Checkin.Com Group AB (publ)

Hello and welcome to today's broadcast with Checkin.com where CEO Kristian Karlsson and CFO Martin Bäumel will present a report for the second quarter of 2024. After the presentation there will be a Q&A and with that said I hand over the floor to you Kristian.

Thank you Ludvig and good morning my name is Kristian Karlsson and I'm the acting CEO of Checkin.com group since end of May this year. So even if I'm the new CEO, I have probably previously worked six years in the group as chief commercial officer. And today I have with me our CFO, Martin, and we will go through our latest quarterly report. what i mainly will go through myself is is my comments from from the ceo letter uh i hope that you have been reading the report um but also about the business in general and the development in our main verticals i will then hand over to martin to go through more today financial parts and we leave it of course with a lot of room for questions Just as in Q1, we have continued to see weak travel volumes through the quarter. We have also had a breakthrough into the fintech industry after the quarter. As you obviously can see on our net revenue for quarter two, we have revenue that's gone sideways compared to Q1, but also year on year. Obviously, we had a really challenging first half of the year, but I feel we are really well positioned for the upcoming year. On the upside, though, even if we have a strong enterprise focus, which means that we focus on the largest companies on the internet, we still signed a double digit number of new contracts in the quarter. As I mentioned, we also had a breakthrough in the fintech industry after a quarter. I will follow up a little bit about that later in the presentation. We have a strong belief in our new travel product, which is now live in Ireland with Europe's largest airline. A little bit about our verticals, our main verticals for those of you listening for the first time or travel in Pintech and iGaming. So I will go a little bit into our current development around our verticals. But first of all, travel. As you all have seen, we are facing some challenges around the travel vertical, which is mainly related to a less amount of bookings through third quarter bookings, where the volumes are down like 38% year on year. um the last year we as a company has continued to invest heavily product wise and also in the sales and marketing part just around the travel industry uh so far it's not been paying off not either with our current customers or not with like potential new customers but we see a strong demand of an interest of our product We have EQ2 released together with Europe's largest airline, our new travel product that should cover all type of bookings and I'm happy to announce that it's also now live in the Irish market and we hope for an expected rollout on key markets going forward here. Also, as I was a little bit into, we have a lot of interest around the products in travel. We have many several discussions going on and where a few of them feels like they are in the ending stage. On the fintech vertical, we have been speaking about the last quarters about this big Swedish fintech company. I'm happy also to announce that we have been growing that business quite a lot. So we are live now in more markets than before, including the US market. And they also now become our second largest customers in terms of revenue now in August already. We've been working really close with the product development together with this company and we see that now we are in a good stage with our product to be really competitive against other banks, fintechs and insurance companies. iGaming was before one of our most important verticals, but has been decreasing a bit once we had been focusing more of our resources into travel and fintech. Even though we still see a lot of interest of our products in iGaming, the conditions has changed a bit in the regulated markets. We see that many of our current customers are operating in less markets. We see that many have like harder time to make money basically, which has also affected our revenue a bit in the iGaming market. Except that, I'm also happy to announce today that we sent a press release this morning about that we have signed an agreement with stake.com, which is the fastest growing iGaming company in the world at the moment. I'm super happy that they would like to work with us and then use our software. Upcoming, we see great opportunities from the new regulations coming in Brazil end of the year. It's with a lot of interest of our product and we have already started to work with one company in Brazil and basically help them with the regulation. And I feel that we are in a really good position to gain more momentum there. Our financial targets remains. The financial targets are like a variant of classic SAS metric, which is called rule of 40, which measures the profitable growth. And the target is to maximize the sum of the revenue growth per share and EBITDA margin. The target stays firm and our vision is still to exceed 80% of our annual basis. Year to year, in the last 12 months now, we are at 55%, which makes it that we need to have a rollout now in common market, especially in the travel industry, two key markets to be able to reach our ambition for the year. But the goal stays the same and ambition stays the same. But to reach the ambition, we will need to have a rollout to the key markets now in the common market. And then I'll leave it over to Martin for some financial highlights.

Thank you, Christian. So the quarterly report itself is packed with a lot of numbers. And my goal here for this presentation is to go through the financial highlights. So as we already mentioned, net revenues fell with 3% in the quarter compared to the same quarter last year. And we had revenues of 20.4 million kroner in the quarter. The organic growth was also minus 3%, given that there were no impacts from acquisitions this year. The gross margin was 75% in the quarter. That's lower than we've had before. And as we mentioned earlier, it's due to the capacity expansion that we have invested in and in order to meet future demands. I can come back to that a little bit later. And despite the continued kind of lower revenues compared to Q3 and Q4, especially last year, and the lower gross margin, gross margins we still have an ebda of 2.7 million kroner in the quarter and that's a margin of 13 and the cash flow is somewhat improved compared to last year and the cash flow from operating activities lands at 2.2 million kroner and we ended the quarter with the cash position of 35 a little bit more than 35 million and an equity ratio of 87 percent So if we jump into the details with the net revenue, for those of you who have listened before, you recognize these building blocks where we now added the latest yellow building block here, 20.4 million of revenues in Q2, as we mentioned, and that's the corresponding growth of the minus 3% compared to last year. And as Christian already mentioned, that's a lot of impact from the travel industry, especially when comparing to Q3 and Q4 last year. If we jump to gross profits, the gross profit in the quarter went down to 15.3 million kroner. And that's mostly driven by the fall in or the decrease in revenues. And the gross margin of 75% is lower than we previously had around 85%. And I think the story here is the same as what I told you in the Q1 report. It's because of the investments we've taken in the capacity expansions in order to meet our largest clients or our largest customers' future rollout plans. We need to be ready when that comes. And we have optimized the systems to be able to run with higher volumes and meet that higher demand. when when the when those volumes haven't really materials yet then the by definition the gross margin will be lower for a while um and that's a little bit um driven by that even the direct costs are not completely variable um with the underlying volume and they are rather you know um incremental capacity steps if you will and um and and that is uh that is what's happened now when we've actually invested in a few more steps uh i.e increasing costs and uh we are so we're ready to to meet the demand when that comes um if we go to sales and marketing And we have increased these investments and put a 4.5 million kronor into sales and marketing in the quarter corresponding to 22% of revenues. And for the first six months of the year, we are at 21% of revenues. And if we go a little bit further down the income statement, we reach EBTA. It is down a bit, as we mentioned before. Jone Peter Reistadler, Compared to last year, if the land that 2.7 million kroner for in the quarter corresponding to a margin of 13% and and similar to what I mentioned in the gross margin, you can say that we optimize the company. Jone Peter Reistadler, To meet high demands and to be a big company and. Jone Peter Reistadler, When we have slightly lower revenues and we had hoped for this is what happens to the margins, but as Christian mentioned, we have, we are in a very good position with high leverage to increase these margins when the when the when the net revenue is coming in. And finally, we ended the quarter with a cash position of just over 35 million kronor and an equity ratio of 87%. And with that, I can pass it back to Christian for some closing points.