Digitization is also gaining momentum in German hospitals. CGM registered a further ramp-up of projects related to the Hospital Future Act for several consecutive quarters. The German governmental initiative for the modernization and digitization of hospitals is a key growth driver in CGM's hospital information systems segment. Also, CGM is increasingly providing clinical rehab customers with connectivity solutions, thereby laying the foundation for further digitization measures.
In addition CGM is planning to further support physicians with the usage of intelligence data tools and driving in-house efficiency by the use of AI-tools. The AI initiative announced in summer to boost the use of artificial intelligence in products and business processes will increase efficiency going forward. The in-house AI tool, based on Azure OpenAI ChatGPT, is now available to all CGM employees, is being used widely across the group. Accordingly, the integration of AI mechanisms into CGM's processes continues.
"We have made further progress in the third quarter in driving digitization in healthcare, especially in Germany. CGM is supporting physicians, hospitals and pharmacies in their daily challenge of coping with limited time per patient and exploding medical knowledge. Data-driven and AI-based solutions are going to change healthcare, and CGM is at the forefront of the development. Using AI will also allow us to grow more efficiently going forward," explains Michael Rauch CEO of CompuGroup Medical.
The successful business development is reflected in the financials of the first three quarters in 2023. Group revenues grew by 10 percent year-on-year to EUR 881 million. The quality of revenues, reflected in a recurring revenue share of 68 percent, underlines the strength of CGM's business model. Adjusted EBITDA grew by 18 percent, and free cash flow reached EUR 90 million in the first nine months of the year. With an organic growth of 8 percent compared to the prior year period, CGM is well on track towards the full year ambition and thus confirms its guidance for the financial year 2023.
CGM also strengthened the financing situation in the third quarter by prolonging and extending the available funding considerably. CGM successfully debuted on the international debt capital market in October by issuing Schuldschein volume of EUR 300 million at attractive conditions and with extended maturities. Given the strong earnings and free cash flow profile, the focus is now on deleveraging while at the same time allowing for strategic add-on acquisitions.
About CompuGroup Medical SE & Co. KGaACompuGroup Medical is one of the leading e-health companies in the world. With a revenue base of EUR 1.13 billion in 2022, its software products are designed to support all medical and organizational activities in doctors' offices, pharmacies, laboratories, hospitals, and social welfare institutions. Its information services for all parties involved in the healthcare system and its web-based personal health records contribute towards safer and more efficient healthcare. CompuGroup Medical’s services are based on a unique customer base of more than 1.6 million users, including doctors, dentists, pharmacists and other healthcare professionals in inpatient and outpatient facilities. With locations in 21 countries and products in 60 countries worldwide, CompuGroup Medical is the e-health company with one of the highest coverages among healthcare professionals. More than 9,200 highly qualified employees support customers with innovative solutions for the steadily growing demands of the healthcare system.