Welcome to the conference call of TeamViewer AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. I now hand you over to Daniel Fard-Yazdani, who will lead you through this conference. Please go ahead, sir. Thank you and good morning. Welcome to the TeamViewer Q3 2021 results call. In a minute, Oliver, our CEO, and Stefan, our CFO, will take you through the business and the financial update and the highlights of the last quarter. As always, you will have an opportunity to ask questions after the presentation. Given that we had the pre-release a bit less than a month ago, today's release is, or should be relatively straightforward, but we nonetheless, of course, wanted to offer this call to you today. More importantly, as a reminder, we will be hosting a virtual Capital Markets Day next week, Wednesday, on November 10 at 2:00 P.M. CET, to which you are all, of course, cordially invited. Information on the event and also the link to participate next week can be found on the IR section of our website. Before we start, and as a little housekeeping exercise for today, as always, please take note of the forward-looking statements that you find on page two of the presentation. With that, let me now hand over to Oliver. Thank you, Daniel. Good morning to all of you. Thank you for joining. Before we dive into Q3 and the nine-month data points, I'd like to quickly take a step back and look at 2021 more broadly. From our perspective at the moment, clearly everyone is much more focused on the negative aspects of the business and the announcement of Q3. Clearly there have been some, no question. But there is also from our perspective, very positive developments that we should not forget completely when we look at our business. I think there's on the one side is the positive strategic positioning and the things that have gone well. Then, of course, we work on measures to improve the situation, the growth, which we will also present in more detail, as Daniel mentioned, in the Capital Markets Day. I think if we put that together, so on the one side, the ability to take measures to act and refine and reconfigure initiatives, and on the other side, the strategic positioning and the positives in the business, then from our perspective, that's the basis for an overall quite optimistic outlook on TeamViewer. First point, I'd like to make, when we look at 2021, yes, we have been below our expectations in billings growth, but we still believe it's a very healthy billings growth. 19% in the first nine months of this year is still very good. 48% adjusted EBITDA margin, I think, is also not too bad. In a combination of the two, I think it's a very strong profile. Having said that, we will still reconfigure our initiatives. We will also look into our cost structure. We will make sure that we set the business up in the right way to reflect some of the more recent development clearly. We are also progressing very well in terms of delivering on our expansion into the enterprise space. Our billings on an LTM basis are up by 75% in the first nine months this year. We are optimistic for a continuation of that journey going forward. I think if we could look back at IPO and where the enterprise business was at the time, I think this is a very strong progress. We believe there is room for further expansion and also increasing ACV in the enterprise business, very much supported by the mega trends in the market. We have now a much more, much broader solution portfolio. We have very highly competitive products in place, especially in the augmented reality space, and new use cases for enterprises. I think we're very well positioned to unlock this potential there. Cash position healthy, and we do generate strong cash flow. I think that puts us in a good position, significant flexibility, which I think is also worth noting. Finally, of course, quite importantly, it's about restoring confidence very clearly. We should prove to you that we are able to deliver the guidance that we had put out. As you can imagine, more than anyone else, we want to end the negative news flow around this. We strongly believe that the reset guidance that we have given out provides the floor which is necessary to achieve this. We feel good about this. As mentioned before, in one week's time, we will have a Capital Markets Day, and that I think is a very good opportunity to really elaborate in detail on our strategy, the markets, and the market growth, the product portfolio, to explain it better, and also the initiatives that we've put in place in different parts of the business. Generally, not an easy year, but we remain very positive for the outlook. If we then go to Q3 specifically, the disclosure for the last quarter, Daniel has mentioned it already. A good part of the release today has been published with preliminary numbers on October sixth. See a summary of many of them, and the largest part of them stayed unchanged versus the preliminary publication. One area in which the final numbers have come out significantly more positive is the growth of billings in the enterprise business. The number is now up 75% year-over-year. Originally, without the time to assess all the billings, we had assumed an already solid growth of around 60%. Now we are happy to see that the growth has accelerated versus prior quarter. As a reminder, in Q2, the LTM growth stood at 66%, so significantly up. What is important, I think, is subscriber growth and retention. We've put a full slide on this one. In line with what we have published a month ago. I think, fair to say, initially, when we came out with the numbers, many market participants have pointed out the relatively low number of net new subscribers in Q3. As you can see on slide six, in prior quarters, we have added around 20K net new subscribers each quarter, and that was also the rough guideline that we have given when we were in discussions with investors. Now churn has been quite stable, has even slightly improved in the last quarter, which we were also expecting. However, if you look at the development of the new billings and put that in relation to the net new addition of 5,000, it's showing that due to the transition to an even higher quality business we are making, and we constantly try to do with our product mix, the number of subscriber adds is really not the only metric anymore that is relevant. I think in the past, going back, the intake from free to paid measures was higher, and there were discussions, more discussions about it. Enterprise business was in its infancy. The whole notion of additional products, upsell, cross-sell was only in its infancy, and therefore, the subscriber additions was relatively more important than it is today. Clearly, we're not satisfied with 5,000 net additions. That's also clear, and we want to improve that, so we're working on it. But it's also important, we think, to focus on the value per customer that we are attracting, and the upselling and cross-selling that we're able to do. Again, one of the areas we will deep dive at the Capital Markets Day because I think it shows the quality improvement of the business over the last years. That's in the velocity part, and that's then also kind of continuing into the enterprise business, which we show on the next page. During the third quarter, number of enterprise customers now increased to 2,419. Reminder, enterprise customer for us definition is ACV above EUR 10,000, which of course is low, but we put it in place at the time of IPO to show that we're slowly progressing into higher ACV clusters. 10,000 was the initial mark that we've given ourselves at the time. Now more than 2,400 of them, which is up 46%. The enterprise billings from these customers expanded by 75% to EUR 77.8 million over the LTM period. That's pretty remarkable from our perspective if you compare that times at the IPO. This also means that the average ACV per enterprise customers came up, now more than EUR 32,000. Also the mix has improved significantly. Enterprise billings with an ACV of more than EUR 200,000 are now 19% of our billings, compared to 11% a year ago. Almost 50% of our enterprise customers generate billings of more than EUR 50,000. One year ago, that cohort has only made up 1/3. You see that the number of enterprise customers increasing, they spend more with us. In all clusters, we see an improvement, an upward movement, which is true for the entire business, also in the smaller ticket velocity part. At the higher end of the velocity business, the SMB business, customers move above EUR 10,000 into the enterprise, become more sticky, more cross-sell opportunities, and hence the very positive development of the enterprise business per se. As always, a few use cases, and that's certainly an area where we can talk more about in the CMD as well. First example, Ricoh, is arguably more traditional IT space. However, it already showcases really the breadth of our offering. It's not only including remote access and support for office devices, but it has moved also into augmented reality to remotely support and train on-site engineers, so in the OT world. There's also remote training that takes place on the back of our product. We're broadening from originally IT support into other areas. We have a use case with Cimbali Group through which coffee machines can be serviced from remote. Again, one of these OT examples, I think we're showing these examples in every call now. Sometimes healthcare, sometimes consumer goods. Here it's B2B coffee machines. Important element from a customer perspective. These cases reduces downtime for these machines, thereby reduces their revenue loss. There's really an operational value-added business case behind it, not just IT spend. That's very important. Makes it a bit longer in terms of sales cycles and convincing customers to deploy. Once they deploy, these are very sticky solutions. Again, things are done remotely, less travel costs for technicians. Again, an example where we expanded our solutions from IT devices to machine equipment, and how we do more tasks, everything can be done remotely. With this, again, we will cover much more of this in the Capital Markets Day. I'd like to hand over to Stefan to take you through the financial results in more detail. Stefan? Yeah. Thanks, Oliver. Hello, and good morning also from my side. Let me quickly summarize the financial highlights in terms of top line and profitability. As you can see, billings increased at constant currencies 18% in Q3 and 21% for the first nine months, clearly confirming the pre-release financials, and I think showing that TeamViewer continues to grow across all customer segments and solutions. IFRS revenue, which can be derived from the billings net of change in deferred revenue, grew 9% for Q3 and 10% for the first nine months, respectively. I know we have explained this quite a few times, why there's such a gap between billings and revenue growth, but we continuously get questions on this, so let me quickly cover it again. The revenue growth rate is below billings growth due to the base effect from the recognized perpetual license revenue last year. As you all know, we discontinued perpetual license sales in 2017, but the recognition of those license sales still continued for a few years. Therefore, during 2020, we still recognized close to EUR 40 million in the first nine months of perpetual license revenue. Obviously, we don't have that anymore in 2021, and that means it depresses our overall reporting revenue growth. However, this effect will completely disappear in 2022. Therefore, if we only review revenue from a subscription model, those revenues actually grew 18% in Q3 and 24% in the nine-month period year-over-year. If we now move on to profitability, I think we still enjoy very attractive margins despite the significant investments into our future growth. Clearly, the billing shortfall, as well as the higher marketing expenses, significantly impacted adjusted EBITDA, and therefore it was materially below the prior year quarter, and was flat on the nine months view, so to say. What are the adjustments? Next to the change in deferred revenue, our adjusted EBITDA is adjusted for IFRS 2 charges related to share-based compensation and other non-recurring costs relating mainly to one-off projects, financing, and acquisition-related transaction costs. I think that clearly the most significant portion here are IFRS 2 charges in relation to share-based incentive schemes, as you all know, which are set up by the selling shareholders in the IPO and stock-based comp in connection with the Ubimax acquisition last year. Both of those charges will significantly reduce in 2022. Just from a reporting perspective, profitability will substantially go up. Please note that both of those charges are not cash relevant, and therefore the charges are booked directly against the capital reserve in equity. Nevertheless, as a result of those charges, the EBITDA in accordance with IFRS decreased by 42% in Q3 and 27% in the first nine months of the year. Now let's move on to our subscriber base. Oliver already explained on the next slide 11, that our subscriber base expanded by net 5,000 subscribers during the third quarter and showed an increase of 11%. And as Oliver already said as well, only 2,400 of those subscribers fall into the enterprise category, which means generating more than EUR 10,000 on an annual contracted volume basis. This basically leaves us with a very large group of loyal customers we can still up- and cross-sell. As you can see, our net retention rate for the last twelve months is now 96%, lower than in the past, clearly due to this one-time effect of right-sizing, which we mentioned in Q2. That being said, you can clearly see a marked improvement in our NR on the third quarter. It reached 99% again after a steep decline to 88% in the second quarter. Very substantial improvement from our perspective. If we turn to the next page, the geographical performance, I think you've already seen this at the pre-release. No changes there, therefore only the rough outline here. EMEA, most established and largest region, clearly benefited the most from last year's extra demand, and this year, I would say, most affected by the one-off right-sizing. Nevertheless, despite this headwind, the business actually grew quite nicely with 25% in the third quarter and 22% for the nine months. I think overall, quite a good performance. Americas delivered 17% growth in Q3 and 23% for the nine months based on constant currencies. Here, growth was clearly more driven by the enterprise business generally. APAC, smallest, region by billings, largest number of markets, clearly remains very diverse. I think we've talked about it, about APAC performance, and we'll mention it again and explain it in more detail at the CMD. Clearly the growth was below our expectations. Specific points to mention here is Japan. You all know Japan 2020, fast-growing market, little bit of a dip in 2021, but I'm sure we'll get out of this, growth dip again in Japan. China, clearly not satisfying overall growth there, and that's something which we are going to address also at the CMD. Because we clearly see in some markets in the APAC region which are more mature, Australia and New Zealand, for example, we are performing really, really well. I think the right setup and the right go-to-market model actually showcases that, we can generate a significant growth in those regions. Again, we'll provide more details here at the CMD as well. Let's move on to the next page covering the cost structure. Nice development with our GP margins, with again, around 93%, the GP margins remain comfortably above 90%, clearly showcasing that our infrastructure scales quite nicely. Even as we expand more into enterprise, sales, and that's a fast-growing business of ours, we are able to keep GP margins significantly north of ninety percent. Very good development, I'd say. Clearly, as you can see from the expense line items, we've invested quite a bit over the last couple of quarters, clearly most pronounced in marketing, but also in sales and R&D. Q3 was the first quarter with the full impact from the brand investments, as you can see in the significant increase in the marketing expense lines. Bad debt is around 3%, slightly a bit more, but overall, we expect that to be in the 3% range for the full year and going forward as well. Let's take a look at cash generation on next slide. I would say overall, a very good picture here. We continue to have a very strong cash flow and high cash conversion rate, as you can see in this chart. Pre-tax cash flow, clearly impacted, at least for the first nine months, by the payments for the sports partnerships. If you take a look at the levered free cash flow in Q3, it stood at EUR 32 million and benefited from a strong cash conversion as well as significantly lower CapEx and interest payments, both of those in line with what we announced a couple of months ago, that CapEx as well as interest payment should come down substantially, and you can see that here in our cash flow results. For the first nine months, levered free cash flow decreased 18% to roughly EUR 90 million. Overall, that means we have a cash conversion rate of 47% of adjusted EBITDA in the first nine months of 2021. Clearly, the healthy cash flow also shows that we are able to actually generate or convert significant amount of our adjusted EBITDA into cash flow, and therefore driving a pretty good balance sheet position overall, as you can see in the next slide. Net leverage is down to 1.5. Clearly, balance sheet continues to be strong. Net financial liabilities have decreased by around EUR 30 million. As I said, leverage ratio down to 1.5 adjusted EBITDA. That gives us clearly flexibility and firepower to execute our growth initiatives going forward. Maybe just wrapping it up on slide 16, clearly the outlook we have provided early October stays unchanged. No changes there for this year. I think that concludes our presentation. We'll now open it up to Q&A. Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask the question. If you find your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. The first question is from George Webb of Morgan Stanley. Your line is now open. Hi. Morning, Oliver and Stefan. I have a few different questions, please. Firstly, just on the FY 2021 guidance, obviously still it's quite a wide range. The low end would imply a further deceleration over Q3, the upper end, and pretty material acceleration. You know, what have you been seeing so far in Q4? And does it make you confident in any particular part of that range, or does it at least take the low-end scenario off the table? Secondly, I think on the pre-release conference call, you were looking to make sure that costs across the business, as you go forward, make sense against that reset growth profile, or at least incremental investment may slow. Has that process for analyzing the cost base already begun in Q4? Lastly, on the marketing spend in the quarter, it was up to EUR 34.5 million. Is that the new baseline we should think about moving forward? Or is there an element of the marketing expenses that you can, you know, flex downwards to a degree moving forward? Were there any kind of one-offs in that line in Q3? Thank you. Yeah. Thanks, George. Good questions. Let me start with the 2021 guidance and Q4, what we are currently seeing in the business. Clearly, as you pointed out, a pretty wide range of outcome for Q4. Why is that? Clearly, we have experienced quite a volatile performance in the business during the first couple of quarters, and that's been reflected in our guidance. I think it's a bit too early overall to say where we come out now at Q4, but clearly we aim to achieve a good result here in the fourth quarter. As you know, enterprise billings will be an important pillar of the final outcome of the fourth quarter. It's just a bit too early to assess. Maybe on the cost base, yes, absolutely. That process has already started a few weeks ago, undoubtedly so. Very detailed process across all functional expense line items, and there will be more details around it at the CMD, as you would expect. Stay tuned for that one. And then marketing baseline, yes, clearly a significant amount of that Q3 increase is due to the brand partnerships. That's now part of our brand investments going forward. And I think as a rough assumption, that's not a bad baseline going forward. Indeed. Maybe just to add from my side on the cost question, number two. General, I would say you can assume that we are moving at pace really and analyzing the cost base and also in developing measures both on the cost side and also on the growth initiatives. Clearly, guidance revision has sparked a significant amount of projects, initiatives, good interaction internally within the management team and also supervisory board to really have a strong action plan at hand and execute as fast as possible. That's fully in the works already. Temple, thank you. Just on the enterprise side, I guess, you know, to a certain extent, maybe it was conservatism, but the fact that Q3 enterprise billings growth was stronger than you'd previously messaged. Does that leave you more confident about Q4? Is it, you know, still you need to deliver there and it's no real change? Good question. I think it's just like, probably early October, we've just been disappointed. I mean, the growth itself is clearly very good, as you point out, right? I think we've just been disappointed against our expectations of growth in the enterprise business. Overall, it's very solid growth, absolutely. I think when we pulled the numbers together early October, look, we had an ad hoc news which we had to release immediately, and therefore were just not able from a time perspective, to pull together all numbers. We want to be conservative rather than being too aggressive when we provide those news. That's been the main reason, yeah. What does it mean from our assessment going forward for the enterprise business? I think we said it, Q3 closure good, but below our expectations, right? Q3 is the summer quarter. I think what we are seeing so far in Q4, that all pretty much aligns with our expectations. Again, that very much depends on November and December closure of the enterprise business on the pipeline. Okay, thank you. The next question is from Stacy Pollard of JPMorgan. Your line is now open. Thank you very much. A few questions from me. First of all, looking at the growth initiatives and cost structure, and I know you're gonna detail this at the CMD, but can you let us know whether we should be expecting any additional costs, either exceptional or ongoing? Second question, looking at the longer term, what percentage of revenues could Enterprise be, I don't know, three, five years from now? Maybe talk about how you see that developing, and can you touch on the geographic split of Enterprise billing so far? Final quick question, what free cash flow conversion rate do you see going forward, given the marketing partnerships? Just how should we think about that conversion forward? Yeah. Again, sorry, Stacy, I have to defer to the CMD in terms of analyzing any exceptional impact. That will be, if there is anything that will be announced at the CMD next week. We're pulling together all of the numbers, and rightsizing and cost reasons whatnot, as all of that is going into a detailed analysis right now, and we'll provide more color around it, at the CMD as well. Yeah. I think you're talking, I mean, from a margin profile perspective, we look at the growth initiatives and we want to take kind of the right initiatives to work against margin recovery, as we had said. I wouldn't see that there's additional costs maybe than one-offs if we do changes, right? That was the question, yeah. The one-offs we'll announce. Yeah. There's no additional cost creep to right-size the company. It's certainly not the case. Yeah. Yeah. Investment areas, outsized investment areas or anything like this. No. Correct. Enterprise growth, again, also pointing towards the CMD here, frankly. I think we said a couple of months ago that the enterprise business could become a third of our business a couple of years down the road. I I think nothing has fundamentally changed there. You can clearly see from the LTM billings growth that the enterprise business is significantly outgrowing the SMB business, and we expect that to be the case going forward as well. From a regional perspective, in the past, it was mainly driven in EMEA for the first couple of years, I'd say, especially 2018 and 2019, but we also in 2020. Now Americas firmly catching up from an enterprise perspective, probably surpassing EMEA, at least in terms of speed and deal sizes right now. I think overall, rightly pretty much balanced. Again, more color coming, but Americas should actually lead here, versus EMEA region. That being said, we have a pretty large install base in EMEA, so I think the potential is in both regions, pretty attractive, frankly. With Americas probably more playing catch up, I would say, and APAC region still early days and overall enterprise contribution, relatively small. That being said, we have seen quite some progress also there in the more mature markets, Australia, New Zealand and Japan, where we've closed a couple of nice enterprise deals. I think in some of those markets, APAC, things are coming together as well. Free cash flow conversion, I think what you can see in Q3, sorry, for the nine months as a total, I think that's pretty reflective of the free cash flow conversion going forward as well. I think generally speaking, you should not expect any major changes there, frankly, in terms of free cash flow. The business remains high quality business, generating significant amount of cash flows. There are no major changes in working capital structure needed or so. So the only volatility is really relating to the advanced payments regarding sports partnerships, which should be happening early in the year and then middle of the year. Yeah. Got it. That's great. Thanks. No. The next question is from Hannes Leitner of UBS. Your line is now open. Yes, thanks for letting me on. I have also a couple of questions. On the enterprise, you stated in the ad hoc release 60% growth. It came in at 75% growth. Maybe you can talk through the moving parts and with the total billings numbers staying unchanged, clearly non-enterprise grew slightly slower in Q3. So maybe you can comment there. Then in terms of headcount, is there any competitive pressure from people in, you know, incentivization, et cetera, especially in particular the U.S., with the labor market being quite hot there? Maybe you can talk a bit about it. Sure. Yeah, maybe Enterprise quickly again. Early October, we clearly had to issue an ad hoc press release, and Enterprise just takes a bit more time to calculate those numbers because it's on an LTM basis, including all customers which generate more than EUR 10,000. We just need a few more days, and I want to be in the conservative side basically when we put those numbers out and don't want to correct them downwards again. Maybe a bit too conservative here. Clearly, that also means, as you rightly point out, SMB, that's obviously at the expense of the SMB because overall billings stayed unchanged. SMB was not performing particularly strong in the third quarter. We know why, right? Because also in Q3 last year, we did run significant amount of free-to-paid campaigns. In Q3, very little effect of the free-to-paid campaigns, as you pointed out, early October. Clearly not the best quarter for the SMB business, but very strong quarter in the enterprise business. FTE headcounts and sales increase, I would say what we have seen over the last couple of quarters, guided for certain functions, there is inflationary pressure. I think we are very competitive with our salaries and we've onboarded a significant amount of new sales guys, as you know. I think the issues we face from productivity perspective were not because we didn't pay enough. I think it's more like ineffective onboarding, which we experienced also due to COVID, generally speaking, that can make lives easier for the sales guys to onboard efficiently. I think from my perspective, there is maybe a little bit of inflationary pressure in certain functions, but I think that's well reflected with our margin guidance. I don't expect any negative or detrimental impact here going forward. Just a follow-up. In terms of the enterprise segment, what is your churn rate in terms of just really customer wins or customers? That will also be disclosed at a CMD or more details to be provided at CMD. As we said in the past, that churn in the enterprise business is significantly lower than the SMB business, as you would expect, right? I think now the enterprise business is at a scale, where you can take a look at churn numbers separately for that business. That's something where we provide more details going forward. I think past numbers, low base, kind of volatile, but always, lower than the SMB business. Now since it's becoming a more meaningful business, we'll provide more details there as well. Thank you. Looking forward. The next question is from James Goodman of Barclays. Your line is now open. Yeah, morning. Thank you very much. Maybe just come back to the subscriber additions of the 5,000 in the quarter. We discussed it at the pre-announcement and you added some commentary to that today. I wondered if you could go a little bit further. I'm trying to square still, I guess, the EUR 20 million or at least half of that of new billings, which didn't come from enterprise with the reduced churn and the improved net renewal. I'm working out sort of what customers have been, you know, lost within that. Is it right to think that that's a sort of cohort of particularly low-value customers in there? If so, you know, can you help us just with what's going on in terms of the sort of structure of those customers in the base? I guess to maybe clarify on this, as you look forward, say to Q4 at the midpoint of guidance, would you expect the subscriber number to re-accelerate back to those historic levels you called out? Or is it more the case that actually you're saying that you don't need to see large net subscriber numbers to re-accelerate the growth in the business? That's the main question. I was just going to ask you quickly on, I guess the leverage being down, CMD coming up. Are you going to talk about capital structure at all? Have you considered, you know, possible deployment of cash to buy back or something else considering, you know, where we are? Thank you. Sure. Maybe with subscriber growth, 5K net additions. Yes, your assumption is right. Simply, the churn which we see is clearly more biased towards the low end of our customer spectrum. And also in the prior years during Q3, we did push significant free-to-paid campaigns after six months of pause during the COVID pandemic breakout. Clearly, that reflects then in higher churn in the following quarters, because that's typically when you monetize free users in the first year of renewal. Basically, then they need to make up the decision, do they wanna use a paid software or are they moving back to a free version? You also always see a little bit of elevated churn there. But I think generally speaking, our subscriber churn is much more biased towards low-value ASPs. I mean, that's also reflected in the ASP development of our SMB subscriber base. There has been a consistent increase in our ASP in the subscriber base, which really confirms that the new subscribers we bring in, generally speaking, at a higher ASP, and the ones which are churning are lower ASP subscribers. From a trend perspective, I would not expect that trend to reverse, frankly. We did run campaigns in Q1 and Q2. We've paused them in Q3. We also paused them right now. And obviously, whenever you pause free-to-paid campaigns, that results in lower subscriber intake, right? But again, at a low ASP, yeah. So I think that's all baked into our forecast. But I would not expect a trend reverse in subscriber growth over the next couple of quarters, frankly. Yeah. Yeah. Your assumption is right, James. We don't need that subscriber growth to generate our billings growth. I mean, it's really the whole company, I think, has moved and developed over the last years towards upsell, cross-sell, move to enterprise, developing our customers into new use cases and broadening the use case and also focus our lead gen on higher value customers. You see that in what Stefan mentioned. If you compare ASP, incoming ASP, outgoing ASP, so we'll disclose much more around that in CMD. But that's the whole point. Then additional subscribers that come in at lower ASPs. I'd say a small addition to that, and that's the way we look at it at the moment. Therefore, I think please don't read too much into the subscriber addition and development. To us it's just one of many factors, and it's becoming smaller and smaller in importance. It's also important to focus the business on the cross-sell and upsell initiatives across the different segments. From a capital structure perspective, that's something clearly which is regularly on the table at the board meetings. As you can imagine, we are now in a very good balance sheet position, net leverage coming down as you pointed out. I think that's a good position to be in. Again, that's something more where we elaborate on the CMD about plans going forward. Yeah, that's clear. Thank you. Maybe just a quick clarification. Just on your comments last quarter on Enterprise, that you had some, you know, some slipped deals, I think, and some that sort of came in. Was that just part of your conservatism, Stefan, in terms of sort of interpreting the Enterprise number, or do those comments still stand that there were deals in Enterprise that were slipping into the fourth quarter? Look, I think generally speaking, enterprise business was performing strong but below our expectations, so to say. That's been a little bit a conundrum which we faced in Q3, right? We internally being unhappy, but clearly strong still producing very strong growth. Some of the deals came through, as you said, but at a lower ASP. Some of that will hopefully then come in in Q4, maybe Q1, Q2 next year. Let's see. I think we need to be cautious there after what we experienced the first couple of quarters, yeah. I think it's a little bit of conservatism on my side, but frankly, it's a bit too early to say we've turned the ship here. I think I need to see more consistent execution against our pipeline, frankly. That will probably take a couple of quarters until we are fully back on track here. Okay, thank you. The next question is from Ben Castillo-Bernaus from Exane BNP. Your line is now open. Good morning. Thanks very much for taking my question. Firstly, on the number of new Enterprise customers that you added in the quarter, that looks to be well below the run rate seen over the last 18 months or so. What's changed there in Q3, and could you help maybe explain that a little bit? On Q4, the implied guidance, related to a question previously, but it looks very cautious, particularly at the low end. I'm just wondering, you know, how much caution are you baking in there around things like conversion rates in the Enterprise segment? Are you still expecting that sequential step up in Q4, given its bias towards Enterprise deals being signed? I have a quick follow-up. Thanks. I think it's good questions. I think the reason why we have picked the guidance is really because there has been volatility in the business. I mean, let's not forget, September was really the first month we were operating non-COVID, back to office, salespeople able to visit customers. Now we are basically with the second month under the belt. Therefore, we've given a wide range, and it's really too early to tell, because again, especially in the Enterprise business, October is the first month of the quarter, where in the first month you don't have much visibility, although we're positive it's in line with expectations, happy on how the business is going, but again, just one month. Then Q4 is, of course, also a big Enterprise quarter. If you are a growing company with accentuated growth in Enterprise and you're going into a Q4 after Q1 and Q2, which was very difficult, then Q3 slowly coming back, visibility is just low. All looks good, but the range of outcome is quite significant. Nothing to worry about, but it's also too early to be super excited and super positive. Give us the weeks that are ahead of us to understand better where we come out. Maybe in terms of net additions to the Enterprise, this is actually, that's not a number which concerned me, frankly. In Q3, I would never expect that to be a stellar quarter for net additions in the Enterprise business. Summer quarter, yeah. Summer quarter. I think more important here, also in the Enterprise business, we've been able to consistently grow the ASP, right, of new Enterprise customers. That's also what you can see. From my perspective, I wouldn't read much into Q3 net additions there. Okay. I just looked. I mean, Q3 last year was a summer quarter and you know, you added over 200 Enterprise customers. By my calculations, in Q3 this year, you added you know, 160-something. So that's almost a 20% decline. I just wondered if you know, that seems to be quite a big change for a large client. Yeah, look, that's a 20% decline in the number of logos we added. If I add a record logo in the Americas with more than EUR 700,000, I mean, that contributes to the Enterprise growth. I think we shouldn't read too much into logo additions in Enterprise, especially comparing this year and last year. Not in Q3, certainly. Not in Q3. Yes, you're right, but that's not a driver of outcomes in the Enterprise space. Okay. Do you have any updates on any proceeds or developments from the SAP partnership? Any commercial wins or examples you can highlight, or should we wait for next week for that? No, I think that's still early. We started, so co-selling is underway. Both companies together sharing leads and working on a significant number of leads. Of course, these are Enterprise deals, so too early to talk about any conversions there. This is something which will be discussed probably towards the end of the year, Q4 closing, maybe into Q1. The sales cycle, as you know, in the Enterprise business, it can easily be six months, three to six months. Three really the low end, six months more the norm, and therefore it will take time. It will take some time. I think we started officially to go out in the market together, I think six weeks ago or so. Got it. Okay. Thanks very much. The next question is from Mohammed Moawalla of Goldman Sachs. Your line is now open. Great. Thank you very much. Morning, Oliver, Stefan. I had two questions. Firstly, just talking about sort of the enterprise business, the mix of kinda deal sizes, you know, has shifted sort of year-on-year. Is this kind of, you know, in terms of how you run this business, I know you were doing a lot of kind of dependence earlier in the year on some very large deals, including kinda seven-figure deals. Have you sort of shifted your strategy around on focusing on kinda more of the regular sized deals and then driving the kinda cross-selling, upselling that you talked about? And this should be kind of the model kinda going forward with the larger deals sort of more of an optionality. Related to that, I don't know, I may have missed it, but did you disclose a net retention rate for Q3 in enterprise? Just curious to see how that's evolving with the cross and upsell. Then my second question was around sort of the cost base. Do you feel, I mean, it sounds like you know, there could be some cost optimization that you will do, but you're looking to kinda reinvest that back in the business. So is this now going to kinda largely come on the enterprise side? You know, are there additional investments perhaps that you need to make to kind of further kinda drive consistency in the enterprise business? You know, to what extent are some of the sports commitments fixed? Do you have any kinda clauses there, maybe not in the shorter term, but over the longer run that allow you to kind of, you know, downscale those investments? Thank you. Yeah, let me go first. The enterprise business, there has been no strategy change. I think it's a collection of activities. I think as you rightly pointed out, the big seven digit deals, I wouldn't say that we strategically go after them, but they happen every now and then, either by scale-up or just because it's a great opportunity and customers want an enterprise license agreement or at least for part or regional upgrades as happened in Q3. No change. I think the way you describe it, high five-digit, low six-digit deal land and then expand from there is probably what is more the successful motion that we're seeing, especially in Americas and in EMEA. APAC, we are almost one step before that, low five-digit range at hand and then expand from there. I think that that's how I would describe it. No explicit strategy change, just the way the business evolves. Cost base. Yes, we look at our cost base. We look at freezing the headcount, and also look into the non-FTE cost, of course. I don't think what you said is correct, that we will reinvest that into growth. Historically, we've always said that the cost increase that goes in line with billings growth is reinvested or the billings. If we had 30% billings growth, we had 30% cost increase, and that was reinvested into the business growth. I think the change now here, and we will elaborate more next week, but the change here is now that we feel that over the last two years we have grown very nicely in terms of staff, systems, infrastructure, offices. We can probably put a break here, a pause, and generate the growth of the coming year without significantly increasing the cost base beyond the run rate. Again, more to come next week, but that's the fundamental concept. Like pause in the cost build-up. Outside of the marketing partnerships, which is a special thing which Stefan can also go in more detail, or we can go into more detail next week. These contracts are fixed, so there is no opportunity to downscale or flex it, as has been asked before, fundamentally five-year deals with a three-year payment plan. I think it's also fair to say that in both deals, we got some good upside in terms of media value that is embedded there by the players and the drivers and additional venues and location races. I think we also need to acknowledge that, relative to when we did the deals, there were some inflationary trends, more media value, and I think fundamentally these things got significantly more expensive. We have to factor that into these considerations as well. Got it. Thank you. The next question is from Gustav Froberg of Berenberg. Your line is now open. Morning, everyone. Thank you for taking mine as well. I'll keep it short. I just have two. Firstly, on the organization, I know we talked a little bit about hiring freeze, but could you maybe also talk a little bit about employee attrition and how you've seen that in the last months, and whether or not the attrition is improving, worsening, or staying the same? Then I was hoping you could tell us a little bit more about the regional churn dynamics that you're seeing in the business on the billings side. Just a split between EMEA, Americas, and APAC would be great, please. Yeah, I go first, and then Stefan does the churn. I think employee attrition largely stable. A few losses here and there to competition, clearly more people, more companies active in more markets now in the space we are in. Maybe a bit elevated compared to a year ago. Clearly, a year ago, everybody was happy to re-employ, no movement. We actually hired through the crisis, through the pandemic. Now we have a bit higher attrition here and there. I think something to watch out for, there is inflationary trends on the labor market as Stefan also suggested and you suggest in your question, especially in the U.S. Something to watch out. I think it's on us to beyond the freeze, also manage attrition, voluntary, involuntary, smartly. We'll do so. I mean, we will certainly use the time to reallocate resources to the strategic areas and make sure that we are an attractive employer in these strategic areas and in other areas, downscale a little bit. This regrouping exercise is going to happen over the next month, and it's already in the process, so to say. But all in all, currently no big worry, but a watch out, as you rightly point out. Churn, Stefan? Yeah, from a churn perspective, I think the way how I cut is much more by customer segment, necessarily. I think that's the bigger driver in terms of ASP, and SMB enterprise. I think that that's the key driver. Yes, you have regional flavor, but the bigger driver clearly is the ASP segment. Their regional, I think, behavior is pretty much the same. You have higher churn in the low ASP segment, right? Again, free to paid monetization. Those countries who depend more on the free to paid monetization obviously then have higher churn. I mean, China, for example, or India, you have higher churning when those customers come up for renewal, the previous free users, so to say. Enterprise higher value ASP churn pretty much sticky across all regions, I would say, and pointing towards the stickiness of our products frankly by regions. Yeah, that's super. Thanks. I'll save some questions on cost for the CMD next week. Okay, very good. Thanks a lot. Thanks for the questions. Obviously, looking forward to seeing you and speaking to you at the CMD on next Wednesday in a week's time. Thanks very much. I just see it came in late, but we have one more question, I think that we can still take. Okay, cool. Sure. The next one. Okay. This question is from Victor Cheng of Bank of America. Your line is now open. Hi. Thanks for taking my question. Just two from my side. You know, given the low net new subscribers and stronger competition at the lower end, can you provide some color directionally on how the number of active free users has trended? Is it still growing or has it flattened or in decline? And then second question to your point regarding free-to-paid conversion, I believe historically that contributed roughly EUR 3 million-EUR 5 million per quarter. Just trying to understand here how, you know, this is a key driver for slower SMB growth in Q3, especially given the improved churn in the quarter. Thank you. Yeah, let me take that. Active free user development, there's a lot of moving parts there because in markets that have lots of free users, we have introduced account enforcement for better security and better user experience for other users, for paying users. I think that's a topic where I would really refer to the CMD because we will have a meaningful disclosure around that to give you a better sense on countries, splits, user behaviors. Bear with us on this one. On the EUR 3million-EUR 5 million free to paid per quarter, that's correct. That was the rough guide. I mean, we basically gave that as a 15-20 per year, to be honest, and not per quarter, because we're saying that happens at times when it makes sense, and it should not happen when it doesn't make sense. Specifically this Q3, no real contribution, very little contribution for the reasons Stefan mentioned. We had done more free-to-paid conversion in Q1 and Q2 this year. Now Q3 was a time where we didn't use it, focusing on other initiatives, as we had discussed, and the same is true in Q4 this year. Got it. Thank you. Okay. Yep, very good. That's it then. Okay. Thank you very much for your questions. Looking forward to speaking to you next week. I think there will be a good amount of disclosure, which I think will answer quite a few of those questions around SMB and enterprise and trends there. Okay. Thanks. Goodbye. Thanks very much. Bye-bye. Bye. Bye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.