Divio Technologies AB (publ)

Hello and welcome to today's presentation where we have Divio, where CEO John Levin, SIFO and Fredrik Wallmark present Q1 for 2025. If you have questions, please use the form to the right and we'll take it up after the broadcast. And I'll leave the floor to you.

Thank you so much Martin and thank you to everyone who is watching as well. My name is John Levin and I'm the CEO of the company and with me is Fredrik Wallmark. Hello. And as usual, we start with a short presentation of the company, what we do for those of you who don't know it. And then we go into a little more questions or especially tell you about the Q-rapport that was released yesterday morning. So I'll start with a short history of the company. We are a Swedish web agency company that started a long time ago, in 2005, and created a product that we use internally ourselves. First, to be able to handle all the projects we had for our customers, mainly in AWS's core service, i.e. Amazon's core service in AWS. And we realized quite quickly that this platform, the product, the service was very good and works very well for our part and therefore should also work for others. And we decided in 2014 that we would start converting and selling this service from consulting companies to product companies. And that's what we did, and we also needed to get capital for this. And to get capital, it was a bit tricky to get capital in Sweden. It was still much harder for startups and smaller companies compared to Sweden. And we were then advised to test everything and see how it could work in Sweden. And it went very well, we took in money in Sweden to make this conversion, and that we would also be noted. Which it became in the same wave as I came in. So in 2019 we became one of the most successful product companies and were listed on the stock exchange. And today we have somewhere between 700 and 800 paying customers. It is growing steadily. Above all, it is the enterprise customers that are growing and becoming more and more. But we also have many smaller customers who pay quite a bit, but who are also important to us because many of them have enormous growth potential. And they are good ambassadors for our platform as well. But you can say that the smaller number that we don't focus on as much is stable, while the large enterprise customers grow. And we are in about 10 countries where we have customers. It also grows steadily, there are a few more countries all the time. But we focus mainly on Sweden, the Nordic countries and the DAS region, which is mainly Sweden, where we also are, and Austria and Germany. And then we have customers in the USA, England and Holland as well. We have, among other things, Fidelity, which is a big customer, which is called American companies, but our business with them is mainly in Europe and a little bit in Asia. Yes, let's move on. What do we do then? Well, to handle, go from having your own servers, which people had before, or companies had before, to getting their web solutions, websites and others, in a cloud instead of having it yourself. It can be considered quite simple, and there are many advantages to it. It is much better, safer, and so on, more scalable. Men det är fortfarande hyfsat komplext och du måste veta vad du gör för någonting och skapa väldigt mycket huvudbry för de som sitter med det här. Och det är framförallt då det är svårt att få en överblick över kostnader. De kan öka lavidartat och man använder ofta, eller man köper ofta mer än man behöver. Eftersom det är hyfsat komplext att sätta upp så blir man ofta individberoende också med beroende på vissa individer som kan det här och blir experter och bygger in sig i lösningar. And it is individuals who Even if there is a decrease in demand for developers, it is still difficult to get hold of these developers. And to take care of a cloud infrastructure is very complex and often a big burden of work. It is often very unstable and often goes down in time and time, especially when it should go down. which creates a lot of stress internally, especially for those who are responsible and those who are dealing with it. Then we have security and compliance that have increased enormously in recent years and the demand for that and that you have a safe solution is also super important. We see an enormous development or increase of different forms of attacks against infrastructure solutions. from those who want to sabotage, and it increases all the time. And then it is often to release a web solution, a website, it is often quite a slow and complicated process as well. Then, above all, support. Finding support is really difficult, and you really have to know what you want to find the right support. Hur löser man det här? Många stora bolag väljer ofta att anlita, antingen anställa ett gäng människor eller anlita stora konsultbolag, en armé av konsulter som hjälper till att lösa det. Eller så hittar man en plattform som våran som löser det. Där vi tar över väldigt mycket av det som annars sker manuellt. It increases the efficiency and makes it much faster. So those who really build web solutions, they will be very happy because everything goes much faster and easier. And we minimize the risks. The risks with this are often built into the human factor. We minimize it as a platform that does most of the work and automates it a lot, so you can sleep better at night. And then the cost becomes significantly lower. Most often you only pay for what you need. And that's something that helps, of course. And so CFO became happy. There's a lot going on in the world, and there's a lot of change happening in the cloud services, and you have to keep up, and that's something we're working on, so it's a bit more future-proof. And then we're single point of contact, so it's just us you need to contact when there's something, if there's something. Most of the time, most problems occur before they arise, or they're solved before the customer discovers them, or there's actually been an effect. So we are the experts and we are super good at this. So let us be that and be a platform that solves most of the problems. The real effect is that you save a lot of money and resources, you can put the resources on the right things, you can focus on developing rather than having a zero infrastructure, which is mostly boring, and to solve problems that they don't want to have. And then the fact that we are single point in contact is super important. It is very simple for our customers and something they appreciate enormously. And then, can they be sure that it is stable? It does not go down, it is very rare to go down and if it were to go down, they would fix it before they blink. So stability means better. Another advantage that our customers appreciate is that you are not locked in a supplier, a multi-service, but you can quite easily, with our platform, or thanks to our platform, move from one supplier to another. Fredrik, some thoughts about our business model or explanation.

Yes, this is a, as you have understood, a SaaS model, even a fast business model with infrastructure embedded with software. And it is a scalable model. We have developed the product that we continue to improve, but it is possible to sell to as many customers as possible. We have good efficiency in production, in the evaluation of new customers. We can grow with a number of customers and then we can grow with the customers that we already have by increasing our engagement, which is often the case that you start with a smaller project and over time they increase. What we measure is these classic SaaS KPIs. We look at monthly recurring revenue, some call it annual recurring revenues, but monthly is the same, divided by 12. That's what we look at and then we book up revenue as a whole. Det här är en väldigt förutsägbar modell så vi kan blicka framåt och se vad våra intryck var över en lång tid framöver. Vi mäter våra närmare i tusentals US-dollar per månad och det är för faktum i US-dollar. Sen gör vi vår årsredovisning och vår aktualiserapport väldigt sek. Men US-dollar berättar mer om hur själva verksamheten går och huruvida vi adderar kunder eller kör när det blir uppsatt och så vidare. So it's an operational method for us. We have a very low churn, which is good. It's a very valuable product when we choose it and it reduces costs for our customers incredibly rarely as it is someone who churns them. Then we also work with advance payments. Our default model is annual advance payment. Then it can vary a little bit, but the big customers have that. undantagsfaller kvartalsvis. Och det här är bra för vårt working capital för vi får pengar i förväg för levererande tjänster i framtiden. Då har vi pengar under tiden. Så det är lite av vår affärsmodell och våra nyckeltal. Och för kvartalssiffran då som kom igår vår MRR är upp nästan 40% till 212 000 USD. Förra tidpunkten då för ett år sedan så var den This is primarily a large customer that we have signed this fall in the pharma sector or health care sector. So net sales is up 66 percent, so this is a downgrade to beat this big deal. There is something else in it, but primarily it is revenue that goes up by 30 percent. And then it is our personal services, since there is a component in this agreement, the best release. to maintain a certain consult service for them. And this is something that we do not classify as MRR, even if it is a recurring call from the team. In the quarter, we have gone down in costs. It is mainly personnel costs that have gone down, but there are also external costs, which means that we end up with a positive EBITDA of 342,000. which has previously been negative with 4 million. So it's an important milestone for us. And then EBIT is still negative, and we continue to fight for it. The result for the tax is minus 4 million, and there will be financial deposits, and it's important to mention that these are not interest rates, but it is a debt from from our daughter company in Switzerland to the fashion company. We transfer capital to Sweden and then we lend it to our Swiss daughter company. And we revalue that debt every month. And then, with the help of the effects that have been in recent times, it turns up and down. You can look over time. Over time, it's actually zero. But some quarters it goes up and some quarters it goes down, depending on how slow And at the end of this quarter, we had almost 4.5 million SEK in the cash register.