Nepa AB

STO:NEPA

Earnings Call Transcript 2024-Q1

[Fredrik Reuterhäll, analyst]

Welcome to Nepa's Q1 2024 Conference Call hosted by RedEye. Here to present the Q1 report is the CEO, Anders Dahl; and the CFO, Sofia Thorngren (sic) [ Sonja Thorngren ], welcome. [Operator Instructions]. And after the presentation, we're going to have a Q&A session. So please, Anders and Sonja go ahead.

[Anders Dahl, executive]

All right. Thanks a lot for that introduction. And it's me Anders Dahl. I'm the CEO, and it's actually Sonja, not Sofia, Sonja Thorngren, who is the CFO for Nepa. So today we're going to talk a little bit about -- give a quick overview of Nepa and then dive into the Q1 and then a bit of an outlook of what we think are in the cards. So in an ever-changing media landscape, it's even more important to constantly track your marketing initiatives and especially when it comes to brand tracking, campaign evaluations and Marketing Mix Modeling. And that is exactly what we do for our clients. We track brands, we track campaign initiatives. We track client spend in different marketing channels. And we deliver that in either in platforms, in dashboards, in reports, but of course, also with a very strong consultancy offer to our clients.

So we work with CMOs, insight managers, insight directors for global brands across the globe, mostly consumer brands, but also a big retail change in different markets. We are active today in more than 60 markets around the world. And of course, we don't have offices in 60 different countries, but we do have a presence when it comes to collecting interviews, collecting data in order to help our clients to make educated decisions. And I think that is also one of the core ingredients in our offer that actually stands out today in a more of a cookie-less world that we actually talk to real people. We'll collect real interviews, and we use that data to build our predictions, our data, our support to our clients. So within what we call the marketing optimization suite, we have our brand tracking, we have our campaign evaluation, and we have a marketing mix modeling tools and brand tracking is a continuously offer today, and we're going to talk a little bit more later on that we're going to offer a Marketing Mix Modeling as a continuous offer also during the later part of this year.

Our financial performance for the last 12 months have shown improvements. So ARR has gone down a little bit. Subscription revenue is growing and it's still a stable foundation for growth. And we have done a lot of cost reductions in our business for the last 8, 9 months. And of course, that is what drives the underlying improvements in profitability. So we have been through kind of a turnaround situation, and now we are setting up the business for profitable growth, both organic as well as inorganic. And of course, we are very early when it comes to the inorganic growth to see what's out there and what could actually fit into our line of business.

A quick summary of the first quarter of this year is that we have seen substantial improvements in our cost position and of course, with a stronger cash flow and also strong operational efficiency with improvements that we have put in place tools for everyone in the organization, all the way from quoting, setting prices, scoping businesses to delivery and to being able to deliver on a profitable level. So now we have an organization in place and a framework of controlled tools to be able to scale this business going forward. So one thing is to scale on the platforms, but also to scale and delivery on our consultancy service. And we have the tools in place to do that. We also have a much more decentralized/centralized organization that is more functional than before, before we had a more of an organic or a country-specific organization, now we have more of a functional organization.

So today, if we have a client need or a project that is being done in one market, we can support that project from across the globe more or less. And we have a strong organization in India, for example, we do a lot of support to the existing clients in the Nordic region. We're seeing a weaker demand in the market that actually rolls over from last year. The Q4 didn't really show the numbers or didn't really show us the sales that we were accomplishing for. And we have seen that in [ Q1 ] and we still see that in this quarter as well. With longer sales cycles and the cautious spending, and we can talk a little bit more about that later on what we see more of a longer looking trend. And -- but it is due to that most of our clients today are consumer-driven businesses. And of course, they are impacted by high inflation rates and interest rates.

When it comes to ARR, we have seen a sequential growth quarter-over-quarter from Q4 to Q1 in 2024. But year-over-year, we have seen a decline in the recurring revenues. We've also seen a fairly large decline in the ad hoc businesses, and that is definitely an indication of that our existing customers, which normally drives the ad hoc business have a bit of a wait and see approach. They're waiting to see what will happen during the full year of 2024. During the first quarter, the shareholders of Nepa also elected a new Board of Directors, and I was appointed as CEO, and we also recruited a new CRO in the beginning of quarter 2. And she will join us in the month of May. And that is, of course, an important tool and statement to our growth ambitions going forward, that she will come in and help us to kind of reshape and make the sales organization even more efficient. So Sonja.

[Sonja Thorngren, executive]

Thanks, Anders. So Anders gave you a quick preview of the quarter 1. And I have some more details here into the financials. So we did see a decline in our total net sales of some 7%, where like Anders already mentioned, we see a soft market with our subscription clients are holding back slightly on the ad hoc part of the business. So there we see a decline. However, we do see a stable subscription revenue, mainly in our core markets. And compared to the last quarter, we grew our ARR with some 2%. When it comes to our CapEx, we have lower levels of our capitalized expenditures, which it does have a direct impact on our operating profit. Going on to the cost side that we have talked about slightly already, we do see a stable gross margin at the moment. So we have it stabilized around 75%, which is an improvement versus the previous quarters. And this is due to our internal controls that are in a much better shape in combination with work with our data suppliers as well.

The largest improvement when it comes to cost, we can clearly see it in our personnel cost development, which is declined with 21% and looking at our number of FTEs declined with 22%. So like Anders already said, we are much better in working cross-country now using our resources in a much efficient way. And also, we are much more stringent in our cost control and scrutinizing every cost that we have to be able to put our money where it's actually giving some profitability as well. So if we look at our adjusted EBIT is slightly below 0, which is an improvement from the same quarter previous period. And also as a comment like Anders already said, we have a strong cash position. So we had a positive cash flow in the quarter.

And just a quick look at our ARR. So as already mentioned, we have a stable ARR in quarter 1 also compared to end of 2023. And we also see that our average revenue per client is -- has increased year-over-year, although we have slightly fewer number of subscription clients but we see the average subscription revenue is increasing, whereas our average ad hoc revenue on per subscriber is quite stable. So handing back to Anders.

[Anders Dahl, executive]

Yes. So we talked about the reduction in labor or full-time employees. And of course, that raises the question, how can we scale? How can we build this for the future? And as Sonja also pointed out, and we mentioned that before that we are working now much more kind of a cross functional or functional across different countries. So with focusing on our marketing intelligence suite to working together as one company, utilizing resources, for example, in India in a much higher way than we have done before, but also to make sure that we're driving our platforms more to be products. We're not saying that we will be kind of a full ended SaaS company, but we will definitely be more of a product-oriented company. But we will have our platforms much more easy to present, easy to package and easy to deliver to our clients and also being priced in a new way that we haven't done before.

And you can see that on our website that we now have more of a standardized way of selling some of our products that you have a light version, you have a medium version, you have an enterprise version. That is more in line with what we can do in order to actually scale our business. And like I mentioned before, I think in times like this, when companies are more challenged when it comes to the reduced number of dollars they can spend or kronas they can spend on the marketing, it's even more important for the marketing department, for the CMOs and the marketing directors of the world to have the tools in their hand to optimize their marketing to be able to make sure that they are -- now when the cookies are being phased out of being able to make sure that they have relevant data to make educated decisions.

So prove marketing, optimize the marketing strategy. And I think that is all what this marketing intelligence suite is kind of driving towards. To give this platform in combination with our consultants, to our clients and sit very close to our clients as a true partner and give them actionable insights. So with brand tracking, with campaign evaluation and with Marketing Mix Modeling, we do have that kind of breadth and deep -- depth when it comes to delivering those solutions. When it comes to Marketing Mix Modeling, we will talk about that a little bit later, but that will be a continuous product as well during this year. So we have done that for a while, but we have done that as an ad hoc service to our clients. But that is what we see right now is one of the most -- the highest demand in the market to make sure that they have a better tool to plan in between different sources and how to allocate their marketing spend in the best way.

And also scenario planning. We have a lot of data. We are now applying or working with AI tools in order to evaluate our data, to build models, to help our clients with scenario planning. What happens if you invest more in this channel? Will that impact that channel? What happened if we focus more on performance marketing in the short run? How will that impact my brand in the long run. And then also being able to give the CMOs of the world and insight managers tools to set up their goals to make sure that they can plan their world in the same way as the financial department can do, as the procurement department can do to help them. And of course, there are a lot of competitors out there in the world doing similar activities. But I think the size we are in right now and then the skilled workforce we have and then the great consultancy team, I think we can definitely be out there and compete with other players in this market.

So we will divide and conquer on this slide. I will take that -- what we have talked about before, I think the team effort for the last 8, 9, 12 months is definitely to working on the cost side. And we saw that we have over delivered 15% to 20% on most of our project cases based on quota versus what we actually delivered. So just by putting tools in place in the organization and focus on that we need to deliver on a specific net contribution margin has really helped us to put us in a strong cost position. And with those internal controls, we can definitely start building the business now again with those tools in place. I think the operational efficiency improvements, we have shown that now that we can deliver with still very high Net Promoter Scores from our clients. They are satisfied, but we can still do that on a profitable level. And like I mentioned before, we have some exciting product launches in 2024. And one of them is definitely marketing mix modeling that we will like to roll out. And they're all, in some way, additions to the existing products we have and platforms we have.

So the natural target for those products are, of course, clients that we already have a strong relationship with, where we are doing brand tracking, we're doing campaign evaluation, and we can add on MMM as an ad hoc or as a continuous products for the future.

[Sonja Thorngren, executive]

Exactly. And then we will, of course, continue to focus on the profitable growth which we have. So the initiative that we put in place during the fall it's all about keeping track of our costs, both from personnel, but other costs as well. But then, of course, delivering profitable products. And like Anders said, we have a newer CRO, who will be joining in May, who will also help to increase this focus for our organic growth as well. And then well...

[Anders Dahl, executive]

Yes, we are optimistic on the long-term outlook for the market, and we are working very close with our clients and trying to understand how will they allocate their spend, what will they do? What campaigns will they roll out? Will they launch a new products? Will they go into a new market? In our case, for example, if we have a client that already exist in 10 markets. Will they add 10, 15, 5, 6, 7 new markets. That is, of course, incremental revenue for us with very high profit margins. So we are working very close with our clients. We see that there is kind of a long-term initiative that they want to go back and work with us and increase their spend with us. But for now, I think the current market conditions remain difficult and the wait-and-see attitude is definitely out there and the sales cycles are longer that they need to think through more. Can we invest now or do we want to push this out in time? So I think that was the summary of our talking points. So we will open up for questions.

[Fredrik Reuterhäll, analyst]

[Operator Instructions]. I want to continue to talk about the clients here. I mean, in the report, and you just talked about it that they continue to hold back spending. What do you think would change the sentiment? Is it 1 or 2 things or a lot of things?

[Anders Dahl, executive]

I think luckily, we are very close with the clients we are working with today. So we do have a good insight. We do have good optics on what's going on in their organization. And some of the churn, for example, from last fall, came out of mergers between different companies, acquisitions that they had to move out. They have to kind of move us out as a vendor in those cases. And for a Brand Tracker, if they already have a Brand Tracker, the acquiring company, they already have a Brand Tracker. For example, we are being kicked out. What we see in those cases is that they will -- in some cases, they will give kind of the advice to the local markets. If you want to continue with us, you can actually come back and work with us.

And we see that, and we have seen that historically too, that if we are being kicked out or something happened with some of those relations. We will have a way to kind of -- probably because we are delivering good quality products and also that they see that we have a lot of historical data that they can continue to mine from when they continue to work with us. And then we know that on the ad hoc side, we know that already with specific activities that they are kind of planned for the next quarters, if that's Q3, Q4 or if it's 2025. For a consumer company, that is very much dependent on inflation, interest rates, their markets, their availability when it comes to capital to launch in those different markets. So I think close relationship with our clients. We will continue with that, have the dialogue and make sure that we are ready to deliver when they have the mandate to invest on their side.

[Fredrik Reuterhäll, analyst]

And you also write in the report that you think the demand will pick up in H2. I mean, the latter part, the end of 2024. You still -- that will happen or...

[Anders Dahl, executive]

Like I said before, I think it is a wait and see, and we are very close to that kind of wait-and-see discussion. And if we can provide tools to our clients to help them to kind of have internal arguments to continue to invest in their brands, we are more than happy to do that. But I think it's a bit of a -- it's out of our hands in those cases to make those decisions. But if it's going to happen in Q3, Q4, [ Q5 ], I don't really know right now because there are so many uncertain factors in some of those companies we are working with. Both when it comes to their internal organization, decision-making and then money as well. So I think we will continue to say that we have a cautious wait-and-see kind of attitude and we see that definitely in Q2.

[Fredrik Reuterhäll, analyst]

Yes. You touched upon it regarding the churn that was 6.1% in Q4, pretty high, I mean, compared to average around 1.1%. And this quarter was only 0.2%. Will we continue to see these big swings? Or is it just one-off last quarter?

[Anders Dahl, executive]

I think you will continue to see some of those up and downs. But like I said before, if you have an extremely big client and they decide or they are being acquired by someone else or something is changing and they're setup for the big Brand Trackers, for example, or the big subscription products we have, that will impact our top line significantly. But then we also know, and we have seen that from history that in many of those cases, they will come back and say, how I -- can we mine the data, can we get into the data, can we continue to work with you because we have so much information about those clients, their categories, their competitors. So of course, if we can continue to sell that and make sure that, that's on top of mind for these clients, we will continue to have a strong position in their decision-making.

[Fredrik Reuterhäll, analyst]

Okay. So how do you look at your current cost base that you had in Q1? Will you continue to push it down?

[Sonja Thorngren, executive]

Well, I think that we have -- like we already mentioned, we entered 2024 with a very solid cost base, and we will keep on working actively with keeping our costs in control and making the decisions based on facts. And also, do we need to replace someone? Do we need to do it one-on-one or do we do it somewhere else in the organization? So very active control from that perspective. And of course, keeps scrutinizing everything that we have so that we actually do spend money where it should be spent. I don't know if you want to...

[Fredrik Reuterhäll, analyst]

And do you think OpEx will come down year-on-year?

[Sonja Thorngren, executive]

Well, solid control. So we're looking at that.

[Fredrik Reuterhäll, analyst]

If we move up inch towards the COGS and the gross margin, you had 75% in the quarter. Will it continue to perform like this? Or should we expect?

[Sonja Thorngren, executive]

Well, this is a result also going back to the whole cost control initiative that we did put in place in -- during the fall. So working closely with monitoring the costs. Of course, some of it is depending on the mix. So depending on which products we sell. But the large part is controlling and also working together with our suppliers in an active way as well.

[Anders Dahl, executive]

And we have actively during Q3 and Q4 of last year, expand our supplier pool and also trying to build more of a partnership with a supplier because they are good at knowing their markets, their panels, the data they can provide to us. And the more we know about what they do to first of all, make sure that they can kind of harvest the high-quality data that we need from responders and make sure that they're engaged and get the real data to us and that will help us to drive both cost when it comes to kind of the actual procurement purchasing cost, but also internal cost on our side. The more quality data we can get from our partners. And if they are aware of that, that we have more or less like SLAs in place so they get it that this is the quality levels we need. So we don't have to redo or we don't have to repurchase data even if we get credit for that data, but it's to work very closely with them. So they understand our business in a better way and our relationship with our clients.

[Fredrik Reuterhäll, analyst]

So let's talk about margin acquisitions a bit. You push forward that you're going to grow profitably and looking at acquisitions. And I'm curious are you active right now? Are you looking at what kind of size you're looking at type of businesses, geographies. Can you give us some more color there?

[Anders Dahl, executive]

We are very, very early in that stage. So I think we have just started up a discussion with the Board. And when it comes to the type of company, if it kind of -- if it's an addition to our product portfolio, if it's in addition to new and geographical markets, if it is in addition to if we can kind of buy clients in some markets where they are, where they already have a Brand Tracker for example, but we think that our product is a little bit better. So I think we are very, very early in that phase to scope. And also when it comes to financing debt, equity, cash, how do we want to finance those deals. So that's probably a discussion that's going to be ongoing now for a couple of months before we can say, okay, this is the direction we're going to move forward with.

[Fredrik Reuterhäll, analyst]

So I got some questions on the web here from Philippe. What was your growth in Q1 if you exclude Nepa APAC? Do you have that? Top of your head?

[Anders Dahl, executive]

4%? 4% minus, yes. Because yes, exactly 2% to 3% yes, 4% minus, yes.

[Fredrik Reuterhäll, analyst]

Another one from Philippe here. Could you elaborate regarding the record level in your project margins? How has this developed during the last years?

[Anders Dahl, executive]

The last years, I think we started that work very actively last year in June, July. And that was -- one thing was to just have a clear target. What is kind of the net contribution margin that we need to have on a project level. And that drove into how do we scope? How do we quote the project? How do we make sure that we are scoping correctly versus platform versus ours setting up consultancy hours and packaging the products in the whole go-to-market packaging, pricing packaging, and then being able to -- when we had kind of our pro forma P&L for that set up, how do we make sure to measure that over time, to put tools in hands on the people that are selling, on the people who are doing the negotiations, and the people in the organization that are doing the delivery.

And also like we mentioned before, to utilize all the resources in the organization, do we have a very strong team in India with data scientists, with insight consultants and using them in a much more kind of client-facing or close to client-facing relationship and doing part of the project has definitely helped us to scale on a lower cost level as well. So that was kind of there. So the reason why we have 12%, 15% improvement -- percentage point improvement is because of that visibility, data, what measure gets done and putting the tools enhanced on people.

[Fredrik Reuterhäll, analyst]

Let's see here now. Another one from Philippe. Could you elaborate regarding the productification of your consultancy services that you mentioned in the report.

[Anders Dahl, executive]

Yes. One thing is the platforms, of course, to drive the platforms more towards kind of being a product, not only we have -- to have a long set of times, a lot of consultancy. So that is one thing. To really reset the organization to think products more than just marketing research as a service. So that is one of the core ingredients to make sure all the way from development, development initiatives and then making sure that the consultant is really on a high level that we do have the platform, the product, the dashboards, the machine deliveries, the PowerPoint that we provide clients with but also when we come in as a consultant, it's really on a high-level consultancy. So we work directly with the insight directors with the CMOs to make sure that we can be a part of their delivery. So that's going to be package within as an add on, of course, is an hourly rate, but any charge for insight meetings and stuff like that.

So it is a matter of -- the rate card is much more clear now than it was before. And I think we also kind of overdelivered in some cases before because we didn't have those controlled parts in place. Just a comment also on the churn side and sales side. I think one thing also on the sales side. Churn is one thing to mitigate churn. And of course, that is for me, defensive, but we also want to be a little bit more aggressive when it comes to sales and marketing. So that is an area where we're going to -- we hired a new marketing director during this period as well. And she is very much working right now on processes and setting up and making sure that we have a very clear visibility on all the way from generating leads. Or can we -- what is the allowable when it comes to cost per lead, conversions, cost per acquisition, customer lifetime. So all that work is kind of in process right now to make sure that we can on that side also scale with full control and understand what we are doing.

[Fredrik Reuterhäll, analyst]

We've got another question here. Can you talk about using AI in your products? Is this going to be a big effect now or later?

[Anders Dahl, executive]

Yes, it's going to be a big effect, and we are doing a lot of initiatives right now. We can talk more about that during the next quarterly report because some of those things are still very much in trial and error mode. But they are going to divide it in different buckets. One is, of course, cost efficiency because we are a data-driven company. And of course, if we can work with the data in a more cost-efficient way and produce some of the final kind of outcome to our clients with the help of AI, that will definitely help us to be more efficient on the cost side. Then, of course, is to let the whole forecasting, thinking ahead, how do you forecast base of a big pool of data, that is definitely a very, very interesting to see what we can do with AI on that side.

And then, of course, in the whole marketing automation side, what can we do with our clients together on our own using AI products and AI tools in our business. But we do have quite a lot of initiatives right now. None of them are really kind of built into a product. AI trend business one, for example, we can see discrepancies in how our brand perform over time. We also use a lot of AI when it comes to figuring out the quality of our data, for example.

[Fredrik Reuterhäll, analyst]

That new product that you mentioned, how has that been received?

[Anders Dahl, executive]

Campaign powers is doing very well. AI trend is still in its early phases. So they're still kind of -- we are still pushing them, packaging them, cross-selling them to existing clients. And that is also kind of a new discipline that we are pushing much more now to have a very organized kind of cross-selling approach to our existing clients. So we're going to be more -- going forward, we're going to break down a little bit more on different products when it comes -- now we have 2 main categories which are growing, especially new products in the future.

[Fredrik Reuterhäll, analyst]

Yes. And regarding the Marketing Mix Model that you're going to release end of 2024. What kind of potential do you see there? I mean it's going to move the needle?

[Anders Dahl, executive]

I guess in all the client discussions that I'm in right now, it's all about how do we navigate in this changing landscape? No cookies anymore. How do we make sure that the short term doesn't impact the long term, the long impact on our brand? How do we balance between performance marketing today? How do we justify brand marketing, so it's not just a fluffy thing you do. And that all comes down to marketing mix modeling in some way, shape or form. And every time we have done Marketing Mix Modeling before for clients, but mostly as an ad hoc. We always seen tremendous results and a very, very high level of client certification. Now it's more to put it in a format that you can actually do it ongoing, you can execute on it.

And I think also Nepa as a company, I think that was my biggest take when I joined last summer that we are neutral in this world. We are not buying media, we are not a media agency, we're not a creative agencies. So we are kind of on the client side, 100% to help the clients navigate in this landscape. And I think that also -- there's no hidden agenda that we don't have to buy media. We have no commissions in left or right. So I think that definitely to put us in a good position. And I think MMM could definitely be at least on the base of the discussions I'm having with clients right now, it's a strong demand. It's a strong interest. Exactly how many millions, I don't know that yet for now.

[Fredrik Reuterhäll, analyst]

So we got another question from Jesper here. What is the new Board contribution win? Contributing win?

[Anders Dahl, executive]

The new Board is it's definitely contributing when it comes to mergers and acquisitions, investment thoughts, pricing, go-to-market strategies, there is a breadth and a depth of knowledge in all our new Board members supporting from Hanover, from Eric coming on from the M&A side combined with Dan and Ulrich that have a strong background in the industry. So I think with Dan's broad network with a new take on kind of investments and growth in organic growth, for example, acquisitions, I think we're going to be a strong team when it comes to really setting the framework for how Nepa can grow in the future. So I think it's a lot of help and support during this short time. It's only been a month.

[Fredrik Reuterhäll, analyst]

Another question. Your financial targets have not been updated for quite some time. Can you give us some view on this topic?

[Anders Dahl, executive]

Yes, I think we're going to have the same answer. It's a Board decision, and the Board has not changed his mind right now, but that's of course, that is a discussion we have internally as well.

[Fredrik Reuterhäll, analyst]

Yes. So let's see here now. What is the focus within the operation right now? And which functions do you intend to allocate more or less money to?

[Sonja Thorngren, executive]

That's a very broad question. Well, I think that given that we have a new CRO coming in, then she will build on her organization, helping to drive our top line. So that's one part for sure. But like I mentioned already, sometimes it's left pocket, right pocket. So it doesn't necessarily mean that it's going to be a huge increase because we have -- we are assessing the full organization and still working in an efficient way across the functions in the organization.

[Fredrik Reuterhäll, analyst]

And she's going to be based in Stockholm?

[Anders Dahl, executive]

Yes, correct. But she is a very strong kind of Central European knowledge base, and she is worth for organizations with responsibility in Southern Europe, Central Europe. So of course, with our help, we're going to start looking into what we can do in other geographical markets as well. Since we have so many clients today working across so many geographical markets. It's more for us, how can we pick up if we have a global brand deal, for example, with the client? How can we pick up some of their business in Germany or in Benelux or in France or in Italy in the future. That's kind of the key question that we don't have to put boots on the ground in all geographical markets that we can continue to grow with our clients, but more from a centralized view. So we don't have to spend so much money that we can actually scale without doing it on [indiscernible] .

[Fredrik Reuterhäll, analyst]

You're active on like 60 different markets, right?

[Anders Dahl, executive]

Yes.

[Fredrik Reuterhäll, analyst]

That's a lot.

[Anders Dahl, executive]

Yes. Like I said before, we are active, but we don't have offices. But we do track interviews and we do track brand and campaign and marketing mix modeling impacts on those markets which gives us a very strong position that we do have such a global footprint.

[Fredrik Reuterhäll, analyst]

Yes. And as you mentioned, when top line growth is going to be effect on the bottom line right away.

[Anders Dahl, executive]

Absolutely, yes. And you see that now on this report. So I think we have -- the foundation is there now. We have a -- we can grow, we can scale and we can control our cost in a better way. I think now we just have to wait and see what will happen, when will the market start moving. And of course, we're not going to sit and wait. We're going to talk to our clients, and we're going to be close to the market. And the lowest hanging fruit is, of course, to work with existing clients to see what we can do together with them. And there is no lack of activity. It's a high level of activity, high level of being in a constant dialogue with our clients to see when can we get those things done.

[Fredrik Reuterhäll, analyst]

And looking at the seasonality of the year, Q2, is that usually a bit softer than the other quarters going into the summer?

[Sonja Thorngren, executive]

Not necessarily, no. I would say that the summer months, sorry, usually maybe a bit on the softer side.

[Anders Dahl, executive]

And then we don't know this year since we know that so many organizations did organizational changes in Q4 and are now coming out and want to do things. If that's going to happen, like I said before, in Q2 and Q3 or Q4, but still we noticed that the outlook, the short-term outlook it's cautious and controlled. So I'm not really anticipating there will be kind of a big catch-up effect for the next upcoming weeks. I think we have to continue to have this dialogue with our clients.

[Fredrik Reuterhäll, analyst]

Good. So I think that was all the questions that we had here. Thank you very much.

[Anders Dahl, executive]

Right. Thank you very much.

[Sonja Thorngren, executive]

Thank you.