Verimatrix S.A.

You know that the world is in a situation of instability, whether for wars, the war in Ukraine or the Middle East, or for the approach of the United States on the part of the customs, which has destabilized certain areas of the world. especially in Latin America, in which Verimatrix is the absolute leader. The countries of Latin America, with economic instability since January, they have to make big investments. And we, as Verimatrix, have concentrated to develop other areas in the world, especially in the Middle East and Africa, as you will see, on the figures that Jean-François will show you. We reacted with a very strong market weakness in the first quarter, with integrated solutions to take market shares. These are the clients that you see that we signed in the first half of the year, divided into anti-piracy products and cybersecurity products. And to finish on the second quarter, as a turnover. Compared to the first quarter of 2025, we have progressed by 30.5%. To tell you, Verimatrix has implemented a whole new strategy of commercial forces with our focus on new customers to take market share and we are accelerating our activity on the market to increase both the turnover and the profitability of the company. And by the way, I will show you on the first half of this year, which is slightly lower than the first half of 2024 in turnover, we have progressed the EBITDA, the profitability of the company, by 49%. There is an improvement on the first quarter of 30% and an improvement on EBITDA in the first quarter of 2025 and the first quarter of 2024 of 49%. The company will continue to focus either on profitability or on winning market shares. This is our promise to our shareholders and our focus on companies around the world. Jean-François, do you want to continue to share the figures with our shareholders and our partners?

Yes, of course. Thank you, Amedeo. Now we're going to talk a little bit about the financial figures, we're going to start with the second quarter. So the second quarter, as Amedeo said, the point of satisfaction is that after a first quarter of 2025, quite disappointing, we had made a turnover of a little more than 11 million dollars, we had the satisfaction to straighten the bar a little bit by generating a turnover on the second quarter which is higher. We achieved a turnover on the second quarter of 15 million. Certainly, it is lower than the second quarter of last year, we are 10% below, but the trend is rather good compared to the beginning of the year. You remember, at the beginning of the year, we mentioned a certain number of attentions from our main customers. on the order, in particular, of perpetual licenses or important subscription orders. And of course, in the second quarter, even if we still have this attention and this decision-making delay of the customers, which tends to lengthen, we have achieved a certain number of successes, we have had a certain number of successes in the second quarter. You have seen the logos previously on the slide of the achievements of the first semester. But in the second quarter, we signed, for example, RTL in the sport environment, in subscription, which is rather very interesting. We renewed a three-year contract with Swisscom also, which finally translates the trust of this client towards the solutions of Verimatrix. And then on the side of the protection of applications, we signed two interesting banks, Banca Transilvania and HDI Bank to protect the applications. Thanks to these successes, what we can observe in the second quarter, if we go into more detail, is that we see that we have 8% growth on subscription revenues, with a turnover of 4.7%. We suffered a little in maintenance. You can see that we have a 6% drop in maintenance revenues. We know that the maintenance revenues are not necessarily where Verimatrix puts the emphasis, since the transformation of the group is carried out by subscriptions. But it is true that we had a few cancellations of orders in the second quarter, which weighed on performance. In total, we manage to slightly increase recurring income, which is rather good news for the Group. The main challenge is always the same, which is to limit the decrease in non-recurrent income. And in the second quarter, it is better than the first quarter, but we are still 21% down compared to the second quarter of 2024. Note that on the second quarter of 2025, customers like Hotwire finally renewed their license order with Verimatrix, which is very good news, it is an American customer. And then we finalized an agreement with a client, a telecom operator and media operator in Eastern Europe. Important revenue and, I would say, an important stake since we have been working with this client for several, several quarters. So, everything has not been realized. we still suffer in Latin America, but we see a recovery in the second quarter, which is rather encouraging. At the level of annual recurring revenues, ARRs, so the value of the contracts embarked, we see that we are in a very slight drop in total at the level of Verimatrix at the end of the second quarter. The good news is that it comes from maintenance. However, when we focus on subscriptions, which is our main source of investment today, we see that we managed, in the first part of the year, to generate a 10% growth, a growth of two figures, which is in line with our indications for the whole year. Once again, it's satisfying, but we still have great opportunities that we're working on, which should, we hope, materialize in the third and fourth quarter. So you have here the evolution of ARRs, it is an indicator that we share with you every quarter. So here we are only on subscriptions and you see that a little bit like last year, about the same period, we have a plateau effect on the second quarter. A plateau effect that comes from two elements, it is indeed the dynamics of Latin America did not take place in the second quarter, and we had a slightly lower control over our expectations. This is what explains the plateau effect that you see here in the ARR. I insist once again, there has been no loss of opportunity, but it is rather an important gap, or in any case a much longer delay for our customers to make investment decisions on their part. So we're going to move on to the first semester and we're obviously going to cover the results, but it's mostly EBITDA and the evaluation elements. So several important elements to note. We observe a stabilization of recurring income. So this is an element on which the group is working, since we have to be able to finalize all the important orders that are in the process of discussion on new subscriptions for the coming quarters. Unfortunately, this will not have an immediate effect in the recurring revenue, since they are subscription revenues, so we will recognize them at the pro-rata of the number of months remaining until the end of the year. On the other hand, you remember that we worked well on the cost structure of Verimatrix. Last year, we were able to improve EBITDA throughout the year. And you can see that over the first six months of the year, we were able to increase our EBITDA by 49% compared to the first half of the year. So we see that all this cost optimization work is starting to bear fruit. And once again, as Diame Deo said, this in the context of business figures going down over the first two quarters of 2025. So, we have a deterioration of working capital, mainly customer accounts. We always have a cyclical effect with Verimatrix. We had exactly the same phenomenon last year at the same time. We have payment delays that are relatively important with very targeted customers. mainly in Latin America. These payment delays are in the process of resolution, but this is what explains the consumption of cash that there was in the first semester. We also adjusted the value of Goodwill to the balance sheet, an important adjustment of 60 million, which ultimately follows the observation of the trajectory of the group's transformation. and then redefining medium-term objectives. So the transformation objectives are always the same, but the speed at which this transformation will take place has been reviewed, which required, according to the IFRS rules, an adjustment of the value of the trade fund to the balance sheet. So first quarter, after a catastrophic first quarter, thanks to the performance of the second quarter, we are still in a downturn, but only 14%. You can see that recurring revenues are slightly growing at 1%. You can also see that the dominant revenues are recurring revenues. So that's exactly the structure of the turnover that we want to have at Verimatrix. Unfortunately, we are penalized by the delay in orders on perpetual licenses, i.e. non-recurrent business figures, which, as you can see, drop by 33% over the first six months of the year. I talked a lot about geography, so to illustrate the idea, a few orders of magnitude. You have about the anti-piracy that represents 90% of the revenue. This is the activity that carries the bulk of the recurring revenues, but also a good part of the subscription revenues. On the other hand, ShredDefense represents only 10% of the turnover and it is 100% based on subscription revenues and maintenance revenues. In terms of distribution, the notable point is the Latin America area, what you have on your right. You see that Latin America represents 20% of the total turnover of the group. In the first part of the year, Latin America is down by 55%. So, with targeted countries, We are talking about Brazil, Colombia, Mexico and Argentina, all of these countries. In Brazil, there is a delay in the deployment of new infrastructure programs in paid television, which delayed the orders for perpetual license. We are waiting for the decision of the Brazilian government so that these programs are relaunched. Once these programs are relaunched, there will be a positive effect for Verimatrix quite quickly. Colombia is a somewhat particular context, we have a few things to discuss, there will be elections in Colombia, so we do not expect to have, I would say, answers at the Colombian level before the end of the elections concerning Mexico. This is also an interesting area for Verimatrix. We have very large historical clients with whom we are in discussion and we hope to be able to complete these discussions. Discussions that deal with both non-recurrent income and important subscription contracts. So that's the comment on the table. You can see that the United States is pretty stable. The good news is that the IMEA part is back to 14% growth. I mentioned the contract with Swisscom. I also mentioned the contract with this major operator in Eastern Europe. All this has contributed to re-dynamizing the region a little bit. Asia is down 20%. Once again, this is a lower turnover. It represents only 11% of the total turnover of the group. And in Asia, I remind you that last year we had an important agreement with the second largest operator in India. which is called Airtel. We will continue to have new business with Airtel, but I would say it will certainly be, it will certainly be realized by the end of the year or the beginning of next year. So let's move on to the results account. So here you have the result, the adjusted results account. So what are the main points of comment? a drop of 14% of the turnover and despite this you see that the margin in percentage is rather well protected, it is slightly lower compared to last year, we are at 66.6% against 69.7% in the first half of 2024. What you have behind this performance is a decrease in the return prices of Verimatrix, a decrease in the return prices that have been articulated mainly around the customer support organization, which has been optimized, and then also the optimization of consumption in the cloud, solutions that we host. So we manage to maintain or even improve the performance of our solutions in the cloud and at the same time reduce the cost of hosting. So we have a contribution of these new activities that improves each year. We see the results here. I mentioned the important work on optimizing operational expenses. You can see that we have lowered operational expenses over the period by 20.7%. And you can see that this concerns more or less all the lines. We have continued to work on research and development. and on the sales and marketing part, on which we did a certain amount of adjustment work and we continued to consolidate the different entities of the group. So thanks to that, we have an increase of 49% to 2.5 million. The adjusted operating income is still negative, there we have the weight of the amortizations related to the important investments that we made in R&D in the years 2020 and 2021, this weight of the amortization, which is a non-cash element, should drop in current in 2027 and allow Verimatrix to pass in positive operational results. Here are the financial costs that are essentially linked to the cost of the debt of Verimatrix for a result, a net stable adjustment compared to last year. We are in the adjusted result, so that's why you don't see the application of IFRS standards concerning the depreciation of the asset of the trade fund for 60 million, which was passed on June 30, which you see in the net non-adjusted result. So I told you about cash, we have a position of cash at $ 5 million at the end of June. We clearly have a degradation of the old balance sheet, which has made us consume a little more cash than expected, so despite the improvement of the EBITDA, the variation the need for a rolling stock has been unfavorable over the first period of the year, whereas usually it is rather favorable. Basically, over the entire year, we always have a drop in the need for a rolling stock, whereas cyclically, over the first part of the year, this need for a rolling stock increases. This is a subject to address, which will allow us to go back to a drop in working capital over the entire year and to find a treasury available much more favourably.

I will now move on to the balance sheet.