Net Insight AB (publ)

Good morning, everyone, and welcome to this Q4 presentation from NetInsight. My name is Andreas Johelsson, and I am responsible for the coverage of NetInsight here at D&B Carnegie. And with me in the room, I have some new faces. We have the new CEO, Andreas Eriksson, joining us. That will kick off the presentation. And he's joined by CFO Cecilia Högård-Hök, that will go through the numbers. And after that, we will have a Q&A. To the right of us on your screen, there is a box where you can send in your questions, and I will read them to management to answer them. But first, the presentation, so I leave the hand over to Andreas. Welcome.

Thank you, Andreas. So let's start. Good morning, everyone. I thought we would start with giving sort of an overview of 2025 and Q4 in particular. I think as we previously communicated, we had a sort of weak Q4 in 2025 and overall quite a challenging 2025. And it was driven by a combination of external and internal factors. If you look at the external factor side, we had exchange rate headwinds, we had an uncertain macroeconomic environment, and also we could see that the sales cycle for the time synchronization business was longer than we had expected. In order to strengthen and respond to this, we have worked on strengthening the portfolio, driving improvement in the sales execution area. And I think also, as we communicated, we had launched last year a cost reduction program and really driven cost discipline and cost control throughout the entire business. And this has all had a positive impact on 2025. For us, the key milestone last year was the first commercial order we won for our 400 gig media platform that we won in quarter four. So that was a key positive milestone for us. And if you look at the time synchronization area, I think we had more throughout the year, we had more customers entering the proof of concept phase. and several of them advanced through the sales funnel. Although, as I just mentioned, we can see that the sales cycles for the zinc area remains longer than we had expected before. So if I sort of zoom in on some of the key areas of actions we started to take in last year and also will continue to drive, they really fall in three categories. Number one is around the enhancement of the portfolio. And some of these we cover at Capital Market Day, what we talked about yesterday. the business. And I think it comes in three different areas in that one. First, it's the whole cloud and unmanaged area where we see big opportunities for us and we see an opportunity to really come out and have a really strong portfolio. We're also talking about the different sort of form factors of the type of equipment we have. So they come in different shapes. So that's the second area. And then also we see an opportunity to enhance the portfolio by adding new compression technologies, which will I'll talk a little bit more about later. The second area is the whole increasing of sales efficiency, where we will continue to drive to make sure we really have a very impactful sales and marketing organization. And that has to do about how we bring new offerings to market. It's related to how we can grow and upsell existing customers and also how we win new customers in a sort of significant way. And the third area of drive and improvement here is on the time synchronization area where we will, you know, now going forward, really drive hard and focus on conversion. You know, drive the conversion of the prospects we have in the pipeline opposed to necessarily adding new prospects. I think what's important to highlight when you look at this is that we're coming from a foundation that is strong. You know, we are active in an attractive market. You know, we have a legacy and we have a heritage and experience in developing really innovative and industry-leading solutions. I think for us, you know, building on that and where we've come so far and adding some of these areas for actions and improvement will be leading to a really positive outcome. If I then take a step back and we look first on the media area, I thought it was just good to maybe zoom out as well when you think about NetInsight and where we are. So I think what we see is we are really well positioned in the live sports and media market where we've been active for many years. As we again talked about on the Capital Market Day, there is a number of trends and drivers in the market which we are taking benefit of. On the consumer behavior side, we know that more and more content is required to fuel an online viewer experience for live sports, which nowadays obviously is commonplace. There's continued to be the shift from satellite to fiber and now into cloud, which we've been benefiting from for a long time. And now that also is, you know, we're adding when companies are moving from satellite and also, you know, going to Internet and delivery, Internet delivery-based solutions. So that's something we benefit from. There's been an underlying trend in the industry for a while, as we have talked about in the remote production area, and that is something that we continue to benefit from. So when you go from a production at the venue, moving that into central production, the requirement on the network is increased, and we benefit from that. Then you have the overall drive, and this is where the 400 gig comes into play, of higher capacity in general, because people and viewers want just more higher band quality on the viewing. The new compression technologies, we are active mainly in one area of compression technologies, and now we see an opportunity to get into other areas of compression, which will be an underlying growth driver. uh for us and finally the shift to ip standards-based services is another underlying trend which we are taking benefit on so i think this summarizes the underlying growth trends that we that we are that's driving the net inside business if you don't think about us you know and position us in this in this world you know what's our core value proposition and and the uniqueness of net insight i think in four areas. One is that we have an extremely strong reputation, brand in the market. We've been here for a long time. People trust the Netiside business and our customers like the product because they really work. It's high quality and we're dealing with a situation in the live sports area where you cannot fail. So I think that's a really strong starting point. If you look at the other area around how you operate the network, there's another thing that really sets us apart because our solutions and the customer likes the solution because it's easy to manage. It's easy to manage the network, which is very critical. That means less cost for managing the network, less risk. When you run, again, a live broadcast environment, that becomes very important. The third area is the ongoing development of our product offerings and make sure we have differentiated the features in a product offering that stands out compared to our competitors. You know, we talk about high capacity, for instance, being one of them with the Ford. We were first with 100 gig, now we're first with 400 gig. And the final area is around what we talk about, the total cost of ownership. And the way to think about this is the cost for buying the equipment and the cost for standing it up and deploying it, and then thirdly, the cost for the operations when you're in production. And our solution has proven to be very strong in looking at really low total cost of ownership across all the three categories. So that's, again, a key selling point for us in this market. If I then just look at the market, and this is similar to what we presented at Capital Market Day. When you think about the market we are active in, in the lower left, you can see where there's a current core market, which we are active in. But we see a really good opportunity to expand our target market there. and go into other areas we've been working a lot on the unmanaged this is where you know internet delivery comes into play for instance we've been we've been working a lot into into that area and strengthening that portfolio and then if you go up right to the dark blue new compression technology that's also an opportunity for us to add um that into our our portfolio So we see really opportunities in all these three areas for us over time here as we build out the portfolio and expand it. And then you can see why these areas that over time we will look to explore whether we can find growth also in those areas. I think for me, The growth of the TAM is just a core part of our future, and to make sure we can continue to grow, we will need to be active across the current core market at this point. If we then look at media and zoom in again more on 2025, as I said, challenging 2025, performance did not meet our expectation or ambition in that area. As I mentioned, we finished the year weak and unexpected. It was driven by low demand in Q4 and also absence of typical year-end budget orders. So this is where customers will sort of, I guess, empty their budgets if they close the financial year. In December, they would typically spend more, and we didn't really see any significant orders like that. I think what's positive is that the cost reduction program and the cost control we had driven throughout the year had a really positive impact on the business. And then coming back to some of these improvements that we're driving is that we, again, enhancing the portfolio, increasing the sales efficiencies is two key areas on the media side. We're all in this now in the beginning of the year. We will launch a new sales organization. We have new CCO. which used to run the EMEA business and has done that over quite a few years with some great success in terms of how we run that part of the business. We have also now, as of now beginning of the year, a new regional head for our Americas business, where we see again an opportunity to drive more growth, as well as in Asia-Pacific we also have a new regional head. It's really a new lineup to some extent to take advantage and be even more impactful into how we execute out on the field. As I mentioned, positive response for the 400 gig, you know, first order. And this is, again, the business driver behind this is really about lower total cost of ownership, as well as, of course, the increased capacities of builds on the key value propositions that we have in place. And really to sort of emphasize that I think we are well positioned to benefit from our foundation that we have over time. You know, we are, again, supported by a presence in a very attractive market. You know, we have this DNA and this heritage of developing really innovative and industry leading solutions. I think for me, that's a really good starting point as we embark on the next phase of the business. If I then sort of change area here and move into the time synchronization area, I think what we have seen throughout the year is we've strengthened the position. We have moved forward in many areas. But again, as I've highlighted, we can see that the sales cycles for the synch area is longer than we had anticipated. Again, the need for GPS independent synchronization continues to grow. You know, we have still strong market interest. You know, to date, 33 customers have entered proof of concept with us. So that sort of indicates the need and also indicates interest for customers. the area, but also for our solution. We had sort of a weak start of the year, but over the year momentum has started to improve in the second half, and several customers are progressing into commercial field trials and pilot deployments. And in Q4 was a great milestone for us where we had the first media customer, and they began deploying the synchronization solution for a large-scale sporting event. So that was a key milestone for us. And then our strategic customer, Turk Telecom, have advanced to higher volume of deployments in preparation for the commercial 5G launch that they will make in April. And I think overall, I mean, the year really demonstrated positive progress. You know, we have more customers moving through the sales funnel. Again, it takes longer time than we thought, but, you know, there's step-by-step, you know, moving towards the rollout phase, which is sort of the end goal, clearly. So, again, similar here, I think, well, you know, look at the outlook. The long-term remains positive. I think what we are expecting, though, is in terms of short-term revenue and We expected to show some volatility during the first quarters because we can start to get orders and the phasing and timing of them will depend, will sort of come over time. Even when in a rollout situation, you don't get the big rollout order in one, you get it in a couple of phases. I think that's what we expect to see going into next year. If we zoom in and talk a little bit more in detail around the sales process around sync, which I think is important to take some time on so it's sort of clear, I think you go from prospect to rollout and full operation. So it's a number of steps here that we have communicated and that we have when you bring on board a new customer and have the engagement. And this whole process, you know all these steps is really what we thought maybe in the beginning would be 12 to 24 months in reality what we're seeing now is more towards the 24 months and it's probably some in some instances even more than 24 months i think that's sort of important to bear in mind having said that i think what we expect over time is that this time will come down because obviously we're dealing with the new technology here um and um and You know, that's why the customers want to do, maybe go through all the different steps. You know, over time, they might decide to only do a field trial or a pilot, you know, before they move to roll. We think that the time will come down. think it was a clarification i think when you think about revenue intake for us obviously you know the whole ambition here is to take as many customers to roll out as possible so i think that's sort of obviously the aim aim goal here when you think about the revenue inflow from us i think it's important to know that you know in poke typically we don't get any anything paid for so no revenue that we that we do as part of the sales process but field trial and pilot We typically get revenue for, I mean, we get, they pay, the customer pay for that part effectively in the evaluation. So I think that's important to kind of understand when you look at the numbers and so forth. But again, the whole ambition is obviously rollout where the bigger amounts will come. If you look at that last year, when you think about the numbers, as I mentioned, 33 customers have started a POC. 60% of the concluded POCs, they've converted into commercial field trials and moved to the next step. 15% have decided not to continue. And the pattern is very clear on this 15%. It's actually not the sweet spot market segment that we had said. It's tend to be the customers, the telcos, that have more of a homogeneous network and are the incumbents. They tend to have another network architecture and network reality where this is maybe less interesting, but really a sweet spot where 75% of the market is really what we've been aiming for. So I think that's important detail to understand. If you look at the 25% that is then residual of these two, they really have not decided. So they basically have concluded a POC, but they are yet to decide exactly what will be the next step. If you look at the other part and a little bit further down in the process here, we can see that 40% of the customers performing field trial have continued to pilot stage. And then we have 40% of is still ongoing at this moment. And similarly, the residual 20% is customers that have not decided yet what they do next. I think one thing to maybe highlight in terms of as we look at through the process here is The pilot installation role are clearly the key milestones here. And what we expect and what we see is that when a customer has decided to do pilot, we expect the conversion rate from pilot to rollout to be high. And I think we will know over time exactly the ratios and so forth. But I think that's an important thing to mention. At this point, we have four customers in rollout and full operations. So that hopefully gives you some clarity on the sync area and what the sales cycles look like in more detail. So with that, I'll leave over to Cecilia.

Yeah. OK. So starting with revenue and for the quarter, we had had 117 millions of revenue and that is a decline of 12 percent year on year. Looking at full year, we had revenue of 521 with a decline of 14 percent. And FX pressure has created headwinds consistent over the year. And in comparable currencies, the decline was 4% in the quarter and 9% for the full year. And beyond FX, market uncertainty remained elevated. And as Andrea said, we also see that we have internal factors that we need to improve. If we look at splits by region revenue, we can see that Americas has momentum and they have grown their share of total revenue during the last two years. And the growth has come from existing tier one customers. Americas is the largest market and very important for us. And despite our growth, we see that we have not yet secured sufficient traction with new major customers. And this remains a gap, but also a growth opportunity going forward. And if we start with probability measures and gross margin, gross margin for Q4 was 68.5 and for the full year 67.4. Margins has been negatively impacted by the FX headwinds and to some extent by lower margin of high volume deliveries during the, especially in quarter three. If we continue operating expenses, We see that operating expenses declined 13% year on year in Q4. And we have a clear downward trend in operating expenses as from Q3 onwards. This is mainly a result of the cost reduction program that we launched in Q2. And we now deliver an annual run rate savings of 30 million. Continue with EBITDA excluding one-offs. They amounted to 17.9 million in Q4 and 102.2 for the full year. And EBITDA has been pressured by the lower revenue that we have had during the year. And FX headwinds amplify the decline. The cost reduction program that we initiated have contracted the EBITDA deterioration, but only to some extent. Continuing with operating earnings, the trend is the same as for EBITDA. And operating earnings for the quarter amounted to a negative of 4.4 million with a margin of 4%. And for the full year, 8.8 million with a margin of 2%. Now to our net cash. And the total cash flow for the quarter was a negative of 14 million. Starting with operating activities, the cash flow amounted to a positive 12.1 million. And if we adjust for the final FBG payment, the cash flow from operating activities amounted to 70.1 million. Cash flow from investment activities amounted to a negative of 23.3, driven by capitalization of expenditure development. And cash flow from financing activities amounted to negative of 2.3, driven by interest and lease payments. So if we close the year end with a net cash of 83, and we have supported an unused credit facility of 85, we now have available liquidity of 168. And this ensures that we will have a confident cash for going forward. That was about it for me.

Thank you, Cecilia. So if I then go to just summarizing the year, I think, again, as we said, you know, we're going to focus on the drive and the continuing improvement that I mentioned, you know, following, you know, challenging 2025, you know, already started 2025, and we'll continue to drive that hard throughout the year. And the other years, we had, as we said, finishing the year 2025 was weak, did not meet our ambition. And again, driven by both external and internal factors. So really driving this continued improvement is this cordon around the enhancement of the portfolio, as well as the efficiency on the sales side. Again, positive, you know, cost reduction program, cost control, you know, paid dividends throughout the year. And again, the positive thing was that we got a really positive response with winning the first order for the 400 gig platform in quarter four. As we talked about time synchronization, positive development, customer progressing through the sales funnel. But again, you know, take a little bit sort of time, longer time than we thought. The long-term outlook there remains positive. Short-term revenue is expected to show volatility during the first quarters, as I mentioned. If you look at the long-term financial targets, they remain unchanged for the moment, although achieving that by 2027 will look challenging. And I think to finish off, as I talked about, I think when you look at the position we come from, I think we come from a position where we have a strong foundation as a starting point. We are active and present in two areas. attractive markets. We have a heritage, a long one, to really develop innovative and industry-leading solutions. I think that's a really good place to start. And then we will build from there with the areas of enhancement and improvement that we are driving. So that was all from us. Perfect.

Now to Q&A. Then we go to Q&A. And there is a lot of questions from the audience. So we take them one by one. And I might sneak in a follow-up from time to time. But if we start with the previous guidance was for a strong second half of 2025. So you touched upon it in the presentation. But what was it that went wrong? Why... you couldn't achieve that guidance. And maybe if I sneak in something, you highlight both macro uncertainty and internal execution in the sales process especially. How much is weighing, so to say, how much is the market impacting you and how much can you sort of gain what's in your own hands with the better executions?

Yeah, I think we have, you know, a lot in our hands in my mind. You know, of course, you cannot do anything against FX headwinds and so forth, I think. But I think for me, you know, we have a lot of, you know, control in our own destiny in a way. You know, improving the offerings we have, you know, making them even sharper and so forth against, you know, the limit of customer commitment as well as... as the competitive aspect, plus, you know, how we bring that to market and how we execute in front of the customer. I think we have a lot of those, you know, in our own control. And we've already started now, as I mentioned, in the beginning of January to make some changes on the frontline just to, you know, build a really stronger team and more impactful team. So I like to think we have things in our hands. But, of course, there will also be some element of external factors that will be, you know, impacting the business.

And the dialogue you had with customers in the second half, if you split it in media, has there been delays in orders? And also on the time sink, is it more that the pilot project or the proof of concept process is more complex?

I think if we start on the swing side, I think it's sort of clear that, you know, when you look at the sales process, I think it's been quite hard to anticipate exactly when orders will come. You know, it's a rather complicated process. It's prolonged, as we have outlined. And I think that was really playing into it, where it's hard to predict exact timing. So that's probably one where, you know, nothing has gone away, if you like. It's all been, you know, sort of pushed out on the swing side. If you look at the media side, it's partly a story also of things moved. I think we thought that the end of the year would be then again stronger than it ended up being. And it was some low demand. It was some deals that got booed as well. But on balance, we came out challenging in our quarter, really.

And you guided last year that you would have sync orders by the end of the year. And as you say, you haven't lost anything besides those 15%. Do you think those orders will come then in 2026 instead?

I mean, I think we want to be, to some extent, we want to be a little bit cautious around the guiding. I think what we are seeing now is that there'll be some sort of volatility in terms of the quarters to come, in terms of the timing. But again, as you said, we haven't lost anything and it's all about the timing. But I think we have now respect for the learnings that we've done in terms of the process is taking longer, harder to predict. So we're now taking that more into account. And of course, we'll communicate more you know, to the market when we start to hit those milestones that we have said we would do.

And can you say something about the proof of concept projects you have now? If they materialize into rollouts, what type of ballpark sales are we talking about? For the entire TimeSync division?

Yeah, I think we haven't guided on the total number at this point. I think we will need to... But it's not part of the order book?

No, no, no. Correct. And you mentioned macroeconomic weakness as a cause for weak 2025. Your peer has grown plus 30%. Can you explain the difference here, us as generalists and not understanding what happens in the market? It's easy to come to the conclusion that they are eating your lunch, to quote.

Absolutely. And that's a very fair question. I think maybe I'll take a step back and look at the differences as well. I think we are two different companies to some extent. We are active in this sort of similar market in a way. But I think we come, as I explained, from a situation of building networks and more providing systems and solutions, whereas a peer is more focused on the compression area. And if you break up the market, it's really, you know, consists of transport, where we are active, Appear is not. The orchestration area and the management system, we are active and Appear is not. And then when you look at compressions, we're really where, you know, both we and Appear are present. And then you break that up into two areas. One is sort of the JPEG family of technology and one is the MPEG family of technology for compression operations. The JPEG one is where we are active and our peers as well. And there we sort of, I guess, head on in a way, you know, against them. We don't see sort of meaningful, you know, loss or anything. We hold strong there and we will, you know, have really strong, continue to have a strong offering there. So we cannot say that we are, you know, losing against them there. If you look at the MPEG area, that's where we do not have an offer at the moment. That's part of our portfolio enhancement plan. So that's really where they have an offering, and I think they've been really benefiting from some growing importance of that area among the broadcast industry and have had, as far as we can see and reflect, a very strong proposition in market for that, plus a good and strong execution. So I think that's sort of the... the difference here when you look at the numbers.

And when you say they have strong execution, is there something specific that you see that they have in that process that you don't have that you would like to turn NetInsight into?

I think it comes back to the improvement areas that are highlighted in action areas. I'm sure we can increase the sales efficiency and sales impact, for instance, and we're also working on the portfolio enhancement and adding portfolios that we will address this area as well. So I think over time we will be more competing with and we'll be active across all the areas where they are active.

And sorry to stay on that, but when you want to increase or improve the execution, how do you do that? It's one thing to say it, and then how do you actually improve that? We can talk about culture and things like that, and it takes some time to change that.

Yeah, that's a good question. I think it's not so much necessarily in the core culture. I think it's first of all to make sure that at the frontline we have the best people and really strong, capable people in the frontline. I think that's part of it. I think also how we work to address and attack the market. I think the ways of working there is critical. We're implementing sort of a new way of working. which is not really culture change. It's more an even more impactful ways of working. I think then the other part of this is also how we bring different offerings to market. I think we can do a better job when we bring things to market and be much sharper into our value propositions and how we are unique compared to competitors and also how we set up not our own salespeople only, but remember that we are also selling indirect through sales partners around the world. if we can equip them really well and make sure that they are efficient in front of their customers, including our own sales force, that will be far more impactful. So those are kind of steps we're taking, you know, a much stronger kind of channel program, you know, make sure the sales people that we have are the best we can find, plus that they're really equipped. So these are very practical things I would consider. And I think also it comes back to really position that inside for where we are really strong. Again, we're a system and solution provider more than individual technologies, and this is what the current customers really value and really like with what we have to offer. So I think it's a combination of these things, but I would consider them relatively practical things to implement and drive, and we have already got the plan in motion.

And the next question, do you see your competitors not only appear then, take more of your business? And is that one of the reasons why you show weak numbers?

I think it's always, I mean, it's kind of competitive landscape out there, clearly. and i think you know for us it's important to you know we're active in a couple of different market segments as i as i outlined i think for us the combination is is very strong but we can we do not see necessarily that we have i think uh against some of the other competitors we're standing standing strong of course you gotta always improve you know and that's why we now have this sort of errors and improvements i think you can never stand still You've got to keep driving hard and driving improvements because it's a fair sort of marketplace. But I think that's not necessary. All the other ones is not really coming into play. I think what we have seen is that we've been really good working with our existing customers and partners. and kind of growing them and looking after them, I think where we can do even better is to win large, new, significant customers. I think that's what we can do better, and that's probably true kind of across the globe. I think as Cecilia said, when you look at the Americas, a lot of growth comes from existing large accounts. but less comes from new large accounts. So I think that's, for me, a growth opportunity and an opportunity for us to strengthen. I think that's what we want to do. Clearly, when you have the existing customers, you want to continue to be, first of all, relevant to what you already do, but also be able to extend the portfolio to them. And what we can see, for instance, we are very much on the managed side, which fiber-based solutions and so forth. Now, when customers start to move over to the internet-based and cloud-based area, and we have now been building up a really strong offering in that area, we can start to upsell that to our existing customer base or use that as a vehicle to get into new accounts. So I think when you look at the plan we have in place now, I think we're starting to have more tools in the toolbox to kind of break into new accounts as well as upscale some of the customers we have. Plus, if you add that really strong machinery behind it in order to kind of execute on that, I think that that's a good combination.

Next question relates to components. Have you seen any changes in customer behavior amid the intensifying component shortage now seemingly spreading from memory to other parts of the semiconductor market?

No, not so much. I mean, of course, as we know, as we have communicated, we bought certain components on the FPDI side and so forth for some of that. But we haven't really seen, of course, some of these components are in competition with some of the AI companies and so forth. But we haven't really seen anything that is sort of significantly impacting our outlook.

Back to the SYNC division, the large US telecom operator that in the end of 2023 entered commercial SYNC tests. What happened here and are they still interested or have they decided to go for another solution?

Still interested at this point, but again, the sales cycle and the steps is just taking longer time.

And if I sneak in a question, is there any sort of trigger in the market that you see in terms of sport rights changes or large live events that will happen like we have a big event right now that can sort of trigger the market to recover throughout 2026?

I think typically the cycle of the whole industry is there is some underlying trends, of course, but then as you indicate, Andreas, you have certain event years where you have a big, like now, Winter Games or a big FIFA World Cup game, which gives a little bit of a spike in that year. I think there is nothing really in 2026 that is sort of a big event big event year in that sense. But that doesn't mean there is, you know, will not be an underlying growth because, you know, the event is clearly one. They tend to be kind of happening, you know, occasion by occasion and in regular rhythm, obviously. But, you know, we serve the leagues. We sell tours as well, you know. the big sort of tours that, you know, jump around in tennis and the motorsport area and so forth. So we're active also throughout service providers and customers in that area. So that is sort of recurring every year. I think it's clear to say that when you look at T1, sport is growing in importance. You know, it's becoming more important for the viewers. It's becoming more important, therefore, for consumers. the service providers and the broadcasters that they serve. So I think we're in that sense in a good place. So that will be, I guess, if you look at the cyclical aspect of it. I think it's important to say as well that when you think about the Winter Games, we've been active since 2008, and we continue to be active even now. So I think we're a core part of that business. What happens is that if you look at the revenue flow, a lot of that revenue came last year in quarter four or quarter three, sorry. And because they need to buy the equipment, stage it and deploy it ahead of. So during the actual sort of event, we don't tend to get the revenue in line with when the events are actually happening. You know, we get it before. And I think that's kind of maybe important to kind of understand in a way from a phasing perspective.

Sorry for jumping back and forth both for the audience and you, so shooting on everything. But what is, given these 33 proof-of-concept customers that you have, is there a common sort of threshold why the decision to roll out is not being taken? Is it standardization? Is it... sort of understanding the product or what is it that has been more complex?

I think we haven't yet seen maybe sort of a common theme necessarily. I think it's fair to say, you know, we're still sort of seeing, and it's a new technology, you know, let's remember, you know, it's a new technology and the customers, you know, but I think when you look at the demand, you know, it's typically driven around, as you say, I mean, it might be driven by some regulatory factors, aspect is about building resilience in the 5G network. Obviously, 5G network is becoming really mission critical, and they need to be resilient. So I think that's a risk reduction aspect. And then the third area is really that a lot of the broad... sorry, the operators, you know, they need to make sure that having a resilience is driving their business when they go into a B2B customer scenario. So I think that's more of a business driver. So I think all those business drivers are coming into play. But it's hard to say necessarily, you know, it's a mix depending on country and depending on customer situation as well. So, you know, hard to at this point, you know, see a very clear solution. clear pattern, but I think we will come back to that as the business matures and we see more patterns in the business.

Then a two-fold question. Is M&A still part of the strategy in the business areas and looking at the cash position How do you see that given the volatility in working capital and maybe also M&A opportunities, the weakness that we see in the market right now?

If we start with the cash flow, I think that we still have... We decreased our net cash with approximately 150 million last year, and half of that was from the FPGAs. So we don't have that going forward. Instead, we will have a bit less yearly outflow since we have already acquired the FPGAs. So I think that in cash point... Point of view, we have quite solid cash flow now with 168 of available liquidity. Then going into M&A, I think that that is a question that we will come back to. It's a long-term strategy that we are looking at.

And here is another question on the FPGAs. You used almost half of that available cash to buy these FPGAs. Yeah. It's quite a remarkable amount to pay out on chance. Is there any planned projects for those?

Those FPGAs are for our Nimbra 1000 series. Maybe you can help me explain more if you want, Andreas. But it's our main product that is leading our growth going forward. So that is in managed area, that is our biggest product. So, of course, we need to secure so that we can secure that revenue going forward.

There is a lot of questions on APIR and how you relate to APIR, but I think we answered that question before. So just so you in the audience know that. You say that your financial goals for 2027 is challenging, but maybe not impossible. If you look at 2024 and 2025 especially, it has been quite tough financially. and the long-term target is 23 to 27. How do you see 26 and 27 in that long-term target range? I guess you have to have the growth in order to reach the margin target, but what is required to get to the exceeding 15% organic growth in 26 and 27?

Yeah, I think on the top line side, I think it's clear that the time synchronization areas is a core vehicle and driver into achieving those. I think that's in a way the big dependency, I would say.

And looking at the media side, you have a big installed base. I think the market would have liked to see more that you can upsell more to that base and maybe more software, which could help the gross margin. And I'm the generalist. I look at Excel. So this is... how I think, why has that not happened? And why do you need new customers when you have that quite great asset to work with? Because finding new customers can be quite expensive and take time.

I think we need to do both. But you're right. Upselling to existing customers is a natural starting point, clearly. And I think what we look at now with the whole unmanaged and the internet delivery era and that portfolio that we now start to have in place, that'll be a natural upsell opportunity to that customer base. And some of that is software. It's a combination of software, more software-centric, but also there's some hardware elements in that. So there'll be more along the lines of what you're thinking about probably. But I think then also just working with the current customers on the current core products and working with them and making sure that we work with the customers that are actually growing because obviously If they grow, they will spend money and want to expand. And so I think that's the core as well, to really make sure we are focused on the right existing customers. That equally is important because, you know, the service provider, they sort of compete with each other in the marketplace. We want to make sure we back the winners in a way because they will then drive our growth as well. So I think that's also very important. And these are the things that we have started to put in place last year in the sales organization to really be more focused on those. And I think that is, again, part of the execution recipe in terms of the sales area.

And at the Capital Markets Day, I think your former boss mentioned something that NetInsight would step into the market areas where a peer is quite strong. Was that the JPEG side where you already are, or is it also the MPEG side? So that's the MPEG side, correct. And when will that happen?

So that will happen stepwise over the year. So there is a couple of product plans we have in place. So we start to get active in the MPEG side really towards the second half of the year. And then over time, that will be enhanced. So that's part of the portfolio plan.

And then we have a couple of more minutes. What happened in Asia-Pacific? The sales is down roughly 50%.

So I think in Asia-Pacific, we have taken a bit of a restart of it. So now as of 1st of January, we have a new Asia-Pacific leader in place to kind of restart that area. I think we still, and also about focus, I think when you look at the Asia-Pacific region, It's really a handful of countries which are critical that are the bigger ones, the ones that will have significantly more spans. It's about working into those and having a very kind of active sales engagement model into those. You know, we have a lot of sales partners in Asia-Pacific for many other countries. So, again, back to that, you know, make sure that we have a good channel program that can serve those countries. We don't necessarily lead them, but we can spend most of our effort on this handful of countries that we are going to succeed in. I think, you know, fine-tuning that strategy and then building behind it, I think, will be one step of the plan we now have in place to kind of change the trend around in Asia-Pacific.

And a final question for Cecilia. What happens if you have a big chunk of orders coming from the proof of concepts into the rollout? What happens with working capital when that happens?

It will... Yeah, at that point, it will go down. We have availability in inventory to be able to deliver. And then we need, of course, we have quite close connection to our partners that manufacturing. So we will have a quite short time from delivery to us and directly to the customer. So we can have a quite good flow with that.

Perfect. Thank you very much. Good luck for 2026 and look forward to seeing you here at the time of the Q1 report. Thank you. Thank you for listening.