Net sales for the quarter were SEK7.6m (7.1), reflecting year-on-year growth of 7% and 2% q/q growth, 4% above our forecast. Monthly Recurring Revenue (MRR) was SEK2.5m, a 2% decrease q/q and a minor negative deviation of 4% vs our estimate. OPEX amounted to SEK9.5m (10.4), 22% above our projected SEK7.8m. One-time expenses related to the CEO change, the establishment in Finland, and higher costs for finance explain the deviation. Higher capitalised development and net sales offset the OPEX surprise, resulting in an EBIT margin of 3%, consistent with expectations. During April, Kontigo Care carried out a directed share issue of SEK10.5m to its main owner, ShapeQ GmbH. We estimate that the current cash position is around cSEK14m.

Despite achieving an all-time high net sales during the quarter, we anticipate a challenging 2024 ahead in terms of growth due to significantly reduced municipal budgets. An indication of this is the quarterly MRR decrease on a q/q basis. Meanwhile, the new Previct Drug product will likely help attract new customer segments and has the potential to become pivotal for Kontigo Care. We believe several ongoing discussions regarding partnerships for launching Previct Drugs outside Sweden exist. We think a partner strategy for international expansion is wise for a small company such as Kontigo Care.

We have made minimal adjustments to our forecasts. We are still factoring in a growth rate of 3% for 2024e, aligning with the 2% growth in 2023. Our Base Case is intact at SEK5.8 per share, and our fair value range is SEK1.1 per share to SEK12.3. Further, our valuation already included the dilution from the directed share issue of SEK10.5m in April.