Qt Group Oyj

Hello everybody and welcome to QT Group's Q2 2026 results presentation. My name is Hertta Nervanen and I'm the communications lead at QT Group and I'm here today with our CEO Juha Varelius and our CFO Ann Zetterberg who will be presenting the results. After the presentation we have time for questions first starting from the room and then if time permits then from the line. But without any further ado let's get going. Please go ahead Juha.

Thank you and good morning everyone and welcome to Q2 results. My name is Juha Parelius and I'm CEO of the company. Pretty much same old agenda, business highlights, market trends, financials by Ann and then I'm going to talk about the outlook and guidance for 2026 later. If we go into the Q2, our net sales grew 19.6% and the quarterly net sales was 61.3 million, an increase of 19.6, so comparable currencies 20.9. EBITDA margin 15.1 and 9.3 million. ARR increased to 160.4 and so it was a healthy croton there. If we look the Q2 A bit more detailed, I'm actually pretty happy about our performance since the distribution license sales year over year was a bit over 6 million less this year than it was a year before. Last year we had 19 million on distribution revenues so that we were able to increase our revenues, our Developer License Sales has been developing very well overall. If we look on the IAR, IAR has been performing very well on their subscription chains. We were expecting on aggressive plan that we're going to have a 40% conversion. Now we are on the over 60%, if I remember correctly, 68%. Thank you very much. And quicker we do it, then we get on a healthy revenue growth on the IAR side as well. So given those caveats, I think that we are pretty happy on the Q2 performance. On the profitability side, we've had the change management negotiations going on. We've done them in the USA and in Finland. They're still going on in some parts of Europe. And we do have one-off costs of those in Q2. So given those one-off costs, We're pretty happy on the profitability as well. We're definitely going in the right direction and at the pace even quicker than we were hoping for. So I expect that the next year the profitability will be well in the old healthy good numbers that we were used to see. And the change management negotiations where we're targeting 20 million cost savings are well on track. So I have no doubt that we're going to be able to reach those numbers. If we look on the license sales, well, it's a mixed package in a way that we do have different industries, medical and defense industries overall are doing globally very well. If we look automotive, we're obviously, our customers are having challenges in Europe, whereas in Asia Pacific, the automotive industry is doing relatively pretty well. So for us, we do have pockets in the automotive industry where we're doing okay, and then we have pockets where our customers are suffering along with us and the, of course, the tier one as well. On regions, well, I would not read too much on the regions on a quarterly level, because there is, as you know, in this business, there is quite a lot of fluctuation. EMA was good, America stable, APAC was on this quarter more moderate. If I look overall on the longer term, let's say that the end of this year and next year, I'm expecting USA to need quite a substantial improvement still where we are. So that's where there is room for improvement, definitely. Well, I already mentioned the IAR subscription licensing model, so no doubts about that, that can we drive through that change in IAR pricing models, that will happen, and that's been very well adopted. That's well on track. Well, depending on these industries, it's always good to remember that we operate on three regions, so we are a very global company. We do have 70 different industries that we serve. Some of our industries are a bit under pressure, like the automotive, but then on the other hand, some industries are doing very well, like the medical and and Defense. We also do see overall economy kind of stabilizing. I think that the latest disruption and uncertainty came from the war in Iran. Well, let's see what's going to be the next big disruption because there's been many of them. But if we now look at what our customers are saying and how people are looking for the future, I would say that the market has stabilized pretty much. On APAC it's been more or less stable all along, but in Europe and in the US we've seen some disturbances. I'm not gonna talk about much on AI but the I think that you know if I looked there was a lot of hype in February, March, April and then there was a conclusion that the software industry is going to disappear and AI is going to take over everything. Now I think it's calmed down a little. And I'm not saying that AI is not coming. AI is definitely coming. But is it coming so that the AI is going to take over everything? I have a bit of my doubts. Here are the kind of the same phrases I said last time, but what do we see in the market is that the companies are not really getting rid of developers because of AI. We do see companies downsizing, but they're downsizing because their business is not doing very well, right? And they're downsizing developers and they're downsizing in certain industries. They're downsizing quite a lot of other people as well. So we know, I mean, you know, you've read the news. There are big automotive companies that have announced that they're going to downsize, you know, 100,000 employees. by 2030 and so on and so forth. But do we see that companies are downsizing because of AI? We don't. Do we see that the developers are using AI as a tool to be more efficient? Yes, of course, that we do see. We also see that the AI adds kind of a complexity in a way that the AI does software very quickly and quite a lot and it's still in a phase that somebody needs to look into it some you know a human needs to look into it that what was done human needs to look into it that does this actually make sense AI as you know also Thank you very much. Thank you very much. On Acute, what is a framework? Framework kind of gives an architecture to software. And it's like a plumbing of the software in a way. And even for AI, it makes sense to use this. So that's kind of where we are. And... What do I envision is going to happen is that all those that are now watching and wondering that why I paused, there were people coming in and I started looking that should I say hello or not. So that's why I paused and I didn't say hello, but hello, welcome. So what we see on AI is the fact that we need to find a way on our monetizing model that it also takes into account that AI does do some coding. And this means that we need to start monetizing and invoicing not only per seat, but on the usage of the Qt technology. And when that shift is going to happen, well, it's probably going to be something like the subscription change that we're going to have a new version of our framework and then we start implementing it. We are working on it and we are now working on different models. We're monitoring how to implement it and what not. And you can expect that during next year we'll start moving into that direction once we figure out what is the best model for us and for our customers. So that we can take into account that there is a developer doing development and then there is also AI doing development. On IAR, that's kind of already taken care of because IAR is selling subscription and then IAR charges per simultaneous compilings already now. So it's based on the usage on that sense. And then on Squiz, We think that since everything that AI does needs to be tested and whatnot, we expect the software testing market to grow in the future. We of course use AI extensively internally, not only in our R&D and developers are using AI to understand that how it works and how can they be more efficient. We use it pretty much everywhere in the company nowadays. I think that the big thing for going forward is that as AI moves into consumption-based pricing models, we need to be careful that how much we absorb cost as a company when we are using AI. So I think that these business models will be evolving just because AI's business models will be evolving and how and where AI, you know, how much we need to pay for using AI, because very easily on R&D you know we're using millions of tokens on one go so the what's going to be the cost of it but so we do use it internally on on many various things starting from sales and marketing of course for example sales guys making a sales pitch nowadays it's much more easier using AI because you can get all the info of the target customer and tailor make a tailored personalized presentation on each customer meeting you have and you can do that very quickly so of course it's giving a lot of efficiencies We're also looking for the opportunities as we go forward because as you know nowadays we're looking on the development process and we're looking that where can we offer services and solutions to our customers so that they can be more efficient on their development process but the as AI comes along that well the most obvious thing that comes to mind of course is a vertical integration because using AI and our tools on smaller customers we should be able to offer actually ready-made solutions more than we are doing today. So we're looking into those opportunities that we have. Very particularly strong now is of course all the functional safety and safety critical things because there you need certifications and you need you can't use open source you need to be able to prove that your code meets the criteria that are required for car breaks and whatnot you know everything that is somehow functional safety or safety critical and we do have tools starting from the From IAR, our compilers are certified using an IAR compiler. You know that you can have a certification that it's done according to the specs. Then you can use Qt and our testing. We have a very comprehensive offering in safety critical functional safety industries and that's a very sweet spot for us in this current portfolio we are having. So, I think that the AI will be there a topic for the future, but for the investors, I would say, I kind of see this twofold, that yes, it's going to change. Very many business models, but at the same time, and it does give us efficiencies internally, but at the same time, of course, it also opens up new opportunities for companies that are awake. So I don't see AI only a threat. I see that it will open up new opportunities as we go forward. So there's going to be a whole service layer on top of that on these data centers we we see as of today and of course we're going to be on that wave as well so uh in that sense you know on this ai i would conclude that we use it ourselves we are looking for the pricing model change we're adapting it and and we're looking actively at the new business opportunities it potentially will give us And with that, the financials.

Yes, thank you, Juha. Well, as You have said this was quite a nice quarter for us. We had a very good growth. It's fine to repeat it, I think, since it was so nice. The growth was 19.6% in the quarter with a small exchange rate impact. So therefore, at comparable currencies, this was 20.9%. And the year-to-date growth was also pretty decent, 15.8, with a larger exchange rate impact of 3.3, and thus it brought us up to 19.7, about the same level as in Q2 at the comparable currency then. And if we look at the products we sell, as we illustrate them in the interim report, licenses and consulting, it grew 10.3% in Q2 and it grew by 5.3% year to date. The maintenance revenue almost tripled like it did last quarter because of the IAR effect. IAR has a lot of maintenance revenue in sales. Historically it's been about half of the revenue that's been those maintenance contracts. Now it's a little less because of the transition into subscription so we're selling less of support and update maintenance contracts in IAR and instead we're selling subscription. But the distribution licenses, those declined. That was totally anticipated. We knew we had a high distribution license level last year, so we knew those were going to decline. They declined in Q2 by 32.4% and year-to-date 17%, so totally anticipated. But that also, if you remove that from the development license and consulting parts, we actually had a growth there in Q2 with 38% on that and 18% year to date, which we are actually quite happy with, I must say. And looking at the ARR also, rolling 12, we ended up at 160.4, like Juha said. And rolling 12, it grew 33.8%. Obviously, IAR was not there last year, so that is separate. And that is why the growth becomes this large for 12 months. At comparable currencies, this was 32.2%. But for the quarter, it's still also a decent growth. I mean, 4.5% increase in IAR, like Juha also showed in his slide. And that is 2.4% growth at comparable currencies. IAR is growing in ARR as we're moving into subscription, removing perpetual revenue and instead selling subscription, which is annual recurring revenue instead then. And then looking at the cost side, unfortunately though the revenue side was good, the cost side grew more. They grew by 31.2% in Q2 and yet today 21.7%. So we are, as you know, working on lowering those, doing those reconstructions, efficiency work. Removing some employees here and there as a result of the acquisitions, of course, but also some cost adaption to various parts of the sales that needs to happen. But looking at the personnel that grew 38.2 in Q2 and 32.1 year to date, we have had 1,035 employees end of June. and that is a year-on-year growth of 119 people. IAR has 200 people so you can already in that see the effect of the people that we have downsized in Finland, the US and partly in Norway. We have still got Germany, France to go and that those are ongoing and those one-off costs will come in Q3 hopefully instead but in Q2 we have 3.7 one of costs under employee costs and 0.6 costs under other costs that are one of costs also. Part of it is relating to that business unit security in IER which we are removing over time as it was more of a cost burden than any type of revenue really. So that relates to the 1.6. But we are of course looking at other costs also as part of the integration, offices, merging entities and whatever we can do to be a more efficient and strong company for the future. But if we look at the EBITDA then, a 9.3% today is lower than what we had last year, 11.6%, and the margin was 15.1%. But if you remove the one-off costs, we are actually up to 22.2%, which is quite in level with what we had last year. So the Q2 is still in level with the profitability there, if you adjust for that. and the year to date that brings up the EBITDA level 12.6% up to 16.3% if you adjust for the one-off cost also. So still a fairly decent profitability there also with that adjustment even though it is actually still then lower than last year. Balance sheet. Not much happens in the balance sheet every quarter. A lot happened when we purchased IAR, but still it can be good to give it a quick run-through. Goodwill, 166.9. That is a constant. It doesn't change. We don't depreciate it. You never do that with goodwill. And most of the goodwill, as you can see, refers to IAR. The rest of it is pretty equally distributed on FraudLogic and Exivion. Other intangible assets, 120. Those are the technology assets from the purchases of the acquisitions and we depreciate those over 15 years. IAR also as I told you before capitalizes some development asset investments already in the still in the balance sheet we have a couple of those and those will be finalized in 2026. So the capitalization for Q2 was 0.4 million euros. That increases the results then by that because we increase the technology in the balance sheet instead with that same number. So no large numbers but it's good to understand that that is still happening in IAR. It will over time as we harmonize the handling in Q2 with the handling in IAR likely not happen much of this anymore. It's not our intention to do that. And the trade receivables are at a pretty good level. They're around 20% of the rolling 12 sales, a little higher now as we don't have IAR in the rolling 12 sales looking back. But it will harmonize itself down to that over time. And we still have a very healthy cash balance, 42.4, even though that is, of course, lower than it was last year because we put a lot of money into the acquisition of IAR. And looking at the interest-bearing debt, That was 126 million euros, of which the bank loan is still 120 million euros, but we have paid off 30 million euros. It was 150 initially. So we have a good cash flow and a good position there in paying off the debt in a good time. Other receivables still have those 5.2 million under receivables and under debt. As you remember, the arbitration for us to purchase 100% of the shares is still ongoing in Sweden. We haven't bought 100% of the shares, but we have booked 100% of the shares in the balance sheet. And thus we have an interim booking on the asset side for those 5.2 million. and a debt to those shareholders on the debt side when we pay the shares and those are still there. It is moving along this arbitration but rather slowly I must say so I hope we can make it move forward in a faster speed. The equity ratio is still decent 53.6 compared to 83 which of course is why because we expanded the balance sheet with the IER acquisition and the debt so it's a pretty solid balance sheet still looking at it. The operating cash flow was 20.6 compared to 28.9 last year. The main other cash flows apart from the operating cash flow was really the amortization of the debt which we amortized in Q2 with 15 million euros. So the total cash flow for the period was 2.3 compared to 27.3 last year, but of course it is lower because the profitability is also lower, which we are working on improving for the future. So with that, I guess I will hand over to Juha again to talk about the future.

Yeah, sure. Thank you. So well we haven't changed our full year guidance so net sales 10% and operating profit at least 15% and the as said last time those are the floors so at least and we're not giving a upper range on that so it's the that's the change usually we you know before we used to give a range now we give the kind of the floor well I'm you know the our plan was that we're going to transition the maturity of the IAR customers into subscription in the next three years that's what it took roughly in Qt when we did that and of course not all the customers will change but the majority we're well on track on that I'm happy how the integration has gone it's gone actually so well that we I see that we didn't even mention it on the slides anymore because we think that it's already kind of a done deal so but the of course the integration is still there but the it's gone very smoothly and so the you know we haven't had any big problems and I don't expect to have and it's going to continue as planned So an IAR integration doing well, the subscription chains doing well, and IAR sales on bookings, that's been doing really well. So I'm happy on the IAR performance and I expect that to continue. On Qt, on license sales, very happy. The distribution licenses, they do fluctuate from quarter to quarter. And they are, of course, a result of deals done before. So even though they were a lot less this quarter than they were year on year ago, that's only natural. They do fluctuate and it's based on the fact that how much our customers Distribute. So I'm not worried about that and we're looking, the overall number is heading where we where we do estimate it's to be. On regions, I think that, well, there's always a room for improvement. I think that the United States, we've had some execution issues in the past, so I think that we are in the right track, but in the United States, we can still improve our business quite substantially. and other than that the things are looking pretty good on the macro in global environment of course we you know if a country overall is doing well usually our businesses are doing well because our customers are global customers they're very big customers building products for either B2B or B2C customers and if the economy is doing well then usually we're doing well so if I look now that the How does the rest of the year look? If we're not going to get any big disruptions over here, I'm relatively positive that our numbers will keep on improving. And next year, definitely they're going to be improving on profitability and also on the top line. So this is kind of a slow-moving business so these web technologies are they move very quickly and the moves are very rapid on embedded businesses the trends are slower moving but the so if I look on the overall the rest of the year and next year I'm pretty confident that we are or I am confident that we are going in the right direction. The operational reorganization, well, there are always tough things to do. We said that we're going to have at least 20 million savings and I reiterate that we're definitely going to have at least 20 million savings. We still have some change negotiations in Europe ongoing. Once they're finalized, then we're done. And like I said before, Finland is already done, USA is done, but in Europe we have few countries that we're still in that process. But I have no doubt that we'll be able to finalize them during the H2. Well, yeah, challenges in the market environment continue to cause, I think, that the... In a way, I guess we should stop talking about the market because it seems that at least for the next two years, we're going to have surprises every week. So I expect that there are going to be some disruptions coming. I don't know where, but there will be. So the market will be volatile for the next two years. On AI, it's going to come and it's going to be a big thing, but it's like internet at a time. It not only changes some business logic, but it also gives new opportunities. And I have no doubt whatsoever that Qt will be one of the companies finding also those opportunities and being able to utilize as the years come. Again, that's like a few year thing. It's not like what's going to happen in a... You know, it's too well long term. I mean, nothing has changed. People do want to have products. They want to have displays. They want to have intellectual, intelligent, mumbling products going into Also in the future, all our customers, if they want to be in a business, they need to improve their products. They need to have new product lines and whatnot. So the overall prospect is not going anywhere. I think that also in the future, customers will realize that there is a need for developers. There is need for a software testing and whatnot. So even a lot of things are being optimized the it's still you know it's humans are still needed there for a long long time and and we're not gonna let the machines run over so in that I thank you and some questions which there seem to be hi Walter Rossi from Danske Bank

Thank you for the presentation. Congrats on a good result. First question related to the US. You mentioned that you can improve there substantially. So what has gone wrong there? If you can go through that once more.

Well, in the United States, I think we had some management changes. We did have some operational... How would you describe not so great operational efficiencies? Some attrition over there, a combination of these things. So if I look at the operational efficiency in EMEA and APAC. Just internally, we can do better in the US. And then if I look into region numbers, now the US is improving. But if I look in the previous, the US was weaker than the other markets. All our customers are pretty much global. If we're doing well with our product portfolio and products in MAI and APAC, I don't see any reason why it should be. So there have been some people changes, there have been attrition and whatnot. So just the operational efficiency numbers are not in the level that they are in the other markets. So, you know, multiple internal things.

All right, thanks. Second question related to the ARR development. Growth there is quite high and I guess it's partly explained by IAR. Too many three letters. Yeah, exactly. Difficult. So how much is IAR from ARR?

I'm having the same trouble with the IAR. We need to change the name. I don't think we've disclosed that number because we've not been disclosing the BU numbers. Sorry about that. As a matter of fact, I don't have that figure in my mind now.

Okay, but is that one of the top kind of drivers behind the growth?

Well, of course. Yeah.

Okay, okay.

And you also don't disclose organic growth? No, we haven't. No, yeah. I think that as we get a bit better, that's a discussion we need to have internally that we start a BU reporting next year, because that would kind of give more highlight. Having the VU numbers myself, I can tell you that you're going to have more questions than you're probably going to get answers when you see them. And it's sometimes a bit difficult for us to estimate, but that's definitely a discussion we're having internally, that what would be our next year reporting. And well, I'm sure we definitely, it's... it's going to change and one obvious way probably going forward would be the do the BU reporting and then well then you still have a whole lot of costs which are central costs and whatnot but you would see a bit more to business but then you have you know you have a lot of numbers that are going like this on every quarter on different directions so it's the you know they all fluctuate really randomly

One last one related to the pricing model change that you foresee also for QT products starting from next year. Sometime next year, not in the beginning. What kind of impacts do you expect that to have potentially for your business or sales?

Well that's too early to say really and that's why we need to be testing it so much so that we need to be kind of simulating now that if we do this kind of a pricing change how would that actually affect in a real life so that we don't do a pricing change where we have our revenue right? So there is quite a lot we need to look into very carefully. If you go in a consumption-based usage and you would think that the people started using AI extensively, you would think that there is a lot more usage than there is as of today. But how do we actually do that pricing? And would there be a different pricing for a developer We need to simulate that and test quite a bit. I mean, our target is not to start charging more from our customers as we do today, obviously. But how that will turn out, that's too early to say. So I wouldn't calculate any revenue increase on that. Because at the end of the day, there is also competition, right? So, and we are kind of, I would say that in a market, our products are really good. I mean, they are really, really, really good, but they are not the cheapest either. So I don't, you know, my gut feeling is that do we, Should we do a massive price hikes? No, I don't think so. Then we would be too expensive. Then we would be like on a very high end use. It's like, you know, Formula One, very high price, very small volume. I think that where we are as of today, that we have pretty high volumes and and we're not definitely the cheapest. So I don't see a whole lot of price increases in the future. Of course, there always is inflation, but not tens of percents. Then how do we price the AI usage? Because what AI does is that it does a lot of gold very quickly. And I mean, you know, it consumes a lot. So we don't have enough. We need to do simulations on that. But I wouldn't... If you think from a revenue modeling perspective, I wouldn't put any price revenue increase based on that at this point. That I wouldn't do.

Yes. Felix Henriksson from Nordea. Continuing on the pricing change topic. Is it sort of unfair to assume that this would change your developer license revenue recognition in a way that it moves the lumpiness stemming from the one and three year? But at the same time, could it even be that the revenue impact will be negative as you start that process?

Well, I don't see that, no. But yeah, the lumpiness would probably go away, apart from the distribution licenses, of course.

Got it. And then on the quarter, can you sort of elaborate on the developer license mix in Q2 between the three- and one-year licenses? Was there any shifts there?

No, you know, it's... When there is a big shock like the war starts and the oil prices go sky high, then everybody kind of are scared, right? And I mean, this is sad to say, but people get used to the wars, right? I mean, there is a war in Ukraine going 50 years soon and it's like a new normal, right? People tend to forget it, right? So whenever there is a big shock, whatever it is, then people tend to go, you know, it's the reserve cash flow and then it's one year license. But as things kind of settle and things settle nowadays very quickly, as a matter of fact. So I think that the many businesses are now kind of are in normal mode. They're looking forward, they're thinking forward, they're thinking their investment. Of course, they are still cautious, but no big changes on that. So about the same.

Yeah, so no unusually large share of three-year license days to explain the revenue.

And no unusual large deals or any of that, yeah.

Got it. So to me that implies that there's a bit of a positive trend sheet in the developer license revenues. Oh yeah. What's driving that? What are customers telling you differently?

Well, it's, you know... People are more confident about their future and maybe we've been a bit better in performance and it's no secret sauce in that sense. Small improvements here and there.

got it and then finally just a housekeeping question on the revenue split between the different end markets can you sort of provide an update on that because it seems like especially the defense and medical shares have sort of increased compared to past ah so you mean industries yeah ah okay so

Good. Now, I was not prepared for that question, but let's, you know, we said that, well, they're definitely increasing because at the same time, the automotive has been going down. So we said, I've said, you know, like Europe two years back, that automotive is roughly 20% or so. Now I would say that it's somewhere between 10 and 15. And at the same time, you know medical well it kind of changes quarter on quarter but the medical is the biggest at the moment. Defense was actually very small and it's growing very rapidly so I expect that the defense will pass the automotive even if it hasn't already done so. So I expect the defense to be somewhere in a 15-20 bracket and the medical over there and medical closer to that 20 bracket.

Thank you.

Hi, Jaakko Turvainen from SEB. Trying to get a bit more understanding on the organic underlying trends in the so-called old QT. You said that you don't provide any organic growth for QT like you did in last quarter. Is that correct? I don't think we gave it last quarter either. I recall you said Qt was 11.5% up organically in ARR, I mean.

Oh, ARR, yeah. Well, yeah, okay, ARR we talked about, yeah, but not the... Well, there is, you know, obviously with this development, you can make the assumptions that with such a heavy... Subscription change we're having on IAR. We really need to change the name. On IAR the impact on revenue is negative on short term. So that's what we're seeing and of course that puts pressure on the IAR profitability as well. If we look on Qt revenue on those numbers, six plus something, Down drift on the distribution revenue means that the license sales has been on a very healthy growth on this quarter. And Squis actually follows pretty much on Qt, because if you're using Qt, the only feasible Test tool really is a Squish, right? So I mean, you know, more Qt does bigger deals and whatnot. Squish goes there. And then on top of that, Squish can be sold outside of the Qt ecosystem and the open source and whatnot. So there it comes. Now keep in mind which I've always been saying that the quarters are you know they're not brothers or sisters together so there is always this quarterly fluctuation so the you know it's not like that the we have one quarter and then we can make a straight line that this is the future you know our business is like this so the But I mean, you know, if I look overall trends that how we're selling licenses, particularly DC licenses, how we're performing on license sales and how we're performing on IAR, I think we are going in a better direction. Now the question is that what's going to be the speed? If I look our change negotiations that we're going to cut that 20 million cost and where we have this business development as it goes, IAR is going to turn into profitability because of this subscription change next year. We're not going to have this one-off costs and I can say that already now we're seeing a 30 plus percent EBITDA for next year.

Good.

If I may follow... The ARR, sorry to interrupt. If I just look at the ARR number, not dividing it anywhere, I'm pretty happy. It's a sizeable number.

Good. A follow up on that one. Let's put it this way. You had organic ARR growth of 2.4% Q on Q. How much of this was driven by IAR's subscription change and overall IAR growth and did Qt grow Q on Q basis?

Well, Qt grew organically on the other questions. We don't have them yet. Qt is growing organically for sure, but on the ARR growth for those other questions, I don't have an answer for you. Sorry.

Okay, and then you already touched it a bit, but on the revenue on the P&L and then the volatility there, did you see some significant multi-year deals impacting the strong development license sales growth?

No, it's very, you know, in that sense, very boring typical quarter.

Okay, good, thanks.

And, you know, as you know, the... You know, always in our business, you know, well, the quarters do fluctuate. Then the other fact that we do have is that a large part of the quarter sales actually comes into last two weeks. And then the fourth quarter is insane. So we do, you know, large part of the year result is actually done in the, you know, probably the three last weeks of December. and so that's the and I don't know why all this buying tends to go towards the end of the year and towards the end of the quarter but that's very typical for us but at the same time Of course, you know, seeing what's happening, sensing where we're moving and all of that, I say that the underlying performance, underlying environment and whatnot, it is getting better. So I have no doubts that with this cost savings that we're going to be on a very healthy bit down numbers next year. Even with the very modest revenue growth, so when I say the 30%, I'm not expecting that there needs to be a huge top line growth. And that, of course, as you know, affects a lot because the top line basically drops directly into our bottom line. So even with the very modest revenue growth, we're going to have a very healthy EBITDA next year. And if we're going to have a decent growth, then it's going to be even better. Yes.

Hey, Antti Löyrö from Inderes. You mentioned in the report that new product sales were going well in defense, aviation and medical. I guess that prompted two questions. First one is that which products are kind of flying the best on the new product side in these segments? And then the second one is you've kind of broadened your product portfolio quite a bit in the last years in IAR, did one step to that as well. Where are the different products you have in your portfolio in terms of their maturity? I guess compared to the kind of not legacy Qt but yeah the Qt framework.

Well if we talk about defense and medical and and whatnot they're kind of all regulated markets safety critical markets and our whole portfolio fits in there very well I mean you know IAR and and the Qt and so our whole portfolio fits into that particular segment when We are actually seeing some light in automotive as well. And just to give you an idea that if we're successful closing some deals in automotive this year, we're going to talk about that revenue in 28. Right. So if we are successful closing those automotive deals now, we're going to see the revenue starting accumulating in 28 so that you actually see them on numbers. So this is kind of the cycle. We did invest in defense. already many years ago but then the sentiment was something that you didn't want to put that on a website because it was kind of a It was not well received that somebody does defense work. Now you're seeing being a patriotic if you do that, but a few years back. So our position in defense is a constant deliberate work that's been carried out for the past five years. So into your question that all our products are in that sense pretty mature. And that's why... particularly on Embedded we're so successful because if you think our customers that they start a project and they do whatever they do usually the lifespan of their product is like 10 years and they don't want to buy a product that they do get the updates every three weeks or whatnot that they have to do so if you look Qt for example we do a couple major releases a year and we have a lot of people using the old versions of Qt and that's one of the cornerstones on this Embedded, that people can trust that we are here, we're going to be here in next 10 years and our products are mature, that they can rely on them, they can use our products for the whole life cycle of the product and that's one of our competitive edges. If you go on a web technologies, it's a different story, but on Embedded, that's it. I would say that we've had a... I'm kind of at the new product and let's see how that works. We do have our design tooling and during this fall we're going to come out with the new versions of that design tooling. It's kind of a... It's a mature product in a way that we've had it for a long time but now it's going to have AI functionalities and whatnot so it's kind of a revamped totally and it's going to be a bit of a new product launch as a whole so the it's a mature product but it's going to be a new release but like said on Embedded people actually our customers respect the fact that we've been around our products are very robust tested and we don't have to do updates very often to them and they can rely on them for a long time so that's a that's that's a good portfolio and that fits very well into the functional safety safety critical segment really resonates over there so how do we add our portfolio in the future remains to be seen I think we're going to be doing acquisitions also in the future adding products into our portfolio AI of course is changing this This scene in a way that the, I mean, you know, if AI improves a bit, if you think for electric bike manufacturer, for example, you know, we do have lots of engineers in house as well. We have all these tools. If, you know, using AI, we might be able to offer a more vertically ready-made software than we're doing today. and we already do have these customers globally and we are definitely a market leader in this. So is our next acquisition going to be adding the portfolio in this development process or is it going to be a product or service that actually enables us to be more vertically integrated? That remains to be seen.

Maybe continuing on that and taking the angle of revenue potential in these different products. I guess we've been talking about quality assurance for quite a while and that could be kind of the next Qt. Yeah. And is that kind of, do you see that product being past its kind of fastest growth phase already or is that still in the very kind of?

No, it's still, it's in the early phases. Yeah, it's still, it's in the early phases. Yeah. So definitely if you, you know, not, This is, of course, in it, you know, disclaimer that don't think about the timings. But if we think on a product lifecycle, the acute obviously is the, you know, much further down the road on the growth. IAR is basically going to grow quite a lot due to this subscription change. It can almost double its revenue basically just due to this subscription. That's the likelihood. So if it was 40 something, the subscription change will be 80 something when it's done. And of course, that's going to take three years. How to get organic road after that is a good question, because it's very well integrated into functional safety, safety critical, but not used so much elsewhere. And so I think that during the next three years, that's going to be the question, what's going to be the strategy for IAR to find organic road. and we're on testing market. Yeah, definitely. I mean, you know, we bought 12 million revenue. It's definitely a 100 million business on the course of the years. How to grow beyond that, it's a good question. And this is always good to remember that the, you know, I tell we... When we... When we started with Qt, we were probably in a 20 million region or something like that. The people were saying that, well, if you can grow a tools business into 100 million, that's, you know, you're like a wizard, right? Because the, you know, 50 million more like it. Well, then we got into 100 million and now we're in a 200 million and it's still growing, right? So when I say that I see that the testing business can grow into 100 million, you know, it's the view I have now. of course it will go beyond that and how and where and where we're going to position it so if you think on testing the Qt potential market if I looked only the developers it's probably one and a half billion if I look the testing market because it's only it's not only the Qt technology it's also other other languages so it's like a the potential market is like a double basically so the that's that's kind of the size I'm envisioning so if you add all that together you know with the current portfolio you should be able to build a four or five hundred million business with a very very profitable operations and and what's beyond that well then that needs new markets Don't forget, we're not in South America, we're not in Africa. There are a lot of markets where we're not at. at this point of time and there are use cases evolving all the time and whatnot technology is evolving so of course the opportunities will grow as we go forward but we are you know the we're looking for we need to do this IAR integration we need to pay a bit of debt away and and then we're looking for new acquisitions so we definitely want to be a growth company also in the future hey time's up Thank you very much for participating in this second quarter. We had a very good quarter and I'm happy with the results and I think that we're going into the right direction and really looking forward to seeing you again and really looking forward to building the business going forward in the second half of the year and next year. Thank you very much.