Netcompany Group As Adr

Welcome to this Netcompany interim report for the first nine months of 2026. Today's call is being recorded. If you have any objections, please disconnect at this time. For the first part of the call, all participants will be in a listen-only mode. Afterwards, there will be a question and answer session. To ask a question, press five star on your telephone keypad. I will now hand the call to your speakers, CEO Andrei Rokoshevsky and CFO Thomas Johansen. You will now begin.

Good day and welcome to this presentation of NET Company's results for Q3 2026. My name is Andrei Rokoshevsky and I'm the CEO and co-founder of NET Company. I'm joined today by our CFO Thomas Johansen. And before we get going, there are some important disclosures that I need you to read through. So could we have slide number two, please? I will pause for 30 seconds here and let you all have a read through of these important disclosures. We go to slide number three. The topic of today's presentation is our performance for Q3 2026. I start by walking you through the business highlights for the quarter. And once I'm done, Thomas will go through the financial performance of the quarter and the financial guidance for 2026 before we open the call for questions. And can we have the next slide, please? I'm pleased to report that our growth momentum from the first half of the years continued into Q3, where we grew revenue by more than 8%. This brings our accumulated growth for the first nine months of the year to more than 28%, a testament to the fact that both public and private customers continue to embrace our AI-powered product and platform offerings. As Adr As Adr Our AI orchestration tool, Phoenix AI, continues to gain traction across all our entities. What's particularly encouraging is how customers are responding to the solution. They're valuing the security and sovereignty embedded in Phoenix AI, which in turn enables them to implement and work with the authentic agents faster and better. And can I have the next slide, please? As Adr As Adr Based on this strong Q3 performance and our solid visibility into the remainder of the year, we are raising the floor for our full year 26 revenue guidance with two percentage points. Growth was broad-based across the group and demonstrates our underlying business strength and, critically, our relevance in the era where AI is truly reshaping the market. Can I have the next slide, please? A significant growth factor in the quarter was once again our UK business segment. In Q3, we were able to announce another win in this segment that underscores Net Company's position as a trusted digital partner for the UK public sector. Net Company has been appointed as a digital delivery partner for NHS England's adult screening programs. This is a five-year contract valued at €250 million. A partnership that began in September 2026. We'll be supporting all seven national adult screening programs, including breast, cervical and bowel cancer screenings. These programs reach millions of people across England every year, making this a generally mission-critical partnership. Beyond operating and maintaining existing screening services, we are also driving next-generation innovation in this contract. We'll be delivering a new national breast screening service and an enhanced cervical screening service that includes digital invitations and at-home HPV self-testing kits. But these aren't just technological upgrades. They represent a shift towards a more personalized, data-driven approach that specifically targets communities that screening has historically been underserved with. The ultimate goal is clear and compelling. Find diseases earlier, reduce the time between invitation and result, and increase uptake through more accessible and targeted screening pathways. This contract reinforces Net Company's track record in delivering mission-critical healthcare services for the NHS and demonstrates our capability to lead complex, high-impact digital programs at a very high scale. And can we have the next slide, please? So the market for AI is evolving rapidly. And we see a clear shift in focus. AI adoption is still accelerating across industries, but increasingly organizations are moving beyond pilots and concepts. The real emphasis now is on the actual delivery of solutions, proven products and platforms that deliver sovereign AI for highly regulated businesses. As part of the EU's tech sovereignty package, the Cloud and AI Development Act, the so-called CADA, proposes a framework of four union assurance levels. These levels are designed to classify cloud and AI service providers for the public sector, and they represent an important step towards ensuring European digital independence. First level focuses on data residency and basic self-assessment, the foundational requirements. Second level adds supply chain transparency and control safeguards, ensuring visibility and governance across the supply chain. Third level introduces EU corporate control and staff citizenship, strengthening European control and accountability. And the fourth level represents the highest standard with strict foreign immunity and full-stack control delivering complete sovereignty and independence. At Netcompany, we are in a leading market position, delivering sovereign AI for highly regulated businesses across all four levels. This capability gives us a significant competitive advantage as European organizations navigate these new requirements and seek trusted partners who can meet their sovereignty and compliance needs. We have the technology, the expertise, and now the market validation to execute at scale in this space. It makes me genuinely proud of what our teams have accomplished so far, and it makes me excited about what lies ahead for Net Company. And with that, I will now pass on the word to Thomas, who will go through the numbers. Thomas, please go ahead.

Thank you for that, Andre. And I will go through our financial performance for Q3 2026 and our updated revenue guidance for 2026. So if we move past the breaking slide number eight and straight into slide number nine in one go, please. As Andre already mentioned, we continued the strong start of the year with 7.6% revenue growth for the Group, excluding net company banking services in constant currencies compared to Q3 2025. Currencies impacted revenue growth negatively by 0.6% in the quarter, resulting in reported revenue growth for the Group, excluding net company banking services of 8.2%. For the total group, revenue increased 7.6% and amounted to 2.3 billion Danish in Q3 2026. Growth was driven by 7.6% growth in the public sector and 8.8% growth in the private sector. As in previous quarters this year, revenue growth in the quarter was particularly strong in Net Company UK, supported by existing and new contract wins. As Adr Net company CEU grew revenue 4.8% compared to the same period last year. The growth was driven by increased revenue from both public sector, including the EU, and the private sector, which grew 3.8% and 8% respectively. Ad company UK continued the strong growth from the first half of the year and grew revenue by 42% in Q3 2026 compared to the same quarter last year, driven by both the public and private sector, which grew revenue by 50.8% and 19.5% respectively. The growth was a result of increased engagements with both existing and new customers. In-Net Company Norway, revenue was on level with the same quarter last year, and In-Net Company Netherlands, revenue increased by 15%. In-Net Company Banking Services, revenue increased 7.6% compared to the same quarter last year. Can we move to the next slide, please? During the first nine months of 2026, Net Company Group, excluding Net Company Banking Services, grew revenue by 12.6% in constant currencies. Growth was driven by public sector, including EU institutions, which grew 12% in the first nine months of 2026, as well as the private sector, which increased 14.5% compared to the same period last year. Can we move to the next slide, please? In Q3 2026, adjusted EBDA before allocated headquarter cost for the Group, excluding Net Company Banking Services, was 20.6%, an increase of 0.6% compared to the same quarter last year, despite additional costs associated with the Net Company India Cycling Partnership. Group adjusted EBDA margin before allocated headquarter cost increased to 18.9% in Q3 2026, compared to 17.3% in the same quarter last year. In Net Company Denmark, adjusted EBDA margin improved significantly sequentially from Q2-26 with 11.5% to 27.8% in Q3-2026. Compared to Q3 last year, adjusted EBDA margin decreased slightly by 1.6%, which was mainly caused by increased marketing costs. In Net Company CU, adjusted EBDA margin was 16.3% in Q3-26 compared to 12.3% in the same quarter last year. Net Company UK adjusted EBDA margin increased to 15% from 13.8% in the same quarter last year as a consequence of strong operational performance and stable administrative costs. In Net Company Norway, adjusted EBDA margin was negative 2.1% in Q3 2026 and in Net Company Netherlands margins increased to 24.6% in the quarter. In net company banking services, the adjusted EBITDA margin was 12% in the quarter, an improvement of 5.6 percentage points compared to the same quarter last year as cost synergies are being realized. The integration is progressing as anticipated as synergies are materializing according to the original plan. Can we have the next slide, please? In the first three quarters of 2026, the group, excluding Net Company Banking Services, realized an adjusted EBITDA margin before allocated cost of 17.4%, in line with the same period last year, despite both lower revenue, increased cost to Agendic AI, and the partnership with Net Company and its cycling team. Can we move to the next slide, please? In Q3 2026, we employed an average of 9,653 FTEs, which was an increase of 171 FTEs, or 1.8%, compared to the same quarter last year. The increase in FTEs was related to both client-facing FTEs and FTEs in the Product Development Unit, which was then partly offset by reduced FTEs in the administrative and support functions of the Group. To enhance and streamline our product and platform offerings and to further embed AI capability into these, all efforts around product and platform development as well as AI initiatives previously anchored within the business segments in Denmark and Southeast Europe was moved into one central unit, product development as of January 2026. In Q3 2026, the number of FTEs in this unit increased by 134 FTEs compared to the same quarter last year as investments in adopting Agendic AI into our products and platforms accelerated. Attrition rate for the last 12 months was 16.8%, which was a decrease of 1.2 percentage point compared to 18% in Q3 2025. And can we go to the next slide, please? The group generated a negative free cash flow of 170.6 million in Q3 2026 compared to negative 55.5 million in Q3 2025. The development was mainly driven by development in working capital and to some extent also impacted by continued investment in our product and platforms and increased tax payments. The main negative drag we have on working capital in 2026 is the change in level of prepayments from the former owners of SDC, now Dead Company Banking Services. At the time of the transaction last year, SDC held a positive cash position, mainly based on prepayments received from the then owners of around half a billion. These prepayments have not been maintained in the new ownership structure of SDC, where the banks are now in a commercial model with us in terms of net company banking service. So rather being the owner of their own banking central, they now have a commercial relationship with Net Company Banking Service. And this explains more than half of the negative development in our working capital year to date for the Group. Compared to Q3 2025, trade receivables increased and advance payment from customers decreased, driven by products reaching milestones and being in moist. Trade receivables was then further impacted by outstandings of close to 300 million Danish from customers related to RRF funded projects, which will be collected in Q3 2026 in connection with the release of funding from the European Union. Day's sales outstanding increased from 53 to 61 compared to Q3 2025. Adjusted for the RRF-funded project, Day's sales outstanding would have been unchanged compared to the same period last year. Can we have the next slide, please? Revenue visibility end of Q3 2026 for the Group, excluding Net Company Banking Services, amounts to 7.4 billion, an improvement of 10.5% compared to Q3 2025. Visibility for Net Company Banking Services amounts to 1.75 billion and solely relates to the private sector. Can we have the next slide, please? Based on revenue growth of 12.6%, excluding net company banking services for the first nine months, and taking into account the current backlog and weighted pipeline, we raised the lower part of revenue guidance for 2026. For the Group, excluding net company banking services, revenue growth is now expected to be between 8.5% and 10.5%, which was previously between 6.5% and 10.5%. Guidance for adjusted EBDA margin, excluding net company banking services, of between 17% and 20% is maintained. For the Group in Total, we raised the bottom of the revenue growth guidance for 2026 to between 18% and 20.5%, which was previously between 16% and 20.5%. While we maintain adjusted EBITDA margin expectations of between approximately 16% and 19%, all in constant currencies. And with that, the detailed walkthrough has been concluded, and we will open the call for Q&A. So if we move to the Q&A slide and open the call, please.