Praxis Precision Medicines general counsel sells $4.8m in shares
Nordhealth reported a robust financial performance for Q3 2025, with a significant year-over-year increase in revenue. The company's innovative strides in AI and strategic market expansion have been pivotal. Despite a negative EBITDA, the market reacted positively, with the stock rising by 2.35%.
Key Takeaways
- Nordhealth's Q3 2025 revenue grew by 15.2% year-over-year to €12.9 million.
- The company's recurring revenue share increased to 88.4%.
- Stock price rose 2.35% following the earnings call.
- Nordhealth is focusing on AI integration and market expansion.
Company Performance
Nordhealth demonstrated strong performance in Q3 2025, with revenue reaching €12.9 million, marking a 15.2% increase from the previous year. The company has shown consistent growth, driven by its recurring revenue model and strategic focus on AI innovations. The veterinary and therapy segments contributed to this growth, with notable expansions in markets outside the Nordics.
Financial Highlights
- Revenue: €12.9 million, up 15.2% year-over-year
- Underlying recurring revenue growth: 10.8%
- Adjusted EBITDA minus CapEx: Negative €200,000
- Cash balance: €16.5 million, with €12.1 million in money market funds
Market Reaction
Following the earnings call, Nordhealth's stock price increased by 2.35%, reflecting investor confidence in the company's growth trajectory and strategic initiatives. The stock's movement is notable given its position within its 52-week range, with a low of 32.2 and a high of 45.8.
Outlook & Guidance
Nordhealth reiterated its full-year 2025 guidance, projecting recurring revenue growth between 12% and 17%. The company aims to achieve 20% EBITDA margins by 2027, driven by AI-driven efficiencies and continued platform migration efforts.
Executive Commentary
CEO Charles McBain emphasized the potential to increase average revenue per user through AI features, stating, "We see a significant opportunity to be able to grow average revenue per user over the coming years." McBain also highlighted the company's focus on enhancing workflow speed through the ProVet software.
Risks and Challenges
- The company's negative EBITDA could pose a financial risk if not addressed.
- Dependence on AI-driven revenue growth may face technological and market adoption challenges.
- Market expansion outside the Nordics involves navigating diverse regulatory environments.
Nordhealth's strategic focus on AI and market expansion has positioned it well for future growth, as reflected in its positive stock performance post-earnings. However, the company must address its negative EBITDA and continue to innovate to maintain its competitive edge.
Full transcript - Nordhealth As (NORDH) Q3 2025:
Charles McBain, CEO, NordHealth: Hi, everyone, and welcome to the NordHealth investor presentation for q three twenty twenty five. As usual, we'll have myself, Charles McBain, the CEO of NordHealth, and my colleague, Alex, our CFO, go through this presentation. So we'll start off with the company updates, then we'll go to veterinary business unit update and therapy business unit update, then Alex will go through the financial updates, and we'll leave some time at the end for questions. So please hold your questions until the q and a session. On the company update, so over the last couple of years, we have grown at a CAGR of 47% to a signed AR of 46.5 at the end of Q3 twenty twenty five.
As you can see, the majority of this growth has come from organic AR growth, but some as well in 2019, 2021 and from M and A. Looking at the year over year growth, we grew 10.6% Q ending Q3 twenty twenty five. 10.7% was net upsell, primarily driven by ProVet expansion. Then you can also see that ProVet cloud signed non implement ARR is 1.6, which does not as well include the Vets for Pets and AmeriVet AR from rollout, which is around 4,500,000. Our churn rate is around 4% per annum.
Looking at how we unpack growth over periods of time, you can see that this in the last twelve months ending q three twenty twenty five, our implemented ARR growth was 10.6%. New customers accounted for 3.9%. Net upsell was 10.7. Churn rate was 4%, and this leads to a net retention rate of around a 107. And then lifetime value to CAC ratio of 16.4.
What's noticeable is that the net upsell is lower than historical as we have not rolled out any large veterinary enterprise customers this year, like we have, for example, in 2024 and 2023. From an EBITDA minus CapEx perspective, we have actually have been reaccelerating our investments in R and D to take advantage of the growth opportunities. There are two specific growth opportunities we'll discuss later. But the primary one is investments in building up team to be able to migrate FETRAB, but also win, additional new customers in Germany, Austria, and Switzerland. The second is, investments in adding AI capabilities to all of our practice management softwares.
On the veterinary side, we signed about half a million of new customer AR in q three. We actually implemented all of PetVet three sixty five's 35 clinics, and this was completed in q three twenty twenty five. Our clinical AI add on was launched in August, and we've got already a 122 paying vets signed up at the end of q three twenty twenty five. And our priorities remain, one, winning enterprise deals in growth markets. Second, continuing the implementation of large enterprise clients underway, notably Amerivet and Vets for Pets.
Three, it's migrating legacy platforms, so Salomalis and Vetvision. And soon, fourth, will be the DACH localization. So we've got the team in place now to be able to localize the product for the DACH region, starting with Austria, then Germany, then Switzerland. And once those are done, we'll slowly be starting the migration of Vetra. We've already migrated a few clinics already in Austria, pilot customers, and then we'll go on to Germany.
There's significant interest from enterprise in Germany for a new cloud software. And last but not least, we've been investing a lot in modernizing and improving the user experience of our core products and adding AI features to be able to make workflows in VetConnect faster. Breaking down the growth over the last twelve months ending q three twenty twenty five, we grew 13.3%. Our net retention rate was around a 110%, and this is primarily driven by enterprise clients rolling out new clinics. Our churn remains very low at around 3%.
Important to note, as I mentioned on the first few slides, is that Vets for Pets and AmeriVet post pilot rollout AR is not included in the 1.6. And that's estimated around €4,500,000 Breaking down the growth of 13.3%, new customer accounted for 3.4. This is lower than previous years in but a net upsell was 12.8. Again, lower than 2024 given the fact that we haven't implemented many new enterprise customers, but our churn is remains very low and has dropped to 3% from 4.8 in 2024. Our net retention rate stays strong at around a 110%.
And LTV this cap is incredibly strong in twenty four point four. Looking at profitability at the NetNear BU, we've invested 1,300,000.0 additional in R and D and CAC, but that's been mostly offset by €1,500,000 in additional cash flow generated from growing our revenue base. The r and d activities have been mostly focused around AI investments and also the Dacht localization. Breaking down the revenue by country over time, you can see that we have successfully been able to grow outside The Nordics, whereas the majority of our revenue in 2021 came from The Nordics, 9.4 of 10,000,000. Now more than half our business is from outside The Nordics, with The UK being a very strong growth driver.
Now taking a look at the type of customers and this that accounts for our growth, we can see that the majority of our growth has actually been powered by enterprise. And so ProVet is a very strong has a very strong value proposition for enterprise customers or consolidators in Europe, but also in The US. In addition, you can see that we've also built up a very strong partner ecosystem and payments infrastructure that enables us to have 3,300,000.0 from those revenue sources. But despite the fact that we've got $12,100,000 of enterprise revenue, our top three customers composed less than 22% of our ARR. So we've got quite low customer concentration risks.
We discussed many times the migrations of Salomonas, Vetserv, and seeing VetVision this year and seeing Vetra as well. And you can see that whereas the majority of our revenue was on non cloud in 2021. Now the vast majority is on our Provid software. So we've successfully proven that we can actually migrate clinics that we've acquired historically. On the therapy side, we've migrated at the September, three thirty three Aspect customers to the unified platform.
Unified platform is a much faster and cleaner software for our users and we continue to migrate Aspect users every week. A thousand users, which is still less than 5% of practitioners have activated the AI systems. And we've delivered over 60,000 AI generate sub summaries, over 27,000 of transcribed in Q3 twenty twenty three. And what's been really impressive is that our conversion rate from free trials has been 20%. Our signed AR in q three has been three zero seven, and the priorities remain twofold.
First is the aspect user migration to the unified platform. Second, we've been continuously developing our AI products and be able to sign up new practitioners to AI products. Looking at the growth, our focus has been on migration and less so on growth beyond the AI products. We grew 6.4 year over year. What we can see is our net retention rate is just above 100% to 102%, and our churn rate is decreasing at 5.6%.
Breaking down that growth, you can see that, as I mentioned, one is our net upsell is up versus 2023 and 2024. This is mainly driven by the fact that we have an AI product now to upsell them. We haven't been focusing much on growth, which we can see from the 4.7% growth in as we're focusing mostly on migration. And our churn rate has, despite the fact that we're migrating, has remained at around 5.6%. Our LTV CAC is 9.1.
Here you can see from EBITDA minus CapEx perspective that our growth generated 0.7 additional cash flow, but we spent $1,900,000 in additional R and D and customer acquisition costs to be able to accelerate the migration and the AI growth. The reason we decided to do that is that the faster we're able to migrate, the faster we're able to get €2,800,000 in annual savings, and the more customers we can have to be able to upsell our AIScribe features too. As you can see, we've been starting to make some dents on the migration, and you can see this in q three twenty twenty five. Now over to Alex for the financial update.
Alex, CFO, NordHealth: Thanks, Charles, and and hello, everyone. So jumping straight into reported revenue. In q three twenty twenty five, we did €12,900,000 of revenue, which is a 15.2% increases versus the same quarter last year. Our underlying recurring revenue growth was 10.8%, going from £10,400,000 in Q3 twenty twenty four to £11,500,000 in Q3 twenty twenty five. The Q3 year on year increase in other revenue comes from implementation revenue linked to current enterprise rollouts.
By q three last year, we had completed most of the rollout of CVS, and so the largest implementation revenues related to CVS were in q one and q two in 2024. This also explains why the Q3 twenty twenty five share of recurring revenue is 80.89 percent, slightly below the 92.6% share in Q3 twenty twenty four. For Q3 year to date reported revenues, the total reported revenue grew by 14% the next slide from EUR 33,600,000.0 in 2024 to EUR 33,800,000.0 in 2025. Year to date, our implementation revenue if we can just move on to the next slide, please. Year to date, our implementation revenue has been relatively similar between 2024 and 2025, and so our increasing base of recurring revenue has meant that our share of recurring revenue has gone up from 87.8% in 2024 to 88.4% in 2025.
I'd also like to highlight that our core veterinary and therapy business units continue to outperform our smaller other businesses. So when we strip out the other businesses, recurring revenue for the two core businesses business units has actually grown by 16.6% year on year. Now on the next slide, quarterly adjusted EBITDA minus CapEx. In Q3 twenty twenty five, we reduced by GBP 300,000.0 year on year to an adjusted EBITDA minus CapEx of negative GBP 200,000.0. Recurring revenue grew by GBP 1,100,000.0 year on year.
COGS and customer service also grew by GBP 900,000.0. The growth in these direct costs is higher than proportional to the revenue growth due to the temporary need for extra client support for the early migrated therapy clients. The largest item impacting adjusted EBITDA minus CapEx is product development expenditure, which has grown by £800,000 year on year. As we announced earlier this year, we've taken the decision to step up our investments in product development for AI feature development and DAC localization. Year to date, for Q3 twenty twenty five, total adjusted EBITDA minus CapEx was negative $2,000,000 compared to negative $700,000 in 2024.
The the year to date adjusted EBITDA minus CapEx changes are also related to increased product development spend, where we have spent £2,600,000 more year to date in 2025 than we did in 2024. We've also increased our sales and marketing investments by GBP 300,000.0 to help accelerate growth in our target markets. Looking now at cash flow. In Q3 twenty twenty five year to date, we had a cash outflow of 1,600,000.0, which is an improvement of GBP 500,000.0 compared to 2024. The year to date improvement is primarily driven by the GBP 1,300,000.0 adverse movement in adjusted EBITDA minus CapEx, offset by GBP 700,000.0 of favorable movements in trade debtors as we've been improving collections and also by a GBP 1,100,000.0 favorable sum of other working capital movements, including other items affecting profitability, noncash items and improved operating working capital.
Finally, looking at the September 2025 balance sheet. Cash as at September is 16,500,000.0, of which 12,100,000.0 is in money market funds. There were no changes to goodwill in q three twenty twenty five except amortization and changes due to FX. There was no external financing taken in q three twenty twenty five. We did complete a share buyback in July, where we bought 300,000 shares for NOK 36, so this gave us an additional 900,000.0 of treasury shares.
NordHealth's equity balance remains healthy at 65,400,000.0, and the company has no interest bearing debt. The full detailed financial statements for q three twenty twenty five, including the p and l, the balance sheet and the cash flow, are all included in the appendices. So now on to guidance. We're reiterating our full year 2025 guidance on Vet plus Therapy recurring revenue based on December 2024 constant currency and excluding acquisitions of 12% to 17% growth. Our Q3 year to date 2025 actual is 16.6% growth.
Similarly, for adjusted EBITDA minus CapEx, we're again reiterating our full year guidance of between negative 4,000,000 and negative £2,000,000 excluding acquisitions. Our Q3 year to date 2025 actual is negative million pounds and we will be presenting guidance for 2026 at the Q4 twenty twenty five results presentation. Lastly, regarding the financial calendar, the Q4 and full year 2025 results will be presented on the 03/03/2026, and we'll publish the full financial calendar for 2026 on the website before the December 31. I'll I'll now turn back to Charles for for q and a.
Charles McBain, CEO, NordHealth: Thanks very much, Alex. Now after q and a, so feel free to ask questions by raising your hand or just ask some questions in the chat as well that we can answer. So we got one question now. I'll repeat the question, and then I'll either answer it or have Alex answer it on my behalf. The first question is, could you quantify the current revenue contribution from your newly launched AI features even if it's small at this stage?
And looking ahead to 2026, how material do you expect AI related upselling to be for overall ARR? We haven't broken down the AR revenue yet by business units. As it comes to more substantial, we might look to do that. The currently, if we look at the pricing of the AI Scribe loan relative to the pricing of the practice management software, it can be 50% higher, you know, it can add 50% more to our AR. That means if someone pays, for example, a 100, they could pay a 150 for including the AI features.
And that's just for the AI scribe. In addition, we're looking at expanding beyond that into an AI receptionist where you'll be able to pay their tickets, but we see a significant opportunity to be able to grow average revenue per user over the coming years. Adoption will over time increase, and we don't see any reason why the vast majority of our users should not be using our AI tools. The only risk to that is that we've seen over time the price for AI, squares in the market going down, where they used to be at 129, euros per user. Now we're seeing the average price go down a bit.
It's somewhat stabilized, but it's between 50 and 75 now for a standalone AI. Next question is, there have been reports of increased downtime of COVID in Europe recently, which has negatively impacted your customers' ability to run their operations. What have the issues been and what are you doing to address them? Yes. AWS has had issues in which is our provider that we use for hosting on the the private side.
So there were two separate issues that happened. One was AWA AWS East going down, which affected some of our integrations. And the second one was the AWS error. So these AWS took responsibility for those. What we've done is working with them to try to make sure that does not happen anymore.
We've also, in addition, just we split the database into multiple different smaller environments, so that if ever there is an error, again, it doesn't affect all environments. The next is regarding your twenty twenty three Capital Markets Day targets. You guided around 20% EBITDA on its CapEx margins by 2027. Are you still confident in reaching that goal? And what are the main drivers supporting that confidence?
Well, our targets for that we said in the Capital Markets Day, we have not updated those, and those are still the current targets. Given the there's always a trade off between growth and profitability. And with our investment AI, we could be able to not only have more revenue, but also can have a huge impact in terms of operations as well. So for example, customer service costs as a percentage of revenue could go down, the amount of people we need to be able to develop the same amount of code is not as much, so we don't have to hire as many net new people. There's huge opportunities as well in implementation to be able to automate a lot of the work there.
So, yes, these are still valid targets. So question on, are you considering any measures to improve liquidity of the NordHealth share, for instance, through increased investor outreach, changing in this embedding or other initiatives? We we did mention during the IPO, and we reiterated during the Capital Markets Day that we are looking to do an upmarket listing. Step one of that will be to shift from Norwegian GAAP to IFRS, and step two will be to actually migrate and uplift. We haven't made a final decision yet on, the market and that we would uplift, and we have not yet given timing on the uplifting.
But that is still our intention. As you own and control more than 50% of NordHealth, given the potential rule conflicts impact on board competition, why would you accept 2,400,000 shares option to be incentivized on share price? There is a because I do not control 50%. I control around 40% of the Nordhelf shares. I'm not sure what the conflict is there.
The I'm not on the actually, the board at Nordhelf. The board is made up of, intentionally, have Jana, who's a major shareholder, Philippe Ilmar and also Didier Bruton. And so our two independent board members in addition to Jana who works the company, and they make decisions on compensation. In terms of the why share based is I the given that I have had liquidity, I prefer to shift most of my compensation to shares, not to cash that I'm fully aligned with the shareholders. Next is a question from Torbjorn on quite a large sequential step down in gross margin.
Is this solely driven by asset migrations? Or there are other contributing factors? How many customers remain on aspects? And how should we think about timing with regard to finalization of migration? On the first one, the there are two things affecting gross margins.
One has been on aspects. The legacy solution is increasingly more expensive to maintain as the cost of to host it on Citrix. For example, the Microsoft license fees cost have increased quite substantially. The second has been on the Vetra side. We've also been increasing the amount that we're spending on customer service to be able to improve the quality of customer service.
The on how many customers remain on Aspects, We have migrated, as we said, three thirty three and there's around as over 7,000 users on Aspects. So there's still a significant amount of people users still on the legacy platform. Our strategy for migration is to break up the customers into different user segments and migrate one segment at a time, ensuring that each segment that we migrate are happy. We have not provided the final time on migration as it's really hard for us to assess exactly when each of these segments will be happening. Also, it's intentional that we don't set an end of life until we've got clear visibility and all of our full product market fit for each of the segments.
Otherwise, it does worry the market where word-of-mouth is incredibly powerful. Why are Vets for Pets and AmeriVet not yet included in the signed AR? The for Vets for pets and AmeriVet and all other enterprises, we only add them to sign the AR when we have a pilot completion and we've got a a rollout plan agreed with them, just to be conservative. The next question is, what is your progress and status on the multiyear effort of making COVID best in class on user experience and efficiency in terms of number of clicks and for the most common operations. There are our goal for ProVet is to make it the best software in terms of the speed at which a workflow is completing.
Right? So and there are two levers we have for this. I'll give you a good example. In the one is improving UX. So figuring out what is the most efficient path that a user can take to complete an action.
And second, with the new lever that we have in AI, we can also think about can we completely rethink this path. Good example is a consultation page where historically at the open consultation page, add clinical notes, add the weights, add vitals, add a diagnosis, not typing into different fields and so on. Now you can just press one button, activate the iScribe. It not only writes all your text, which is what's currently out now for customers, but the next version coming out that it figures out if you're adding medicines, adding diagnosis, vitals, and so on, and that can fully automate that process. So it would be one click consultation.
So it's a very exciting time and the ability to for PINs to be able to dramatically improve efficiency is heightened now. Great. Yes. So there's a question on and you could also comment on the current competitive landscape, both from new AI native applications and from other EHR providers across your veterinary and therapy segments. Yes.
So we in terms of AI native applications, there are two different types. There's AI scribes and there's hundreds of AI scribes in the markets. In the end, they're just a wrapper over an AI model. They do have some good functionalities to make it specific for their specialties. But I do not believe that these AI scribes in the end will become a standard part of practice management software.
There won't be a separate software. We've seen this again and again historically. For example, online booking used to be a separate add on with separate parties. Now it's a core part of any practice management software. Given the data is lives in the practice management software, a AIScribe only has the history that it sees from this one consultation.
We've got the full view of that patient's history. And so not only for the AIScribe, but also for example, patient history summarization, we're in a prime position to be able to win. However, there are some AI native practice management software which are popping up. We're seeing some in The UK, for example, and another one in Continental Europe on the veterinary side. On the therapy side, there is a lot of regulation and a lot more regulation on veterinarians.
So we're not seeing as much AI native practice management software in the in the markets we operate in. There's a question. When do we plan to reignite the growth in the therapy segment? So I learned the hard way to focus on one thing at a time to get that done. So when I first started the business, we were focusing on we went in too many countries at the same time, and so it diluted our efforts.
And diluting your efforts mean when you face a localization means that you have to go after one user segment and make sure you're localized in the next one, the next one, and so on. And so if you spread yourself too thin, you're very the pace at which you can fulfill a problem that you encounter is much slowed down because you're working on multiple fronts. So on therapy, we wanna make sure we nail this migration. Then once the migration is done, right, from a product perspective, we can focus on the next growth market. This is a very similar path that we took on the veterinary side as well, where we're going into that new market one after the next.
The issue we have in in in therapy is that instead of spending sales and marketing dollars to actually acquire those customers, we preacquired them by the acquisition, and now we're rolling them out. So great. Any other questions? Perfect. Well, thank you very much and thanks for the engaging questions.
And we will see you all next quarter. Thank you.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.