The organic ARR growth was 13% y/y, and organic growth in contracted ARR (CARR) was stronger at 17% y/y. Our organic ARR forecast was 16%. ARR was SEK287m (238), boosted by SEK34m from Data-AL – mostly support & maintenance from on-prem deals. The churn remained at an excellent 2% level, which aligned with our expectations. However, the contribution from new sales and net upsell was somewhat softer than anticipated. Adjusted EBITDA-CAPEX was SEK3.6m, corresponding to an EBITDA-CAPEX margin of 4.6%. We expected NOK6.2m – 6.0m in SEK. For 2024, EBITDA-CAPEX was SEK0.9m, in line with the NOK~0m target for 2024 and starkly contrasting -18% in adjusted EBITDA-CAPEX margin in 2023.

Following the CEO’s elaboration on the earnings call, the risk we saw related to Stockholm eventually choosing Cambio is most likely rather an interesting opportunity. The opportunity relates to increasing sales to new customers in Stockholm and potentially other Cambio regions as well down the road. However, this is a long-term opportunity and nothing that will impact the next few years significantly. Nevertheless, sustaining or even expanding the TAM for Webdoc in Sweden is a key component of the investment case in our view.

We raise our Base Case to SEK28 (NOK26.5) due to a slightly lower WACC, raised mid- and long-term margin assumptions, and a larger confidence in the long-term TAM outlook in Sweden. Trading at about 3.6x sales 2025e, Carasent might not look that attractive, considering its soft LTM margins. However, we believe Carasent is set for substantial margin expansion over the next few years. With an R40 approaching 30-35% in 2026-2027, along with a very low churn and a non-cyclical end market, we believe Carasent’s valuation could approach R40 SaaS businesses that tend to be valued at 6-8x sales NTM (excluding Fortnox).