Mapspeople A/S

CSE:MAPS

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Unknown Executive]

Good afternoon, and welcome to this Q2 presentation with Mapspeople. With us today, we have the CEO and the CFO. First, there will be a presentation and afterwards, a Q&A where the management team will answer questions submitted via stokk.io. There have already been pre-submitted questions on stokk.io and the Q&A is still open so that you can submit questions live as well.

I will now hand over the mic to Mapspeople to start the presentation, Morten and Christian, your line is now open.

[Jens Brøgger, executive]

Perfect. Thank you. And welcome to everyone to listen to a short presentation of our Q2 financials. I'll start this, and I'll hand over the microphone to Christian, then we will jointly answer the question to the best of our capabilities. So here are some of the key numbers for the second quarter of the year.

First of all, on annual recurring revenue, which is clearly one of the most important SaaS metrics that we track because a lot of the things after this follow revenue, recognized revenue follows this one, thereby EBITDA as well, and after that, also cash.

So ARR has grown 19% year-over-year compared to the second quarter last year. Please remember last year in Q2 was the first quarter where we recorded the ARR that came from the acquisition of [indiscernible] site. That means that we had a big step-up in Q2 last year. So we still managed to grow the business fully organically with [ 90% ] year-over-year. The quarterly growth on ARR was 5%. I'll get back to that a little bit on the second slide.

It's a little bit in the low end of what we hoped for, but there's been a lot of movements around this one that requires a little bit of a deeper explanation. Our main growth product, which is maps and doors, has grown 27% year-over-year, and it's also grown around 5% quarter-over-quarter. So we're very pleased with the growth of that one. And when it comes to recognized revenue, you can see that the ARR is turning nicely into revenue.

We grew our recognized revenue with 35% compared to the second quarter last year and it was more or less flat compared to the first quarter this year. And that is also impacting the EBITDA, which is 48% better than it was last year. It is negative and it's still negative, but it's almost half the negative EBITDA compared to the same quarter last year. And here, again, we are making small improvements over the first quarter this year. This is more or less the numbers. We are currently keeping our guidance.

We feel that we are well on track on the recognized revenue. We have clear plans and it's developing according to the plan on our ARR, and that will also impact the EBITDA. So we're keeping our guidance of these key parameters for our business. But let me try and dive in a little bit deep on some of this stuff, right? So below the ARR growth we had in the quarter. The growth in new contracts and new sites was actually significantly higher.

You can see it's almost DKK 7 million of new contracts that were signed measured in its ARR impact. Out of those DKK 6.95 million of those came from existing customers expanding the business. So this clearly indicate, and we tried to write that also in our Q2 financial report that there are some churn below it. I would say that the natural normal organic churn is completely within line of benchmark and our expectations, but we had a little bit of what we call extraordinary churn.

Let me explain this. Those of you who have followed us will know that we used to basically have what we call framework agreement which was a contractual contract between us and our partners, where they had some committed amounts they needed to reach within a certain period of that contract.

Some of these contracts struggle to move forward and struggle to materialize last year, and some of them had absolutely no movement. And on those contracts, we decided that we would enforce the contract. So we invoiced the amount that the customer committed even though they haven't used it. And those customer who wasn't even started yet, we were very aware at that point in time that there was a very low probability that they would renew one year later, which is now. And thereby, we actually had what we call some extraordinary churn that was baked into our budget. So the movements you see that we have some of these old framework agreement that we forced to be invoiced last year that is now churning out is fully planned.

So there's a lot of shift of some of this, I would call low-quality ARR to this new that we bring in, that is high-quality ARR, where we also see our [ in and out ] front. So I think that's important here. We do not have a lot. We actually have quite a lot less. I would say the vast majority, over 90% of that unnatural extraordinary churn is already in our books, so we don't expect a lot of that for the remainder part of that year.

So it's important to say that below the surface with the shifts, the business is actually performing well and they brought in almost DKK 7 million new ARR bookings for the quarter. Recognized revenue, as we said, is 35% higher. So that's a good thing, and we expect an recognized revenue growth over the year. And those of you who do the math, will see that halfway through the year, we are probably around almost halfway towards our guidance. So this one is in a pretty good spot.

EBITDA improvement is 48% compared to next year. Christian will show the exact numbers. That is due to two things, all the cost reductions we did last year, combined with the growth in ARR that is materializing in the growth in the recognized revenue. Our cost reductions are pretty much in full effect right now.

So the improvement in ARR for the remainder of this year, next year should come from growth in ARR and thereby, growth in recognized revenue. And we do expect that to happen in the second part of the year, meaning that recognized revenue will be higher, and thereby, that you will see some improvements in EBITDA, at least in Q4, which is our big growth quarter.

Net revenue retention is 110%, which is at par of what we've done for the past quarters, but again below the surface, we had this unnatural churn. So that doesn't count again this year. So below the surface performance on NRR is actually a little bit bigger on, I would say, the healthy customer contract layout than what you see here.

But despite those things, we have kept a good healthy net revenue retention of 110%. Now one thing we decided to change a little bit, but it's a really important thing and we use this internally, is what we call our CAC Payback period, customer acquisition cost. And we changed the way we define that, and we tried to describe it as good as we could in the Q2 report. Let me explain this a little bit. We have used the very traditional definition of customer acquisition cost. And that has been how much money are you spending on getting new customers into the business? And what are the average earning on those customers? That is what the community of growth companies -- public growth company, has in their guidance.

Now our model is slightly different than a traditional SaaS because we are a Platform-as-a-Service, and our primary go-to-market is through partners, meaning that we don't get a lot of new customers. It's actually our partners. So we get a lot of new business from our partners that has the end customers. And technically, that didn't really go in. And that also means that if we use the very traditional description in our business, it is not giving a real picture on how we grow the business because we do spend sales and marketing cost money to grow our existing partners.

So the definition is fundamentally here, how much new ARR are we getting into the business. And that includes like more ARR from existing customers, which predominantly is partner, which means that they are getting a lot of new end customers, but they end customers and our customer is the same. But we do spend a lot of time and effort in our sales, our marketing and our customer success to actually grow that business through our partners. And thereby, it's a more correct picture that if we measure all the new ARR that we get. And we fundamentally divide that with the costs that we are spending on getting it, then we have a payback period on the sales and marketing costs that we're spending.

And you'll see that, that is going up and down, which is like pretty natural. We did not sell a lot of new business in Q1. In Q2 underneath, we actually sold a little bit more than we did in Q1. But a lot of the cost reductions in sales and marketing had full impact in Q2 and not in Q1, that's why it's down a little bit. And this is also where we said that we probably saved a little bit too much on our sales and marketing costs, and we would like to increase them a little bit.

So since we also know Q3 is normally a low sales quarter. Q4 is high, that's okay that the green line is going up and down a little bit, but that's also why we took a trend line. We could only do that for the last two quarters, the comparable numbers. And as long as that purple line, that trend line is between 12 to 18 months payback of our investments in acquiring new revenue, we would be fairly happy.

And you see we are more or less in the middle, you'll see it's fundamentally trending down a little bit into the middle, and we are fine with that. We just need to keep a good eye on that one and make sure that we don't spend too little. If we can spend DKK 100 and get a DKK 150 in we should. And that's why this is super, super important for us.

So this is one thing that is different. We are now measuring the payback of the sales and marketing costs that we spent on achieving new ARR contract into the business. And I think this is a better way for our company with the nature of our selling through partners and helping these partners grow. I hope that gives a little bit of sense, but we'll definitely practice explaining that going forward as well.

[Christian Laeso, executive]

But it's also because it's aligned with the way we run the business internally makes so much more sense for us to look at it this way because we use at least as much time on keeping our current customers happy and upselling to them as we do hunting new ones.

[Jens Brøgger, executive]

It's the beauty of our partner model, where we have a lot of partners, who has a lot of sales people who sell to their customers. And every time they do that, they sell one of our maps. And clearly, we do help them as much as we can in that growth. You could see that out of the approximately DKK 7 million we got in new contracts in Q2, five of those seven came from selling more from existing -- predominantly selling more through existing partners, right? And it would be cheating ourselves in the market if we showed it differently, right?

So as Christian said, this is way more aligned to how we measure ourselves internally and how our sales functions are measured in their spend and the return on the investments we do in this. Now changing gear a little bit. We will talk about the ongoing capital increase. I'll start. Christian will finish, and then we'll go into the details of the numbers. As you may know, we announced that we would issue new shares with preemptive rights for existing shareholders.

And we can do that up to DKK 36 million. We are extremely happy in a very complicated, difficult market to raise cash. I read in the papers yesterday that it's not normal in our industry. But we already last week had a contractual commitment of 96.5%, which is almost DKK 35 million out of the DKK 36 million has been subscribed for either through new investors or through existing investors participating, right? This also means that we are fairly comfortable saying that this will be, if not fully subscribed then very close to fully subscribed as well. We have existing investors, both [ Bank Invest IFO ] and some people around the Board and the management team. Large existing shareholders like [indiscernible] also committed in this one. And then we had an underwriting consortium, which is led by [indiscernible] who took a good chunk of these guarantees that we have in here. So we're glad to welcome new super nice investors into Mapspeople. And we're glad that some of the large one, has participated to invest alongside them as well.

Clearly, we hope that a lot of all of smaller investors will also subscribe to this, and then we also get a chance to get a few new more smaller private happy investors call it whatever you want, it has many names.

[Christian Laeso, executive]

Maybe important to say there is room still for everyone who wants to buy shares to do so, but I'll get back to that in a few slides.

[Jens Brøgger, executive]

Yes, exactly. Why did we do this? Well, first of all, we, as I said a little bit earlier, and as we also wrote. We felt that we may have been a little bit too ambitious in our cost reduction in sales and marketing. We are now probably like only 50% of the people we were 12 months ago. And we may have been a little bit too optimistic on how fast we could get the productivity level up to a completely different level. And we do have a concern that we are in a high-growth market.

And if we don't invest enough and you saw also that we had less than 12-month payback in Q2. If we do not invest enough in our growth that we may be overtaken by some of the competition we have. And clearly, my job is not only to look at this quarter and the next quarter is also look at can we maintain our market leader position in international in the long run because that will mean a lot of our growth and thereby the future profitability in the company.

And this is probably where we felt that we may have been a little bit too ambitious. At the same time, we've been optimistically -- opportunistically talking to companies that would like to sell their business to us. And for some of that, it makes sense, and we also decided to raise a little bit money into a war chest of this, mainly because from the ones we talk to, it's not possible to do full acquisitions with shares only.

You would need to combine shares and cash. So we wanted to make sure that we had a war chest so that we could act swiftly and quickly when we have these opportunities because we felt that was the requirements in the market. Now the types of companies that we would be looking at are companies that look very much like us. So it's not acquiring new technology. It is fundamentally acquiring a customer base that looks exactly like us, so you can migrate that and put it on our platform and thereby, you can have some platform operational cost synergies. And clearly, we see that there are also some other synergies in this game as well.

Meaning that if and when we make some of these acquisitions, we are comfortable that they will be accretive or have a positive impact, not only on the annual recurring revenue coming from the customers we buy, thereby also on the recognized revenue, but we will also be able to operate that with a combined lesser cost. So it will have a bigger impact on our EBITDA and thereby also on our cash. And we believe that these synergies can be derived within a period of maximum six months.

So these are the things that we did. And the second part is also. If we do not participate in that, someone else probably will. And then we risk again that we are getting a little bit challenged on our market leadership position, and we do not feel that is a good place to be when it comes to long-term growth and long-term profitability. So both of them is making sure that we can defend and maybe even expand our leadership position, which we feel is good for mid- to long-term growth as well.

So if we look at that, how we're going to spend the capital that we raised, probably around 30% is something that we, over the next 18 months, we'll spend a little bit more on sales and marketing to get the organic growth to make sure we can maintain that -- at least maintain that at the level we have today, hopefully do a little bit more. 50% is reserved into this M&A war chest, which is the inorganic growth of business that looks like us, which will give synergies and thereby improve our EBITDA and our cash flow.

And the remaining 20% is to make sure that we are in a position where we can continue to invest in AI in regards to map creation like digitizing new buildings and maintaining those indoor maps of the customers. We are actually expecting that these AI technologies can actually improve our productivity in the teams who digitize the maps with 100% every year for the next four years.

And clearly, that has nothing to do with the people working long hours or anything else. That is something that has to come 100% from the technology and the tools that they're working with. So this is very important for our future competitiveness on the cost side. So this is how we are expecting to use the proceeds of this financing round.

Christian, I'll leave the microphone to you.

[Christian Laeso, executive]

Super. And that's, of course, assuming that we get the full DKK 36 million, which, as Morten said, we were very close at already. So this is just to get back to that there's still time to buy Mapspeople's shares. These are the time lines. There are supposed to be some headlines out to the left, but I see they got messed up here.

So the top section, the white part is the subscription -- the subscription rights just have to translate from English to Danish, the other way around in my head here. So every shareholder in Mapspeople gets subscription rights to participate in the new round. So if you are a shareholder, you should from your bank and your deposit in a mail or whatever from your bank, have gotten a letter or a mail telling you that you have rights that you can use to anticipate in the new round where you can buy shares at a valuation of DKK 2.

These subscription rights, if you don't want to use them, you are able to sell them on the stock market as well. They have their own ISIN number. So you can simply go in and sell them. So others can subscribe instead. And that window is open now until the 28th of August, then the subscription rights are no longer active of any value if you have not decided to sell them.

You can use them until the 30th of August, that window opened on Monday. So you can subscribe to new shares be part of this DKK 36 million round. And the thing I just wanted to get back to was the DKK 34.8 million that we have already secured. Part of that is guarantees, which means that they stand behind the existing shareholders. So if you, as a shareholder want to subscribe, then you get in ahead of them, and they will get less shares if it's oversubscribed.

And we don't know whether it's oversubscribed or not until the trading windows ends on the 30th of August. Actually, we won't be told until the 9th -- September 3, what this data is. And at that time, it will be allocated, how many shares these guarantors will get out of what they have signed up for. Probably they will get most of what they've signed up for. Maybe they'll get less if there is a lot of interest, which we, of course, hopeful of new shareholders joining in.

So Mapspeople shares at DKK 2 is what you can buy here. All right. So changing to the Q2. Back to the Q2 financials. So we are on a journey here where our revenue has increased. So this is my favorite graph for you, those of you who watched last quarter, we're going to reuse this. This shows -- these 2 lines show the revenue and the EBITDA for a 12-month rolling period. So out to the right on the green, the top graph, you can see that we now reached DKK 50 million in revenue. So the last 4 quarters add up to DKK 50 million in revenue. This is compared to the DKK 40 million in revenue that we reported for the year 2023, and thereby, a nice increase of the top line. The same goes for EBITDA. When we ended the year 2023, we had a loss or a negative EBITDA of DKK 60 million.

But if we add the last 4 quarters, we're at around DKK 44 million in negative result. And thereby, you can kind of see what way the curves are going and draw your own lines as to where we will be out in the future. It is -- we have done a lot of adjustments to the cost structure of Mapspeople in 2023. They, as Morten said, are more or less included now in the numbers. So the growth of our results or the improvement of our results will come from the growth of the ARR and have thereby the revenue.

But let's look a little bit more in detail into the Q2 profit and loss statement. So we ended Q2 with a revenue of DKK 14.4 million, which was very close to the same level as in Q1. ARR from Q4 to Q1 went from 52 to 52.8. So we didn't add that much extra revenue to the Q2 numbers, whereas from Q1 to Q2, ARR went from 52.8 to 55.6. So there will be an increase in revenue going in the next quarter that should be expected, at least mathematically.

You can also see that our EBITDA improved, as Morten said, it's around half of what it was last year. So Q2 '23, we lost almost DKK 16 million. And this year, we lost just above DKK 8 million before special items. And let me just go a little bit into that because that's a new thing for us. We have circled in 3 things that I wanted to give a comment on.

The first one is special items. We did a management restructuring in April. So during Q2 and changed our management team to the current team. And the cost of that, DKK 2 million has been isolated here due to the IFRS reporting. So that's a one-off that we don't expect any more special items for the remainder of the year. On the second item is staff cost. I just wanted to do 2 comments on that.

Staff costs have decreased approximately 20% compared to last year, included in the numbers this time around is that we have changed the accounting for own work capital in the quarterly reports so that it follows what we do on an annual basis. So therefore, the staff costs are a little bit higher and the own work capitalized income is also higher. So net, they are at the same place. And the second thing is that we have rolled out an employee share scheme where a large part of the employees and management have chosen to allocate part of their cost or their salary as new shares instead of getting a normal payroll.

This will affect -- it does not affect the P&L but it does, of course, affect our cash position. And hopefully, a lot of employees will follow the stock even closer. And the last bullet I just want to make, I can see where time is running here is that, that we have increased our depreciations. And that's because if you look into our quarterly report at the balance sheet, you can see that we've actually finalized a lot of the development projects that have been going on for longer period of time and now starting to utilize them. And therefore, our depreciations have increased quite a lot since last year. That was speed talking.

[Jens Brøgger, executive]

Yes. Thank you for catching over me Christian.

[Christian Laeso, executive]

Yes, you talk too long.

[Jens Brøgger, executive]

Do you want to moderate the questions?

[Unknown Executive]

Yes, of course. That's let's jump into the Q&A and start with the first question here. So the question is, great to see that EBITDA has developed great in the past year. But at the moment, you have negative DKK 17 million for the first half year, and you are expecting negative DKK 20 million to DKK 25 million for the full year. Does that mean you plan to have a maximum negative DKK 8 million for the second half of the year?

[Christian Laeso, executive]

So it's a great question. So the good thing about a subscription business is that every time you add on revenue, ARR, you also add on the top line revenue. We do expect the top line to increase and we have our costs under control. So we do expect an improvement of our EBITDA for the second half of the year. And to stay within guidance, it's -- I think the math is correct, that it should be negative DKK 8 million to stay within the DKK 25 million. That is still our guidance. And so we do expect a significant improvement of EBITDA for the remainder of the year.

[Unknown Executive]

Then the next question, looking at expected EBITDA for the full year and the second half of the year, do you expect the second half year numbers to be the same for both H1 and H2 in 2025?

[Christian Laeso, executive]

'25?

[Jens Brøgger, executive]

We don't guide on '25 yet.

[Christian Laeso, executive]

No.

[Jens Brøgger, executive]

So I don't think we can answer that question. But easy to say that we expect an organic growth for '25 at the level of what we are seeing in 2024. And then hopefully, we can make some of these M&A acquisition that should come on top of that one as well. How that turns out in their budgets when they are approved by our Board in December, and how that will determine the guidance, we will have to wait and see.

But yes, it is a business where we feel we are having the cost under control. Meaning that the -- the ARR and the recognized revenue will grow significantly more than our cost, thereby EBITDA should continue to improve year by year, half year by half year, quarter by quarter.

[Unknown Executive]

And I don't know if you have anything to add to the next question here, but I will just read it for you. I know you have not guided for the next year yet, but if you receive the full amount of your capital increase. How do you expect this to impact growth and profitability in 2025 compared to 2024?

[Jens Brøgger, executive]

Yes. Yes. I kind of answered it as good as we could, right? But what I will say right now is that, clearly, our ambition is to have a financial plan for '25, where we're delivering the same amount of organic growth as we do this year. And then hopefully, maybe even this year and also next year, we can add some M&A or acquired ARR that has these positive impacts on our revenue cost and cash and EBITDA as well, that should accelerate that a little bit, right? So I think that's what we can do. And I think we even wrote in our annual report that the current ambition, but it's hard to predict timing and all that stuff is achieving somewhere between DKK 10 million and DKK 20 million of acquired ARR by the end of next year.

[Christian Laeso, executive]

That was in the company announcement.

[Jens Brøgger, executive]

In the company announcement that's where it was.

[Christian Laeso, executive]

But we have announced that we do expect growth from acquisitions in that range that's the full year effect or '25 effect or something like that.

[Unknown Executive]

The next question also think you have partly answered it, but I will read it anyway. Why do you believe M&A growth is a feasible growth opportunity for mass people? Do you look to acquire technology, ARR? Or what is your focus?

[Jens Brøgger, executive]

The main focus is to acquire ARR from companies that looks very much like us. So they make indoor maps for different customers that looks like us so that you can migrate that into our technology platform and get some operational costs around this as well, and then combining the other functions and have some synergies about this one, right?

So that's the main focus. We are not targeting tech acquisitions. We feel it is a better return on investment to grow our market share and our customer base before you buy new techs that you can sell to existing market share, right? So we feel that this is the right M&A strategy is to buy market share, similar types of services, customers and products that we can migrate into the platform. We are optimistic that the pricing of doing that one is reasonable in the market right now because it's hard to get capital for start-ups, and we know exactly what it takes to invest to be in a leadership position like this and sometimes 1 plus 1 is more than 2.

And that is exactly the dialogue that we have. If there is a question in between the lines, if it's more profitable to grow organic and through M&A, will you consider that? The answer is absolutely yes, right? This is a business case that will determine how we spend the funds. But right now, it looks like the 20% on our technology, 30% on more organic capacity and 50% on the inorganic growth. That's how we still look at the proceeds from what we know and what we see in the market right now.

[Christian Laeso, executive]

And also, the structure of our industry is also in a way that makes us believe it's feasible for us to capture some of the smaller players and kind of what we call round them up into us or into one unit to be a bigger player on a global scale.

[Unknown Executive]

Yes. Can you give a bit more insight to the focus on AI, you plan with the capital increase?

[Jens Brøgger, executive]

So it's continued the work we've done for a long time. Those who is following, as you know, we spoke about automation and we started talking about machine learning. And if you had enough machine learning algorithms, it becomes AI to a large extent, right? And when you look at the AI that we are building into our product, it is really to make the product faster and more efficient in terms of two components: One is digitizing new Maps, right? If we can make the machines recognized like table, desk, doors and stuff like that from the files, and they can maybe like may 80% or 90% of the map automatically, then we need people to 10%. So that's one thing. So the faster we can create a new map, the happier our partners and their end customers will be.

And actually, also the faster we do this, the cheaper it is to do it. So it's really important for our cost competitiveness going forward that we can digitize maps faster and cheaper better than anyone else in the industry. And this is what we're doing with the ARR, and we've come pretty far and we are currently training that on the 25,000 business that we already mapped. That may sound trivial, but there's not a lot of indoor mapping repositories out in the world where you can train your AI engines.

We are just lucky enough to have one of the biggest ones in the whole world, so we can train them better than others. The other side of that coin, when you have an indoor map, that you use for an employee engagement or workplace experience application. If the map does not reflect reality. For instance, if you have moved the desk or you have like half one meeting rooms that are one big, you have two small ones.

So if the map does not reflect the reality, the end user experience dropped rapidly. So it's very, very important that maps are always updated and reflect that. And any update of the map, if it's fundamentally making a new map after another one, then it's expensive. And this is where we have worked very much with this. We have very -- like our 2 largest customers, we have built in really high-level integrations. One of them, we are getting between 80 and 230 flow update every day, that the machines completely automatically update and put back as updated map to them. And we're now democracizing that into like all the middle-size company who cannot build that deep integration, so that we get the benefits out of that.

Let me give you one example. We launched -- we prelaunched in the second quarter on a product we call Map Update Automation. It's currently out in beta, but it will be released in full any day soon, to be honest. And that one is very simple, like we did time studies. And when we have to update the map from one of our partners, our customers, 80% of the time we used was used to detecting what has changed. And now we have this machine learning algorithms who can detect all changes, and it can even categorize them this change and it doesn't matter.

It's just a tree in a parking lot that has grown bigger. It doesn't matter in the map. Here are tables that has changed or here are rooms that has changed. These are the things you need to look at. So just by identifying what has changed since the last version, we reduced the work of updating with 80%. Now we're training them to do some of the training itself, like. Now we're working on optimizing the 20%, that makes sense, right?

So both like digitizing new buildings into indoor maps and maintaining these maps, the AI investment is making that faster, which generates customer, partner and customer satisfaction and it's also making sure that we, from a cost production point of view are very competitive. That's why that part is important. I hope that answered the question.

[Unknown Executive]

Yes. How do you believe the capital increase -- how far do you believe the capital increase will take you? And over how long a time period do you plan to invest that capital just to understand the time frame on future investments.

[Jens Brøgger, executive]

Yes, over the next 18 months towards the 2025, and by then, on an all things equal basis, we will be EBITDA and cash flow positive and can finance ourselves. It doesn't mean we have enough money to do a lot of additional acquisitions at that point in time if that turns out to be successful. But what we've said somewhere between 2 or 4 small tuck-in acquisitions. It will finance that never help us accelerate a good and healthy EBITDA improvement into the positive. And so also with the cash.

[Unknown Executive]

Yes. Perfect. In your latest acquisition, you also acquired ownership of some maps, if I understand it correctly. Has that ownership of new maps turned [indiscernible] incurrent stream or how do you plan to take advantage of this in the future?

[Jens Brøgger, executive]

Yes, it has. It's been a nice part of our growth the last couple of quarters. So it's going very well for us.

[Unknown Executive]

Perfect. And then we are at the last question here. Looking at the chart of 12-month revenue and EBITDA, it looks like almost all new revenue has been added to improved EBITDA. Do you plan to be able to do this in the future as well where all new revenue almost goes directly to EBITDA?

[Christian Laeso, executive]

Close to.

[Jens Brøgger, executive]

Close to, yes.

[Christian Laeso, executive]

Almost.

[Jens Brøgger, executive]

Yes. Perfect. When Christian said, we are very much in control of our cost, but it's not like -- it's not that the cost will grow as much as the revenue, it will be much more flat. It will look flattish. But of course, we're going to keep like investing a little bit when it makes sense. But fundamentally, the majority of the growth in revenue will drop to the EBITDA line. That's exactly it. Now you can see that the curve on the 12-month rolling EBITDA is steeper than the revenue, and that's because these costs savings has been implementing in the business. And as we said, they are now fully incorporated in the numbers, which is why we expect the curve on the 2 graphs from here on will be more or less following each other going forward. Is that a fair?

[Christian Laeso, executive]

Yes, EBITDA will still catch up a little bit more, but they will be closer to the same slope. Yes.

[Unknown Executive]

Perfect. And that was actually all the questions. So that finalizes the Q&A. And before we end the webs, I will just hand over the word for you if you have any final remarks to end with.

[Christian Laeso, executive]

Go buy some shares. I'm not allowed to say that. Am I?

[Jens Brøgger, executive]

No, listen, we are happy about the results. There's been a lot of like changes in the quality of the ARR below our hope that we tried to explain that to the best of it is. We're happy with the growth. We are happy that we can see that we can sustain and support the business more efficiently with a lot less cost. And this graph that we have on here is really what is guiding us, and we need those curves to keep more or less the slope they have right now.

[Unknown Executive]

Perfect. Thank you for the presentation. Thank you for the answers to the Q&A. And thank you, everyone, for listening in. See you next time.