Clavister Holding AB (publ.)

Welcome to our Q1 2006 interim report presentation. My name is Kate Linwood and I will be your host for today's session. And with me today, I have John Westberg, our CEO, and David Nordstrom, our CFO. So we will start today by John giving an overview of the report and sharing some insights and elaborating on detail on that. And then David will follow with the financial details. And yeah, you have the chance to ask questions after. We'll have a Q&A session. So please just post your questions in the question box throughout the presentation, and then we will pick those up after. So yeah, the session is also going to be recorded. So you'll find that on our website after. So yeah, with that, let's hand over to you, John.

Thank you very much, Kate. And again, welcome to this report presentation. I'm really happy to see that we have lot of attendees um maybe even a record number of attendees uh that's really really good to see um Speaking of record, I think we can be proud of and happy to report what we consider to be really a record quarter for Clavister from really many, if not all, perspectives. So if we would sort of phrase Q1 2026 in just a sentence, it would be really a strong start to the year. uh some of the highlights of course then includes the major defense contract that we were awarded by the norwegian defense material agency earlier in in the year um we'll come back to that um which among other uh key growth drivers has really you know driven a strong revenue growth in in the quarter with 35 net sales growth which is yeah among the the the highest growth numbers we've recorded. Not only that, we've seen that our profitability is picking up significantly, actually, despite cost drivers in the quarter related to a number of one-off effects and so forth. But despite those, we were able to show significant profitability improvement as well. All of that taken together, we are now sitting on a significant backlog, a really robust order backlog that gives us a strong visibility for the foreseeable number of years. If we start zooming out a little bit and looking at the geopolitical drivers, we've talked about this before. We will repeat a bit again because it is a clear trend. It is something that sort of dictates the market and drives the market as we speak. So if we would sort of single pick one growth driver that dominates the cyber industry right now, it is the geopolitical development in the world. So moving back a few quarters a year, we were essentially seeing the war in Ukraine as the main geopolitical tension, if you like, or geopolitical driver. But since then, as you know, we have the escalations in gaza we have the u.s intervention in venezuela we have of course than the iran war so a lot of a lot of increased tension that continues to drive the need for for security obviously That in combination with the more and more distinct requirements on moving towards a European digital serenity, those two factors are strongly contributing to high interest, high growth and high market demand for European solutions. And we've sometimes received the question, what happens if the war or wars end tomorrow? Won't that change the narrative back again? Our answer here is quite clear. Absolutely not. This is a structural and sustainable change in demand for European cybersecurity. What has happened in the past few years cannot be undone. Not at least in the many, many 10 years from now. so that trend is here to stay we see this more practically in prospect customers partners and and larger customers that we have been you know approaching for a while um seeing their narrative changing or the mindset changing from curious interest in the beginning to concrete tech evaluations and actually procurements happening with clear requirements on moving away from the dependencies that Europe has of US and other technologies. And this is on a level that we have not seen before. Then again, it's a process. It doesn't result in revenues overnight from new customers, but the trend is there. The levels are there on a level that we haven't seen before. If we move over to our civilian business, and just as a quick recap, we consider CloudVestor to be a dual-use vendor, meaning that our products are equal suitable for the civilian market as for the defense market. In the civilian business, which represents, if we look at the last 12 months, it's the majority of Clavister's business. Around 70% of our sales is coming from the civilian business. It is clearly a central part of our long-term growth strategy. So we anticipate our civilian business to be a fast-grow market for Clavister in both near-term and absolutely long-term periods. We have been working actively on a gradual shift or gradual complement, I would rather say, from a more diverse type of sales operation within the civilian business. to a more strategic selection of customer segments, especially segments where the Swedish heritage, the Swedish technology, if you like, is important and where the geopolitical tensions are really important or drivers for those type of customers. This is a process that is a bit of a transitional process. It takes time. It is an investment in time, but it's clearly something that we see is building foundation and sets the conditions for building even higher growth and profitability. One concrete example of this is, it's just one example, but a concrete one, the extended partnership that we entered into with our distributor Arrow. back in the autumn. With Arrow, we've seen us establishing distribution in more countries than the countries we've been established in, being the Nordics and Germany. So we've expanded that to the Benelux countries and the Baltic states and to Poland as well. Now, in some of those countries, we are now establishing new partnerships with new resellers, new system integrators. We are adding our own local presence in terms of our own salespeople, our own pre-sales technicians and so forth to build those relationships on those markets. So gradually expanding the civilian business. That being said, if we just look at a few number comparisons, Going back to the same quarter last year, we had a significantly high volume of hardware deliveries, extraordinary high, I would say, which temporarily boosted the revenues. Keep in mind, we're getting one of spikes in revenues from hardware deliveries and then the gradual increase of software revenues coming from the term based licensing. If we don't look at this quarter, I would refer to this quarter in terms of hardware volumes to be a bit more normalized. And of course, that means that from a comparison point of view, it results in somewhat lower revenues in hardware deliveries in comparison. But I would say more to a normal level. If we, however, then look at the underlying base of contracts, so the software licenses and specifically in the civilian side that continues to develop positively. So that is a growth business. And this is clearly visible in our increasing ARR. If we move over to the defense side and a bit of a repetition from for those who were in the Q4 call as well. We were awarded a significant contract, a strategic contract by the Norwegian Defense Material Agency in Norway in mid of January. This is a contract that is part of a large digitalization program called MIMA. It's essentially the full digitalization of the Norwegian armed forces. And I'll come back a little bit to that as well. We consider this contract to be a breakthrough contract. It's a game changer contract for Clavister, not only for defense, but it sort of sets the tone and it gives the credibility also in other civilian, larger type of business prospects. The actual contract includes development. It includes delivery of our standard products. It is mainly a software deal, which means that obviously giving very substantial margin contributions as well. After the initial delivery, we're looking at a four year maintenance and support commitment, after which, of course, we expect the relationship with this customer to continue for many more years. It's a system that should be active for very many years. The deal itself, the order sits at 280 million SEK, that's the committed order value. We have already started delivering on the project during Q1, which means that we see both revenue and margin contribution from the project already. And the project, as mentioned, is supposed to be running for a few years after after this initial start and then moving over to maintenance and support phase and or further development. That's to see. I mean, it's a system that will expand and live for a long time. if we look at the actual sort of what are we delivering this this becomes a little bit of an educational part but i think that's super important for the understanding of what we're delivering um to get an insight how that could potentially you know lead to growth business elsewhere uh going back a bit in in history again this is part of the large mime program it's a you know double digit billion Norwegian Krona program in digitalizing the Norwegian armed forces. Many years back, the special forces in Norway implemented or developed their own in-house communication system to be able to support high levels of mobility, high levels of secure communication and so forth. That system was rolled out. It's still in operation and it's really, really appreciated by the Norwegian armed forces. However, coming up to end of 2022, there was a political the political insight, if you like, or a political decision made that the Norwegian armed forces, they should be the users. They should not develop solutions. The industry should develop solutions. So when looking at the next generation of this system, they essentially turned to the industry and started a significant, large procurement process where we and many other vendors and honestly, Clavister was by far the smallest vendor. We're up against many, many large international defense contractors. So a long procurement process which ended in end of 2025 and beginning of 2026, with Claverstreet then being awarded the contract in, again, in strong competition. What is it then we're actually delivering? Well, we refer to this as the Tactical Core Network System or TCNS. So in essence, you can see this as a brain or the brain of the network connecting all units, all soldiers, all vehicles, all tactical posts, all of the units within the Norwegian defense. are connected through the Clavister system. So obviously it's a prestige project from that point. Everything is connected, everything is dependent on the quality and the performance of the Clavister solution. To give a bit of sort of more flavor to it, you could see the Clavister Tacticals core network system as the backbone, as the spine, if you like, of the entire network in Norway. So on the one hand, you have a number of so-called battle management systems, a few examples on top. Could range from Norway's own battle management system. It could be Saab's battle management system. Could be any of those. We are agnostic to any system. uh at the bottom of the picture you see a number of tactical radios and other connectivity links could be commercial 5g networks could be private 5g could be starlink or other satellite links but also common military radios or digital radios from kongsberg or elbit or bitium or or trellisware or or others we are again agnostic to to the system so What we essentially become here is a system of systems that are interconnecting all other systems into one cohesive system that sort of interconnects all the units, all the operations in the Norwegian army. If we look at some of the benefits of this, first of all, it brings an always connected type of philosophy to the network. So regardless of if you're behind a forest, behind a big mountain in the Norwegian fjord, wherever you are, you should have connectivity. That's obviously super important in this highly digitalized environment. But even more so, it's a nationwide communication. So whether you're in the south of Norway or in the top north of Norway, you're connected to the same system, you have the same capabilities and the same communication abilities as everywhere in the country. Furthermore, one key aspect of this is so-called interoperability, which means that whenever Norway is running federated missions, NATO operations, NATO missions, the system as such is fully compliant with other NATO systems. So essentially, you can have a group of vehicles belonging to different NATO nations, and they are immediately able to connect and communicate. And finally, as one final example, also a global access. Obviously, NATO countries, Norway not excluded, is participating in a lot of global operations or global missions. If you have soldiers or units elsewhere on the planet, they are still able to communicate. They are still forming a part of this national network in Norway. So many operational benefits and a lot of, of course, security and connectivity demands on the system. If we then move slightly from the actual contract in Norway and look at the defense sector in more general, If you recall from Q4, we had a number of supply chain challenges with hardware deliveries that were postponed into the new year and thus negatively impacting our fourth quarter. Now, we have been working very thoroughly with our suppliers on this matter in the past months and quarter, and are happy to see that we have been able to mitigate many of those supply chain challenges in this quarter. We are, of course, monitoring this situation going forward. We are ramping up our deliveries. Again, from our order backlog, we have large volumes of deliveries coming up. So it's highly, highly, highly important for us to monitor this and make sure that we have long-term stability now in our deliveries. But so far, looking good. With that, moving over to the numbers and David.

Yeah, thank you, Jan. So we're looking at a record high order intake and quite obviously so given that we won the contract in Norway of 280 million SEK. So that is clearly boosting our order intake in this quarter uh comparing to to q1 last year which was in itself quite strong with with a quite large bae order there is there is not no such bae order in q1 this year so so but with this uh this is clearly our our largest order intake quarter so far and then leading to an order book of 640 million second to put that into perspective that's almost three times last year revenues so so that's a significant um support for for revenue growth going forward in the coming years and i think it's important to reiterate that this is a committed order book with a delivery timeline tied to it so so we have a you know a strong certainty on how this order book will translate into revenues over the coming years Then seeing then that the order book that we're sitting with are able to fuel net sales growth in this quarter. And I think important to say, Jan said it, and I think it's important to say it again. The Norwegian order is starting to support net sales already in Q1. We don't see net sales support from this in January. This project is being ramped up in February. continuously ramping up in March and still growing somewhat here in Q2 as well. So the full net sales support that you would see from a contract like this is not yet visible in our P&L. And we will come to looking at kind of the civilian and the defense business, how it's performing in Q1. But we can say that, okay, the defense business has been very important in driving net sales growth in this quarter. Ramping up the Norwegian contract is one reason. The growing deliveries to the BAE system is another. There are others as well, but these are the two main drivers and then able to recuperate a lot of the We did profit warning Q4 because of the supply chain issues that John talked about. We have been able to deliver a lot of that delay in Q1, which also generates support and growth here. Then comparing the civilian and the defense business, the defense business are showcasing a very large growth in Q1. I mean, more than 300% net sales growth in the defense area. But important to state, the civilian business still is 70 of our revenues and with somewhat i think this is something we can elaborate a little bit on because this is important to to look at and understand that clavister are seeing a robustness in the civilian business. Comparing to Q1 last year, then we saw a more than 100% growth of hardware deliveries in Q1 2025. And as Jan said, we have more normal levels of hardware deliveries in this quarter. So that might give the impression that the civilian business is shrinking. It is not, but it does not have the very large revenue support of one of hardware sales that we saw in Q1 last year. but saying that it's important to say that there is more growth capabilities in the civilian business that we're showcasing here and now and then why while Clavisor is doing a transition in building larger markets as Jan were talking about building larger partnerships working with larger end customers and this takes time so if we're moving also sales resources in creating a better foundation for larger growth going forward and to us It is important to make this investment and give this investment some time so we're able to capture growth in larger customer segments. And that, of course, have a somewhat dampening effect on the growth capabilities here and now. But we believe in making these investments to create a larger growth vehicle in the civilian business going forward. And we see good proof points of this. And I think just mentioning this very quickly. Some time back, people were talking about European alternatives, then going to investigating uh european alternatives now and we are in a phase where we more do more technical proof of concepts signing new partners building a distributed landscape and and seeing active procurement happening in a civilian era not making promises on where the growth will be in a quarter or two quarters from now but but we have a situation where the european market is moving from curiosity to action and this over time will benefit clavister and our growth capabilities ar wise We're still seeing and continuing the growth trend in ARR. And that means that even though we don't have the hardware support compared to Q1 last year, the installed base of the software contracts is growing. Then, of course, the ambition is to grow this faster. And I think we will. But this will take some time and just reflect on what John and I said before about how the civilian business is evolving. Profit-wise, I mean, we're seeing a 45% increase in our gross profit, maintaining or showcasing a strong gross profit margin in this quarter. And then why? Well, there are three reasons to why the gross profit or the gross margin is this strong, despite the high growth level. One is, of course, that the contract in Norway is a software contract, meaning that there is really there are no third party components. There are no hardware. So the sales here have more or less a close to a 100% gross margin. So that in itself gives support. On the other hand, we were able to recuperate a lot of the delays to BAE in Q4, delivering a lot of that now in Q1. That has a dampening effect, but the strong gross margin in the Norwegian contract boosts this. Then the civilian business, which was a bit lower on hardware volumes, then of course generates a strong gross margin on its own. So there you see a good margin support in the civilian business as well. So when you take these three effects together, we're landing on a gross margin that is above our target of 80%. So this is something that we're happy with. On the operational leverage, we're seeing a continuing trend of maintaining reasonable deltas between our net sales growth and our OPEX growth. But there are a lot of things to talk about here. OPEX growth is 22% in the quarter. However, We are burdening Q1 with one of costs related to winning the contract in Norway. These are 3.6 million. So if you take that into account and also adjust for non-recurring items, we are actually sitting with an OPEX growth of 11% compared to a net sales growth of 35%. So I think we're able to grow and grow with cost control. And this, of course, have been a key focus for us for quite some time. So glad to see that. And on a profitability level, the growth that we are demonstrating, the gross margin and the gross profit expansion, is then leading to profitability increases as well. So on an adjusted EBITDA level, we're sitting at 15.1. And then worth mentioning here, those 3.6 million that being one-offs related to Norway, they are not in this number. Would you adjust for them? We are at 18.6, but we're not adjusting EBITDA with the one-off effects for Norway. So that's important to state. Staying with an adjusted EBITDA margin of 20%, we are seeing that we're able to grow our EBIT levels of sitting at 3.6 million and leading to a net result of 1.4 million compared to a positive result last year of 3.2. So let's just a few words on that. Last year, we still had the debt to EIB and that debt was in euros. So Clavistry was subject to large effects in our financial net. And we had a substantial revaluation last year q1 where the sec were improving versus the euro so that gave a very positive accounting effect impacting our financial net but if you adjust for that this is actually the first quarter where the clever is your business is generating positive net results without support of one of accounting effects so this is actually the performance of the business that's generating a positive net results and that's i think is is a clear highlight for us as a company

Good, thank you David. Looking a bit on the outlook going forward and we're Essentially, continuing the trend or the momentum, we're not changing our outlook as such. Again, just reiterating that one of the key drivers here is the sort of European movement towards the digital and military sovereignty. And that really drives demand for our types of products. uh we see that we have structural growth opportunities and i think we're demonstrating them but but as david alluded to we believe that there is much more growth to fetch in specifically in the civilian business that we have not showcased as much so far but we're building the foundation for it The order backlog that we're having, those 640 million, they are, again, as mentioned, they are committed contracts. So that means that we have a very good visibility on the deliveries for the coming years, which also means that we can more confidently invest in growth factors, growth drivers going forward. uh so if we look at the coming three-year period what are the planning ambitions well we we want to see a revenue growth that exceeds the the market growth that's clear um we already mentioned the target gross margin of 80 and i think the past years have clearly demonstrated that this is a reasonable target we have most of the quarters been slightly above this some some quarter slightly below, but clearly this is doable given the type of products we have. And There is a big market and Clavistry is a small fish in a very big pond still. So we need to grow. We want to grow more, which means that the focus after reaching sustainable positive cash flow is to reinvest a big part of that cash flow into growth driving activities, mostly in sales and marketing build up, but also, of course, in delivery capacity. So that's important. With that, leaving back to you, Kate, for Q&A session.

Perfect. Yeah, thanks very much for elaborating on the report and sharing your insights. So now let's move over to some questions. We've already got a lot of questions. But please post them now also in the question box and we will get back to them. Yeah, but I think let's, I mean, of course, the Norwegian wind and the TZS deal is a big topic for this quarter. And we've got a lot of questions around that. So I think let's dive first into that area. One question is along like, okay, is there a new potential business that can come with such a wind? Can the system be distributed to other countries? How does the pipeline look like there? Is there any action already happening there?

around uh yeah uh leading after the after this leading up after this uh when john uh yes with regards to the norwegian contract you mean yes exactly yeah yeah um i mean the the starting looking at sort of zooming out a bit the good thing here is that we are in this contract following the principles that clavister has been having as a product company for for for for always we we are never building bespoke products or solutions for single customers. We're investing in product development that creates more and better standardized products. Sometimes our customers are part of financing that, but it's still Clevister's IPR. We can still replicate that as part of our product portfolio to other customers. Now, a system like this in Norway is, of course, it's a large system. It's a huge rollout. We shouldn't sort of take lightly on the effort it takes to implement this in other countries. That being said, however, if we look at where Norway are on the maturity level in digitalization compared to other countries, they are definitely definitely in the forefront. And we know that there are other nations that look with envy on Norway on what they are doing. So clearly our defense sales team, they are picking up picking up those signals and seeing, can we replicate can we do this in in other countries um i think theoretically conceptually the answer is yes we can um is it an easy effort or an easy task no but you know clearly we will try

So staying with the TCNS deal, though, there's another question around the current one now. So what is the potential of mishaps around this contract? What could go wrong? Do you see risks, for example, cost overruns or other liabilities? And how do you plan to manage that?

Any large project could, of course, have their challenges. What we did, which which is and I would like really to state this, that the customer in this case is a highly professional party, a highly professional customer to work with, which means that we, together with the customer, have spent a lot of time identifying risks you know setting up plans for mitigating risks in advance uh added proper um proper safety margins in timelines in budgets and so forth so that you know of course there could be mishaps but but at least we've proactively took a lot of sort of precautions to mitigate them um I think one benefit here, if we just reflect on the fact that the market is a bit suffering on a broad level from supply chain issues and component shortage, this is a software deal. So it's entirely in our hands. We're not dependent on third parties to that extent that we are in other business. So I think we have a very good chance on delivering this project on time. And also the fact that we are scaling up so much already in Q1 that demonstrates a bit the readiness as well the organization had or became forced to have, I would say, in delivering these type of contracts.

Yeah. Yes, staying with that, we've got another question around how high were the contributions from the Norwegian contract in Q1 in sales and EBITDA. I think, David, you had elaborated on that. Is there anything else you want to add there or elaborate further on?

No, not really. We're not exposing the exact number of a specific customer contract, neither in absolute volumes nor its contribution to the underlying profitability. But what we can say is just restating that this project the contract was signed end of january so there is no revenue support from this contract in january then starting to build up a delivery organization consisting of both our own employees new recruitments and consultants that means that there is a build up in in in this project so of course the full revenue potential from from this contract was not there in q1 it's a higher degree there in q2 where where this you know then you have a full quarter to work on it and you have more of the organization in place to deliver on it. So I think that's what we can say. Yeah.

Okay. Yeah, I think we've covered a lot of questions around that deal now. So let's move on to defense in general. We've got a few questions. There was a big order for CB90s for BAE. And the question was, what is the impact on that for Clavister? Or is there any business coming for us with that win?

Not entirely sure what that refers to. Maybe the person asking that question could perhaps detail a little bit.

But isn't it related to, as I understand it, the Nordic edition and the potential going forward? Yes, exactly. And how would that involve us? Yeah, I understand.

Yeah, sorry.

Yeah, that's it. Yeah. Okay, so that's obviously a business that BAE is discussing. They have not won it yet. And I think here we can just do what we made in previous BAE deals, referring to the public announced information that BAE is giving to the market. So, of course, we're closely following those business discussions. We hope and believe that we can be part of those, of course. But as always in business, nothing is done until it's done. But we're fairly positive.

That will probably also answer the question. There's a question about both Sweden and Norway have a large legacy base of old TV90s that will be upgraded in the near future. And where do we see our business potential in that as well?

Yeah, I mean, in this large so-called Nordic edition prospect that VA is working on, Sweden and Norway are two of the six nations that are sort of cornerstones in the deal. So both Norway and Sweden will most likely then see a large addition to their fleet. And as part of that, potentially also upgrades the current fleet. fleet of CV90s in Sweden, they are already being part of a semi-midlife upgrade. It's not a full digitalization upgrade. It's more a mechanical upgrade. So we're not really part of that. It's still a bit too mechanical. But in general, both Sweden and Norway sees a lot of upgrade potential here.

If we move out of the defense business for the moment and look at the civilian business questions around that, we've got a question here. Last quarter, you spoke about the somewhat cautious customers in a civilian business. Could you explain if this has changed during this quarter?

I can start. I mean, civilian business is a wide church, so it depends on what we're talking about. So if we talk about certain sectors, the energy public sector, I would say that there is They are not cautious per se. It's rather looking more actively at European alternatives. So that's where we're investing with our sales organization, meeting up that demand that is growing. These are typically not quick wins, but we are investing a lot here and having very many good dialogues. I think that will translate to business over time going forward. Then if you look at the private sector, I would say that the cautious behavior that we have been seeing is there because in Q1, we have also the war between the United States and Iran with all the ramifications that have on private individuals and business when it comes to increasing fuel prices and access to oil. And that, I would say, at least it injects more uncertainty into the private sector. And that uncertainty could and to somewhat delay investments decisions in whatever, including cybersecurity. So that's I would say uncertainty in that part is not it's not beneficial for anybody being exposed to a kind of a private sector. So let's let's see where that uncertainty takes us. I don't know if you want to elaborate, John. No, I think that's that's a relevant answer, I think. Yeah. And just adding, I mean, when it comes to Clavister, as a business, to a certain degree, will benefit from geopolitical risk because it puts the spotlight on the question about geopolitical risk. And that, I would say, benefits Clavister and makes more organizations subject of kind of nearshoring and reducing risk by procuring solutions, cybersecurity among them more locally in Europe. But on the other hand, uncertainty has a negative effect as well. And that will also impact all businesses, including us, that uncertainty might defer investment decisions. And I think that's what we can say.

What is the target to its trend in terms of ARR growth for 26?

We are not explicitly guiding anything around ARR. So I think we have to be a bit vague, but we can say like this, that even we are seeing a bit cautious growth in the civilian business. That's the main source of ARR. The defense business is not very ARR centric. So it's a low ARR support in defense. We have tried to explain how is the growth outlook looking for the civilian business. So with quite low growth in the civilian business, as we've seen in Q1, we saw it in Q4 as well, we are demonstrating a 6% growth of ARR. When, and I think it's not a question about if, it's a when question, when growth start kicking in in the civilian business, that will, with a little bit of lag, an impact on ARR and why is it a lag well it's because we record ARR when the license we have sold has been activated and typically the duration there is 30 days so that there is a little bit of a lag in ARR compared to the net sales and then of course we would strive for double digit ARR growth and then it will be a gradual shift I don't expect very large kind of booms where ARR it has It is a slow moving metric to a certain degree. So I hope that answered the question. Maybe not the answer that you were looking for in the question, but we're not able to express an explicit number.

Thanks for elaborating, David. Could you share a bit more around how your own sales force is working in the relations to the partner network in order to drive growth in the civilian business? Yeah, David, I think that's for you as well.

Okay, yeah. I mean, we're doing several things. Mainly what we're doing is focusing on certain customer groups where we know our message resonates very strongly these are customer groups who mainly value two things one is they are concerned about geopolitical risk And they're looking for very secure cybersecurity solutions. This type of customer fits as well as we are a European supplier. So we can check the geopolitical risk box in a good way. And we know compared to others that our security solutions are very secure when we look at kind of public accessible data, known vulnerabilities and such. These customers are, for example, energy companies, energy grids, it's public sector, it's public agencies, so forth. And what we do is then, of course, we do two things. Working with our salespeople to create demand among end customers can be in customer pool, but also building larger partner relationships where over time the partner will be able to generate more and more business to us. But in order to attract and win larger partners, there needs to be an end customer traction. So we do mainly these two things, creating demand among end customers, while at the same time attracting larger resellers, which can in turn generate more growth and have the ability to handle larger customers as they come in. So this is what we're doing.

Okay, we have some financial questions. Well, you activated some tax assets last quarter. Are there potentially more tax assets you might activate?

Yes. so the the tax losses accumulated in clavister is roughly 800 million sec with a tax rate of 20.6 percent that means that roughly there is there is 160 million in a potential tax asset we have recorded 30 million that means there's roughly 130 million that is not recorded as an asset in the balance sheet we are taking a very conservative stance on this but but yes as the business evolves We will revisit this and see if there is room for adding larger deferred tax assets as we move forward. I would assume yes, but let's look at it when we move forward.

Can you please comment on the cash collection from Norway? You build up WC now and the cash will come in H2. Should we expect a jump in your cash position in the second half?

Yes. That's a very distinct answer.

So answers can be so easy.

I can elaborate a little bit on that. I think we alluded to that in the report as well, that these type of contracts, especially with government customers, they are almost always associated with delivery or performance guarantees, which means that we will have to deliver certain parts of the project until we see cash flow. and have proper bank arrangement in place as security for our delivery. following the restructuring of the balance sheet we did in q4 as it happened that also opened up the good abilities for us to combine those type of performance guarantees in commercial banks together with with with still abilities to to to benefit from cash flows from those projects so um yeah david's uh short answer is absolutely correct we will see a jumping catch position

We released a great quarterly report, but we still see the stock prices plummeting. Can you elaborate on that?

I believe everyone agrees that the valuation of a company is hopefully and likely much broaderly covered than just, you know, 47 minutes of trading. So I'm not too worried about that.

Okay.

So someone else looking at the company today, are you ahead or behind if you compare to your thoughts three years ago?

That was a very good question. Of course, this is a question that never has a clear yes or no answer. In some areas, we are definitely ahead. I think some areas have accelerated and moved faster than we were able to anticipate. have had certain expectations in some areas that did not materialize as much as we hoped. I think we've been clear that the sales we've seen in telecom, for instance, due to the 5G challenges on the market, that's one area that we had higher expectations of in the past, but didn't really materialize. Whereas the defense side has, I wouldn't say skyrocketed, but at least grown faster and added much more opportunities than we really had in the pipeline initially. I think the civilian side is picking up more or less according to plan. Of course, we can always ask for more and faster growth, but also quickly. just repeating a bit what David said, we're coming from a background with a very diverse sales and fragmented sales, which really put a strict glass ceiling on the growth abilities. And we needed to take actions to change that and to become more relevant in certain sectors and in certain geographies. And we've been We've been executing on that transition. We are in the midst of that transition. We're nowhere through it yet. And I think that shows in numbers as well. But the data points and the proof points we're seeing from the market, from the customers, from the dialogues, from our sales teams, all of them are positively indicating that we're absolutely on the right track there.

And may I add one thing, and I agree with everything you're saying, but I think it's worth mentioning. Did we, because we were, three years ago, we were talking about geopolitical risk and the need for Europe to arm itself with European solutions. Did we expect that that narrative would be so clearly understood broadly today? No. And that means that the potential for us going forward is larger than we would have anticipated three years ago because now the dependencies that europe has on non-european communications and security solutions are now understood on a level that it was nowhere near to be understood in this way three years ago and that creates a business opportunity that is significantly larger then of course we need to be able to capture that and handle that opportunity that we're seeing, but the opportunity is there and it's larger than we would have ever anticipated it to have been three years ago. I think that's also important to remember.

I've got a question that says, we saw Airbus acquire two cybersecurity companies this year. Do you see a trend of consolidation and what is your role?

A bit jokingly said, I think it's good that some smaller vendors are absorbed by large corporations because then they will stop being competitors, really, because they are just absorbed. Yokes aside, yeah. A little bit of a trend, yes, depending on the market. Some areas like the identity and access management market is highly fragmented. There are many, many, many small vendors out there. The firewall business, firewall market, a bit more consolidated, if you like, fewer vendors. Glovister potentially standing out as one of the very few or maybe even the only vendor in europe not being part of a large conglomerate or a large large corporation um i mean our role in this going forward At the end of the day, it's, of course, a shareholder question. From a management point of view, from a business point of view, we see that we have a lot of growth to capture based on the structure we have today and the organic growth that we're doing today. That being said, if there are important or interesting, I would say, pieces to our portfolio that could come our way, that could be interesting for us to take a look at from an acquisition perspective. Naturally, I mean, we're not looking for new homes for Clavister. Again, that's a shareholder question, but that's really not part of our directive right now. There's a big market to capture for us right now.

Talking about where we are at now, there is also a question about how is the cooperation with Saab developing?

It's still looking quite fine. We did not talk about it in this call, obviously, but we mentioned it briefly in the report. that Q1 saw the first commercial deal for our joint cross domain solution with Saab. This was for a European defense contractor or defense system producer. We are continuing the product development, coming up with new products, new generations during the autumn, and in active dialogues together with Saab, building up a joint prospect base here. So I would rate the cooperation as fine and with initial data points now in Q1, but hopefully more to come.

okay yeah so thank you very much for answering all all those questions and sharing your insights uh now to to finalize i have some uh two questions to you so one to you john what are your highlights of the last quarter yeah i mean

In a quarter like this, there are, of course, many highlights to choose from. If I'm forced to pick one, yeah, of course, I need to pick the contract award from the Norwegian defense. Why? Because it's, first of all, I mean, the size of it. But more so the fact that we were scrutinized by the customer and up against a handful of really, really large vendors. And we managed to steal the contract, to win the contract. ahead of those large corporations, that it signifies two things or symbolizes two things for me. One, that our technology is really edge, it's really, really good. And secondly, that we have built the type of business, the type of company that is big enough and robust enough to deliver on these opportunities. So yeah, if I were to pick one, that has to be the one.

Yeah, I think that's one to be proud of. Definitely. So David, your highlights.

Yeah, I would say that we are able to showcase such high growth because it is a record high growth and still maintaining such strong gross margin. That combination, I would say we haven't seen before. And then adding Even though we're investing in growth, we're able to maintain a decent level of cost control. So I would say a healthy delta between our growth and our cost buildup, meaning that we're able to grow our business, but we're growing with profitability, but also expanding our organization to capture more potential going forward. So maybe a long answer, but... I thought after a yes on the cash question, I had room to elaborate a little bit.

Thanks very much for that, David. Yeah. And thank you also to our audience today for joining us today for this session. There will be, as I mentioned, the recording is going to be available on our website. And if you have any further questions, please reach out to us. So, yeah, with that, I would say thank you and have a great rest of the day.

Thank you very much.

Bye.