Good day and welcome to the TeamViewer AG Q2 2022 results call and webcast. Today's conference is being recorded, and at this time, I'd like to turn the call over to Michael Lohner. Please go ahead, sir. Good morning, and welcome to TeamViewer's Q2 2022 earnings call. I'm Michael Löhner for Investor Relations, and I'm joined by TeamViewer CEO, Oliver Steil, and CFO, Stefan Gaiser. They will now present our business and financial update for the second quarter of 2022. As always, the presentation will be concluded by a Q&A. Please pay attention to the note regarding forward-looking statements on page 2 of the slide deck. Oliver, over to you. Thank you, Michael. Good morning. Thank you for joining TeamViewer's Q2 earnings call. Let me start with an update on our business highlights, which is then followed by Stefan, who will guide you through our financials in detail. Let's begin with a high-level summary. As you can see on this slide, in Q2, we achieved double-digit billings growth and revenue growth, and a strong adjusted EBITDA margin above market expectations. The same goes for the first half. Again, double-digit billings and revenue growth and a margin above expectations, also slightly above our full year guidance. Given the overall current economic and political environment, our results are solid. We remain confident in our future growth trajectory, and our strategy also works in the current environment. We continue to grow and do so very profitably. This is particularly true for SMB, where the resumption of our monetization campaigns resulted in a 10% billings increase compared to Q2 2021. A major uptake from the 4% year-over-year growth that we saw in the first quarter. Obviously, like many other firms, we began to feel the effects of the current macroeconomic uncertainties and geopolitical tensions. We see decision-makers around the globe becoming more cautious, and we experienced tightened procurement processes resulting in overall longer sales cycles. This began to translate into a softer order intake for both of our business segments. Enterprise, in particular, saw slower than usual pipeline conversion, but still the segment grew by more than 20%. We now have more than 3,000 enterprise customers, and we have a growing pipeline for Q3 and Q4. As you know, the enterprise business generally is leaning more towards the end of the year, and particularly to the fourth quarter. TeamViewer remains in a strong position to navigate through the current headwinds in the second half of the year. We are very profitable and have proven repeatedly that we can maintain this profitability even in challenging environments. We further optimized our financial profile by strengthening our financing structure, which increases resilience and flexibility. We successfully concluded the cost optimization part of our ReMax program, resulting in a further sustainable lowering of expenses. We continue to win key customers and to enter into high-level partnerships. Last but not least, we continue to record the highest growth rates in the largest ACV buckets in both the SMB segment as well as enterprise. That clearly shows the ongoing shift of our business towards high-value customers. We will most likely have to cope with ongoing lower visibility due to the economic uncertainties in the coming months, but we are well prepared. Fundamentally, the demand for our products and services remains strong, and if anything, the mega trends fueling our business model are getting even more relevant. With that, let's move to the next slide. Taking a quick look at TeamViewer's regional performance. The regional breakdown nicely illustrates the benefits of our globally diversified structure, because the strongest increase in billings on a year-on-year basis was recorded in the Americas. Here, Q2 billings increased by 22% to EUR 48 million, and by 20% to EUR 101 million in the first half, respectively. Our strong operational performance in the Americas was also significantly driven by the U.S. dollar appreciation against the euro, obviously, as seen by the comparison with the constant currency rates. In EMEA, like in the previous quarter, Q2 growth continued at a stable 8% year-on-year to a total of EUR 69 million. However, the ramification of macroeconomic uncertainties and geopolitical tensions became particularly evident here and consequently impacted our pipeline conversion. Our decision to terminate business activities in Russia and Belarus also negatively impacted billings in EMEA in the first half. Lastly, APAC, clearly challenging, and clearly not what we had expected. As you can see, billings in Q2 grew slower up by 4% year-on-year to EUR 19 million. Our leadership team in APAC is continuously working on the transformation of the business. Remember, our President APAC joined beginning of December only. However, with the new COVID-19 outbreaks and the lockdowns in several APAC countries, China in particular, it temporarily slowed down sales activities. Hypothetically, if we would exclude China, then APAC would have recorded the same growth rates as EMEA. We are happy with the strategic path of our business and the changes we made, and therefore expect the business momentum to increase again. If we go to the next slide. I mentioned large customer wins and strategic partnerships in my intro. As always, let me provide some insights into three relevant additions to our enterprise portfolio from the second quarter. Firstly, we are really pleased to announce a strategic partnership with Siemens Digital Industries Software. I think that's another example of how our technology helps digitizing industrial processes. Together with Siemens, we will innovate in the product lifecycle management space, with our AR platform Frontline. We allow Siemens global customers to improve their product development process based on experiences with interactive 3D content, which is then connected to the digital twin of the product. I think after SAP and Google Cloud, Siemens partnership is the third really high-profile collaboration to expand our access to global tier 1 technology players. Let me continue with another example, of leveraging, again, our mixed reality technology, which is also part of the Siemens piece. This case is DB Netze, it's the railway infrastructure manager of Deutsche Bahn, and they use TeamViewer Frontline Spatial, that's how it's called, to train their employees in maintenance procedures. More specifically, our solution enables the client to illustrate training rooms and embed virtual information, including projections of technical equipment such as components or malfunction. Generally, we see that remote maintenance and virtual training environments gained a lot of traction during the beginning of COVID-19 pandemic, and clearly are here to stay. This is a promising growth market, micro trainings, with increasing importance of more and more businesses and industries. Let's conclude the customer spotlights with the customer Wendy's. As you know, the global restaurant chain with operations in 27 countries. While leveraging the potential of AR platform Frontline, Wendy's can improve critical areas such as food safety and quality, for instance, by monitoring suppliers and complaint investigations. In this context, the experts in Wendy's centralized restaurant support center perform remote product evaluations or supplier walkthroughs via Smart Glasses. In total, the mentioned partnerships and customer cases further demonstrate how TeamViewer solutions are increasingly integrated into different business-critical processes at commercial customers around the world, clearly meeting their demand for solutions that foster digitalization of their operations. With that, let me now hand over to Stefan. Thank you, Oliver, and good morning to you all. It's my pleasure to guide you through the financial details for actually one last time in my role as TeamViewer CFO. As you all know, Michael Wilkens will take over my role as of September 1st. Actually in the past few weeks and months, Oliver and I already touched base with Michael repeatedly to make sure that we have a really smooth transition. I'm pretty sure that from day one on, Michael will be up to speed with respect to all major strategic and financial topics. And just on a personal note, thank you all for the collaboration and very open discussions over the past years, which I really thoroughly enjoyed. Now let me start with the financial highlights in terms of top line profitability and cash flow on slide 10. Total billings up EUR 122.36 million or 7% in constant currency, which then basically brings total H1 billings to nearly EUR 300 million, up 12% or 8% at constant currencies. Double-digit top line growth from a revenue perspective grew 12% in Q2 and 13% in H1, respectively. Revenue growth is largely in line with our expectations, even though we saw a softer order intake amid the macro headwinds Oliver already explained. In terms of profitability, adjusted EBITDA of EUR 85 million, sorry, EUR 58 million, as well as the adjusted EBITDA margin of 42.6% in Q2 was above market expectations and clearly showing that we continue to successfully grow our business while maintaining strong profitability. The H1 margin of 47.2% was actually slightly above our full-year guidance already. Free cash flow in the second quarter as well as year to date, slightly down, basically solely reflecting the brand marketing partnership repayments, which are pretty much front-loaded. In H2, the second half of this year, we will see a better free cash flow conversion again. Let's move on to slide 11. 12% overall growth. As already pointed out, total billings up 12%, which represents, I'd say, a robust quarterly development that is clearly also due to favorable FX movements broadly in line with our expectations. If we take a closer look at the quarterly segment billings on the left, you can see the accelerated growth in the SMB business, which is the effect of our monetization campaigns. With that, we basically mean that we reactivated the paywall for commercial users within the free ecosystem. With a 10% billings growth compared to last year's Q2, the second quarter saw a good billings growth acceleration from my perspective. I will explain in more detail in a second. This was also again driven by successful upselling of SMB customers into the higher ACV buckets. If we take a look at the enterprise billings, they increased 21% in Q2 and now amounted to a total of EUR 27 million. As you can see on a half-year basis on top right, enterprise clearly remains the growth driver for the total billings growth. From H1 2021 to H1 of this year, enterprise contributed 53% or roughly EUR 62 million to total billings growth. Between H1 2020 and H1 2021, enterprise growth contribution only amounted to roughly 1/3. Despite a somewhat slower enterprise pipeline conversion, we are still seeing the ongoing mix shift in our maturing business. In Q2, the enterprise contribution to total billings was 20% compared to 21% in the first quarter. I think the slowdown of the enterprise growth rate reflects the aforementioned macroeconomic uncertainties. To be more specific, we noticed that decision-makers turned more to the cost side amidst lower visibility. This led to extended deal cycles and also resulted in softer order intake for us. I do not expect these macroeconomic uncertainties to disappear in the short term, but I want to emphasize that we have a growing pipeline for Q3 and the second half in total. Obviously, at the same time, we have to take into account the aforementioned factors. Overall, though, we remain confident with regards to our back-end-loaded enterprise business. Now, against this background, new billings on a quarterly basis, shown on the bottom right side, slightly improved by EUR 1 million compared to Q1, overall EUR 17 million. Let's take a look now on slide 12, a detailed look at our SMB segment. As you can see in the chart on the left side, LTM billings in that segment developed positively on a year-on-year basis, especially considering the shifts between ACV buckets in Q2, with total LTM billings amounting to EUR 470 million and an LTM growth of 8%. Generally speaking, the SMB segment remained robust, and certainly particularly pleased that we saw continued upselling trends towards higher ACV buckets, clearly a proof of the attractiveness and importance of our solution portfolio. The low end in the SMB segment remains competitive. At the same time, the successful upselling fueled the growth in the stickier and higher-quality cohorts with ACVs over EUR 500. The segment above EUR 500 and the segment above EUR 1,500 recorded the highest increase with 12% and 22% respectively. This trend towards higher ACV buckets is also reflected in the number of absolute SMB subscribers, which you can see then on the right-hand side. The lowest ACV bucket below EUR 500 decreased, mainly driven by the exit of Russia and Belarus. Both the middle and upper-end cohorts actually increased significantly by 18% and 20% year-on-year, and therefore, total subscribers finally amounted to 623,000 in the second quarter. Let's turn to slide 13. I think the key points here on that slide are the continued churn reduction. I think that's a very good and consistent development over the last three years, I think, and clearly confirming that we migrate to a stickier customer base. The recorded subscriber churn rate in the SMB, shown on the lower left-hand side, was 14%. However, considering the effects of our Russia-Belarus exit, which we mentioned earlier, the adjusted churn rate would have been slightly lower at only 13%. Again, a very healthy development from my perspective that our customer base remains very stable. The exit from Russia and Belarus will cost us about 10,000 subscribers overall over a year, over a full year. Again, just as a reminder, as already noted in previous calls, we stick to providing the churn rate for the SMB. This is clearly the more meaningful metric for the segment as opposed to the NRR, which is very important for the enterprise business. Moving on to the enterprise business. In Q2, that amounted to 20% of total billings. On an LTM basis, those billings rose by 62% to EUR 110 million. As you can see in the upper left-hand side, the relative ACV bucket distribution remained almost stable year-on-year, with the lowest ACV cohort, that's those between EUR 10,000 and EUR 50,000, contributing roughly half of overall enterprise billings. The second-largest ACV bucket between EUR 100,000 and EUR 200,000 in absolute terms nearly doubled year-on-year to more than EUR 40 million and slightly increased in absolute terms to 30% in relative terms, really indicating a significant boost in higher-value contracts and substantial customer demand for our comprehensive high-value solutions portfolio. If we move on to the chart on the upper right-hand side, you can see the total enterprise ASP in the second quarter remained relatively stable at EUR 36,000. The enterprise net retention rate slightly declined to above 110%. A drop, though, from the first quarter, as you can see in the bottom left. This reflects, from my perspective, that the implications of the uncertain macroeconomic environment, some customers getting more hesitant to close new deals or upgrade existing contracts. Nevertheless, we achieved a net retention rate of 101% on a Q2 LTM basis, and therefore, we managed to consecutively increase the NRR four quarters in a row now. As you can see in the right-hand chart, on the bottom right chart, now the final numbers of enterprise customers exceeded for the first time 3,000 enterprise customers. Very, very strong development here. Let me highlight one more important point. In the second half of the year, we also intend to launch a dedicated campaign which aims to transition a significant amount of our larger SMB customers to TeamViewer Tensor, the enterprise edition of our remote connectivity software, which we talked about a lot in the past. That's really the version those customers should use, and we have seen great upselling here over the last three years. We will now make this an even more streamlined focus area for our upselling activities and expect to move quite a few of our existing SMB customers towards the enterprise segment, which should accelerate enterprise growth rates again. Let's move on to the next slide. Year-on-year, our adjusted EBITDA increased to EUR 58 million from EUR 57 million as a result of strong operating leverage, the clearly successful execution of ReMax, and lower bad debt expenses. I think overall, this is a particularly strong achievement given last year's second quarter did actually not include any material costs from the marketing partnerships. One remark regarding those sizable contracts in marketing, they do not include any material inflationary adjustments, so large amount of those are relatively fixed. For the first six months, adjusted EBITDA was EUR 141.3 million, while in the prior year period, it amounted to EUR 147 million. Both the Q2 margin as well as the H1 margin were above market expectations. Moving on to cash flows on the next slide. You can see that we maintained a high free cash flow and cash conversion in the second quarter. IFRS pre-tax operating cash flow was down 80% in Q2, overall amounting to EUR 48 million. Levered free cash flow in Q2 declined by 13% compared to the previous year. Again, this is pretty much solely due to the planned sport partnership prepayments in Q1 and Q2. Those partnership prepayments are pretty much front-end loaded and very little remains to be paid in the second half, therefore providing a boost to cash conversion in the second half. Total CapEx accounted only for EUR 2.4 million, representing a very low level with no investment-heavy projects and significantly reduced expenses due to the successful rollout of the new ERP system. I think in total, it's fair to say that our cash flow profile and the cash conversion remained very healthy and added to us maintaining a very strong liquidity position, as you can see in the next slide. On slide 17, you can see the waterfall, cash and cash equivalents at the end of the second quarter amounting to EUR 383 million. Clearly, the largest cash outflow came from the payments for the share buyback. The other outflow contains a positive FX impact of EUR 16 million and - EUR 4 million lease payments, netting overall EUR 12 million. The net financial liabilities increased in the second quarter and amounted to EUR 527 million as of June 30th. All in all, our liquidity in Q2 remained very strong with a leverage ratio of 2.1 x. Let me also give you a brief update on the share buyback program, which we announced earlier this year. As of end of July, we have bought back approximately 19 million shares of our own stock. This buyback corresponds to roughly EUR 249 million or 83% of the target volume of EUR 300 million, which we announced. What is important here is that roughly 3 million shares of those are earmarked as restricted stock units, clearly an important feature of our long-term employee retention. As discussed when we introduced the SBB, the share buyback, we will continue the program until the amount of EUR 300 million is fully invested, and I expect it to be completed within the third quarter of this year, so relatively soon. We also increased the maximum number of shares to be repurchased under the program to 30 million shares in total. Actually, using our strong cash conversion profile, we were able to refinance our leverage structure with, from my perspective, very attractive terms. Let me quickly provide you some details on the next slide here. Our new revolving debt facility comes now with an extended maturity profile. The refinancing included a down payment of EUR 477 million term loan by using existing cash from the balance sheet and entering into a new, significantly lower term loan of EUR 150 million in combination with a revolving facility. The total RCF facility amounts to EUR 450 million and is currently drawn with EUR 150 million. On the left, you can see how much more balanced our maturity profile has become, thanks to the extended revolver and the new extended term loan. The optimized financing, which now also includes an ESG component, provides us clearly with more flexibility for potential future investments. Secondly, it bolsters our financial resilience. We have less FX volatility as well. Lastly, we significantly improved our midterm maturity profile, which is now both flatter and more extended compared to before the refinancing. Overall, very, very good news from my perspective. Maybe just quickly on slide 19 to sum things up on this slide, I think we have clearly done our housekeeping. TeamViewer is very well prepared to navigate through the current economic environment and beyond. A very strong focus on the bottom line, even better financing structure in place, and we have proactively addressed long-term employee retentions as well. We successfully executed on ReMax. Next to many other benefits of the program, we have clearly reset the cost base and realigned top line and OpEx growth that could be seen in our flat OpEx development despite the double-digit top-line growth. Secondly, with the refinancing, which was clearly made possible by the strong financial performance in the past quarters, we substantially improved the financial structure going forward. Stronger balance sheet, great liquidity, and lower financing costs, so very good result. Lastly, we also significantly improved our long-term employee retention by introducing now a modern RSU scheme across the employee base on a global basis. The cash outflow for this program is already fully done in the second quarter and will cover us very well for the next 2-3 years. Now, most importantly, the guidance. We maintain our current guidance. We've analyzed a variety of different scenarios over the past weeks, and despite the macro uncertainties and limited visibility, we are confident to reach the guidance, though at or around the bottom end of the predicted range, at least for billings. However, full disclosure here, we also came up with scenarios where this will be challenging, especially in light of recent volatility and customer cautiousness. It really remains to be seen how enterprise develops and how we can push through with pricing and upselling our large install base. This means for the full year 2022, we continue to expect revenue to increase in the mid-teens to EUR 565-EUR 580 million, and an adjusted EBITDA margin within the range of 45%-47%. We expect billings for the full year of 2022 to be at or around the bottom end of the current guidance, which means somewhere around, EUR 630 million. Now, let me conclude the outlook section with a rather long-term view. While we recognize the positive brand-building effect of the partnership with Manchester United, we do not intend to extend the sponsorship agreement with the club beyond its term. In light of the current macro environment, we have decided to reassess the long-term marketing strategy, and as already touched on over the course of today's presentation, we have already implemented several short-term measures to ensure and increase our attractive affordability. I think in the next step, we now increase our focus on medium-term measures. As a result, we expect that the combined effect of these measures will lead to significantly improved margin following the end of the current sponsorship agreement. With that, I'll hand over again to Oliver for concluding remarks, and let me end by saying thank you all again for the very open, respectful, and inspiring conversations and discussions over the past years. Looking forward to having some final one-on-ones later today and tomorrow during my last few days in the office. Thank you. Yeah. This concludes today's presentations. We now look forward to taking your questions. Before commencing the Q&A session, I would like to sincerely thank Stefan for his exceptional contributions to TeamViewer. The outstanding refinancing he secured for TeamViewer, and which he presented to you some minutes ago, is just one of the numerous proof points of how good a CFO Stefan was for TeamViewer. I'd also like to thank you, Stefan, for ensuring the exceptionally smooth transition with your successor, Michael Wilkens. Thanks to you, he will have a head start when beginning in September. Stefan, I think everybody knows that I really enjoyed working with you, and I really wish you all the best for your future. With this, I think we move over to Q&A. Ladies and gentlemen, if you would like to ask a question, you can do so now by pressing star one on your telephone. We will now take our first question from Katinka de Keijzer from J.P. Morgan. Please go ahead. Hi, thank you for taking my questions. Two for me, please. Firstly, on the demand environment, you told some customers being cautious and postponing deals. Can you give a bit more color on maybe which regions, which sectors, and even kind of what type of deal sizes? Secondly, you still need to see a meaningful acceleration of billings growth, and both billings growth in Americas and APAC slowed sequentially in constant currency terms. What is the visibility you have into the second half? Finally, during the first pandemic, the lockdowns accelerated the demand for your solutions, and now you're mentioning that the lockdowns are having a negative effect in APAC. What has changed? Thank you. Yeah. Let me start here, Katinka, with the regions, and the deal sizes. I think from our perspective, we experienced first a slowdown in the EMEA region, you know, sometimes during the second half of the second quarter. I think generally more cautious tonality from customers. We basically came in line with our forecast for EMEA, but clearly we had hoped for more. I'd say the U.S. enterprise actually pretty resilient. Yes, we had a few larger deals which slipped. Those deals are still very much alive, and we expect to close them shortly. Overall, actually, the enterprise contribution in the Americas was pretty strong in the second quarter. Some of those deals which slipped are significant deals for us, EUR 500,000, roughly in deal sizes. Quite significant deals. Again, they are still live, but let's see whether we are able to close them. We should know that pretty soon. Overall, I would say the slowness was more pronounced in EMEA than in the Americas. APAC very much differs by country, frankly. Our most mature markets, Australia and New Zealand, actually very strong growth, clear double-digit growth in those markets. China, tougher spot for us. The lockdown certainly there hasn't helped, because, look, the basic remote access products, I think that market has a certain maturity achieved over the last couple of years. The lockdown certainly doesn't make it easier to pitch new products, to meet customers and present our technology, especially for the newer use cases, and therefore, the lockdowns had a negative impact. We can clearly see that in EMEA and the U.S., where we had a significant amount of field activities going on, lots of customer visits and great shows, and that clearly helps us build the funnel. In terms of billing growth and visibility for the second half, yes, it requires an acceleration. That's not untypical for an enterprise software company. We've seen that last year as well. To a certain extent, Q4 was very strong. That's the time of the year when you typically close the larger deals. We expect the same to happen this year. At the same time, obviously, we need to be cognizant of the tougher macro environment out there, and that's why we put the language around the outlook statement that's clearly based on the pipeline. We are confident to achieve the guidance, but there are also scenarios in which that might be tougher, especially continuing cautiousness on customer side, and deal slippage. And then the last question. Sorry, go ahead, Katinka. Just how much of FX are you assuming in the guidance of EUR 630 million? We basically assume a continuation of the current FX rates, which means the U.S. dollar/euro to $1.02 to EUR 1.03. It really only started strengthening toward the end of last year. I think the average rate for Q4 was still around 1.15 USD last year. We still expect a significant FX tailwind there. Thanks. Thank you. We will now take our next question from Mohammed Moawalla from Goldman Sachs. Please go ahead. Please go ahead, Mohammed. The line is open. Mohammed seems to have stepped away. We will now take our next question from Gianmarco Contini from Deutsche Bank. Please go ahead. The line is open. Good morning there. Yeah, thanks for taking my questions. I have a few now. I'll ask some follow-ups maybe later. The first one is on exactly which customer cohorts do you see most of the slowdown in order entry coming from? Would that be from enterprise or SMEs? The second was just like a curiosity about, you know, how come more free-to-paid campaign activated? I was sort of under the impression that, you know, the growing subscriber, you know, growing subscribers using this strategy could perhaps mean that you'll be acquiring lower quality customers, and that they will sort of like churn away in twelve months. Just wanna understand the strategy around this. The third question is, what was the main reason for the slowdown in NRR, you know, going below the 100% mark? Thank you. Yeah, maybe, I can start. I think the slowdown, let's say, if you look at it's most pronounced in the enterprise segment, obviously. If you look at pipeline conversion towards the end of the quarter, that's where we see delays in decision-making. Which doesn't mean that the deals are not there anymore, but customers really take time. It started in Europe, and it's now, I think, also the case more in the Americas. I think generally SMB is not so much a conversion topic, but I think that's in general just deal flow, leads coming in. It's also weaker in current environment. The conversion piece is really slowed down. It's for us most important and most pronounced in the enterprise segment. I think on the monetization, we were running monetization campaigns. You're right, these customers are mostly coming in at the lower end. We have been running campaigns across the regions. We're trying to really move customers into the business license or not so much into the remote access license. We are less aggressive, I would say, in terms of promotions and pricing than we have been in the past. That reduces the overall volume of the monetization impact, but it's also reducing the risk of a churn one year later, which you mentioned. Obviously, this is the entry-level cohort, so there will always be a slightly higher churn in this cohort than in the higher end segment. You're absolutely right with this. I think relative to other times when we did significant monetization campaigns, for example, after the COVID, where we had a big wave of conversion of monetization of customers or users, I think that looks very different. Stefan, that retention rate maybe. Yeah, with the NRR down, clearly the biggest driver of that is the slower up- and cross-sell activities. It's not a churn topic, which is good news. I think the business continues to be very resilient. Churn has actually come down, if you adjust for Russia, Belarus from 40% to 30%. Very good from my perspective. Up- and cross-sell suffered under the current macro environment. Customers continue to use our software. It's an important solution which they need, but they've been more cautious in terms of extending and increasing the volume under the current environment. That's the main reason for the NRR drop. In the enterprise business, I mean, it's still north of 110%, which is quite good, but it saw a deceleration compared to the last quarter. That kinda leads me to two follow-up questions. The first one is, you know, given you've had slower up- and cross-selling activities, sort of what gives you the confidence that you're able to do that in H2? You know, you sort of like briefly said that you have a strategy to try and upsell from existing SMBs to enterprise. I guess as the macro like environment deteriorates, as you're seeing order intake slow down, you know, what sort of gives you the confidence that you'll be able to do upselling and cross-selling in H2? That's my first question. You know, the second question is just a final one on, do you expect sort of H2 margins to trend in line with H1? You know, this strong margin beat was driven, I'd imagine, mostly by the ReMax program. You know, what are sort of your expectations of ReMax having an impact in H2? Should we expect something similar? Thank you. Yeah, maybe I take the first one. So up- and cross-sell from SMB to enterprise. 'Cause, you know, this has been an ongoing motion, but very selective. If you track the number of enterprise customers or number of customers above EUR 10,000, so it's a gradual increase, quarter-over-quarter, now standing at a bit more than 3,000. Of course, really we started from the top, with relatively strong upsell, and increase in ACV per customer. What we think we should do now, and we started with kind of sample cohorts. We think now it should be reflective of the current economic environment where many customers look for kind of good offers to improve their security positioning and improve the feature set, work more remotely, and have the right solution, which is our Tensor platform. We know there's many customers in our base that want it and have expressed interest in the past. We have been, I would say, on the high side of pricing. You remember discussions we had where we often indicated that it's often the 3x, 4x increase of ACV when we move these customers. We feel in the current economic environment where companies under pressure, there's really room to be more a bit more aggressive on these campaigns and offers. We providing these functionalities at a lower ACV increase to make it an attractive bundle for our customers. We believe that there is a significant amount of customers that would then move to the solution that they anyway want in a way because it comes with single sign-on and many more functionalities. This is why we believe if we run this as a campaign across the regions that there can be significant more upsell and cross-sell than we've seen in the first half of the year. Margin development. If you take a look at the quarter development of our total OpEx, I think came down from roughly EUR 90 million in Q3 and Q4 last year to now around EUR 80 million. ReMax is pretty much fully concluded, at least from a cost-cutting perspective exercise. So we are now sitting at a run rate of around EUR 80 million, give or take. We continue to invest, but more selectively. We continue to invest into sales and R&D, but other functions, we are more cautious in terms of overall investment and replacements. So I'd expect a slight increase in our cost base in the second half, but obviously we also have a higher billings number in the second half, and therefore margin should be pretty much in line with what we've seen in H1, yeah. Overall, I feel really confident about adjusted EBITDA for the second year, and also about the second half and also about adjusted EBITDA margin. Great. Thank you. Thank you. We will now take our next question from Ben Castillo from BNP Paribas. Please go ahead. The line is open. Good morning. Thanks very much. A couple from me, please. Billings guidance for the full year. I guess what does that embed in terms of pipeline conversion versus what we've seen in Q2? Are you sort of factoring the same level of deal slippage and pipeline conversion or some deterioration or going to be some improvement? Probably the first one. Second question, on the news of the Manchester United sponsorship, I guess how should we read that? You know, why make that announcement now, given you're only one year into a five-year deal? What's the messaging there? Has the return on that investment maybe been different to your expectations? Clearly there'll be little impact for the next four years if you're thinking of the financial impact. So yeah, curious on the messaging there. Third, if I may, on capital allocation, you're over 80% through your share buyback. What's the outlook for M&A in H2? Should that pick up as a use of capital, or more buybacks on the table? Thanks. Yeah, maybe I start. I mean, this is a difficult environment at the moment, so it's difficult to read how macro and demand trends in enterprise will continue. I think what we've communicated is that pipeline conversion was weaker than we had expected. We don't assume a deterioration there, but we also don't assume an improvement on conversion. I think what we do see based on our partnerships that we have, SAP, Google, now Siemens, and also the activities we've been doing since we can travel again and visit trade shows and generate leads, we see a growing pipeline. The pipeline cover relative to what we need to achieve in order to get to our guidance is better for the remainder of the year and especially also for Q4. That's the current thinking. Again, hard to read how it will develop, evolve in terms of buying behavior, but we are operating with a growing pipeline quarter-over-quarter sequentially, and therefore we feel better towards the second half of the year than we feel for the first half. Manchester United, Stefan- Yeah. Look, Location. I think from my perspective, in the first year, we clearly got a significant brand boost through those partnerships, especially Man United, in the visibility of TeamViewer as a global brand has certainly accelerated substantially, no doubt about that. At the same time, we entered into these partnerships under different assumptions, especially in terms of our long-term growth. When we entered this partnership, we felt that we will be growing north of 20% or close to 30%, and obviously, the situation has changed and therefore we needed to reassess, the long-term, investment strategy for TeamViewer. From my perspective now, we've done all of our homework in terms of the short-term, profitability preservation, where I think we've done that extremely good. ReMax fully concluded and very effective. We've kept margins at the 47% level. I think it's also now time to think about the future and the long-term alignment of our cost base with the top-line growth, and that's why we made this decision so that the analysts know out there about the margin profile going forward, in light of the current environment. That's why we took this decision and announced it today. Capital allocation. Capital allocation, share buyback now pretty much completed, will be done within the third quarter. In terms of M&A, yes, we are actively screening the market. I wouldn't expect anything to come shortly, frankly. That's not the time right now, but, let's see how things evolve. Clearly, we will continue to do M&A, but nothing short-term on the horizon here. Yeah. I think from my perspective, adding to this, obviously, now being the transition from Stefan transitioning out, and then Michael coming, I think it's absolutely important to keep focused on profitability for the business. Do our homework, grow the business in the areas where there is growth and opportunity, like the discussions we had before on enterprise. Upsell, cross-sell, and also SMB. It's very important to focus there. Brand building and investment into our technology brand is very important and remains very important, and we have these partnerships that we're using. It's also clear, as Stefan said, growth is different. We need to prioritize, we need to keep cost in order, for the midterm and the long term. Hence, we wanted to provide clarity on how we think about this, at the moment. Capital allocation, as Stefan said, I think it's currently the time to do, to focus on organic and drive our billings and develop the business in the different regions. There's enough to do. Obviously, in the current market environment, there might be opportunities coming at some point, but it's not a priority, for now. Great. Thanks very much. Thank you. We'll now take our next question from Gustav Froberg from Berenberg. Please go ahead. Hi, everyone. Thank you for taking my questions as well. I have two, if I may. First on pricing. I know we talked about ACV expansion, et cetera, and shifting among cohorts, but could you share with us how your underlying pricing has developed over the quarter, just across the regions? Then my second question on caution in the market, when exactly did you see this arise with your customers? Would you say that the situation has improved, worsened, or stayed the same, as it stands today in August versus the end of the quarter? Pricing. I think underlying development is as we always said, we typically don't do like for like price increases. However, we started last year upon renewal to do slight increases upon renewal, so there we talk order of magnitude 3%-4%. This is for some segments and some cohorts also happening this year, but not very pronounced. I would say in the other elements where we talk about new business, I think the pricing environment has stayed relatively the same. Yes, there's more discussions, but I think most of the projects and most of the situations we have, there's anyway some price exploration going on. What is the value that we generate for customers? What is the overall size, rollout speed and the likes and the likes? I wouldn't say that there is fundamental change there. We also had reported already last year that at the bottom, and bottom means, like, really below EUR 500, there is competition. There's more competition. That hasn't worsened, I would say. I think it's relatively the same. We have done in some regions some adjustments there to be a bit more competitive, but generally speaking, I think on the pricing side quite stable development. As I said before, when we do upsell, when we will do upsell into the base, relatively to our price book, we might be a bit more aggressive to have interesting offers in these recessionary environments to SMB customers to move to the Tensor platform. That's still a significant ACV increase, a very significant ACV increase, so therefore that wouldn't be visible as a price pressure or so. It's actually an ACV up. Looking forward, as you know, we just had some weeks ago, our new Chief Commercial Officer joined, Peter Turner. I think given the significant inflationary environment in many markets, I think it's really worth looking at the price development and the renewal price increase going forward. There probably will be countries and cohorts where we should push through a slightly stronger price increase, but that's all under analysis, and I don't wanna kind of jump the gun here because Peter just joined, and he will take his time to analyze and then come up with actions. In terms of current environment, I think clearly things have not deteriorated. I think they are stable now on this level. I think we've seen that slowdown probably first starting in EMEA, in Q2, then a little bit of slower conversion, the enterprise pipeline in the Americas, but still very good numbers for the enterprise. We just had hoped for a bit more. July off to a good start. Things are stable, I would say, or can clearly say. Let's see how things evolve, but I think the dip was mainly in Q2, and from there on it seems stable. Yeah. I think the organization is clearly also, I mean, it has adjusted to the fact that you need more pipeline to get to a certain number of good deals. I think there's always an adjustment phase, so to say. Europe was very harsh, tough early in the year when the war started. I think Americas was more gradual. Everybody knows what we're up to and the environment we are working in. Full focus working on building pipeline with all the partnerships in all the different segments and for different use cases. I've shown some of them in new industries and new verticals. All hands on deck to work on this one. Stefan said July always the first, I mean, the first quarter of the month, never an easy month. If we compare with the beginning of last quarter, we actually see it looks better. Again, this is early days, just one month. Beginning of Q2 was a tough one. Everybody in adjustment mode, beginning of Q3, it feels organization is more on it, and we have been able to early days, just a few days ago, seems like we have been doing better than at the beginning of last quarter. Perfect. Thanks. Thank you. We will now take our next question from George Webb, Morgan Stanley. Please go ahead. Your line's open. Morning, Oliver and Stefan. I've got a few follow-ups. Firstly, just on the sports marketing partnerships. I think the annual report from last year had total contractual obligations for this year at EUR 72 million, which I guess most of which will be relating to Manchester United. Do you have any early thoughts on how much of that marketing spend you'll look to reinvest back through other marketing channels versus what we might see as uplifted EBITDA margin once that term ends in a few years? Secondly, on the free-to-paid monetization, I think when I asked on the Q1 conference call, there was a broad comment about perhaps linking the restart of that post Peter Turner starting as CCO, seeing his thoughts and then making a decision. I'm curious as to when during Q2 that was turned back on and what drove that decision. Thirdly, just on your employee base, can you talk about what you've seen through this year so far around attrition levels and also on the flip side, your ability to hire? Thank you. Yeah. Let me start with the sports partnerships. Let's bear in mind that this is not only Manchester United but also Formula 1. Clearly significantly less compared to Manchester United, but in the EUR 72 million, that also includes the Formula 1. That being said, if we come to the end of our term, there will be significant relief of the P&L, but we still have significant marketing funds available. I would, at this point in time, not expect that we need to continue to reinvest a significant amount. I think most of those savings will actually go to the bottom line. That's why we announced it today. I think there will be a step up in March and going forward, everything else being equal. Look, I think coming back to my earlier comment I made about the marketing partnerships, I think for us this decision is really about realigning our long-term growth with our long-term cost base. This longer term growth rate has come down, and therefore now the longer term growth in the cost base also need to come down, and that's what you will see happening. Therefore you should see and model an increase in our margins going forward beyond the term of this partnership agreement. Maybe I take the attrition levels. I don't think I understood the second question well. Employee attrition levels, what are we seeing? It has been for the first half of the year. It's a very competitive marketplace. I think we've discussed that early. We've done our homework in terms of respective salary increases where we need to do it. We also launched the RSU scheme, which will be financed or is fully financed, as Stefan explained before, with a small portion of the shares that we bought back. That's all done. Attrition levels, Americas, high. Obviously we have inside sales people, and the service people where the fluctuation is anyway high. Clearly the attrition levels are higher than we want them to be. EMEA is, I would say so far, still relatively in line with expectations. APAC is in transition anyway, so there's lots of, call it, wanted attrition, where we actually change it up of the organization and do then also people changes for performance reasons. I would say really the big area or the most affected area is the Americas. From what we see now, I think it's early, but seems like the recessionary trends are coming through more. It seems to ease a bit, but early days, as we see. Flip side, hiring, yes, we hire for key positions, absolutely. I think in some regions that works, well, in others very complicated or functions. I think it's not significant change to before. Obviously we anyway, we're disciplined. We look at every position, in the senior leadership team where we replace and where we add positions for strategically important topics. I think it's an environment at the moment where we're disciplined, and that's what you see in the FTE development. If we have a high attrition here and there, we're also sometimes a bit slower in backfilling, because that's also a good measure to keep our costs, in the right place. Could you maybe repeat your second question on monetization? I wouldn't mind. Yeah, of course. No, I was just looking back at the Q1 call, and I think I recall asking, you know, how would you think about restarting the monetization campaigns? I think you made a broad comment that you might look to see Peter Turner start as CCO before you made a firm decision on timing, but of course, yeah, you started it in Q2, so wondering when in Q2 you kicked that off again, and why you decided to go ahead in Q2 versus more the second half. Yeah, we did. I think we mentioned that we do a few test runs in the second quarter, and I think those test runs clearly show us it's time now to monetize again, because there's no benefit to be had to wait longer. That's why we launched those campaigns. I think from my perspective, they've been very effective, but they also proved to us from all that we've seen, it doesn't make sense to hold back longer. If anything, maybe actually do it more regularly and more frequent, but maybe less intense. That's our current thinking, and it was one of the reasons based on those test runs that we actually had it activated more broadly in the second quarter. That's a matter of, it's a function of when are these users active, and when do you best approach them to buy a license versus letting them be active maybe for six months, and then activity goes down, and then, they're less likely to convert. It's always. These are micro campaigns that we're testing across countries, different regions. After the testing, we felt it's probably time to do some of it in some markets, not all. There's still potential left, of course, for the remainder of the year. What we felt we shouldn't wait too long. Also, taking into account Peter joining in July and then obviously, taking some time to understand and probably also focusing a bit more on other topics. We felt we should probably continue to work on this on a regular basis. Understood. Thank you. Thank you. We will now take our next question from James Goodman, Barclays. Please go ahead. Yeah, morning. Thank you. Stefan, all the best for the next chapter. Firstly, just a clarification, please. Stefan, I think you said in your pre-prepared remarks. I might have missed some of it, but you said something along the lines of you targeting the low end of the billing guidance. I think you said, to be frank, there are scenarios where you see yourselves coming below that. Did I get that right? If so, can you be a little bit more specific around what scenarios you are discussing? Just a couple of specific questions. One, I think I see that you set up a new share-based compensation plan for employees in the second quarter. Can you just talk to the magnitude of that? I mean, is that just a sort of underlying wage increase for employees? What's the annualized stock-based compensation now on a normal basis? Because it's sometimes hard to separate that out from what's funded by the sponsors from the IPO. Finally, just on bad debt, very low bad debt this quarter. I'm a bit surprised. I thought maybe given your macro commentary, bad debt might be increasing slightly. What's happening there, and are you expecting that to remain low? Thank you. Yeah, sure. Maybe on the scenarios. Look, I think when we did the analysis of our pipeline and the upsell campaigns, Oliver explained with the SMB, within the SMB segment, to push them to our Tensor product. I think all of those numbers make us very confident that we hit the low end of the range. At the same time, I think we have to be cognizant of the macro environment out there and extended sales cycles and cautiousness on customers' decision to extend or extend contracts. Therefore, there are also scenarios where we will not make our guidance, and that's what we wanted to bring across. If the situation deteriorates, then this will be a scenario where it will be tough to get there. Again, from the pipeline build and so forth, we clearly have confidence to get to the low end of the range. In terms of the RSU scheme, actually, we have an appendix sheet where you see in the second quarter, it was very little, I think EUR 1 million charge. The most significant part of the IFRS 2 charges are still related to the scheme which was put in place by the previous sponsor, which is non-dilutive and results in non-cash outflows. The RSU scheme going forward, I think that's a very attractive element which will clearly help us to retain key talents. It's a broad-based program, has now been fully financed already, you know, through the share buyback. I expect the charge in the next one or two years to be mid- to high single-digit million euro. Still relatively small or very small compared to other companies. Clearly a key element in our employee retention. On bad debt, I think we have seen a very good development over the last few quarters already. I think at the time of the IPO, it was 3%-4%. It has trended down to 3% even during COVID times, when we relaxed our payment terms and dunning procedures and so forth to help our customers. Even then, in 2020 and 2021, bad debt has come down. The more we move to enterprise, the more important that gets. The more we are having business with the existing installed base, the lower our bad debt ratio gets. As you can see from the balance sheet, our AR exposure, I think it's EUR 11 or EUR 12 million, so very well covered there, and I expect a significant decrease in bad debt going forward as well. Yes, the macroeconomic uncertainty might result in some higher bad debt here and there, but so far, I haven't seen it. I think we're still very much applying a conservative accounting here, and I expect bad debt to trend at those levels going forward as well. Great. Thank you. Thank you. We'll now take our next question from Victor Cheng from Bank of America. Please go ahead. Thanks for taking my questions. Just two from my side. Just follow up on the monetization. Can you talk a bit about the contribution of the monetization in Q2, and what is the expectation of it for the rest of the year? You know, it sound like you were just, you know, starting to test it in Q2, but that seems like to have taken a hit on active devices. How much further should we expect the contribution from it going into H2? Then just a clarity check on the subscriber contribution from Russia. I think you mentioned 10,000 subscribers from Russia and Belarus. How much of that is from Q1 and how much of that is from Q2? Is that 10,000 coming off from Q1 entirely? Yeah. Maybe free to paid, first of all. We had roughly low- to mid-single-digit million contribution in the second quarter. I expect the same to take place in the second half. I think that's pretty much actually in line with our assumptions when we did the budget, that we expect around EUR 10 million overall. Less compared to last year, clearly, but still a very decent number and pretty much in line with our expectations. Q2 now low- to mid-single-digit, and the same will happen in H2, that's probably more Q4 though and less Q3. In terms of the subscriber count, the 10,000, that's on a full year basis, so that will manifest itself in our subscriber numbers over the next few quarters. In the second quarter, we probably had a fourth or maybe 1/3 of those subscribers, leading to roughly 3,000 or so in the second quarter and the remainder to come in the next few quarters. Got it. Thank you. Sure. Thank you. We'll now take a follow-up question from Mohammed Moawalla from Goldman Sachs. Please go ahead. Yes. Morning, Stefan and Oliver. I had just one question. When you think about your medium-term guidance, which is kind of in the high teens, given some of the macro risks that you've sort of identified, how feasible does that look? Or do you need to kind of revisit your kind of margin guidance over the long run as well to try to stimulate more investment, to stimulate growth? Just related to that, a follow-up, you've done the Manchester United sponsorship. Is there any way to kind of measure the benefits of that, given kind of it's been 12 months on in terms of your billings growth? Thank you. In terms of margin and midterm outlook, I think this is right now not the time to think about midterm. I think I certainly would need to experience Q3 and Q4, frankly, to assess the midterm outlook. That's just a bit premature, given the volatile environment. I feel very optimistic about the fourth quarter and the enterprise pipeline, but obviously at the same time we have a tough environment. I think we need to wait for that and then make a judgment call about the midterm guidance. In terms of margin midterm guidance, look, I think with the announcement today and the cost measures we've taken, I don't believe that TeamViewer is underinvested, frankly. I think we will see a margin step up clearly beyond the term of the Manchester United partnership agreement. We still continue to go ahead with investments in sales and products, as you can see from our P&L. At the same time, we have seen scale effects within G&A, right? I expect that going to be the case going forward as well. Margin profile of this company, I feel very confident and there's no investment needs to assess or to address the billings potential. In terms of billings impact from Man United, look, I think the focus clearly was, as we communicated, this will boost our brand. Yeah. It certainly has helped us to boost the brand. Billings impact in the first year, we always said that will be very limited. That's certainly the case. Okay. Thank you. Thanks. Thank you. There are no further questions. That will conclude today's conference, ladies and gentlemen. You may now disconnect. Thank you very much. Have a good day. Bye. Thank you. Bye. Bye.