Teneo AI AB (publ)

Okay, let's go ahead and kick off. Fredrik, can you just do a thumbs up if you hear me well and see me well so I know that it's working?

Working perfect.

Thank you very much. So good morning all and welcome to this first presentation of a company called Teneo AI. It's actually our first quarterly report where we are now Teneo AI, a fresh start that we did during the summer and very well executed by the team. It's now all done. and everywhere we are, online presence, LinkedIn, customer email, et cetera, we are teneo.ai as a company. Our product is, of course, Teneo. So this is a great start for us to be able to get more recognition, better rankings in search engines, et cetera. Very happy with that. Very happy with the team execution on that. Also very happy with this quarter. Another stunning, exceptional quarter. delivered by the team at teneo.ai. It's going to be Per and Fredrik talking today. Fredrik, of course, our CFO, and I am the CEO of the ticker Teneo. Teneo, the ticker, is Sweden's only publicly traded AI company. So some of the highlights, except for that, is that we also had a record quarter, 90% revenue growth year over year. That is a astounding what the product and the team is achieving here. We have three new customers so far this year. We're also closing on new partners to cover a larger part of our TAM. We're just about done with that. I'll be releasing press releases on this in the next few weeks, but that is partners to cover a larger part of the time in the US. We already have partners in Europe doing that, but we needed to do the same in the US. So very happy with that too. that we're moving on the right cylinders there. But this last one is really, really tremendous. So the growth in our traffic, we have now 700 million API calls as an annualized value into the platform. And I think that's a Swedish record. I just can't imagine that there's any software as a service platform out there that has anything close to this type of volume. That means that we're going to be doing about 100 million phone calls this year. in the platform. I mean, it's mind boggling and start to think about the amount of people that would have been engaged in those 100 million phone calls across our customer base. It is truly astounding what's been accomplished with this platform and how it scales and how it manages that traffic. Extremely, extremely happy with that. You see some of our logos on the right side that we're very proud of. Of course, Valcon is the one that came in during this quarter. Slightly different tack on those. It's a partner, but they're also gonna be a consolidation partner, meaning they're gonna use one Teneo to deliver to several customers. And I'll come back to why that's important. This one you've seen before, it's our SaaS journey that started in 2021. I'm not gonna bore you with all the different boxes here, but essentially where we are right now is We've sold to large customers during 21, 22. We understand what they're using the platform for. We understand our unique selling points, our unique capabilities, and we build stories around that. We're taking that to market primarily in the US and UK because that's where we find that our strengths come to the best, to the forefront. And therefore we also hired quite a senior team in the US and also in the UK to attack these really large accounts that we're talking about now, the types of, let's take an example, American Airlines, these types of accounts that have huge contact centers in the US and the UK. So the road to a billion, let's talk a bit about how this works and why that's very important. We aim to get to a billion API calls, which sounded a bit outrageous when we put the goal forward, at the time we had 24 billion 24 million API calls on an analyzed basis and it sounded a bit outrageous and of course it requires a lot of phone calls to come into the platform why is that important so we have two ways we make money and yes I see it's USD and Euro on the second row there so different on the two but it is because we charge customers either in Euro or US dollars depending on where they are we also do great British pounds in in the UK. So the number is the same, the currency changes. So we have two sources of revenue. We have five sources of revenue, but 99% of our revenue comes from these two sources. One is the subscription, what you need to start developing your platform. This is Tenio Studio. Here you get a subscription for five people to work and build solutions on top of the platform. We now are launching also a new one here, which is going to be more expensive. for the really large customers that need more than five seats. But €10,000 is our standard pricing for a platform with five seats. Here, you can start building your use cases. So typically the first 60 days, you're probably transitioning an old keypad IVR like a nuance. You're now transitioning that into us. And then you start using the platform for calls. That's when you start generating API calls. API calls are just a few six to seven API calls make up a phone call. And that's just our measure, the way that we measure, the way most cloud companies measure consumption is API calls. And we charge a small amount per API call. But of course, when it gets large numbers, that amount gets high. The interesting thing with the API calls is that that's where we make big margins. That's where the real big margins come. So on the studio, that is more or less an investment for the first year. The payback starts on the studio license only after year two. However, the API calls, they start making money for us from day one. And the customers that are above a million API calls per month, that's where the 96 plus gross margin kicks in, which is helping our gross margin to of course be improving quarter after quarter as well. So that's why a billion is important. And this is what it looks like for our total customer base. This includes our legacy customers, which are, I won't dive too much into that, but we have a few customers who are still on legacy pricing models, legacy delivery models. This chart actually goes all the way to September. The September fell away when I cut it into PowerPoint, I see. So the last date there is September. And the number in September is 700 million API calls if you annualize it. So September times 12. And we started out in 2021. with less than 200 million. Gets even more interesting when you look at the platform that we launched in 2021, which is the only platform we're selling since the beginning of 2021. It's the SaaS platform, our software as a service platform. That's the one that also makes the most margin for us. And if you look at this, we've actually done, looking 36 months back, we've done 59 times the API call volume. So in September here, you can see we're above 500 million and slightly above 500 million. And that of course keeps growing. You see the plateaus of this. That's what customers go from. Let's say that they're using that they're developing a new country. They're developing a new language or they're developing a new channel. Then nothing happens. Then they turn it on and then it peaks again. So that's why we get a few peaks along the way. But in general, the trend is of course very positive up. Like I said, 59 times. This is what we're taking to market. So what we found also in the first few months of this year is that our unique selling points really, really resonate with the really largest customers and they take a bit longer to sell to. There are a bit more stakeholders in these customers, but this is where our sweet spot is. What we launched is a program we call accelerate. This is internal. I'm showing this to you as investors. This is not how we show it to our customers. since it might be controversial, but Accelerate means agentless contact center. And of course, Accelerate is just to make it into a nice name internally as well. And what it is, is we're aiming to be the company that within the next three years, and I'll tell you a bit more about this quarter, why it might be even shorter than that, but within the next three years, we want to be the first agentless contact center in a top 500 enterprise. So, agentless contact center here means that we no longer need level one support or tier one support or support level one agents these are the people that take the first phone call and if you have a more complex question they'll send you off to level two or potentially even level three these are the people that will answer questions like what's my account statement where's that bill why didn't I pay the bill did I pay the bill the more simple stuff that most phone calls are about. We see a way now to take that out completely. So we see a way using LLMs ML and our TLML, which is our own proprietary product in Teneo. We see a way to eliminate that whole layer in contact centers. So if you look at a large contact center, let's say a few of those really top customers we're addressing, we're talking tens of thousands of people in every customer. So incredibly powerful thing that we see we can achieve here. These things need to be sold to customers that are sophisticated buyers. Sophisticated buyers in that they know that they can't just use open AI straight away. They understand that the hallucinations come with LLMs. They understand that everything needs to be integrated. You need to have ISO, you need to have SOC, you need to have compliance, you need to have encryption. You need to have an enterprise-grade application managing all of this. They also understand the pitfalls of modern AI, which are it's very quick to do something quick and dirty and get 80% right. It's very difficult to do the last 20%. And they need that platform that's going to help them mitigate the risks, both compliance risks, security risks, risks of misdeveloping or risk of miscommunicating to customers, while still harnessing the powers of and all the new things coming out of AI today. So this is our vision. We're going to be the ones that provide the first agent as contact center in the next three years, but I'll share a bit more of what happened during Q3, which might mean that this is even going to move even faster than that. Here's how we go to market. So this is our focus since Tenio AI was launched. We have 30 strategic accounts at the top of the pyramid, 200 accounts in the middle, and then our total addressable market, which are where we have 500 agents roughly in customers. The target 200, the 200 is five to 10,000 agents. And the 30 strategic is where we have 10,000 or more agents. So could be, I think the largest we've seen so far is seven, 8,000 agents. and that's that's of course in the strategic random the strategic accounts we go after with a direct focus so those that's our account managers the three new people we hired here during the summer and very very senior people that go after these people with with what we say in the us rolodexes but also of course very senior knowledge of our market and we also do ABM campaigns in here that means account based marketing meaning that when the people we need to talk to in these customers, which is 20 to 50 people, depending on sorts of different personas, but 20 to 50 people in these accounts. We have them targeted with ads, with the personalized letters, with Google ads, with Google generic links, et cetera. We also, in the US, we have a tool which helps us to see that If we send a physical letter, for example, to somebody, and they then go to our website, we'll actually be able to see that they've done that. That's not allowed in Europe, but a great tool in the US to see that our campaigns are also working. And they are, so we're very happy with the focus on those 30. The account managers, the account directors then, they also nurse another 200 accounts. These are primarily, they do LinkedIn outreaches, email outreaches, mostly automated. but also some personal outreaches in that space. And here we have lots of marketing campaigns happening. We're also doing lead management together with partners. So we're mapping these out with partners. This is to make sure that if one of those 200 are gonna replace their IVR, like their newest IVR now, or they need to go conversational or they need to cut costs, then we will be able to push them up into the strategic layer and start working them with the full power of the organization. Whole website has been rebuilt to support the buyer journey in these lower parts of the pyramid, the blue and the yellow. Of course, that also helps in the top part, but the blue and the yellow primarily. So if you look at our website now, it's very much tailored to people that find, I need to do something. They go out and search, they go to Google. We're top of most Google searches and they come into our website. That is generating now about 30% of the pipeline in the top two parts of the pyramid. Bottom part of the pyramid, that's where we go after with channels primarily, that's why we need three new ones in the US, three instrumental ones in the US in Q4, very close to that, I'll announce that soon. And then we have marketing campaigns running here, and then targeted campaigns like, for example, the Nuance replacement that's coming out now, Nuance, which is a company that was acquired by Microsoft. They have a system that picks up the phone with voice or with keypad. The keypad version of that is in 90% of our target accounts. Nuance has been communicated two weeks ago that it's end of life in the mid summer next year, which means that companies need to find a replacement. And we're obviously going to be there for them and help them replace this. We've done a few of those replacements already. and it takes us about 60 days to help a customer do that, to help a customer and a partner do that. We have the methods for it. So that's how we go to market. We're addressing the full market. We're very highly focused on the top since those are the ones that can generate the most API calls. Those are the ones that are going to get us the next billion API calls. So what happened here during the summer, which I touched a bit on during the presentation, now I really want to step into, One of our launch customers, they use the latest functions that we launched during Q2, which is called Copilot. It is where we have access to OpenAI or other LLMs, but most use OpenAI. Use OpenAI to make the process, but also translate processes. So if you think of a customer journey, it can now translate that customer journey from welcome, why are you calling us today, to customer being happy on the other side. If you have that in, let's say, English, You can now translate that into other languages. One of our launch customers tried that and they found it good enough to in 48 hours deploy 42 languages and 89 countries. So in over a weekend, they expanded from English only into all these countries and geographies. That means that all their channels, the plain old telephony, IPT, so IP telephony, WhatsApp channels, their chat, etc. All those channels, both for support and for new sales, were now in other languages and in other countries. Now we have something which is, I'm going to be a bit technical, but I'd still want to mention this. One of our core competencies is we do deterministic pre and post processing. So we decide what the customer said deterministically, not statistically, probabilistically, which is what ML and and LLMs do, so machine learning and large language models, we do it deterministically. We first use LLMs and MLs, but then we have our own patented language, which we parse with, and that lifts the accuracy so we know what the customer is talking about. And then we also know what the answer is going to be to the customer. So instead of having, well, let's stick some glue on the cheese on the pizza, we're going to tell you exactly what to do in the right language. So once you have that set up in English, You now convert that to other languages. It just works. Incredibly powerful. It shows the performance. So we scale. It shows that we have that deterministic working since the customer's satisfaction in this solution is better, but also shows that any customer that has a large home base and needs to manage 24 seven in other countries, this is a perfect choice. So with that, I'm going to go into very quickly exactly the economics of this for a customer. And I'm going to show you the last thing that happened here during this quarter as well. So it was a language piece, the country geographic piece, but then the other one. So we have a system which picks up the phone and lets customers build a system that picks up the phone, understands why somebody is calling, with 98, 99% accuracy, far better than the human would. And on top of that, now, this quarter, we saw two customers go from 40%, which was best before, to 60% of cases on the phone automatically resolved, taking us even closer to that agent as contact center vision. Those calls cost about 40 cents. A call that goes through and then gets routed to a human costs about $6. So if you move more from the right side to the left side, you're obviously making big money if you have millions of calls per month, which these large customers do. So the 200, so the blue part of the pyramid and up, these are really, really big cost cutting numbers as well. So that's something that we're taking to market selectively. Cost cutting is not something you want to bring out everywhere, but definitely very, very important to customers. We're talking, millions potentially per month that you could be saving in cost here. Most of the time, the level also support level one is outsourced in the USA, UK. Another reason to do this in the USA, UK, seldomly is that employees of the customer, it's employees of business process providers, business process service providers, outsourcers. Also you get happier customers because you resolve something right away. You call in, the system understands you, there's no queue, and the reason you're called, you get that result. The real reason behind this is we've done real tests. We use this extensively in our selling. We've done real tests with real data together with a real testing company, Ciara. We have much higher accuracy than anybody else. So if anybody doubts and says, well, obviously there's no doubt that Google is better than everybody else, Well, as you can see here, not in this particular case. So if you were to use Dialogflow today, you would have problems understanding the customer and problem delivering the right answer at the end, which is why those solutions do not scale to millions of calls. So again, just summarizing my part of this presentation before we go to Fredrik's more deep dive into the numbers. It is Sweden's only publicly traded AI company, Tenneo. So if you want to bet on AI, this is the bet. record quarter, 90% revenue growth year over year. Really, really proud of the team. Great work here. Three new customers so far this year. Existing customers growing like crazy. And we're also closing in the partners to cover a larger portion of and build more pipe in the US. And tremendous growth. I mean, 700 million API calls. Again, I'm going to start asking around in my community and LinkedIn and so forth. Does anybody have this type of Does anybody have a SaaS application with this type of traffic today? I seriously doubt it, but it is a tremendous feat of performance optimization by the product team. So with that, I'm giving it over to Mr. Törgen.