Oneflow AB (publ)

okay good morning good morning 10 o'clock okay so welcome to this meeting uh where we will walk through um the highlights of the second quarter uh 25 for one flow so my name is anders hamnes i'm the ceo of the company and next to me we have

Nathalie Hjelve, CFO of Manflow.

Thank you. And also please use the Q&A function in Zoom and not the chat. And we'll get back to your questions in the end of this deck. So first, some highlights for the quarter. ARR closed in at 171.2. This is a growth of 19%. year over year. We ended July at 173.2. Net new ARR was down 33% during the quarter and closed in at 6.6 million. And the main reason for that is related to John and expansion that you can see from the retention rates below. Net ended at 97% and gross retention at 87%. ARR per full-time employee up 22%, 936,000. And we had 15% more paying customers end of second quarter compared to last year. getting the cloud close to four and a half thousand paying customers in one flow. So first, two slides to those of you that are new to OneFlow, just to give you some idea on what we are doing. OneFlow is a platform for handling contracts, all your contracts, sales, procurement, HR, legal. And this is an end-to-end solution for all the steps in the process. We work pre-sign. sign, and post sign. You can build templates in one flow. You can collaborate in real time with your participants, making changes, audience trail, suggestions, and so on. So you don't have to jump between Word, Outlook, and so on. You can do it all on one slate. Of course, signing is a part of the application as well, a small part. And post-sign, where you can manage your contracts. You can be notified on key events along the timeline. You can summarize, filter. We have... a set of really powerful AI features where you can analyze your contracts, you can get advice on improvements for your contracts, you can scan through all your contracts and find contracts that have some kind of deviation from whatever. So a lot of really powerful AI features, both in the pre-sign and in the post-sign stage. And obviously, contracts is a part of every company's workflows. So integrations are a very, very key area for us. We have more than 20 developers in Sri Lanka working full time only on building integrations and maintaining our API. So this is one of our cornerstones in the company. So we have Tons of really good integrations to CRM, HTS, HR, and API middleware, a lot of different tools. Time is the most precious thing we have in life. And if you can save time, that has a lot of value. And this is what OneFlow is about. Contract is the part of every department, every company across the globe. That's why companies exist, to buy and to sell and to hire people and so on. It's all about contracts. So if you can save time, that has a huge impact for companies. That's what we do in pre-sign and post-sign. And if you go for one of the more simpler e-sign solutions out there, there are tons of those vendors. You're only going to save... the purple bar on top of the sign stage. So you can see that it's a very, very small part of the potential. The magic happens in pre-sign and post-sign. E-sign is a commodity. That's not what we do. We have it, it's a wheel on the car, but that's not where we put the focus. Then to some product highlights for the quarter. We added what we call signature fields on PDF. Those of you that know OneFlow know that we are not a big fan of PDF. But still, a lot of companies are trapped in all ways of working. So we have to support this. So we are definitely on top of the line when it comes to PDF as well, even though that is not the core in what we're doing. new content tab. This is a very powerful way for people to work with templates to drag in whatever data field section you need. So this is helping to increase the happiness and the and the ease of use in one flow. Before we only had a marketplace for admins. Now we have it for all users. So you can see all the powerful stuff you can activate to do even more contract magic in in one flow. We have a lot of AI ideas. We have a lot of QAS. Actually, we had a discussion yesterday if we had the most in the market. We're not sure, but definitely in the top league there. And if companies should need something that we don't have, it takes a very short time for us to activate it. So we have a really, really powerful suite of advanced and qualified signature capabilities. uh we support today 12 languages in the application we have made several improvements to how the language behaves through the application we have launched new integrations with a hard pace hr and sweet time to big hr tools and we continue to make improvements to hubspot and super office and power automate main events during the quarter. After the quarter, during the summer, we have many developers working during the summer as well. We continue to work on HubSpot and those of you that have followed OneFlow for some time have seen that HubSpot goes again and again and again and again. A lot of consulting firms working with helping companies to integrate HubSpot have told us that we have by far the best integration in the market. We already knew that, but it's always fun to hear it from external companies as well. We are definitely a big, big step ahead of competition when it comes to HubSpot. And even for Salesforce Dynamics, we are definitely in the top three league globally when it comes to powerful integrations. This is a key area for us. New integration with Lime. We have had a Lime integration for years, but we decided to just remake it totally. And also we launched with an HR tool called Talent Recruiting. I think it's Benelux based in the Netherlands, quite big there. uh notes to documents before you only had the possibility to make comments between participants but now you can even make notes in in the documents as well we have launched a lot of new and really powerful capabilities when it comes to ai review more concepts um so you can do you can you can just decide how you want us to scan through your contracts and what kind of information data you want us to look for in a much, much more powerful way than you could during the spring of this year. And since OneFlow is a contract lifecycle management tool, we have made a lot of really powerful add-ons to our folders and how you can archive and manage your contracts. This is just some of the big highlights. We also launched or opened a new office in the North America. The office is up and running and we are starting selling in the beginning of September. First day one, only one guy, but we have a pipe of more people. So we expect this team to be somewhat bigger relatively soon. Location will be in Chicago. And the person that is going to be responsible for this company is not just somebody. This is the person that built up OneFlo North America for Pagero, another Swedish company that was bought and unlisted last year. So he's been living in Sweden, sorry, in the US for a long time. He's actually from Gothenburg in Sweden, but he has done this journey before. And also I could add that this is not something we do as an experiment. We have actually been selling in the US for quite some time. Around 40% of all business we close in the UK has been from the US. And we also have partners in the US. So we have a lot of data. We have a lot of customers. So we know what we are going into. So this is going to be, we're super excited. It's going to be really, really fun to start playing in that little bit crazy land, I would say. Yeah, you kind of like it and hate it. Yeah, we're going to get potential. So... Let's dive into some more numbers. Net new ARR closed in at 6.6 million Q2 for the first half of the year, 12.2, which is down 45%. We had some headwind from currency, 2.6 to be accurate. So if you adjust for that, we were down 36% year over year, first half. Around 40% of the ARR is foreign currency. New ARR was actually very strong for the quarter. We had the best second quarter ever when it comes to new ARR. And we also had the second best quarter ever across all quarters when it comes to new ARR. So what pulls the numbers down is churn and expansion, which has been the case for roughly a year now, I would say. So the market is sluggish. It's not the most fun market at the moment. And it's been like that for some time. Do we see some sign of improvements? I would love to say yes, but actually I would say no. But not the other way either. It's still quite tough out there. And we can also add that we have also signed contracts for 8.1 million that will be recognized after the quarter. So what we report here is the live ARR. So still there are 8.1 million in deals that will fall into the following quarters, not yet reported. ARR 171 million up 19%. If we adjust for the currency, the growth would have been 21% and not 19%. But still, the trend has been declining, which is something that most software companies experience at the moment. It is a different climate. It is tough out there. And we have communicated two goals to the market. That is to have an ARR growth of more than 30% year over year and to become profitable with the current funds. We also said to the market sometime now that we are going to prioritize become profitable. Obviously we have to do that. So we will not be able to reach our growth market during that phase. So that is still the case. We focus on becoming profitable. And after that, we will work on getting the growth up again at 30% plus, which is our mid to long term goal. How to get there? Obviously, there are different factors there. We need to see some kind of underlying market improvements. At some point that's going to happen. When? I don't know. Obviously, we do have a lot of stuff in the product that we are working on that we need. It's going to have an impact on our hit rate and our customer happiness. So we have a really good picture of what we need to do in the product, obviously, to make customers more happy and to increase the hit rate. And it's not like We're going to continue to do what we have done in the past and expect to see a different result when it comes to go to market and how software companies operate. That has changed a lot over the last few years. I would say if you go back five, 10 years, how ways of working were quite the same year after year. But now for the past few years, things are changing really, really fast. And you have to adopt and change your whole go-to-market motion to adjust to this more challenging market. But this is something that we obviously, not only we, I guess all software companies are having kind of the same situation. We don't call it a problem. It's more like a challenge. We think that's also what makes this really fun to work in software because it is hard. It is tricky. This is like playing chess. There are a lot of combinations, but we have a really good idea on how to get through the storm, how to get ahead of the 30% mark again. So we are very excited to see how this is going to play out. Net New Year R, sorry, that was the wrong button. This is another key metric we love to follow, talk about. ARR per full-time employee up 22% year over year, 936,000 SEC. Why is this so important? Obviously, because we are an ARR company. 99% of our business is recurring. 99% is recurring. That is beautiful. Gross margin is 93%. That is also beautiful. It's super high gross margin. So we have basically one cost. It's salaries, salaries, and salaries. So that's why this is a key KPI to follow. The beauty of SaaS is that the revenue is recurring. But the challenge with us is that you have to make the investment upfront to have something to sell. And that's why this curve has been increasing from quite low numbers. After the funding we did when we IPO the company, we needed to really, really step up in the tech teams and so on to get the head of competition and to maintain the strong position we have with the product today. because it's all about the products it's all about having a really really good product and we do so um but now we can steer um gradually over to to becoming profitable we also did some big changes in the first half of the year when it comes to head counts So we have reduced head counts during the first half of the year. So this line, this curve is not going to follow the same trend as you see on this picture. It's going to be a really big bump in Q3 and Q4. And we look forward to show you that in a few months time. Retention rates, net retention, 97% and 87% for gross. This is honestly below our internal expectations. We know the market is sluggish, but this is not the way we want to see it. Gross retention is about churn or includes churn and downgrades. And if you add expansion error, then you get the net retention. So downgrades, obviously, are included in the gross retention. I know that not all companies do that, but we think that's the way it should be. First half of the year, we had a churn, including downgrades, obviously, of 13.1 million. 13.1 million. And that is up from 6.2 million. First half last year is a really, really big bump in churn. Started to hit us in Q3 last year. And if you look at the mix between downgrades and churn, it's around 50-50. Actually, we had slightly more downgrades than churn in the second quarter, which is, of course, better because Downgrades mean that the customer is still, in most cases, happy with the product, and it's going to stay with you in the product, but it's more that they are downscaling headcount. So at some point in time, when the market comes back and people, companies start to hire again, we believe that this is going to hit the net retention and pull it back up where we'd like it to be. So drivers for increasing net retention, obviously the market fundamentals is going to be an important factor. We are, as I said, working on new features, new product enhancements to meet our customers' needs, to make customers more happy and to increase the hit rates. And we are changing how we work, both in the go-to-market motion, but even in the product. So it's a lot of really, really, really big and exciting moments that is going on in the company at the time, which is super, super interesting and inspiring because it's really challenging and it's hard, but we have a really good plan on how to get there, get where we want. Paying customers increased 15% year over year. We ended at 4,400. I guess it's quite 4,500 quite soon. It's a lot of customers, a lot of customers. The ACV or average customer value is around 39%, sorry, 39,000 SEK. And this is up 3% since the last year, we are constantly, as I said, adding more features, we are also we opened up the marketplace. Now for all users to, to showcase all the stuff that you can add on and buy more in one flow. So I'm also working on renegotiation of contracts and so on when customers have had discounts. So it's a lot of different movements that we are doing to increase the average customer value. And we expect, obviously, this to continue to grow going forward. And with that, maybe I should leave the stage to you.