a couple of members to the sales team in the beginning of Q3. These people are already productive and contributing to the growth. It's a very short ramp-up time for when we hire new sales reps. Next slide. The third part is our customer success.
We believe that customer success is a key component in our growth strategy and probably in the growth strategy of most SaaS companies. This creates growth in three ways. The first one is that we sell add-ons and more seats to existing clients. We also find cross-selling opportunities within larger existing clients. The typical case is that we do a smaller deal with some part of a larger enterprise, and from there we can continue to grow. The third part is that investing in customer success creates a lot of referrals, which is actually a rather large part of our new business comes from referrals from satisfied clients. This is, of course, something we're very happy about because it's probably the best feedback you can get that the product is working and that you're taking care of your customers.
Let's head into some of the financial highlights for the third quarter. Starting to look at slide 10, the revenue. Our ARR amounted to SEK 78.8 million at the end of the quarter. That's an increase of SEK 3.3 million during the quarter. Our ARR grew by 20.6% the last 12 months. Our net sales amounted to SEK 17.9 million in Q3. I'd like to comment on these revenue numbers. We are very happy with the fact that we continue to grow the ARR in Q3. The third quarter is usually a rather slow quarter in terms of new business, mainly due to a lot of customers being on vacation in July and probably a big part of August as well. If you look historically on our third quarter, it's almost flat growth in both 2018 and 2019.
We're very happy to deliver growth in Q3. We continue to increase the subscription share of our total revenue, which is why our net sales is growing slightly slower than the ARR. I believe we had around 90% recurring revenue share in Q3 2019, and we had 94.4% in Q3 2020. This is also aligned with our strategy to sell less consulting hours. Next slide, looking at the profitability. EBITDA was SEK 6 million, which is a margin of 33.4%. Our EBIT was SEK 3.7 million, and the net income was SEK 2.7 million. Next slide, looking at the cash flow. Our operating cash flow was negative SEK 0.7 million. Total cash flow, negative SEK 1.6 million. Our net cash at the end of the quarter was SEK 27 million. That concludes the financial highlights, and we will now move into the Q&A.
Thank you. If you would like to ask a question, please press zero, one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero, two to cancel. Once again, if you have a question to ask via the audio teleconference, please press zero, one on your telephone keypad. Our first question comes from the line of Rikard Engberg of Erik Penser Bank. Please go ahead. Your line is now open.
Morning, guys. I have one question regarding the growth in the quarter. Could you please shed some light if it's on new customers or existing customers? If you can do so, tell the mix or some sort of a mix.
Sure. In terms of revenue distribution, looking at the growth, I would say that the third quarter was a rather typical quarter with around 50/50 of the growth coming from new clients and existing clients.
Good, thanks. Thanks for the answer.
Thank you. Once again, I remind you, if you do have a question to ask via the audio teleconference, you may do so by pressing zero one on your telephone keypad. We currently have no further questions via the audio teleconference. I will now hand back to the speaker.
All right. In conclusion, I'm very satisfied with the third quarter, and we're looking forward to finish 2020 with a strong Q4. Thank you very much for participating this morning.