Physitrack PLC

Hello everybody and welcome to Physitrack's Q2 2026 results webcast. I'm Henrik Molin, I'm the CEO and founder of Physitrack and I'm joined today by our CFO Matt Halter. All right, let's get to it. We will give you a little snapshot of what worked and what worked less well as a start of it. And then we'll look at the two business divisions. Matt will take you through the financials in more detail. We'll also cover the share buyback. We're going to wrap up with strategy and outlook, and then we'll move into Q&A. And as usual, submit questions at any time using the Q&A function at the bottom of your Zoom panel down there. Now, let's go. Right, Q2 snapshot. Some interesting developments. Revenue was up 8% year-on-year, 6% quarter-on-quarter. Compared to Q4 2025, we're up 10%. revenue reached 3.4 million euros and 96 percent of that revenue comes from subscriptions and that is as you know the gold standard and what we do in software your predictable recurring revenue flows and that's almost all of what our business is built on Life care revenue was up 11% year on year to 3.1 million euros. Life care ARPL, which is the average revenue per license, increased 10% to 189 euros per year. That's important because we're increasing the value of every customer relationship and we're adjusting pricing accordingly, which is great. Wellness continues to move towards profitability. Adjusted EBITDA was 170,000 euros. Profits after tax from continuing operations came in at 49,000 euros. there are also some really important milestones during the quarter the biggest one was in the US we launched RTM we now have our first paying customers live and the active leads that we're pursuing here are closing in on a hundred of a customer base of about six thousand paying customers in the US and on top of that we announced several really nice enterprise wins that you've seen through our press releases and There are some really nice movements here. Looking at what slowed a little, adjusted EBITDA margins came down slightly. That's entirely because of planned investments in sales and marketing, mainly building up the New York office with more salespeople. Adjusted EBITDA less capex also came down temporarily because of the RTM development work that we've been doing. but nice investments there and is already paying off. Free cash flow for the quarter was negative because of a settlement relating to a supplier relationship that dates back to before 2018. It's been hanging overs for a long time and it's great to put that behind us now. Operating cash flow however remains positive and that's now seven consecutive quarters of positive operating cash flow and we're very very happy with that as well. annual recurring revenue now stands at a run rate of 13.6 million euros we're also a much leaner organization today we have 33 employees a year ago we had 71. it's a very different company we're modernized we've adopted ai across the business we've simplified the organization and we've exited operating physical clinics ourselves all of that makes us a much leaner and meaner business looking ahead we expect the capex cycle to moderate during the second half of the year as the RTM build is now largely complete.

All right, some financial highlights from the quarter.

This rehashing revenue for the quarter was 3.4 million euros, 8% up year-on-year, 6% quarter-on-quarter, 10% compared to Q4 2025. Adjusted EBITDA, 1.2 million euros. Group ARR reached 13.6 million. Free cash flow from continuing operations, positive at 0.1 million. That's our seventh consecutive positive operating cash flow quarter in a row. The SaaS growth margins remain very strong at 9%. Let's take a look at Life Care. Revenue up, as I said, 11% year on year. Churn remains at 1%, 12 months look back. Adjusted EBITDA margins sit at 50%, equivalent to 1.6 million euros. Adjusted EBITDA less capex was 25%, or 800,000 euros. You'll notice that the license bates dipped slightly during the quarter, and that was mostly intentional. We parted ways with a legacy customer in the UK that generated very, very low margins. That's an agreement that I think we came in to 2017 2018 and it simply wasn't a contract we wanted to continue servicing what you can also see is some really nice movement in ARPL so again serving a higher value customer base and we implemented our plan price raise in April churn following that increase has been extremely low so in fact it's been the most successful price increase in the company's history it gives us a lot of confidence in our pricing power We still believe the platform is undervalued relative to the value of our customers getting from it and customers tend to agree looking at core KPIs. Turning to wellness. Revenue contracted 14% year-on-year. Some of the reduction in contracts was planned as we exited lower margin business that were done by the legacy team behind Champion Health. Some contracts also simply came to an end of their term. annual recurring revenue stands at 0.9 million euros adjusted EBITDA margins have improved to 32% that's bringing wellness much closer to the group's long-term financial targets adjusted EBITDA less capex margin improved to 11% we've also achieved a very nice reduction in operating expenses and that's largely the result of closing the champion health plus clinics and moving entirely to outsource clinical delivery through our Nexa partnerships and today we're really excited to not have any hands-on clinical operations ourselves we've completely exited that we've focused entirely on the software platform clinical deliveries handled through partners and that's a much leaner structure it's a much more simple operating model and it's a much more scalable business The priority now is rebuilding growth momentum from that stronger foundation. All right, looking ahead, execution priorities, sorry for the busy slide here, but there's a lot going on here. Our priorities are very clear though, North America, as a natural point of focus. The build out of the New York office where we are today continues and is really exciting. We have some very hungry people on the ground here and we're continuing to expand the commercial team. We're also adding more product capability in New York. and it's so important for us to be close to the American market and it's not just about the commercial aspects of it it's for the product aspects of it as well because healthcare providers here they're ahead of the game of their international peers they have different needs and consumers they are really really on top of what they want from UI UX because the latest and the greatest innovation reaches them ahead of time from anybody else around the world And so we want the product teams close to that market so we can respond faster and be ahead of the game. So moving over to RTM, that continues to be a really exciting opportunity. As I mentioned, we're closing in on a triple digit pipeline of RTM opportunities. I think we're closing in on 100 of those within the existing customer base. Very important point there. We're not entering North America from zero. We're actually growing inside of an existing customer base that's already generating a couple of million of revenue. So we have a very significant opportunity to increase that revenue per customer through upselling. And we don't have to build everything from zero, which traditionally is very, very expensive. on the capital market side we continue working towards a us parallel listing through otcqx we are just waiting for market cap qualification levels we've seen a lot of interest from american investors thanks to the work of our investor relations team the entrepreneurship culture here in the US makes Physitrack a very interesting company and there's a big history with market cap investing thanks to the American Stock Exchange and other outlets we're just moving towards this as our market cap grows once that happens we'll move ahead with that parallel US listing so American investors can actually just press a button and buy Physitrack more easily. Now, on the product side, RTM, of course, has been live in production since June. We've also launched a unified enterprise bundle for the U.S. market that combines home exercise programs, RTM, and continuing education that puts us more directly alongside providers like MedBridge when we're competing for enterprise customers. Motion capture, another really important part of the strategy, so as reimbursement requirements become increasingly data-driven, providers need much better patient monitoring to prove that they're actually working with their patients in a particular way so motion capture gives us another meaningful opportunity to provide that and to increase license value across the US customer base so from a financial perspective we maintain really strong margins while continuing to invest for growth and of course again seven consecutive positive operating cash flow quarters speaks for itself The numbers we saw exiting June were extremely encouraging. Both growth and margins have improved drastically and that gives us confidence heading into the second half of the year. Now finally, down there bottom right, Wellness has now completed its reset into a pure enterprise SaaS business. No longer are we involved in physical care delivery ourselves. Everything is done through partners through the NEXA system and that leaves us with a much leaner cost base, much more scalable business model and a company that's firmly profitable. So overall we're very encouraged by the first half of the year. We're looking forward to building on that momentum in the second half of 2026. Now with that I'll hand over to Matt to walk you through the financial results in more detail. Matt over to you sir.

Thanks, Henrik. So looking at the Q2 2026 financial summary, starting with the summary table revenue 3.4 million against 3.2 million a year ago, which is up 8% and then 7% on a constant currency basis and 6% ahead of Q1. It's also worth looking at this on a six-month view measured against Q4 last year. Revenue is up 10%. And I put that alongside the year-on-year number, not instead of that, because for a subscription business like ours, revenue builds up progressively through the base rather than arriving in one step. So that sequential trajectory is a genuine read of momentum, not just a big number to quote. Adjusted EBITDA of 1.2 million is down 3% year on year at 34% margin against 38% a year ago. That margin move is planned investment behind our US expansion strategy, and that's not down to cost inflation. And I'll come back, I'll touch on that, exactly why and how we hold ourselves to account for it when we get to profitability in a moment. Free cash flow in the settlement was 0.1 million. That's our seventh consecutive quarter of positive underlying cash generation. And I'd like to add one point of context here. Quarterly cash flow can move around with working capital timing. That's normal for a business of our nature. But generating cash every quarter is an ambition that we hold ourselves to. And seven straight quarters shows that ambition being met through executed planning and not just by chance. Now, on the settlement itself, free cash flow was an outflow of 0.2 million on a reported basis, and that's entirely attributable to the final payment on a legal matter stemming from a supplier that's contributing to the business way back in 2018. I'd underline that. this is a long-standing historical matter which has been disclosed for many years in our annual report and it's unconnected to any current supplier or trading relationship and now it's finally resolved with no further expansion and I'd just like to reiterate and confirm that there'll be no further cash outflows in relation to this next slide please Henrik now let's look at the consistent quarterly revenue growth this chart is the best single picture of the business Revenue has compounded in almost every quarter since 2021 from 1.4 million to 3.4 million. A compounding business is not a step change one and Q2 2026 is a new quarterly high ahead of the previous peak in Q1. Understandably, life care has driven the great majority of that growth. And wellness, as you can see from the shrinking band, is now smaller. But conversely, it's a profitable business following last year's restructuring. And that's a deliberate strategic choice, not underperformance. Next slide, please, Henrik. Now we turn our attention to profitability. On profitability, the headline is simple. Our adjusted EBITDA margin is now held at 34% or higher for six consecutive quarters. So this is a durable, it's not one-off, I also want to pick up on the margin move I flagged a moment ago, because this is where it belongs, alongside the investment in funds. Now, that spend is predominantly in North America and in RTM, and we front-loaded that by design. We're investing now to increase the velocity at which we ship products and features, and those costs don't scale with that. They're a fixed development investment, not a variable one. It's bigger than RCM alone. We're deliberately building a broader feature set that goes beyond remote monitoring to address the full range of what physiotherapists need from their platform and the breadth of what lets us expand revenue both for our existing user base and for new users we bring on. The market is moving at such a rapid pace and we intend to lead it. We'll just keep pace with it and our medical device status in the US is a real durable moat in that context. It's a regulatory bar that's expensive and slow for any new entrants to clear. As those features launch, revenue expansion and bringing new business, we expect them to be offset by the revenue that they generate. So these margins are not going to be carried indefinitely and these costs won't be carried indefinitely and it's not going to be a drag on our margin. I'd expect this to be the area you want to scrutinize closely, and that's rightly so. So let me be specific about how we hold ourselves accountable. We've made medium-term EBITDA margin target 40% to 45%. We're conscious that our current 34% sits below that. And closing that gap through revenue growth against the control cost base is exactly what we're working towards. Lifecare does continue to fund the group. Wellness is essentially breakeven on this basis rather than drag. And the group total reflects this year's deliberate capital expenditure program. Next slide, please, Emmerich. So the financial position at Q2, 2026 close on the balance sheet and liquidity cash of 0.4 million is unchanged on Q4 and Q1 with 4.3 million draw revolving facility and 1.3 million of available headroom. net debt is 3.8 million up 3.5 million and i want to be specific about why that increase as we've discussed reflects the legal settlement and a facility drawdown and it's not due to our blind trading it's a one-off step not a trend and we expect net debt to come down over the remainder of the year as that one-off expenditure and cash outflow unwinds and the underlying cash generation continues We'd also like to touch on the covenants as well. We have sufficient headroom with all covenants despite the increase in net debt and the drawdown in this quarter. cash conversion operating cash flow of 0.7 million is in line with last year free cash flow was an outflow of 0.2 million on a reported basis but excluding that settlement it's 0.1 million positive that's now seven straight quarters of positive underlying free cash flow on capital flexibility our margin held 34 percent net profit positive, cash generation continues to exceed operating costs. We remain in full compliance with our Santander facility in both covenants, leverage test, and minimum cash test. And that compliance position is what allows us the conditions attached to the share buyback program, which we're going to touch on in a second, to be satisfied. And that brings us on to the next slide, please, Henrik. So let's turn our attention onto the share buyback, which we announced this morning. Essentially, the share buyback program allows management to have now skin in the game through the long-term incentive program. And that long-term incentive program is directly focused on margin expansion and sustained profitable growth, funded without diluting a single existing shareholder. And now here's how. It's entirely non-dilutive. So shares are brought back from the market into treasury. it won't be newly issued shares and annual grants are sized against those repurchases. Now, because 2026 is a partial year for the programme, this year's grant will draw down a small part on the 2027 share buyback repurchase. That's just a timing point, not a change to the funding approach. But then from next year, the grants are fully aligned year by year with what's been bought back in that year. So we'll never have to draw down or re-achieve another share. The awards were sized against independent remuneration benchmarking. So nothing was set internally. Management doesn't actually see a single share until 2031. So it's a long way off based on a three-year performance period. Vesting only at the end of that and nothing before. And then subsequent to that, there's a two-year holding period. So the first exercise lands in 2031 and that spreads across 2031, 2032. Vesting isn't automatic either, and the bar is a real one. It takes a minimum of 10% annual revenue growth just to unlock the quarter of the award, scaling up to full vesting only if we sustain 15% annual growth. And there's also an EBITDA underpin below that as well, which the remuneration committee can apply to reduce vesting if profitability doesn't keep pace or in line with our medium term targets. I'd also like to add that committee is comprised entirely of independent non-executive directors, so management has no vote on its own awards. There's also a shareholder-friendly mechanical benefit too. Because the shares sit in treasury rather than being newly issued, they're excluding from the earnings per share count while held there. So ahead of any transfer to option holders in 2031, the structure supports earning per share in the medium term rather than diluting it. On purpose and process briefly, this is not a return of capital to shareholders. Its purpose is to fund the plan I've just described within the relevant safe harbor rules for employee share schemes fully set out in today's announcement. We expect the first purchase to commence in the coming weeks, most likely first week of August. and we're just waiting for a couple of statutory filings to be completed. At this point, it's an administrative process rather than anything substantive or outstanding. That covers the financial results of the quarter. Henrik back to you with the strategy and outlook.

Christoph, thank you so much, Matt. All right. This is true. So why are we positioned to win? Well, AI is an important part of it. But of course, at the core, we are a clinic-embedded SaaS platform, so we're deeply integrated into practitioner workflows. It's not a light touch tool. It sits inside of the day-to-day delivery of care, and that creates real switching costs. Once we're embedded in those ecosystems, it becomes operationally difficult to replace us, and that's where Now if you look at the care and education proposition, we're not just delivering software, we're integrating continuing education and physiotherapy content directly into the platform. So you have one single ecosystem that covers delivery, compliance and professional development. that increases both relevance and monetization potential of course it gives us a clear path to expanding average revenue per license which strengthens our position in enterprise environments RTM we've spoken about a lot but it is a step change it moves his track from being perceived as a cost center to being a revenue generator for our customers and that changes the conversation completely when you're tied directly into a provider's revenue stream your importance in the stack increases deal sizes increase and retention strengthens further Now, from a business model perspective, I keep hammering homebrew or a 96% subscription revenue business, and that gives us a highly predictable and stable platform to operate from. Gross margins are around 90%, and that translates into a strong cash conversion over time. in line with a long-term model and that is a business that's built to scale very efficiently. We also have a true global footprint. At the same time, we're building very focused commercial hubs in New York and London. So this is a global platform with a low complexity. Now, if you step back and look at the investment case, the underlying market dynamics are supportive. Of course, healthcare is digitizing. Providers are looking for scalable delivery models and reimbursement frameworks like RTM are accelerating adoptions. We are well positioned from an innovation standpoint and the model is highly scalable. In terms of financial goals, we keep iterating. We're targeting a doubling of the company in the medium term. EBITDA margins in the range of 40-45%. based on the KPIs we are seeing, particularly on profitability and efficiency, we are well on the track on the margin side. Overall, we have a highly sticky embedded platform, multiple levers for revenue expansion and a scalable high margin model. So, a little summary. We are ready for Q&A, so please use the Q&A function at the bottom of your screen and we'll take your questions live. Thank you so much for this first part. See you on the other side.

Okay, we are live with Q&A.

Let's see if we can get Matt in the room as well. One sec. Right, so as usual, you can ask your questions via the Q&A function at the bottom of your screen. Let's just take a little look here. So we have a few questions. Grab a cup of coffee, sip of water, and we're off to the races. OK, adjusted EBITDA held at a 34% margin, but adjusted EBITDA less capex compressed to around 9% at group level on higher US and RTM slash AI investments. When does this investment cycle peak and what is the path back towards the 40% medium-term target? Matt, do you want to grab that one?

Yeah, so I think we've now absorbed the bulk of the US and the RTM AI investment. We've been in the States, New York now with the office for around six months and obviously that involves some front-loading. of investment. And I think the run rate that we're now at is what we'd expect to carry forward. Obviously, there might be some increases in that as new projects or new investments come along. But we're not expecting that now to be a step up as we start expanding further. I think really now the primary driver for that 40% medium-term margin is going to be through the revenue growth. So we're front-lining that investment now, and then we now expect the revenue to come through to offset those costs and then expand those margins further. So we're expecting the margins to progressively build over the medium term rather than trying to pare back in these sort of investments.

Thank you, Matt. You announced a non-dilutive buyback that funds the new LTIP from treasury shares with net debt of €3.9 million and €1.7 million of liquidity. How do you balance the buyback, debt leveraging and continued US investment? And is the intended €250,000 per year strictly sized to the plan?

So I don't think these are competing calls. In finance, we have informal, what we call fiscal rules, but we run a formula where any excess cash that we generate is applied to pay down the facility and investing in further innovations within the business. But we weight that formula towards de-risking and de-leveraging the balance sheet, so paying down that debt. I'd like to point out that net debt was temporarily elevated this quarter, as you've seen through the repayment of the legal settlement, €0.3 million. I'm expecting that net debt to fall and our cash duration to increase over the coming quarters. I'd also like to stress as well, on the buyback itself, this whole thing is structured so it's going to be non-valuative and our intention is that this year and in future years the article award is never larger than the buyback funding it so the treasury share mechanism doesn't value existing shareholders 250 000 euros that's the intended annual sizing at the moment and it's deliberately counter protect that non-valuation objective obviously as the business grows and we generate more cash flow that by that program may expand further but as of today in this moment in time the cap there is 250 000

Thank you, Matt. You achieved US medical device status this quarter. Indeed, we did. How big a moat is that and how do your preparatory data and own AI models defend it, I'm guessing the moat, as your classification continues to evolve? Well, I'm sad to say that medical device classification is not really much of a moat. It is something that any company that can spend time and resources on can achieve. The biggest moat that you can have is the pace of innovation and making sure that you deliver value to customers and that you have a nice build-in into their ecosystems. And some of these things are part of that. So having medical divine status is important because that means that you can get adopted by a healthcare system or you can get adopted by a customer that has very strict rules around what tech they use. And as you do that, that's the entry point into being built into somebody's ecosystem. Now, data and AI, of course, this sits as part of innovation. And that's something that deepens a moat and that deepens the distance to a competitor. But these things are very much fast moving. And it is very important to respect the fact that innovation and product development needs to move really, really fast. And having a team that's always curious and that's always on the ball in terms of developing the latest and greatest, even things that your customers don't even know that they need six to 12 months before they actually do feel that they're desperate for it. That is the best model that you can have. All right, I have some more questions and thank you. There's some understanding here. If you don't have time to address all the questions below, there's a bit in advance. Thank you so much for that. We'll keep going until we can't breathe anymore. All right, wellness. is it really worth continuing to invest in the wellness business when the majority of its revenue comes from a single contract and it appears to require significant effort to move the needle have you considered whether the business might create more value under different ownership so those are a couple of questions so we are diversified in the book of business for wellness so it's a fallacy to claim that revenue is coming from a single contract so that is not correct we like having a revenue diversification across both our business lines. There's no bigger effort really to service big enterprise contracts inside of Wellness. There are some reporting overlays that are more or less automated at this point in time, but it's not a big difference between those things. have you considered whether business would create more value under different ownership and I don't know if you mean specifically wellness or champion health or if you mean the business all together I think we have an interesting cap table I would welcome maybe an industry owner to some of the parts of the of the shares that are sitting with legacy shareholders now and legacy shadows that are connected with the business or the industry. So that will be the required lines because that's something that you can use to drive innovation and open doors for commercial acceleration. And of course, if you can have experienced investors with a foot in really deep innovation in places like Silicon Valley or in Austin, Texas or something like that. That would be really favorable to us. So we do welcome a shake up of the cap table if anybody's interested in doing that. Next question. You state that you have around 33 to 35 employees, but LinkedIn suggests that the number is significantly higher. What explains the difference? We have a number of contractors and a lot of the relationships that we have legally with the business are through contractor relationships because it's the small flexibility for us, the small flexibility for the contractor. And of course, it creates a favorable tax environment. And of course, if you want to part ways with contractors, then it's much faster to have it that way and there are also some some things around permanent establishment in certain regions where if you have employees then you have to set up local entities and think about it makes the whole process quite cumbersome that answers the question profitability versus growth you've now demonstrated that you can operate profitably thank you for noticing If RTM develops more strongly than expected, would you be willing to sacrifice margins to accelerate growth, or does profitability remain your top priority? Well, if RTM in itself has a very high margin proposition, and so if that acceleration comes into play, then it's actually a reverse problem that the margins will expand a little bit too fast than what we can probably invest into. So, yeah, there's no... There's no linearity there between how much we spend and the growth of that segment, which makes that really, really interesting. Capital raised. Do you foresee any need to raise additional capital over the next 12 months? No, we actually never raised capital beyond the IPO and friends and family investing back in 2014, I think was the last round. So there's none of that on the horizon. Probably not ever. growth excluding currency effect and one of items what level of organic growth do you believe is realistic for 2027 well looking at uh so we we grew 10 from the fourth quarter until until now so i think that's a healthy pace uh it's hopefully something that we can step up and do more of. If you're in a software business that has product market fit, you should have very healthy top line growth. And I think, you know, 20, 30% is probably modest in that context. The sites are set for much higher growth than the communicated financial goals. And I believe that we're in a very, very interesting position to actually reach those with what we have in our book of business and what's going on with our product roadmap. All right, questions on AI. Which AI capability do you believe will have the greatest commercial impact over the next 12 months? Now, motion capture is something that very well supports our RTM business, so the ability to measure adherence based on what patients actually do with the rehab. That's an important part of being able to claim RTM money for our customers. So I think commercially that's going to be a very, very important component of it. There are some other things going on with our AI. So we have some proprietary LLMs that underpin the A couple of components in product development, notably with the recommendation engine that recommends exercises for healthcare providers to assign to patients based on what conditions they suffer from. I think that can be a major competitive advantage. So it's a big step up from the co-pilot that we launched in 2023 already. and there's a lot of scope to expand that into the B2C segment of our business where you can have recommendations for exercises based on what a patient or a consumer suffers from. And there are some other things as well in terms of authentic workflows that will be underpinned by AI. It's really, really interesting. So yeah, but I think in the short term, motion capture, for sure, that's the big one. You've communicated that AI is improving productivity, yet your development investments have not declined. Can you help us understand why these productivity gains are not yet reflected in your capital allocation? Well, I don't think we report productivity metrics, and so we don't offer a look through on actually the number of commits or the pacing or the the velocity in our engineering team. So what you're seeing at your end is the fact that we're actually making more investments. We're doing more things. So instead of just booking a saving with our AI, we decided to do more with that extra time that we have. And therefore, it wouldn't filter through as a margin expansion. where you do see some of these things in terms of productivity gains will be on other businesses as more objects related finance team which has stayed pretty much stable over the last couple of years for just the you know minor additions and just reworking the teams the support team for example that's now underpinned by two AI agents and um and also sales and marketing which are quite quite heavily reliant on AI at this point in time but uh being on the CapEx side we we would like to do more things with the same or less resources rather than book savings there because it's all about the velocity of push pushing stuff up If AI isn't reducing capex, where do you expect to see the financial benefits first? Higher gross margins, faster product launches, higher ARPU, or lower churn? Yeah, you'd see it in faster product launches. You see it in higher ARPU and ARPL. And if you deliver more value, you will have stable or lower churn. So it's almost all of the above, apart from the higher gross margins at this point. Are you investing in AI primarily to create new revenue opportunities? Yes. Or to ensure that you remain competitive? Well, it's actually a combination of both. So you do market expansion, and market expansion is supported by having great things to sell, and AI is really underpinning that. If we meet again in two years, which line item and income statement should investors be able to point to and say, that's the impact of AI and the impact of AI investments. I think the big one is yet to come, yet to be announced. So we have something cooking that I'm sure you will want to talk to us about in two years time. otherwise it would be the oh I remember the launch of RTM that was hugely successful it wasn't really underpinned by a ton of AI but it went really well and mostly thanks to motion capture but what we're working on is something that you would definitely remember stay tuned to that CapEx and cash flow. How much of this year's increase in CapEx is temporary and related to the RTM launch in the US, and how much represents a new sustainable level of investment? I'd say probably 80% is new and sustainable levels of investment. Now, here's the thing. RTM is really something that's driving us very much in... these coming quarters and we've front-loaded the investment into that just to speed up the launches there are other things that we are working on and we continuously need to work on that so it's not like you temporarily switch on capex spend because you're launching one thing and then you just stop investing in things because you think you're done there's no hail mary in this type of business and this type of market you consistently have to push out innovation and so i would expect cyclicality in the in the in the CapEx band. But as you know, cycles come and go. They are cyclical after all. And that means that we will find homes for CapEx band because they support innovation and they support future revenue flows. Okay, what level of free cash flow do you believe best reflects the underlying earnings power of the business once OTM begins to scale? I don't know what you actually mean there in terms of level of free cash flow on an absolute basis, but Matt, do you have a read on that question?

I mean in terms of margins the when RTM does kick in that will just fall straight through into either DAO and then cash flow and as we've done in our report RTM whilst it's a fantastic product the market is and it's going to take time for the market to fully understand and adopt that so we won't see huge gains come through in the short term. It's more of a medium term play. But once that does come through, that will just be straightened to.

Yeah, I mean, I think what they're saying, are we building a separate commercial team to push our team? And the question, the answer to that is no. So there's no additional spend. uh we might be a bit more visible uh in terms of um of you know marketing and sales people might travel a bit more to just go and see some of these bigger hospital systems but there's no there's no rtm sales team per se it's just whatever individuals that we have in the new york office and they also ask whether they're supporting that that business is not an initial investment um Right. If RTM proves highly successful, would you expect the resulting cash flows to be allocated primarily towards reinvestment, acquisitions, or share buybacks? Well, the reinvestment is very important. Again, you have to keep the velocity going. We have to do new, exciting things. Acquisitions, I think we crossed that bridge too many times. And in this type of market, I think it's a high-risk proposition to buy companies with technology that actually might not be... great enough in like a couple of years we've learned some expensive lessons from that and also in an ever-changing world there's very little predictability around those things share buybacks that's interesting so we're currently at that 250 000 euros a year level and that's naturally as Matt mentioned in his intro that's something that we can increase and so I think that's that could be quite interesting because we also with more success we have to incentivize our high performance better and those shares can really play an important part of that so increasing the share buyback to feed the commercial effort I think that's a that's a win-win situation both us and for our shareholders Which financial KPI should investors focus on over the next four quarters to assess whether your RTM investments are creating shareholder value? Well, top line revenue, of course. And yeah, I mean, top line revenue, I think OPEX is probably good to keep an eye on. Keep an eye on the CAC and the cash and the rest is easy. What do you think, Matt?

Get online revenue also in terms of the revenue splits. Well, the revenue will be used as base. So when you subscription based, so in the split of recurring revenue may also

Good point. Yeah, look at that. RTM investments, they're based on the size of the patient cohort for a customer. And so that will classify as one of revenue. For now, we might have plans where we have a certain level of revenue patients that you're allowed to do OTM on and then and then as you reach that certain level of patients then you need to buy another package so we might roll this into subscriptions later on but for now look at one off revenue there it's simple it's sticky and it's similar it's it's similar in nature it's just classification wise in the income statement it is slightly different okay let's keep going NHS contracts you've signed agreements with two of the largest NHS hospital providers in the UK What financial impact do you expect these contracts to have and should investors expect a meaningful ARR contribution during 2026 or primarily through a broader rollout in later years? No, I think that the financial impact is pretty immediate with these contracts. We are a very dominant provider to the NHS and so it's going to just keep adding these trusts. If you're in London, we are in, I think, all of the NHS trusts there and throughout the UK, you can probably expect to bump into us and probably 30, 40% of NHS hospitals out there for physical therapy. It could be even more than that because you have multi-site providers. But yeah, the impact is you see that pretty much immediately. When we announced those things, the invoices are not very far away. Large tenders. You mentioned you're participating in some of the largest tenders in the company's history. Which business areas do these relate to? It's life care. how many tenders are underway, when to expect decisions, and what proportion of really long-term growth opportunity do they represent. I think we probably have a handful of these type of tenders, decisions, or they are hard to predict. These are long sales cycles, but I expect that we'll have news from this quarter and next quarter over these things. And proportion of long-term growth opportunity, they can be very substantial if we get them right, because size-wise here in the US, small is very big compared to what you do, what you get in Europe. A small clinic will be 100 licenses. A small clinic in Europe will be one. So yeah, these are some very, very significant opportunities, tenders and collaborations that you'll see more of It's very exciting actually. Pricing power. You've highlighted life-curious pricing power. How much of your recent AR growth has been driven by price increases versus new customer wins and expansion within existing accounts? On a yearly basis, what are we... or like half-half? Yeah, 50-50 is probably a reasonable approximation. Nice and easy. Okay. Let's see. All right. Not too many questions left. Grab some more coffee, people. RTM scaling. You see significant potential in RTM. What is currently the biggest constraint on accelerating growth further? Sales capacity, implementation resources, customer adoption, or the reimbursement framework? Yeah, that's a good question. I'm just thinking here. There's a lot about education, actually. It's implementation or educational pieces which aren't necessarily done by the sales team. So a lot of these providers, they don't actually know that they can get additional revenue from RTM. So it's a nice surprise to them. A lot of them need to learn how to do this and how to implement it. And so there's a lot of those things that we're doing. If you check out our marketing pages, You can see that we are educating our customers on how to do this. So that, I think, is the thing that slows stuff down. Once they actually know what's going on, they're pretty fast on the ball and the tech is quite easy to implement. And in terms of the process to buy it from us, you can do that via product-led growth. And so it's an automated upsell if you do that. But education is the biggest part of it. which is customer adoption education at the front end. But it's a very rapidly growing market and it's quite interesting. The reimbursement framework, interesting. I don't know if you follow the story now, but Some of the providers here in the U.S. on RTM, they offer an all-in service where they have the tech and they have people that basically take over the RTM or the monitoring process of healthcare providers that sit in call centers that monitor patients. That's going to be disallowed. in the next few months, and it's going to revert back to only being reversible if the healthcare provider themselves provide the care service, which means that this is a pure software play. It used to be a hybrid play, and that's something that was hammered home a lot by providers like Limburg. that's going to be a thing of the past which means that we are competing on a very level playing field when it comes to care provision for them not so level playing people because we actually have what is called the best RTM tech in the market so there's some really really interesting things in that development so reimbursement framework that's really in our favor right now we have some campaigns around that so you can take a look at some of the cons all right Motion capture. It's been highlighted as a strategic investment area. When do you expect it to begin making a meaningful commercial contribution? And what role does it already play in customer conversations and new business wins? Very important to customer conversations and new business wins if you're seen as a provider that is moving fast, developing new things, and are supporting revenue streams for them. You are a preferred provider, easier to get in the door, and it's easier to stay inside and close a deal when you have that in place even before you have launched it. So it plays a very important part of that. obviously the reimbursement framework for RTM is going to be heavily reliant on data collection and we can see providers that have not had great audit trails for producing data around RTM they've had their claims put back by public and private insurers So it has begun making an impact even before launch. I think an actual launch is scheduled for this quarter. And it looks great. It's going to be really exciting to roll that out. Share buybacks. Sounds like I'm going to get a break now. Matt's going to talk instead. Matt, is the current share buyback program a one-off initiative related to the incentive program, or does the board view share repurchases as a recurring capital allocation tool when cash flow allows?

yeah exactly that it's uh it's this isn't this is a one-off now this is all our intention is that going forward it will be a as part of our capital allocation strategy um in terms of the LTIP as well whilst we're seeing that this is initially for the senior management team um we are expecting in future years that that will expand further to other members of the leadership team and the wider business because especially being in the states it's imperative that we have a very competitive remuneration package and there are expectations that share options are included in that and in order to retain and attract the best talent we need to have a compelling and competitive remuneration package so support that we are intending that that will be where excess cash allowances that they can't sort of share by that.

Yeah some lessons that you learn from actually being on the ground here remuneration expectations are very different from Europe and so we haven't historically had a sharing center scheme in place now with this we can actually kill two birds with one stone we can set that up and we can avoid dilution and we take out some of the liquidity overhang in the share ratio that we've seen from legacy shareholders mainly. So it's definitely something that we'll have as a permanent setup here. I think it's a very, very nice methodology that Matt set up. Okay, valuation and I will, we don't generally comment on valuation, but I'll read the question out again. Looking 12 months ahead, what are the two or three key milestones you believe PhysiTrack needs to deliver for the market to begin assigning the company a higher valuation? Listen, I... There are some mechanical factors behind a low valuation. You have legacy shareholders that have systematically sold shares since the lockups ceased 12 months following the IPO. Some of those things just need to be eaten away. I think a cap table shift from that perspective will be really interesting. Hence why we introduced a US investor relations team, because you do have appetite from micro-cap. focused hedge funds and other players that have a lot of experience in that space and so there's there's a lot of there's a lot of work going into that right now I don't know if there's a milestone or not but otherwise it's you know you need to do good business and you need to communicate it and you know make money and spend a lot of money that you make it's actually pretty simple so so top line KPIs free cash flow and and also you know look at look at the revenue splits between products to a certain extent. I think those are going to be the important key. That's really where the matter of investing, given that we can get rid of some of those mechanical factors that are holding us back. Okay, we are running a little bit out of time, but let's do this. Board compensation. Do you believe the board's remuneration is appropriate given the company's current size and financial position? I think that is very modest compared to what it would be if we had board members from the US. And so, yeah, depends on what you want. I do think you have extremely competent board members. that have a diverse background in finance and in healthcare that are very, very helpful to us now, that understand us. And I think, yeah, they are quite modest compensation packages. Relative to the size of the company, the board's remuneration appears to be fairly generous, maybe from a Swedish perspective. From a US perspective, it's very, very low. How do you benchmark board compensation? We have external studies that look at board comp in the target markets where we operate, so UK, US mainly. And we just had a review actually this year. And I believe that the last one was not last year, the year before. And those are third party. independent evaluations that we actually pay money for to do so. Okay. Last two questions. Which competitors do you meet in the US RTM business and what are your major competitive advantages that make you win the deals? So Limber is a competitor. I think we mentioned that a few times. uh the um uh but they have that hybrid model it's uh it's care provision on an outsource basis plus the tech and that's going to go away for them it's going to be very hard for them to compete in terms of the software we're really good at UI UX We're also really good at distribution agreements and so FizzTracks RTM is being integrated into a couple of the really really big EMRs here in the US that serve as accelerators from a distribution point of view and we have exclusive deals for that. That's really, really advantageous. And of course, just staying on that innovation curve, very, very important now with the tech as it's built now. In addition, we have the motion capture piece and then also being competitive with the other components that feed into it, like home access prescription and the the recommendation engines etc that come into that that's going to be really important as well there to keep the distance to the competitors Medbridge is also active in the space I should say but we are pretty much on par with them in terms of our offering ATP plus continuing education plus RTM so we are up against them in some tenders it's quite interesting to see the dynamics there so want to come last question how does a US sales pipeline develop in terms of number of cases contract volumes probability I thought it was profitability now we have around 100 open cases on RTM right now it's really exciting and that's that's SME up to really big hospital systems the so the contract volumes are from a few hundred dollars a month to a few hundred thousand dollars a month in terms of the value of them. It's early days for these things. I'm just seeing exactly how a customer rolls out RTM, what volumes they get. It's subject to their processes and how successful they are. there is a very substantial shift in terms of the potential for contract volumes. Probability, I would say, it's a very high probability for the small to mid-sized market where we are. So we are a dominant player. We're already embedded in a lot of these workflows. And with small to mid-sized, by the way, in the US, that's up to a few hundred practitioners. And that represents, you know, can represent up to... six-digit annual revenue for TMs. So still small to mid-size can still be very substantial. When you look at the big enterprises, that's more competitive, it's more political. And so probabilities there are lower. There's a lot more work that go into them. But then again, the payoff is extremely big if and when you get some of those. And we do have these live that are in live pilots where our tech is being evaluated as part of these tenders. And so we're very much a player that can be reckoned with. OK. That is it folks. Thank you so much for tuning in and good luck to everybody and we'll speak again soon. Have a good day.