Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carasent ASA (OSL:CARA, Financial) reported a solid quarter with improvements across all areas, indicating a positive trend expected to continue.
- The company achieved 23% organic growth in contracted ARR, surpassing their target of 20% for the next year.
- Carasent ASA is on track to list on NASDAQ, with the first day of trading expected in December, having overcome major obstacles.
- The company has seen a significant increase in sales discussions with new customers, including a recent large sale.
- Gross margins improved from 80% to 85%, driven by strategic divestments and renegotiated supplier costs, indicating sustainable financial health.
Negative Points
- Carasent ASA faced high one-time costs in the quarter related to the NASDAQ listing and acquisition projects, impacting short-term financials.
- There is a risk of delay in the worldwide implementation of a major contract, which could affect the company's financial goals.
- The company is experiencing challenges with the VDR and Millennium system integration, which could lead to legal processes and financial impacts.
- Free cash flow was negative in Q3, primarily due to working capital effects and one-off costs, despite overall financial improvements.
- The launch of Web.X in Germany is taking longer than expected, with certification now anticipated in the first half of 2025.
Q & A Highlights
Q: Regarding the situation in VR, with specialists being excluded, does this affect the region's success scenario?
A: No, the exclusion of specialists is included in the numbers presented. Specialists were never fully integrated into Millennium due to their diverse patient base, so they will largely remain with Web Doc.
Q: What is the market potential for the surgery module now that it's nearly complete?
A: The surgery module has a market potential of around NOK150 million in Sweden. These are typically larger clinics, which take longer to sign and implement.
Q: Can you elaborate on your expectations for new sales with the surgery module?
A: We expect a significant increase in new sales, with the surgery module contributing to this growth. Although larger clinics take longer to implement, we anticipate contract signings to accelerate in the coming months.
Q: Why are you more successful with semi-cold cases?
A: Our sales and marketing team has been proactive, using social media and direct marketing to generate leads. We've also shifted to a performance-based pay structure for sales staff, which has incentivized them to engage more actively with potential customers.
Q: Could you clarify the scope regarding the WVO contract and its potential impact on ARR?
A: The scope has increased due to additional functionalities like billing systems and patient portals. This will lead to extra consultancy income and potentially higher ARR, as these features can be sold to other providers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
