Overview
Physitrack delivered a solid Q3 with continued margin strength and cash generation, reinforcing the progress of its SaaS transition. Despite a muted share reaction, the results confirm the structural improvement underway—Lifecare remains the profit engine while Wellness nears breakeven after deliberate rightsizing. The market’s focus on short-term declines misses the underlying improvement in cash flow and earnings quality.
Financial Highlights
Revenue (pro forma) up 6% YoY to €3.5m (9% in constant currency).
Subscription share reached 88% (+6 pp YoY)—highest in company history.
Adjusted EBITDA rose 25% YoY to €1.2m (margin 33%).
EBITDA less CapEx at €0.4m (+297% YoY); free cash flow €0.4m (vs –€0.4m).
Lifecare ARR +13% YoY to €2.9m; ARR €11.7m (+9% YoY).
Wellness ARR +46% YoY to €1.0m; EBITDA–CapEx near breakeven at –€42k.
Net debt improved to €3.4m (from €4.1m FY24).
Discussion
The market’s lukewarm response overlooks clear operational gains. Lifecare continues to expand profitably, with ARR up 13% YoY despite minor FX-driven QoQ softness. The recent hires in the U.S. and the new London office point to renewed growth capacity in 2026. Lifecare alone, valued on peer SaaS metrics, still exceeds the current group EV—a disconnect that remains the crux of the equity story.
Wellness, though slower, is executing the planned transition toward scalable enterprise SaaS. Non-recurring contracts linked to prior management were intentionally phased out, improving gross margin to 91.6% (+28pp YoY). The division’s EBITDA–CapEx loss narrowed to just €42k—effectively at breakeven—validating the cost base reset.
The company’s focus on cash generation (“EBITDA less CapEx”) continues to pay off, marking the fourth consecutive quarter of positive free cash flow. Yet, sentiment remains clouded by legacy perceptions. Particularly recurring adjusting items and difficult comparables. We expect this to ease as restructuring and one-offs roll off, making the progress more visible in headline figures.
Conclusion
With disciplined execution, a stronger SaaS mix, and consistent cash generation, Physitrack is on course for sustained value creation. The current market valuation fails to reflect the earnings quality improvement — Lifecare’s momentum and Wellness’s operational turnaround provide a strong base for multiple expansions once sentiment shifts.
We will slightly trim our projections due to a slight decline in the trajectory of Lifecare licenses, but this does not alter the equity story. Current valuation largely ignores the quality of Lifecare’s SaaS business, which trades far below peers despite superior metrics.
Our peer group trades at a cap-weighted EV/S (NTM) of 5.6x, with consensus expectations for a 13% 3-year CAGR and 20% average EBIT margin. Lifecare, by comparison, is expected to grow 15% annually with 26% EBIT margins, yet the full group trades at only ~1.8x EV/S 2026E and an enterprise value of about SEK 300m (€28m).
Except for liquidity and scale, there is little justification for such a discount. With Wellness no longer dragging cash flow and representing optional upside, the risk/reward remains highly asymmetric.
We currently have an Outperform rating on PTRK with High confidence over a 12-month horizon and a target price of SEK 26 per share. We do not expect our positive stance to change in the forthcoming update.
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