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Yubico AB

Q42023

2/16/2024

speaker
Mattias
CEO

Welcome to the Q4 presentation for Ubico. We'll dive straight into it. And just as a reminder, us presenting here today is me, Mattias, and my colleague, Camilla Ubico, Chief Financial Officer. I will start by talking about some background as a reminder about Ubico. For those of you who are new to the company, we'll talk a little about the significant events during the quarter and the year.

speaker
Camilla Ubico
Chief Financial Officer

And then Camilla will go through some details about the quarterly report. I'll wrap it up for the presentation session. And then we'll be happy to take questions from the audience. So without further ado, just a high-level link. As we met last, we updated some of these numbers. We've reached a position where we have more than 4,500 business customers in the million of consumers as customers and more than 30% of the Fortune 500 companies are already customers of ours to varying degree. So there's lots of potential within the already existing customers.

speaker
Mattias
CEO

Since start, we've sold and deployed about 28 million Yubikeys. We're a hardware-based company, and we're very proud of our product. And what's most important about our product is, of course, that for those customers that have implemented our product with the modern protocols, they've experienced exactly zero account takeovers. which is a bold statement, but we intend to keep it that way. And despite that we're a hardware company, software is really at the core of our offering and that has enabled us to maintain healthy gross margins. Looking over 2023, we had an average gross margin of about 86%. So that's us in a nutshell. And I mentioned that the thing that we're most proud of course, is the problem that our product, the YubiKey, and the important problem that it solves.

speaker
Camilla Ubico
Chief Financial Officer

Protecting YubiKey accounts take over. So it's efficient, resistant, and multi-factor authentication solution. The second thing that we're very proud of is our customers. We've worked closely with several of the leading brands historically in the high-tech sector, as you can see at the start of this slide, that I hope is easy to your screens. But since then, we've expanded into a very wide set of customers, financial services, public sector, manufacturing, and also global footprints, starting out in the U.S. but growing very quickly now in Europe and parts of Asia. One of our unique competitive advantages is that we have a very versatile key. So we can use the key to access and log into a wide range of systems. So today we cover most of the applications used within an enterprise. I would say all the other applications used within an enterprise that YubiKey uses. And YubiKey has a Swiss Army knife to fit into all the different locks and different systems, operating systems, access points, and software that you want to ensure that you have secure logging solutions. So that's been an important journey over the past 10 years with us. Looking then a little closer at 23, some of this will be kind of repeating what we said at earlier calls. But of course, there's some news related to the fourth quarter. And there's been several changes during this year. We have important updates to the management in February.

speaker
Mattias
CEO

Since the foundation of the company stepped down and I was appointed CEO in February. Similarly in June, This year, sorry, last year in 23, Ram Sriram, who had been Ubico's chairman for, I think, more than seven years, was succeeded by Patrik Tegerskjöld. It should be noted, though, that both Stina and Patrik remain very active in the company. Stina as an employee and a board member, and Ram as a board member and an investor in the company. We then went public through the merger with SK Buda and the SPAC, and our first day of trading was 20th of September in 23. We maintain long-term shareholders. The biggest shareholder today is Bure. Second biggest is AMF. Then it's the founders, Dina and Jacob Ehrensvad, and Andreessen Horvitz, one of the most prestigious venture capitalists for main shareholders in Ubico.

speaker
Camilla Ubico
Chief Financial Officer

And we've appointed a new board, and it's, I feel, a very competent mix of the boards that was that were the board members that were previously with Yuriko and those that were with ASQ before. So I think we have a very good of industry expertise that holds to knowledge. Board of the Public Company. With that, I'm going to hand it over to you, Connie. Everybody. So I will just summarize the quarterly numbers as well. And we start here with the main KPIs in the space of EBIT. You can see that we have good growth in the fourth quarter of the 19.5%. In local currencies, about 17.8%. So from 469 million to 500 million. We also see that the subscription share of net sales that we are measuring is also stepwise increasing from 11.5% in Q4 last year to 14% this year. And looking at the full year, we are in 13.8% of the net sales represented by subscriptions. compared to 9% in 2022. Looking at the gross profit, we see a 20% growth from 3,888,460 and it's slightly lower gross margin Q4 versus the previous quarters 2023.

speaker
Connie
Head of Financial Reporting

But the gross margin that can vary between the quarters and we see a quite stable gross margin around 85 percent. So the full year gross margin ended on 85.6, so also slightly better than last year. Looking at ARR, we also see that our annual recurring revenue portfolio, the subscription portfolio is also increasing. It was 286.5 at the end of that year. that is a growth of 40 versus last year then we have the profit which we are measuring or communicating adjusted ebit and we see that we are growing the profit with 39 31 percent sorry up to 88 million and we see a

speaker
Camilla Ubico
Chief Financial Officer

the gross margin improvement from 14.4 to 15.8%. And the items we are adjusting for is, as you know, related to the merger. between ACQ and UBQ, which was executed in September, when we went live on the stock listing as well. And there was a small effect in the fourth quarter, a positive effect of net 6.7 million. This is a correction of the merger balances due to reduced tax costs where we could reassess the tax. before the merger and also some additional costs of 4 million. So looking at our bookings, We can see that this quarter was a really record quarter of 684 million. That was a growth of 83% versus Q4 last year. The full year growth is 16% up to €1,840,000,000. Q4 was a strong growth. primarily in multiple industries and across all the geographies, but especially in American high-tech and financial services. And also, it's spread of Canadian and European customers. Nice that Canada is also starting to move. Looking at the subscription bookings, they amounted to 129 million this quarter compared to 64 million last year. That corresponds to 18.9.

speaker
Connie
Head of Financial Reporting

percent of the bookings was a higher share than last year. To note here is that this quarter a large part of the bookings is renewal of contracts as we have now ended the first three-year cycle where we had a contract signed in Q4 2020 when we received a bigger first subscription contracts. So, going forward to net sales and annual recurring revenue. Looking at the net sales, we see a nice growth continued, although below our long-term target as 2022, as you remember, was a very high growth. We had in local currencies

speaker
Camilla Ubico
Chief Financial Officer

slightly above 60% growth 2022. So that was a tough comparison, of course. The full year growth was 18.1%, 12.5% in local currency list. If you remember, first half here we had a big impact of the currency excess compared to the second half. So now H2 is only a smaller difference between growth and local currencies. We see also that in the ash shows close to 50% growth. APJ almost doubled the growth, while the U.S. had a set of comparisons due to this exceptional large order in Q2 last year. But anyway, had a growth of 5%. So it's nice to see that the APGA is really giving growth effects as well here now, coming up. On the ARR side, as said, we had a year-over-year growth of 40%, adding 31.2 million in net new ARR. we have a subscription is not affecting ARR as it's And then we . And then we .

speaker
Connie
Head of Financial Reporting

Adjusted EBIT was 88.3 million and corresponds to an adjusted EBIT margin of 15.8%. And I said, what about the gross margin? But we see a stable margin over time on around 85%. This quarter, we see a higher commission cost due to strong bookings, of course, but also that we have effects late at the year, we have acceleration effects in the commission terms that also drives the cost a bit here. Unrealized currency effect was minus 14.3 million, slightly less than the Q4 last year. For the full year, we can see that unrealized currency effect was close to zero, actually. And the full year effects of these items comparing

speaker
Camilla Ubico
Chief Financial Officer

effect in comparability then ends up in a negative effect of 87.2 million. And looking at the cash flow and our really strong. We have an operating cash flow of minus 17.7 million in the quarter. And the net change in working capital was minus 99.9 million. And we are continuing the build-up of the inventory, as we have talked about, and that is in line with the strategy and also to meet the future demand, where we see a strong demand from customers and new customers. And so we are prepared to meet that expected growth as well. So we have now 90.4 million added in the Q4. And for the full year, we have increased the inventory 335 million. Full year operating cash flow is 97.6 million. And if we adjust for the investments we are doing in meeting the future growth, we would see a positive operating cash flow of 97 million, actually. But, of course, we need to be prepared for customers' demand. Cash equivalent at the end of the period was 547 million, and the is also related to the merger with ACQ, which added some cash here. And the net cash at the end of the period is 508 million compared to 231 million.

speaker
Connie
Head of Financial Reporting

We still have a small loan, external loan there. which is not very much. And yes, that was the numbers.

speaker
Mattias
CEO

Thanks, Camilla. I'll take it from here real short. I don't think it's lost on anyone that there's been a lot of attention being brought to cybercrime and cybersecurity lately. In the Swedish market, there have been some notable hacks and we've had some visibility in the press And it's an interesting pattern because these hacks have been very visible in the U.S. for a long time. And we've had a very high stance in U.S. media. And this was further reinforced during January. So after the end of the reporting period, when we saw articles, independent articles in both the New York Times and Wall Street Journal recommending consumers on

speaker
Camilla Ubico
Chief Financial Officer

how they should best protect their accounts and how companies should best protect their assets. And they're both recommending Yubiki, long story short, which is, of course, stunning. thing which reinforces our brand and helps us in customer conversations and increases the attention for the company. So that's very satisfying to see that Even during these times of threats, there are working solutions that significantly increase your security posture. One of the most efficient ways increases security is to implement unities, either in your personal use or for your organization. I feel that this is a good segue over to why we are positioned for continued growth. I should mention that as was communicated yesterday evening, we've updated our Long-term targets or how we set the long-term targets moving from order bookings to revenue. There are two reasons for that. One is that we feel that it's important to use measurement which is very well defined revenue is very well defined we feel that that's perhaps easier for people to relate to that water bookings we debated before we introduced order bookings at the target that would better capture the mix between subscription and perpetual sales. But we've come now to the conclusion that it's better to keep something which is easily recognizable and well-defined.

speaker
Mattias
CEO

And the other reason for wanting to update this is because we want to make sure that there is, when it comes to the order booking, some lumpiness. You see swing quarters. We had an extreme one in Q2 2022. We had a very strong quarter now where we see a lot of things aligning up. So we got to 83%. But if you look at the revenue, it's a more consistent growth. I think that's a good measurement of how the company develops long term. But the underlying trend is there. Cybersecurity has never been more important, and we are recognized as a market leader in a rapidly growing segment. And the reason for that segment growing fast is because this is one of the most efficient and cost-efficient ways to improve your security as an organization, ensuring that you have tissue-resistant multi-factor authentication to ensure that your logins aren't compromised.

speaker
Camilla Ubico
Chief Financial Officer

Our business continues to perform well. Camilla mentioned that we've seen an inventory build up. That's part of the strategy to ensure that we can deliver bigger orders more quickly. I feel that we're at a point now where we have sufficient inventory levels. So that's one part of where we made a bet to ensure that we could meet growth. I think we continue to perform according to the plan. We have a broad customer base going into 2024, and we have the healthy sales pipeline. Long-term, it will be important for the regulators to set up policies that ensure that the society and critical infrastructure is protected. We are working across the EU and in the US with policies makers and legislators to ensure that while the easy way to address the big cybersecurity threat, i.e., compromised logins, is addressed properly. As I mentioned at the start of the presentation, we find that when you do sell a key, it needs to fit into all the logs, and it needs to be easy to use our keys. We're constantly working with tech partners, as we've mentioned in previous to ensure that it gets easier and more intuitive to adopt e-bookings. growth. I think with that, Camilla and I are finished with presentations, and we'd be happy to take questions. I can see that there are three live

speaker
Moderator
Conference Moderator

questions in line I'll end here and then we'll wrap up after the questions first live questions and I think we have a few written questions too if you wish to ask a question please dial pound key 5 on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key 6 on your telephone keypad. The next question comes from Joakim Gunnell from DNB Markets. Please go ahead.

speaker
Joakim Gunnell
Analyst, DNB Markets

Thank you for that Mattias and Camilla. So can you just help us here given the fact that I would assume a lot of your commercial focus in 2023 has been consumed by the whole IPO, et cetera.

speaker
Camilla Ubico
Chief Financial Officer

So despite this, and the very strong, obviously, bookings momentum you see here in Q4, as you can focus more on the commercial aspects How do you expect this to basically translate into what you envision for 2024? I'll start. Thanks. to what came for the question and I was going to say it was a little bit of a drive to be an adjunct because we're in 2023 and as I I think I mentioned on the Q3 presentation that there were a few orders that, including the big one that we got early in Q4, that I would have hoped that we would have gotten in Q3. And maybe we could have done so if we had our eyes on the ball more closely then. I think both Camille and I are a little relieved that we're through the ongoing public stage. And now we can operate with a full focus on the ongoing business. And I have to say, the underlying trend is there but this is by no means self-playing piano so of course we need to develop how we work we need to further enhance our go-to market And I think we have the people and the process in place to uplift the country. So I'm really excited. I don't know if you want to add to that. No, I think you have covered it. Yeah. Okay. You basically made some nuanced shifts to your long-term target scale here. To what extent are they painting the picture for what you see for 2024 as well?

speaker
Mattias
CEO

We only issue long-term targets. Last year, we felt that it was important, given the significant growth we saw in 22, where I think we mentioned on some call that we essentially saw two years' growth in one year. in 2022, and therefore we want to make sure to level set expectations on what we felt was attainable for 2023, which was slightly below the long-term target in terms of growth and in terms of profitability. But we're not issuing any specific guidance for 2024.

speaker
Joakim Gunnell
Analyst, DNB Markets

Understood. But you comment that there was a high share of renewal contracts here. So can you say anything about what share of today's quite stellar numbers are driven by replacements which are not?

speaker
Camilla Ubico
Chief Financial Officer

Oh, I mean, you comment on what is subscription, but to me, to more fully capture the recurring elements of your business? Can you say anything about how much of this are replacement events? That's a great question. I don't have an answer for the back. We did see a lot of new customers, frankly, in Q4. I think I've indicated earlier that typically we see There's some background noise now. I think I explained earlier on the call that we typically see 80 to 90 percent of the sales during a year from existing customers. In Q4, Potentially because of the high, the large number of attacks and visibility of those, we didn't see a large inflow of new customers, so perhaps a little bit mixed, the mix skewed a little bit to new sales compared to existing sales, which is kind of natural since we have such a strong quarter. If it were just renewals, it could not have been this strong. Renewals in the sense as either repurchase, buying more keys, or renewing. I understand. Just finally, Dan, what would you see as incremental growth drivers Can you say anything about whether you think you've found the right market for your partnership strategy, et cetera? One is in terms of verticals and geographies, i.e.

speaker
Mattias
CEO

some customer segments. we can see that there are some new trends when it comes to where growth is happening. Camilla pointed to one which was visible already in Q4 and actually throughout 2023 that we saw a lot of growth in EMEA and APJ. We're also seeing certain segments industry verticals taking off so that's part of it which has not so much to do with our offering but more kind of where the demand is generated When it comes to what we can do ourselves to support strong growth, as you mentioned, it will be important that we get some of the strategic partnerships up and going. And that is something that we haven't proven yet. So that will be an interesting lever to see how much impact that can have already in 2024 and beyond.

speaker
Camilla Ubico
Chief Financial Officer

Thank you for watching. The next question comes from Eric Lindholm from SCB. Please go ahead. Good morning, Mattias and Camilla. A couple of questions from me. I think starting off on subscriptions. a share of borders, as said roughly at 15% throughout 2024, with strong growth in both petrol and subscriptions. Do you think this transition to subscriptions will accelerate in 2021? or should we expect this level going forward? Thanks, Eric. Thanks, Eric. Yeah, you're right. It was a percentage relatively constant during 23. Going into 2024, of course, we'll work on refining that product offering. Based on the pipeline and the types of organizations that we see in the pipeline going into 2024. I expect the growth in subscription offering just because of customer composition. I think the underlying What really could drive subscription growth going forward is that we develop the product offering further. All right. Interesting. You mentioned the pipeline here. Obviously, a very strong end to the year. But can you say something about how the beginning of 2024 has looked in terms of developing or delivering on this pipeline?

speaker
Mattias
CEO

The only thing I can comment there is that we haven't felt it necessary to issue any press release in either direction. Let's put it that way.

speaker
Unknown Analyst
Analyst

Okay. Interesting.

speaker
Mattias
CEO

But as I mentioned, to be a little bit less of a politician, as I mentioned, I feel we're in a good position to continue our growth journey.

speaker
Unknown Analyst
Analyst

Yeah, I guess that's fair to say. So the gross margin was 83% now in Q4, slightly lower than in previous quarters in the year. Is there any sort of factors affecting this? And is this a fair level to expect going forward?

speaker
Connie
Head of Financial Reporting

Emelie, do you want to take this one? Yeah.

speaker
Camilla Ubico
Chief Financial Officer

No, as I said, the gross margin is fluctuating between months and between quarters. depending on customers and specifically resources. And we expect to continue the gross margin, keep up the gross margin around 85 to 86%. Also going forward. I think the mirror image of that was in Q3 when we had a very high gross module, if I remember correctly, and that was due of the customer composition and certain variations pretty much by quarters. So I think it's better to look at that from a... I think I said... So at that time, too, it's better to look at it from a customer basis rather than just the recent quarters. Maybe a final question for me. You mentioned that you had to scale up quickly to meet the height and demand here in Group 4. If you think about cost growth going into 2024, would you say that Q4 is kind of a good indicative level of where you should be, maybe excluding the higher commissions that you normally see in Q4? Thank you. Yeah. I mean, we are continuing to develop the organization as well. Of course, growth, we are... still building for growth. So keeping a fixed cost level is probably not what we are looking for here. But of course, scaling is still the next question comes from pre-draft the benefit from Carnegie please go ahead

speaker
Pedrag
Analyst, Carnegie

Hi, good morning. Wow, decent figures reported today. So congrats on that. Could you maybe double click a bit on the bookings growth, which really spikes in the quarter? And I'm curious how this number spread if it's driven by fewer larger orders or evenly spread across a lot of customers.

speaker
Mattias
CEO

Thanks, Pedrag. And I must say that looking at your analyst reports, you were pretty much spot on everything except for this order bookings number. So you clearly have demonstrated that you have a good sense for our business.

speaker
Camilla Ubico
Chief Financial Officer

When it comes to the order bookings in Q4, again, I should say that this was a very strong quarter, and it's also worth mentioning that if you are, we're comparing it to Q4 in 2022, and as I think I mentioned on our earlier course, The second half of 2022 was not our strongest six months. When we talk about 2022, we do highlight the in Q2, but we also have mentioned that we didn't have particularly strong in Q3 and Q4. So it's kind of an easier quarter to compare with. That said, it is a record quarter. And what is very interesting encouraging to me is that it's not just one outlier order that explains this. Of course, we had a significant order, as was communicated. We delivered the Q3 report for, I think, sex, but that definitely had an impact. But below that you see a pretty nice set of orders in excess of one million dollars. which is where we want to be. And it's across a very wide range of customers, industries, and geography. And when you have that role-based growth, that, of course, feels even than when it's limited to one or two accounts. But again, this was a... We usually have a strong end of year And that definitely materialized in 2020. Sorry, I missed part of the question there. You asked me to double-click. So if you need further cover on that, please feel free to add playback.

speaker
Pedrag
Analyst, Carnegie

No, that's great. I was mostly interested in how it spread across different customers and if there were any outliers. But then, again, on bookings, what is your best guess for the timeline on delivering on these?

speaker
Mattias
CEO

What is... I mean, as you could see, even if we had an 83% growth in bookings, we quote-unquote only had... about 19%, correct me if I'm wrong here, Camilla, in our revenue or net sales. So of course, several of these orders are spilling into 2024 in terms of as they get delivered and as we are able to book the revenue. However,

speaker
Camilla Ubico
Chief Financial Officer

Because of the improvement in inventory, we are able to turn around more quickly. Now it's more of a question of how quickly the password want the keys and how they can deploy them. So I'm actually quite happy with our ability to deliver on those at this point. So is it a fair assessment to say that near-term growth could be trending above the financial targets that you set out yesterday, thanks to the bookings number, which is quite is high so you can deliver on them quickly. That train of thought correct me if that is wrong. So looking at the things we have big bookings number in Q4. And of course, not all of that was delivered in Q4. The revenue would have grown or the sales would have grown at the same rate. Yeah, there's definitely that. That, of course, sets us up for a strong start when it comes to revenue growth in 2024. But then, of course, we need to keep the pace up. of course. Yeah, of course. Another thing I'm thinking about during this course quarter, we have noted that OCTA has undergone hacker attacks twice, I think, which has been successful. We're starting to see that was in Q4, actually, and once in the first quarter. And intuitively,

speaker
Unknown Analyst
Analyst

This should be positive for you, I think.

speaker
Pedrag
Analyst, Carnegie

So if I were Okta, I would like to strengthen my partnership with Ubico to combat account takeovers. Is this something you think you would be experiencing or something that you think can boost the implementation of this partnership further in the near future?

speaker
Mattias
CEO

Yeah, of course, I don't want Okta to be hacked. But like you say, we're an obvious partner for them. And I think this further reinforces the benefit of us working together. So I'm very optimistic about that cooperation.

speaker
Pedrag
Analyst, Carnegie

Super. And finally, we did speak a bit about Accenture last time, but if you could elaborate a bit on how that partnership is developing as well and what kind of expectations you have there.

speaker
Camilla Ubico
Chief Financial Officer

Accenture? I'm sorry. I'm at the lot. Pamela, remind me. Was that Accenture we talked about? I think we had a agreement. As I recall, we did spell out that there were some major system integrators that we had. Yeah, I assume it was Accenture. Okay. It's a trick question. Okay. Yeah, but you were prepared. He was prepared. No. for us when we first had our success with high tech it was because we were able which the turned into us being able to be very active in establishing the center which is now promoted under the Passkey's name. I mean, then we had the high-tech companies pretty much eating their own dog food first before being willing to recommend it to the customers. And that's exactly the exercise we're trying to accomplish with the major restaurants today. I do first time in a month. as internal customers to gain credibility for them to familiarize themselves with technology so we can then work together in addressing their huge reach when it comes to global enterprises. I'm afraid I cannot share more than that right now. Thank you very much.

speaker
Unknown Analyst
Analyst

Impressive figures and looking forward to the coming reports as well.

speaker
Camilla Ubico
Chief Financial Officer

Thanks, guys.

speaker
Moderator
Conference Moderator

The next question comes from Anders Rudolfsson from DNB Markets. Please go ahead.

speaker
Anders Rudolfsson
Analyst, DNB Markets

Yes, good morning. First of all, congratulations to Monster Report. Really fantastic. Well, what's going on lately is, of course, not only cybersecurity threats, but also generative AI. And I can see that a number of companies in your world, so to speak, like CrowdStrike and Cloudflare, a number of them are included in the AI world in a way.

speaker
Camilla Ubico
Chief Financial Officer

And I wonder how you see AI, is it a threat or an opportunity for you? And in what way would it be? I'll try to answer that. Thanks for the question. As we've stated, AI helps the cyber criminals in the sense that they can make much more refined attacks when you get these bandwidth click this link because there Mr. Dunn is on with the typo you are now about to win a million dollars I mean those kind of really stupid attempts for you to access and click links and access material that have been done on a mass scale with AI you can have much more tailored attacks I mean the worst example that I've heard of so far was the deep using AI where a person in the finance team in Hong Kong, if I remember right, was persuaded by someone that he literally thought was the CEO and CFO of the company. you call telling him to transfer $25,000. And that was all enabled by AAP. So you can really, on a massive scale, tailor-made messages that trick people into into either transferring money or permitting access into sensitive systems. And there are senses that makes it even more important to have a robust multi-factor authentication because then it doesn't matter if that individual happens to share their password.

speaker
Mattias
CEO

So I think the robustness of our solution where you're not depending on really the user being aware of of there being an AI-based attack, that's something which we feel actually speaks in favor of our solution. Now, that's on kind of the threat level. Of course, we're evaluating AI for internal use and improving our efficiency for different development tasks and for admin and system questions. It hasn't had a significant impact in all honesty yet, but that's definitely something that we're interested in. And as you can imagine, with an engineering heavy organization, there's a lot of people around that find that this is very intriguing and I want to explore how we can use it from a business perspective.

speaker
Camilla Ubico
Chief Financial Officer

That was a long-winded answer. I don't know if you want to add anything to that. No. I really look forward to being able to use AI more in our internal processes as well, actually. So if I try to summarize that, I understand this is a period where we will see probably really a new wave of cyber attacks. I mean, what we have seen in, for example, a couple of months with Microsoft, or one where you We were hacked there, and we have this Swedish one here where it was really, really negative for a number of companies. And I really don't know what actually happened there. Can you actually position yourself more into the those kind of threats, can you, so to speak, expand your product offering more than just have the Yubico to make sure for sure, right? now you have you are the one that everyone trusts could you actually give more products to the marketing companies to get a wide range of products for Texas, so to speak. Do you understand what I mean? I think so. If so, it would be more of a long-term ambition. What I think would be the more near term or imminent effect is the fact that people realize we can't depend on people not being fooled.

speaker
Mattias
CEO

We need to have, we can't rely on people not clicking the wrong links or sharing the wrong information. We need to have a hardware based solution which ensures that only those that should have access to accounts and information get access to that. So I would say that's the more important short-term effect.

speaker
Anders Rudolfsson
Analyst, DNB Markets

Well, I guess you don't have much time more now. You have to go out and sell more. So I stop there. Thank you so much for my questions.

speaker
Mattias
CEO

Thanks, Anders. I think that's the last of the live questions. We've received a couple of text questions. I guess we'll transition over to that.

speaker
Moderator
Conference Moderator

There are no more telephone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

speaker
Camilla Ubico
Chief Financial Officer

Okay, so we've received two questions online. The first one was related to the EUID wallet project that we mentioned in the Q3 report. The question goes, with the upcoming EU wallet market, is Yubico's position to provide competitive hardware wallets? To be clear, we're a member of the project, which is sponsored by the European Commission. The word here is we, of course, want to be part of that in providing a competitive solution. By definition, it's an open project which involves several parties. Of course, it's not going to the exclusively assigned design around a UBI code solution or UBI keys we need to but we're quite used to working with an open standards and open technologies so of course we want to be part of this. We feel it's an important project and we feel that we have a unique product and a unique understanding on how to design something which provides right mix of functionality whilst protecting people's identities so that there's not an oversharing share of information. So I think it's an exciting one. I'm not I'm just going to tell you that this will have a major impact in 2024 and probably not even in 2025, but it's one of the things which is driving demand long term. Can you explain the strong order bookings a bit deeper?

speaker
Mattias
CEO

They're new versus new. How are they divided between customers? Are there any dominant orders in that? I think this question was posed before Fedrag asked a similar question, but repeat. Of course, when you see such a big increase in order bookings, it's not just about renewals. Of course, it could be that you scaled up from existing customers, but as I mentioned, we saw a lot of new orders. And how they're divided, yes, there were a number of big orders, including the one that we communicated in the Q3 report. But what was really nice from our perspective was that it was a broad mix of different customers where I think there was a lot of potential for growth.

speaker
Camilla Ubico
Chief Financial Officer

I don't know if you want to add on that. You have all the numbers. Yes. No. I think that is a very good explanation. And as we have talked about this also earlier in the call. is very much smaller than this. Excellent. I think that's a wrap. On to a busy Friday. It's an exciting year. I'm optimistic that 2024 will be an exciting year for Fubico, too. Thanks for all the good questions, and I hope that we provided some cover. to the report that was shared today. So with that, I think it's over now for us, and we'll be back. I think it's about mid-May with a Q&A.

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