Physitrack (Stockholm:PTRK) Q3 2026 Earnings Call

0:00 hello welcome to fizz track's q3 2026 results webcast i'm henrik marlin ceo and co-founder of fizz track and shoulder to shoulder for the first time not an ai i can assure you i'm joined by matt palter our amazing cfo so let's kick this off we'll start with a little snapshot of the quarter and I will walk you through the business updates from our two divisions Life Care and Wellness Matt is then going to take the helm and walk you through the financial results a bit more in detail and he'll give you an update on the Share Buy Back program and then we'll revisit our strategy and outlook and after that we'll take a question so as usual use your Q&A function at the bottom of your screen and I think that's it all right let's let's go Alright so a little snapshot looking at the quarter what worked really well and what perhaps didn't work quite as well and where we actually ended up. So starting with what worked.

0:56 Revenue was up 14% year-on-year to 3.6 million euros on a constant currency basis that's 11% so really nice growth. Life care was up 15% and the core PhysiTrack home exercise prescription platform it grew by 26% year-on-year. that's a really really great number for a platform that's been around for more than a decade actually we'll talk more about that in a moment average revenue per license increased by 11% to 190 euros per year per user and churn remains steady at around 1% per month on a 12 month look back basis in wellness margins came up very nicely and if you look at that we're at 36% adjusted EBITDA margin which is close to our overall financial goals operating profit 0.2 million euros and importantly three new systems were launched during the quarter so remote therapeutic monitoring our electronic medical record system our EMR we'll talk more about that in the coming slides and it's an early access now we have our educational modules as well that went live we also secured two us healthcare system selections through competitive processes led by our new york team very very nice win there so lots of really nice things happening here Now let's slow down a little bit. Well, adjusted EBITDA was down 8% year on year.

2:10 This was largely planned and reflects the investments that we made in building out the US operations and of course, developing these amazing new systems that we just brought to market. I'll revisit that a little bit in a moment. Now, adjusted EBITDA as capex was 0.3 million euros in the quarter and wellness ARR contracted 2.7 million euros following the loss of one large customer. And as we exited the quarter, group ARR stood at 13.6 million euros and net debt was 3.7 million with that revolver at Santander. Net debt came down during the quarter and we expected to come down further. Our educational modules are now live and on the EMR side we expect paid subscriptions to start contributing from January 2027.

2:55 So overall a quarter of really strong growth a lot of product delivery and some deliberate investment in the next phase of the business. Okay so just quickly walking you through the financial highlights again revenue 3.6 million adjusted EBITDA 1.1 million euros group ARR 36 million free cash flow 0.2 million and importantly that's the eighth consecutive quarter of positive cash flow lucky eight gross margin remains very strong at 89% and recurring revenue represents 94% of the total now let's look at that it's a very resilient financial profile and we're managing to grow the business while continuing to generate cash we're going to dig a little bit deeper into that moving to life care here so realized performance so 50% growth year-on-year 3.3 million euros of revenue contribution for the quarter adjusted EBITDA was 1.4 million euros and adjusted EBITDA less capex 0.6 million euros representing an 18% margin.

3:54 We've seen really nice growth throughout the year here. And as I mentioned earlier, the core Fisdrack platform itself grew by 26%. Now that's a really strong number for a mature platform. And there's more to come there, particularly as we bring EMR and remote therapeutic monitoring into the ecosystem. Average revenue per license increased by 11%. We implemented a price increase during the quarter, and we're now seeing that reflected in the numbers now what's really encouraging is that shown remains steady and i think that tells us two things first our customers are clearly seeing value in the platform and second we're still underpriced relative to the value that we're actually delivering so this room here to continue expanding revenue per customer over time just with price adjustments now the division remained profitable uh gross margin 89 and overall This is actually the strongest growth we've seen so far this year, while at the same time, we're funding a really meaningful expansion in the United States and a lot of innovation.

4:49 So, very pleased with Life Care. Looking at wellness, growth was relatively flat, up 2%. As I mentioned, we did lose one large customer, which brought annual recurring revenue 2.7 million euros. But what I'm particularly pleased about here is the improvement in profitability. adjusted EBITDA margin is now 38% and adjusted EBITDA as capex is 29% so that's a really nice development revenue retention has also improved 96.6% and we're now back to growth while rebuilding the enterprise ARR base we've spent quite a lot of time resetting this business as you know we focused on the fundamentals and getting profitability back to where it should be doing stuff that is profitable not dealing with customers that are losing those money and so on so it's been a nice cleanup effort and we're now seeing the results of that work more to come from wellness but we are definitely moving in the right direction we are looking at execution priorities it's quite a busy slide but let's start top left there north america you've seen a couple of really nice us healthcare system selections announced including one with integration into epic my chart and another with a potential contract value of almost four hundred thousand dollars now that's a great testament to the hard work being done by the new york team and as our head of growth kevin likes to say It's impossible to lose. And that's the real ambition here, just to making sure that we can really do those really nice big wins.

6:21 And the RTM remote therapeutic monitoring solution is now open for trials across all US customers. And of course, the US is also our number one priority for the new EMR. So we're starting to see that different parts of that strategy come together. Looking at mortgages and cash, bottom left, it's a very, very nice story here to see that we've delivered eight consecutive quarters of positive operating cash flow while also reducing debt. And we're accelerating revenue while remaining profitable. Now, adjusted EBITDA, it came down a little. and the margin is 31%, but I think that's quite marginal in the context of everything that we've delivered. We've built and launched several major new systems, expanded the US presence, and we've invested really here in creating a much bigger commercial opportunity for the business. So that's a very nice combination, and I think we can just accept that lower EBITDA margin, and that's gonna be temporarily.

7:16 Looking at product unification and value expansion, we opened early access to the EMR on September 28th and we've already had almost 5,000 users sign up so far. We're now rolling that out step by step and the feedback so far has been amazing. We've also launched educational modules inside of visitrack and we'll begin commercializing these in the fourth quarter. Now, one thing I want to highlight here is how we actually managed to deliver so much innovation in such a short period of time. We brought our teams together in Poland for what we call a fizzy campus. So essentially, we hired a hotel, we moved in together, we lived together, worked together, ate together, coded together for a couple of weeks. And this model was inspired by some really, really nice, successful companies like the Fang businesses, whatever you call them these days, and companies like Atlassian.

8:07 where people live together and they do these things either on campus with hotel rooms that they have as part of that or that they travel together and they do this the results were quite extraordinary and when you get talented people together in one place working towards the same goal you can move incredibly fast and that's what happened to us so we'll definitely continue doing these physical campuses and the next one is scheduled for mid-November and it's going to be really really exciting to be part of that and again just to put things into perspective the core physical platform it grew by 26 percent even without having launched the EMR and monetizing the remote therapeutic monitoring piece so i think that's a real testament to the strength of that underlying business model now finally bottom right wellness again we've been setting that business and getting back to sustainable growth and stronger profitability but without compromising on innovation some really really interesting things that have been launched as of late and I'm really, really excited about what we can do there on a standalone basis and also by integrating that into the LifeCare ecosystem.

9:13 So nice, good progress there as well.

9:16 Now, what is everybody talking about right now?

9:19 The EMR. So, of course, we'll talk about that a little bit more. There's an extensive interview with me from this morning where we speak more about that and then also, obviously, the launch announcement on the 28th of September is a good source of information too now. We're very excited about this. I'm going to talk about it a little bit more if that's okay. So when we started building the MR, we looked at the situation that was facing healthcare providers around the world from a micro perspective. And we also saw things from a micro perspective that are really, really interesting. These are people that are incredibly time constrained. So these guys want to work faster. They want to work smarter. And above all, They want to spend more time with their patients rather than sitting in front of a computer doing administration.

10:06 There's an interesting disconnect here. In their personal lives, of course, people are getting increasingly used to working with AI agents. They can ask questions, give instructions, get things done almost instantly now. That's a trend that's changed the world in the last, let's say, nine to 12 months. And the way that people interact with technology as consumers has fundamentally changed. But when they go to work, They're often using systems that feel like they were built 20 years ago or maybe even 40 years ago. A lot of menus, a lot of clicking around, lots of boxes to tick, a lot of text-heavy interfaces, and we wanted to fix that. So we took everything that we learned from more than 10 years of serving healthcare providers around the world, so the data, the workflows, the patient engagement side, the relationships there.

10:53 And we had our own experience as well as pioneers in AI. And we built an EMR with agentic AI at the core. And that's the important distinction here. AI isn't an add-on. It's not a little feature sitting somewhere on the side. It's right at the heart of the system. So you can talk to EMR. You can give it instructions in plain language. You can ask it to perform tasks rather than having to navigate through This is a very natural transition for clinicians who want to move gradually towards an agentic way of working and that is very much the future here. so what's really exciting is that we built this as a complete solution so from patient onboarding and scheduling to clinical documentation billing insurance reimbursement and of course home exercise prescription and home exercise prescription is really at the heart of it because ultimately ultimately that's what you want your your patients to leave with so a clear plan for how they're going to get better and very very tightly integrated with PhysiTrack with the remote therapeutic monitoring as well so instead of having a lot of disconnected systems the clinic can operate through one unified platform and I think this has the opportunity to become the go-to AI platform for clinics and starting in physical therapy of course which is a market we know super well but the opportunity is obviously much broader than that over time and because we're really doing something here where we're rethinking how clinical software should work

12:26 we start with the human beings who actually use it and that's why we're so excited about this anyway enough said about that the traction is really really nice and the numbers have actually ticked up even further than this this are numbers from from i believe from monday morning but we have had A very, very nice response here. Almost 500 clinics and almost 5,000 individual users have signed up to early access for this. And remember, we only opened this up on September 28th. We're talking about a very short time period here. What we're doing now is we're releasing access to the system step by step. It is live. It is run by customers. And I believe the beta is now 50 clinics.

13:12 What we do is we work with them step by step. When we're comfortable, we will increase or expand the beta, but we have a wider release on the 2nd of November. So hopefully that whole list will be able to profit from this and learn from what we can do and then give us feedback as they go. So far, feedback has been really, really encouraging, and so you've seen some of these quotes on socials. Still early days, of course, but when you look at the level of interest and you combine that with the size of our existing customer base, the strength of our distribution, I think it's fair to say that we could be sitting on a very significant new source of recurring revenue here, so potentially even explosive. So we'll see, we're not going to say too much here, but we know these customers really well and we understand the workflows and the pain points. We spent more than a decade building trust in this market and now we're bringing it in a completely new way. So we really think we've hit a home run here.

14:07 We'll give you updates throughout the progress and we will we will see what comes through with that now with that before matt just gives up on me and falls asleep matt will take you through the financial results in more detail and also talk about the share buyback program matt over to you let's see financial results here we go thanks henrik and good morning everyone henrik has walked you through what we built this quarter and i'm going to now show you what it did the numbers how we grew where we invested and how we paid for it

14:40 so to repeat some of the earlier slides revenue was 3.6 million up 14% on last year and 11% on a constant currency basis on Q2 we were up 6% and that's our strongest growth of the year with 94% of our revenue being recurring adjusted EBITDA was 1.1 million at 31% margin compared with a 38% margin a year ago and that's when the investment shows up we built out our North American team and launched three products in one quarter and we planned for exactly that one probably point to note as well adjusted EBITDA refers to last year this is actually the first quarter that we have no adjusting items I think that reflects the point of the business is we've put a hell of a lot of the restructuring buying companies, legal fees, et cetera, all through adjusting items over the years.

15:33 We're now a new business, all of that is behind us, and we're not forecasting or expecting there to be any adjusting items going forward. So EBITDA really is the metric, and adjusted EBITDA is that metric from prior quarters. If you add the growth and the margin together, we come out at 45 on the wall of 40. So that's the balance we're really striking there, growing faster and staying firmly profitable Free cash flow was over 0.2 million, down from 0.5 million for the same reason. It also marks our eighth quarter in a row of positive cooperating cash flow. Next slide please, Henrik. When we now look at the revenue growth, so five years ago, the quarter for us was 1.4 million of revenue. This quarter it was 3.6 million, which is the highest quarter yet. Life care fundamentally drives most of that.

16:24 Revenue grew 15% to 3.3 million and our core Physytrack product grew 26%. We raised prices in May and since then the revenue per licence is up 11% to 190 euros per year. Churn has stayed at 1% and the licence base has grown for two quarters running. It's clear that customers are accepting the increase and they're staying with us. Wellness is a smaller business now and that's growing again, up 2%. Group annual recurring revenue finished at 13.6 million, up 6% on last year. It's flat on Q2, but Lifecare kept building, and that was offset by one large customer we lost in wellness. Underneath, the Lifecare base keeps compounding. Now we turn our attention to profitability.

17:11 The margin for the quarter was 31% and 33% year-to-date. The chart on the left is how we run the business day-to-day. Profit by capex by division. So Lifecare made 1.4 million of adjusted leave at DAR. a 42 margin and 0.6 million after capex it did that while funding the us expansion alongside the additional development needed for the three product launches this year um wellness has also turned a corner a year ago it made 54 000 in the quarter this quarter it made 125 000 so that's an 80 a 38 margin up from 17 and the restructuring is now paying off Group costs after CapEx rose to 0.4 million from 0.2 million.

17:56 That's as a result of expanding the senior leadership team, which we brought in at the end of last year, and also the team now driving the US push. And this year's launch is two. So what are we getting from that investment? From a sales front, and specifically in North America, we signed two US selected deals this year. One is a metropolitan health system, which goes live in Q4, and then the academic system follows in 2027. The EMR moves to pay subscriptions from January, and CapEx out flat at 0.8 million, our busiest product quarter ever. just on capex as well in the day in the age that we're working in we're not forecasting there to be any further expansion on the current capex levels and we're hoping over the next few courses that capex spend will tail off but we're not expecting that to be increasing significantly at all.

19:01 Also to point out RTM and educational modules are live and EMR is in the early access so we've got three there new revenue streams. Over the next three quarters these are probably the things to watch and as a business we're really excited about that. Next slide please Hendrik. So looking at the financial position, operating cash flow was 1.1 million, more than 100% of adjusted EBITDA. Our profit is coming through as cash, and after capex and interest, free cash flow was 0.2 million. The chart tells the longer story. Through 2022 and 2023, the business used cash. Since then, it's turned around with eight straight quarters of positive rating cash flow. Year to date, free cash flow is 0.1 million, which includes settling a legal matter from 2018 in Q2. So that's awfully behind us now.

19:51 And the chart shows the underlying trend without it. Net debt came down to 3.7 million from 3.1 million in June. What that is showing is even with that additional investment in CAPEX and EBITDA, we've seen this quarter, we were actually still able to pay a small amount on the RCNF as well. And that represents 0.8 times a million adjusted EBITDA. the facility is drawn at 4.2 million cash is 0.5 million and liquidity is 1.9 million including 1.4 million headroom and drawn on the facility so we're all comfortably within our covenants too really what we're trying to say here is that we're funding growth from our own cash flow and we're paying down debt at the same time last slide please Now we return our attention to the share buyback.

20:38 So it's a small, what we're doing this quarter and this year is small, but it's done one job and that's to fund a new management incentive plan without issuing a single new share. So we want to reward our senior members of the team, but we don't want that to have a negative impact on our shareholders by diluting their shareholdings. The capital reduction we completed in July has made that all possible. It cancelled £24.9 million of share premium and then created £8.1 million of distributable reserves with parent company. We're planning on spending about £120,000 this year and subject to board approval £250,000 a year from 2027. That's in line with the cap outlined by our banking partner and alongside that the 10% authority approved for the HEM. Pareto Securities runs it independently so nobody at the company directs any of the trades at all and by the end of September we bought 47236 shares at an average of €0.76 that's all held in treasury shares so each year's grants are capped at the shares we buy back that year management does well when shareholders do and nobody gets diluted So, in a nutshell, this quarter has represented faster growth, investment from a profitable base, profit turning into cash, and debt coming down.

22:01 Three launches alive, and next we turn them into revenue. Back to Henrik.

22:10 Just to wrap things up here, reversing this briefly. So this is where we think Foodstrike is so well positioned to win. So what is happening now is that we're moving into a very interesting position in the clinical workflow. So historically, we were very strong in home access prescription and patient engagement. Now we've added RTM and with EMR, we're moving right into the center of how clinics actually operate. So we're becoming part of the clinical backbone, if you like, of these organizations. So that's a very powerful position to be in because you're establishing those workflows well then the revenue becomes very sticky and it's not something that customers are going to change every six months we're becoming a central infrastructure for the clinic and at the same time we're unifying care education the administrative side of running a practice and so these are some very very nice opportunities to expand revenue within the same customer relationship and importantly we're not just helping clinics operate more efficiently we're also helping them generate revenue so with better patient engagement, remote monitoring, more efficient billing, new products, more utilization of the time, we become a very important revenue generating tool for these guys rather than just another software expense.

23:22 And that's a very, very powerful proposition. Now, if you're looking at the financial side of the business, also very attractive, highly recurring revenue, high gross margins, strong customer retention. Increasingly, we have multiple products that can be sold into the same customer base. And so as revenue grows, we believe that it can translate into very durable profitability as well. We have an established global footprint with a particularly exciting opportunity now in North America. So when you put all of those components together, I think we're in a stronger position than ever. All right. And lastly, just visiting the financial goals. I'm going to read those out because they're an important part of how we think about building this business. The medium term adjusted EBITDA margin target. And again, this is the first quarter in a while that we didn't have any adjustments.

24:09 And I believe that's going to stay this way. But the adjusted EBITDA margin targets are 40 to 45 percent. That's the target hasn't changed. As we continue to focus on the rule of 40, combining revenue growth and profitability, we continue will be accelerating organic revenue growth and we build towards that 40 to 45 margin range and we continue to generate positive cash flow as a result of that now at the same time we we're growing the business nicely and we have the ambition to double this business in the medium term at the same time It's generating nice cash. Eight consecutive quarters of positive operating cash flow. That's something we're pleased about. It gives us options. We can reinvest it in the business, accelerate the growth, reduce debt, and of course return capital to shareholders. So exciting times for PhysiTrack.

24:59 A lot happening, and we have a very clear idea of where we want to take this business. And with that, we're going to conclude the presentation as part of today's webcast, and we'll open it up for questions. Again, please use the Q&A function at the bottom of your screen. We'll read out your questions and we'll answer them. And thank you very much for joining this part of the presentation. Let's get right into the questions. See you on the other side. okay thank you for that Matt let's see what questions we have and you can use the Q&A function on your zoom panel here let's start with this one EMR signups new versus existing customers of the 480 clinics 4,700 plus users that signed up for the EMR Early Access. So far, how many already use PhysiTrack today and how many are new to the group? In other words, how much is the potential selling of the existing license and how much is new licenses?

26:16 And of course, for the caveat, we have more. The numbers are higher. We're close to 5,000 now and over 500 clinics. But let's just break that down a little bit. that around 59-60% are existing customers 7% are former customers that were with us at some point but cancelled their licenses and are looking to come back 34% are new to the group And so it's a nice mix there. So we can do some maths there as a follow-up just to figure out what that's actually worth in ARR, just so we can put some numbers on that. So first of all, you'd have to apply a conversion rate to the signups. So that's to say the existing customers convert at 35%.

27:01 That will be roughly 3,000 of the signups so far. Now that part then is worth about half a million ARR at the founder rate of $40 per month. So that's nice new business. And of course, if you have a higher conversion rate, if given we have a close relationship to these guys, maybe it is higher, but even at that rate, it's quite nice. Now for new customers, you're probably looking at a lower conversion rate. So let's just call that 20%. But you're looking at roughly the same ARR there because you have to be a FizzTrack customer just to qualify to get the EMR there. So you'll probably get 60 bucks a month there. And it's another half a million ARR. So this adds up nicely. And just for the signups that we've seen so far in the few weeks, it's worth about a million ARR, give or take. But it's all theoretical. It's all about making sure that we have a nice conversion rate with a really, really nice product.

27:58 But so far, so good. But keep an eye on those signups. All right, second question here, and I'm going to give this one to Matt. Cost base from here. Adjusted EBITDA fell to 1.1 million euros or 31% margin because of hiring in North America and the three product launches. Is Q3 the full run rate for OpEx, or will costs keep rising in Q4 and 2027 as the US health systems go live and the EMR is rolled out? Over to you, Marie.

28:31 So operating costs in Q3 were around 2.5 million euros. We do expect them to ease slightly in Q4, but... I would expect that over the next couple of quarters, maybe half one next year, the costs are going to probably stay around this amount. Um, that's both with CapEx and OpEx as well. Just linked to that is the launch, uh, a marketing that we need to spend in terms of the EMR and then also, um, having any additional product engineering people to get us across the line, or also if we need any customer support or success linked to that. But I'd say ballpark OPEX and CAPEX is, run right now is around that going to be tool.

29:20 platform next year.

29:21 Now, just to clarify, we expect to have a lot of automation in the customer excellence piece. And for the support piece, there's so much wonderful technology now that you can use AI agents and chatbots and things like that. That's a great first line of defense. And we are implementing a low-cost customer excellence platform service where you can get brief onboarding calls 10-15 minutes and as part of this whole thing there's a little bit more hand-holding that we expect to do but we are optimizing the cost base for that so it doesn't run away but again there's so much that you can do now with automation and pre-recorded stuff and that's how we expect to do it so we don't expect any big pressure there on OPEX Now, next question.

30:12 Margin path back to 40 to 45%. The adjusted EBITDA margin was 31% and it was 38% last year because of the North American team and the product launches. Is Q3 the low point? And I'm going to bounce that over to Matt again.

30:30 So similar to question two, the equity we're seeing now is mainly linked to marketing and launch activity and not additional people. Our cost base is largely fixed. So similar to the HEP platform, as the revenue grows, we don't expect the costs to grow at the same pace. We're sort of investing now for future revenue growth. So the cost base will remain relatively flat, but When the revenue grows up like a rocket ship, that's where we expect to see the margins expanding. We're not forecasting the margins at all to fall from this point. And if anything, I'd expect them to expand slightly in Q4. But then as we start to recognise revenue on the EMR, that's where we're going to sort of see much more fuller expansion on that back to the 40 to 45% medium term target and for now we're envisioning that that remains unchanged.

31:29 Well, thanks for calling that a rocket ship. It's fully theoretical at this point in time. But we had 38% margin last year. Remember, we only had the legacy platform for Fusitrack in terms of the products that we could sell and some Champion Health, which was clocking in at a much lower margin than it is now. So you can imagine with the EMR and RTM, and to a certain extent the educational modules these are all super high gross margin products and there's no real additional cost base attached to it so if we have this type of conversion that we think we'll have of these signups then you will see an automatic very dramatic margin expansion so I don't see why we wouldn't come back to where we're supposed to be, which is 40% to 45%.

32:15 But that said, we don't have any specific margin guidance for Q4 or for 2027. Right now, we are investing nicely into the next round of development for the EMR, which is the Physicampus. That starts on the 13th of November. And then additional marketing spend, but it's nothing dramatic. But yeah, with revenue, you will see that expansion coming as well. Okay, next question. US health systems, timing and size. The metropolitan safety net system is due to go live in Q4. What ARR does it add and when will it show up in revenue? For the academic system still in contracting, what is left to agree on and how big could the contract become?

33:04 Starting with the Metropolitan Safety Net system, we're expecting to go live in Q4, so that's when revenue will start coming in. The annual license is around $26,500 in the first year with a 5% annual increase. So that's the AR for that. But what's interesting here is the additional revenue opportunity from RTM. So we charge that at $8 per active patient episode. And so just to put that into perspective, if each of the 86 practitioners has 10 patients enrolled in RTM, that's around 80,000 in additional annual revenue, roughly three times the license fee. So it's quite a bit of upside beyond the initial contract here. Now, on the academic healthcare system side, we're still in the contracting phase, but everything's been agreed, the proposal has been signed, and everything is set to go. But these are large organizations, and there's always some infosec and legal reviews that naturally take some time. The rollout work has started, and we're looking at around $130,000 in annual revenue there.

34:03 with 390,000 over three years. And that's 260 is committed over the first two years. So we expect this to go live and generate a revenue in early 2027. And again, RTM would come on top of that. So the revenue potential is quite a bit larger than the initial license value. And I will just point out here that the EMR, that's not an enterprise way. We are not planning to sit in really long tenders or request for proposal processes for that because an EMR is such a big intervention in a clinical system. So it's likely to take a lot of time and a lot of sales resources. EMR is mainly for small to midsize companies up to say a hundred, couple of hundred people.

34:49 users on there and not the really, really big guys that we're out there with in the US. Okay, more questions. Regarding the EMR, are you able to tell where most of the subscribers are coming from? I assume it is the US. Well, we have three key markets there. We have the UK, we have Australia, we have the US. Those three markets have taken turns being the biggest sign-up market in the early rollout. I think currently it's the UK that's leading the charge We actually have a really, really solid footprint in the UK with home exercise prescription. We own a big chunk of the NHS healthcare system and we're kind of a standard product for HEP. So it's not surprising that people are really interested in the EMR there.

35:43 and also the nature of that healthcare market. There is a lot of self-pay and the insurance reimbursement process isn't that super complex. And when you work with the NHS, if you have referrals in public healthcare and you deal with that as a private clinic, the process is quite easy. And our EMR is something that would All right. Concerned that you might be missing out on potential opportunities and revenue by not spending more? Well, it sounds more like a statement than a question.

36:34 But there is a way to actually grow a business and to accelerate without throwing money at everything that moves. And I don't think you necessarily have to run a business for the super low margin to be successful. So there's a fine balance there, and I think we found ours. I think a business that does the right thing in the software space should have a really, really high gross margin. So closer to 90% where we are. And if you look at the processes in terms of OPEX, you should be able to automate a lot of things. Now in this day and age with AI and the way that you can work with smaller teams and you can optimize workflows without throwing people at it, you should actually be able to have really, really healthy margins on it.

37:26 So I actually don't see that we're being held back. And remember this, we're B2B. So in terms of customer acquisition, it's not a play where we have to pay significant amounts of money just to acquire new customers. And it's not like a consumer market where you invest a lot of money to get consumers to sign up. So you have ridiculous CAC levels and that's basically paid growth. Now, in our situation with B2B, word of mouth is really important. And also the fact that you market to your existing user base with people that have confidence in you already and they're already... using your tech, the costs are significantly lower. You're talking mailers and socials, basically just to spread the word.

38:11 And then if you have a really, really nice product, then word of mouth is even stronger with existing customers. So there's some natural drivers there inside of our business that make it possible just to have those high margins without compromising on the growth velocity.

38:30 just to add to that as well we do monitor the return on investment as well on spend so we like to try spend a little but try lots of different ways work out what the most effective approach is and then that's when we would then invest the money where we know we're putting our chips on a return that's going to give us more as opposed to just scattergun approach just dumping loads of money and just praying for the best that it works out. It's a much more strategic investment analysis goes on where we spend in terms of marketing.

39:04 Yeah. And of course, with engineering and product these days, some of the game has changed so significantly in terms of how you can build prototypes and how you can roll them out. with great engineering firepower that uses AI for leverage. The EMR is a perfect example where we have 400,000 lines of code and this is a product that we only really seriously started working on earlier this year whereas in a normal or like a pre-AI scenario you would have had probably dozens of people work on that for multiple years and so you would have plowed several million of capex into that. In our case, it's actually very modest thanks to the all the learnings and all the all the tools that we've been able to use following just being early on the ball with AI ever since I think 2022 when we had a first integration into chat tpt before that was even a thing for for consumers right so there we are so don't worry about the high margins people we are accelerating nicely despite that right and that concludes the questions that we have unless there's anything else thank you for watching and stay with the story exciting times ahead have a great day see you