Teamviewer Se

Welcome to the conference call of TeamViewer AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. I now hand you over to Daniel Fatsad Yastani, who will lead you through this conference. Please go ahead, sir.

Thank you. Good morning. Welcome to the TeamViewer Q3 2021 results call. In a minute, Oliver, our CEO, and Stefan, our CFO, will take you through the business and the financial update and the highlights of the last quarter. And as always, you will have an opportunity to ask questions after the presentation. Given that we had the pre-release a bit less than a month ago, today's release should be relatively straightforward, but we nonetheless, of course, wanted to offer this call to you today. More importantly, and as a reminder, we will be hosting a virtual Capital Markets Day next week, Wednesday, on November 10 at 2 p.m. CET, to which you are all, of course, cordially invited. Information on the event and also the link to participate next week can be found on the IR section of our website. Before we start, and as a little housekeeping exercise for today, as always, please take note of the forward-looking statements that you find on page two of the presentation. And with that, let me now hand over to Oliver.

Thank you, Daniel. Good morning to all of you. Thank you for joining. Before we dive into Q3 and the nine-month data points, I'd like to quickly take a step back and look at 2021 more broadly. From our perspective at the moment, clearly everyone is much more focusing on the negative aspects of the business and the announcements of Q3. And clearly there have been some, no question. But there's also, from our perspective, very positive developments that we should not forget completely when we look at our business. And I think on the one side is the positive strategic positioning and the things that have gone well. And then, of course, we work on measures to improve the situation, the growth, which we will also present in more detail, as Daniel mentioned, and the capital markets day. But I think if we put that together, so on the one side, the ability to take measures, to act and refine and reconfigure initiatives, and on the other side, the strategic positioning and the positives in the business, then from our perspective, that's the basis for an overall quite optimistic outlook on TeamViewer. First point I'd like to make when we look at 2021, yes, we have been below our expectations in Billings growth, but we still believe it's a very healthy Billings growth. 19% in the first nine months of this year is still very good. And 48% adjusted EBITDA margin I think is also not too bad in a combination of the two. I think it's a very strong profile. Having said that, we will still reconfigure our initiatives. We will also look at our cost structure. We will make sure that we set the business up in the right way to reflect some of the more recent development. Thank you. We are also progressing very well in terms of delivering on our expansion into the enterprise space and our billings on a LTM basis are up by 75% in the first nine months this year and we are optimistic for a continuation of that journey going forward. I think if we could look back at IPO and where the enterprise business was at the time, I think this is a very strong progress and we believe there is room for further expansion and also increasing ACV in the enterprise business, very much supported by the megatrends in the market. We have now a much broader solution portfolio. We have very highly competitive products in place, especially in the augmented reality space and new use cases for enterprises, and I think we're very well positioned to unlock this potential there. Cash position, healthy. and we do generate strong cash flow, so I think that puts us in a good position, significant flexibility, which I think is also worth noting. Finally, and of course quite importantly, it's about restoring confidence very clearly, and we should prove to you that we are able to deliver the guidance that we have put out. As you can imagine, more than anyone else, we want to end the negative news flow around this. And we strongly believe that the reset guidance that we have given out provides the floor which is necessary to achieve this. So we feel good about this. As mentioned before, in one week's time, we will have a capital markets day. And that, I think, is a very good opportunity to really elaborate in detail on our strategy, the markets and the market growth, the product portfolio to explain it better, and also the initiatives that we've put in place in different parts of the business. So generally, not an easy year, but we remain very positive for the outlook. If we then go to Q3 specifically, so the disclosure for the last quarter, Daniel has mentioned it already. A good part of the REITs today has been published with preliminary numbers on October 6th. And on chart 5, you see a summary of many of them. And the largest part of them stayed unchanged versus the preliminary publication. One area in which the final numbers have come out significantly more positive is the growth of billings in the enterprise business. The number is now up 75% year-over-year. Originally, without the time to assess all the billings, we had assumed an already solid growth of around 60%. But now we are happy to see that the growth has accelerated versus prior quarter. As a reminder, in Q2, the LTM growth stood at 66%, so significantly up. What is important, I think, is subscriber growth and retention. So we've I'll put a full slide on this one. In line with what we have published a month ago, and I think fair to say initially when we came up with the numbers, many market participants have pointed out the relatively low number of net new subscribers in Q3. And as you can see on slide six, in prior quarters, we have added around 20K net new subscribers each quarter, and that was also the rough guideline that we have given when we were in discussions with investors. So now churn has been quite stable, has even slightly improved in the last quarter, which we were also expecting. However, if you look at the development of the new billings and put that in relation to the net new addition of 5,000s, It's showing that due to the transition to an even higher quality business we are making, and we constantly try to do with our product mix, the number of subscriber ads is really not the only metric anymore that is relevant. I think in the past, going back, the intake from free-to-paid measures was higher. and there were more discussions about it. Enterprise business was in its infancy. The whole notion of additional products, upsell, cross-sell, was only in its infancy, and therefore the subscriber additions was relatively more important than it is today. And clearly we're not satisfied with 5,000 net additions. That's also clear, and we want to improve that, so we're working on it. But it's also important, we think, to focus on the value per customer, that we are attracting, and the upselling and cross-selling that we're able to do. Again, one of the areas we will deep dive at the Capital Market Day because I think it shows the quality improvement of the business over the last years. So that's in the velocity part, and that's then also kind of continuing into the enterprise business, which we show on the next page. During the third quarter, number of enterprise customers now increased to 2,419. And again, reminder, enterprise customer for us definition is ACV above 10,000 euro, which of course is low, but we put it in place at the time of IPO to show that we're slowly progressing into higher ACV clusters. And 10,000 was the initial mark that we've given ourselves at the time. Now more than 2,400 of them, which is up 46%. And the enterprise billings from these customers expanded by 75% to 77.8 million over the LTM period. That's pretty remarkable from our perspective if you compare that times at the IPO. This also means that the average ACV per enterprise customers came up now more than 32,000 euro. And also the mix has improved significantly. Enterprise billings with an ACV of more than €200,000 are now 19% of our billings compared to 11% a year ago. And almost 50% of our enterprise customers generate billings of more than €50,000. One year ago, that cohort has only made up one-third. So you see that the number of enterprise customers is increasing. They spend more with us, so in all clusters we see an improvement, an upward movement, which is true for the entire business. Also in the smaller ticket velocity part, but then at the higher end of the velocity business, the SMB business, customers move above 10K into the enterprise, become more sticky, more cross-sell opportunities, and hence the very positive development of the enterprise business per se. As always, a few use cases, and that's certainly an area where we can talk more about in the C&D as well. First example, Rico, is arguably more traditional IT space. However, it already showcases really the breadth of our offering. It's not only including remote access and support for office devices, but it has moved also into augmented reality to remotely support and train on-site engineers, so in the OT world. And there's also remote training that takes place on the back of our product. So really broadening from originally IT support into other areas. And then we have a use case with Chimbali Group, through which coffee machines can be serviced from remote. Again, one of these OT examples. I think we're showing these examples in every call now. Sometimes healthcare, sometimes consumer goods. Here it's B2B coffee machines. important element from a customer perspective. These cases reduces downtime for these machines, thereby reduces their revenue loss. So there's really an operational value-added business case behind it, not just IT spend. And that's very important. It makes it all a bit longer in terms of sales cycles and convincing customers to deploy. But once they deploy, these are very important. sticky solutions, and again, things are done remotely, less travel costs for technicians, and again, an example where we expanded our solutions from IT devices to machine equipment and how really more tasks, everything can be done remotely. So with this, again, we will cover much more of this in the Capital Markets Day. I'd like to hand over to Stefan to take you through the financial results in more detail. Stefan.