Divio Technologies AB (publ)

Good morning! Hello and welcome to today's quarter presentation with Divio. With us from the company we have CEO Jan Plevin and Finance Manager Fredrik Wallmark. After the presentation follows a Q&A. It is good to send a question to the company via the form on the website finvayer.tv. My name is Fredrik Hansson and I come from Finvayer. Jono and Fredrik, you have the floor now.

Thank you very much again. Welcome everyone. My name is John Löfven and I have been the CEO of Divio for a while now. And with me is Fredrik Wallmark, my CFO. And we were going to start by going through what we do and then go into numbers and tell you a little bit about what happens in the company. So I'll start with a short presentation and a little background. Divio, we started as a Swedish company relatively long ago. We still see ourselves as a start-up slash scale-up, because we have made so many changes since the start. Today we are a product company that has been running since about 2014, but the full conversion to a product company took place around 2019. Vi har en plattform som vi säljer som underlättar hantering av olika molntjänster. Det gör vi åt kunder. Vi ska gå in alldeles strax på mer exakt vad vi gör. Vi noterades sen slutet av 2019 på Nasdaq. Vi har idag strax över 700 kunder. Det ligger ganska stabilt där. Man kan säga att The reason for that is that we focus a lot on larger customers, while the large number of customers we have is a little smaller. But the large customers grow, but you don't see that much in the number of customers. But the parity changes, so we get more and more larger customers, which is what we do. There are other actors in this industry that focus more on volume customers. Many, many, but smaller customers. But that's another strategy that we don't want to run. We focus on the larger enterprise customers. A little of what we do. Managing morning services is for most. It requires quite a lot. I'm not going to say that it's a burden, but it is a certain form of headspace. There is a lot to keep an eye on. Previously, you had these on-premise solutions, your own servers that you handled. It was, to a certain extent, maybe easier, but much worse, really. Then we moved, the goal service was created quite a long time ago, it became much better, everything much safer and so on. But you still have to have a stone's throw on the goal supplier's setup and if you're going to släppa webapplikationer, hemsidor och annat på i olika molntjänster så måste du, och även bygga applikationer, så måste du ha stenkoll på hur det funkar. Och det här skapar en del huvudbry och lite utmaningar kan man säga. De utmaningar som finns är framförallt mycket kostnad. Det är svårt att förutse kostnader och när man väl satt igång så har man en idé om vad det kommer att kosta men det kan lavinartat öka mest beroende på dels att man behöver mer kapacitet men det är också väldigt svårt att förstå de här olika betalningsmodellerna som finns. Since it requires a lot of knowledge, you need experts in this field, and then you tend to employ people who have a lot of knowledge, but they also build themselves into solutions if you become very dependent on this person. They are difficult to find, they cost a lot of money, and they are not always particularly long-term. Sen är det många som inte tycker det. De flesta utvecklare tycker det. De gillar att bygga saker. De är inte så intresserade av hur bakgrunden och infrastrukturen funkar. Det ser många som mer som en börda snarare än en möjlighet. Then comes the issue of stability. Everyone knows that things tend to go down all the time. There is a lot of instability when it's like now, Black Friday. Today, it tends to be many websites that lag and go down for various reasons. And it creates enormous stress on not least those who are responsible, but the entire IT organization, the entire company. Then we have compliance security. We see a strong increase in various forms of attacks against websites, servers and so on. With various web applications and that is something that constantly creates a lot of stress. And then you have to follow all the compliance rules that exist, GDPR and so on. And it is also a big jungle that is difficult for most to follow and make sure that you meet the expectations that exist and the requirements. And then to find the right support when something goes to the forest or something goes down and so on, to know how to move forward and solve various problems. It is also very difficult in general to know where to start and how to get the right information and so on. So there are many, many challenges and you can solve them in different ways. Many employees can start employing people. If you are a larger company, you employ an army of people who can try to solve this. Often cost-effective, or you take in consulting companies that help. Then you can also use a platform, and this is where we come in. We solve this for customers with the help of a platform that facilitates the management of target services. We automate a lot of what is normally done manually and then we take care of it and make sure that it works and if something goes wrong, we make sure that it is resolved. They are often not even able to react to the fact that it is up and working again. That's why we exist. We increase the efficiency. Developers can focus on developing. We and our platform take care of the target infrastructure and make sure that it works. Vi minimerar riskerna så att vi tar hand om 24-7. Också om någonting går ner så är det vi som löser det så att man kan sova gott. Även någon som är ansvarig kan sova gott på nätterna. Sen är det också det här med kostnaderna. Vi ser till också att optimera och trimma och se till att allting är precis som det ska. Att man inte använder för mycket. Se till att du använder rätt... applications and so on to optimize costs so that it does not just stick away in the avalanche so that you can foresee the costs. Then we also make sure that what is built on the mining services, that it also does not just work here and now, but also follows the development that the mining service takes so that it works all the time. And then it's us as experts. If you need help, you don't need to contact 10 different suppliers or support on AWS or documentation that you don't really master. If you contact us, we'll solve it. So what we sell and what we offer our customers is largely a lump sum. You can focus on your business, build your business, then we can take care of this, which is not necessarily painful, but necessary. We take care of that part in a cost-effective way. So the advantage for customers is that they get more currency, they get more from their developers, they get reduced costs, they become faster at developing services and also get them deployed, so to speak. You have one person or one contact point in us you contact regardless of what it is about, connected to this, which of course is very important. Man kan slappna av i det här också och vara lugn i att vi har koll på compliance, security, hjälper till, vi certifierar och så vidare. Man behöver inte fundera på det. Den biten tar vi också hand om och har stenkoll på. Och sen är man inte låst vid en. Man bygger inte in sig i en leverantör, en måltjänstleverantör. Med vår plattform kan man hoppa från, kan vi lätt skicka, flytta projekt och så vidare till en helt annan leverantör. Again, calm is the most important thing. Fredrik, our business model. You can tell us a bit about it.

Yes, thank you. We are a so-called SaaS company that many use, or in our case a PaaS company, Platform as a Service. This means that we have built a product that we can then quickly copy, which makes this a very scalable model and we can roll it out to several customers in parallel without much more work. This means that we can grow in the number of customers and we can also grow in the dimension that each customer can increase their engagement with us and thus have a larger business per customer. What we measure is our MRR, or as other companies do, ARR, Monthly Recurring Revenue, or Annual Recurring Revenue. We focus on Monthly Recurring Revenue. The difference is just a multiple with 12. We look at that to see what our monthly revenues are in the future, and that makes us a very predictable model. Then the customers pay in advance, but we get income monthly over time. This means that if a customer pays in advance, we have an improved working capital, but a debt to the customer to carry out the task, but it works well financially for us. Then in our case, we are very happy that we have an extremely low churn. Most of the customers who jump on our platform and enter into an engagement with Divio choose to stay with it when they have seen the advantages and entered our model. This makes it very nice for ourselves and our support, and above all for Finans, that we know that the customers we have secured are the ones we will keep and our MRR is stable in that way. I can jump to the next picture then, Jon. And this morning, due to a capital acquisition round that we have been doing, we have released our Q3 figures. We have also announced these figures preliminary before the capital acquisition coverage started, so there are no big news here really. But the important thing is that our MRR in September And then we count the last day in September, what we have for MRR right there and then. It is 109,000 US dollars. Last year, at the same time, it was 151. That is, it has gone up 38%, which is big for us. Then you can add that we have just signed a new deal and that is the reason for this, it has been handed over. So the revenue for this has not materialized yet. On the other hand, our revenue has gone up by 8% and has fallen to 5.2 million. Earlier this year it was at 4.8 at the same time. And then we have got a little higher professional service revenue, i.e. the one-time consulting revenue, which is usually like start-ups and so on. And we will see a little more of this, and Jon you can go into a little more detail about this business that we have closed, which is very large and that allows our MRR to go up to 40%. EBIT is still flat, about where we were, and due to some financial items, our earnings per share is almost zero. We have 1.1 million i kassan och det är inklusive ett brygglån som vi har förtydligat i kvartalsrapporten vad det är för någonting och det som har hänt nu efter Balancedagen är då att vi har gått ut med kapitalanskaffning, den är redan stängd och fulltecknad och utökad så att det blev 17,5 miljoner då för kostnader som vi har säkrat för framtida drift och investeringar. Och den nya kunden då har gjort sin första betalning så där rullar allting på. Så finansiellt så känner vi oss mycket trygga och det känns väldigt bra alltihopa. Jo, några kommentarer eller ska vi hoppa till nästa?