Bambuser AB (publ)

Good morning, and welcome to Bamboozer Q3 2023 report. I'm Maryam Ghiramani, the CEO, and I will hold this presentation together with Acting CFO, Jonas Lagerstrom. Our agenda includes a quick company introduction, an overview of our Q3 highlights, and a dive into our SaaS KPIs and financials. Thank you for being here, and let's begin. Bamboozer is at the forefront of the video commerce industry. Our journey began in 2007, initially providing a groundbreaking video technology that allowed users to stream live video from their mobile devices. In late 2019, we made a strategic pivot into the world of video commerce, a move that has since then drawn in more than 350 prominent brands spanning across 45 countries. Our global footprint now extends to key locations such as New York, London, Paris, Tokyo, Turku, Dubai, and our lovely headquarters in Stockholm. Since the beginning, we've been achieving strong ARR growth. However, we're now facing a tougher market with customer churn and longer sales cycles among our enterprise clients, affecting our ARR growth rate. We remain very optimistic about our long-term ARR prospects. given the significant market opportunities ahead. Our world is evolving rapidly, and this change is inevitable. At this moment, the majority of e-commerce websites remain static, relying solely on text and images to showcase their products. Yes, our daily lives are increasingly connected with video content. I'm quite confident that in the past 24 hours, each of you has engaged with some form of video, whatever through FaceTime, Zoom, YouTube, TikTok, or other services. The shift towards video becoming a fundamental element of e-commerce is not a question of if, but when, and Bamboozer is leading this transformation. Bamboozer's shopping experience taps into today's video-centric consumer behavior. We enhance conversions by a magnitude of 10, You can reuse content effectively by integrating show snippets across social media, product landing pages, and transforming existing videos into interactive shopping experiences. We also reduce returns. Informed customer decisions lead to a notable reduction in return rates. Video commerce represents the future of retail, and it's a trend that has already gained substantial traction in China. In the Western world, we find ourselves roughly five to seven years behind China in terms of massive GMV growth and widespread adoption. This gap highlights massive potential that Bamboozer is tapping into. Bamboozer operates worldwide, serving over 350 paying customers, and we're proud to have some of the best merchants using our video commerce platform. We have also seen expansion in our partnership network, and we anticipate that this will play an increasingly influential role in our ARR growth in the future. Since the last quarter, we offer a video commerce platform, including both one-to-many and one-to-one, and that platform comes equipped with advanced analytics and incorporates AI and machine learning features. We are platform agnostic and seamlessly integrated with popular e-commerce platforms like Salesforce Commerce Cloud, SAP Hybris, Magento, Shopify, Commerce Tools, and more. Additionally, our customers have the ability to simultaneously stream on major social media apps. Merchants can now engage with their customers through web browsers or custom apps using our SDK. Our vision is to create a comprehensive ecosystem around this platform with other services connecting to us. This represents a groundbreaking advancement in the world of video commerce. Last quarter, we introduced a new business model that now centers on a committed usage-based pricing. It's been very well received, allowing customers to start with a lower allowance and as they grow, upgrade to higher tiers. This approach benefits our ARR and improves customer retention. Now, please let me guide you through some of the key highlights from the third quarter. We achieved successful acquisition of new customers, including Renova, Mini Cooper, and Guerlain. Additionally, we renewed and expanded our relationship with existing customers, such as LVMH and Shiseido. We're excited to have Mini Cooper join us for their pursuit of enhancing customer engagement through video commerce. Their goal is to leverage the Bamboozer platform to enrich the Mini community as they expand into new markets. This partnership is a significant milestone for us in the automotive industry. Cybex has chosen to strengthen its partnership with Bamboozer, expanding to 12 markets for the launch of their exclusive capsule, La Parisienne. This expanded collaboration reflects the trust and success of our existing relationship. We're also very pleased to announce that our one-to-many solution now offer password-protected shows, fulfilling a long-standing customer demand. These features open up the doors to exclusive shopping events and master classes, enabling our customers to create a unique and secure experience for their audience. As previously communicated last quarter, we have phased out Bamboozer Plus since those services are now available through our expanding global partner network. Additionally, as of August, Relatable has been operating independently under its own name. Given our current focus on developing a world-leading video commerce platform, we have initiated a strategic review of Relatable. This review may include a full sale of the business. I'm now leaving over to Jonas Lagerström, who will present the SaaS KPIs and financials.

Good morning. The AR was minus 13% year over year. at constant exchange rates, and minus 5% quarter over quarter. New business continued to be slow as a result of the challenging market with longer sales cycles. While churn is still not satisfying, it was heavily reduced by 60% quarter over quarter in absolute numbers. If we look at the net revenue retention, we continue to see a strong momentum with our top accounts, confirming that we should continue to spend time with that kind of customer profile. The number of customer groups increased from the previous quarter, but witnessed a decrease when compared to previous year. The average ARR per customer group declined by 4% year over year at constant change rates, which was anticipated. We have confidence that in the long term, this will rebound driven by our new pricing strategy. If we look at the regions, EMEA and APAC was both down 5%. In the Americas region, we faced a notable negative impact during the quarter. This was primarily due to a number of contract negotiations with customers that didn't complete on time, leaving them out of contract by the quarter's end. I'm happy to report that we successfully finalized several renewals in Q4. The overall net sales were down 9% year-over-year, and the net sales for SaaS was up 1% year-over-year. The SaaS gross margin saw an increase of 3 percentage points year-over-year, which aligns with our expectations of an enhanced gross margin. The gross margin for professional services demonstrated a notable improvement increasing by 9 percentage points year-over-year. We anticipate that this margin would continue to strengthen in response to recent strategic adjustments. We would like to highlight the OPEX this quarter. As we have been working hard to improve our numbers, and our OPEX showed impressive improvement by 13 percent quarter-over-quarter and a substantial 22 percent improvement year-over-year. These positive changes were primarily attributed to the reorganization efforts that we conducted last quarter. However, it's important to note that currency effects have had a negative impact on OPEX this quarter. When we adjust for these currency effects, OPEX reveals even stronger results with an 18% improvement quarter over quarter and 25% year over year. Our adjusted EBITDA naturally showed significant improvement as well, rising by 9 million SEK year over year. It's worth emphasizing that the corresponding period last year was positively affected by capitalized work for own account. When we adjust for this item, the adjusted EBITDA improved by 14 million SEK year over year. The free cash flow was minus 33.6 million SEK and affected by a negative networking capital, primarily resulting from Q2 garden leave accruals totaling 7 million SEK. Nevertheless, our closing cash balance stands at 292 million SEK, sufficient taking the company to positive cash flow. This was the end of the presentation. And we are now inviting you to a Q&A session.

If you wish to ask a question, please dial star 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad. The next question comes from Nikola Kalinowski from ABG Sundal Collier. Please go ahead.