Ladies and gentlemen, warmly welcome to Basware's Q3 2021 results webcast and conference call. My name is Katariina Kataja, and I'm an IR manager here at Basware. Today here with me, I have CEO Klaus Andersen and CFO Martti Nurminen here present at the Espoo office in Finland. Firstly, I would like to draw your attention to the disclaimer note that we have in this presentation and remind you that you can ask questions all through the presentation, through the web chat, and after the presentation through the conference call lines. The questions may be also asked from this meeting room here at Espoo. With these opening remarks, I would now like hand over to Klaus. Klaus, please go ahead. The stage is yours. Thank you very much, Katariina. Thank you. Good afternoon and good morning also from me here from our headquarters in Espoo in Finland. Let's, as we always do, let's start with the key takeaways for the quarter. Our financial performance in line with our expectations. Top line growth, even though very modest growth this time, but still growth, and operating profit up 17.5% year-on-year, amounting to EUR 2.4 million for the quarter. Cloud revenues grew 9.1% year-on-year on a constant currency basis. Our recurring cloud revenues is now 80% of our net sales. Order intake was EUR 2.6 million, and in addition to that, we signed a significant enterprise agreement with a large fast food chain in North America, which is not included in the number because of the ramp-up structure of the contract. We welcomed during this quarter as well our new Chief Revenue Officer, Alwin Schauer. It's a pleasure to have been working with him now for a month and watch how quickly he actually comes up to speed. Customer success during Q3 2021. Our cloud order intake was, as said, EUR 2.6 million, and all regions contributed this time, and especially APAC and France had a good quarter this time. Finland, Germany, and Benelux all performed well, whereas Scandinavia and U.K. both had a slow quarter. U.S. had a very special quarter, and I will dig deeper into that in a moment. We welcomed in total 16 new logos, and the logos we are allowed to share with you are Northern Territory Government from Australia, Southern Cross Care, also from Australia, Pernod Ricard from North America, and BinckBank Group from Holland. Many of our customers still, unfortunately, have internal policies that doesn't allow us to disclose their logos. Let's dig a bit further into the order intake, and as well on the environment that we are operating in for the moment. We continue to see market uncertainty, and that affects our sales cycles as well as our contract structures, especially for larger engagements. Customers are increasingly looking for flexibility. You could call it pay-as-you-go. The trend is to avoid large upfront commitments, and we are adapting to that reality. New business coming in from all regions and countries, but U.K. and Scandinavia are clearly the countries with most potential to improve. U.S. is a special story this time because on top of the, you could call it the normal order intake, we closed a significant enterprise agreement with a large North American fast food chain, an agreement we have been working on for a long period of time. This agreement is not included in the EUR 2.6 million reported order intake number because of the ramp-up structure of the agreement. Order intake from this deal will be reported in the coming quarters stepwise as the rollout progresses. Our expansion business continued with a steady pace, and more than 100 of our customers expanded their business with us during this quarter. Expansion business was almost 50% of the order intake, and our transformation business was around EUR 500K of the order intake. Right now, the transformation business is primarily coming from customers sitting behind our partners who are now moving away from on-premise to cloud. Partner contribution was, in relative terms, around the same level as the previous quarter, with approximately 1/3 of all our deals being influenced by partners or sold directly through partners. The large enterprise deal with the fast food chain in North America was done in close cooperation with KPMG in the U.S. Just to put this a little bit more into context, without revealing too many details, had this large enterprise deal been on normal standard terms and conditions, then this quarter would have been significantly better than Q3 last year. September 1st, Alwin Schauer joined us as the new Chief Revenue Officer and member of the Basware executive team. I'm very pleased to have Alwin on board finally. We have been waiting for Alwin for almost five months. His previous employer would not let him go. We had to be patient and wait. I think it has been worth waiting. It's actually quite a good sign that your previous employer will not let you go before they absolutely have to. Alwin joins us from Software AG, where he was responsible for their business activities in the DACH region. Before his almost two years with Software AG, he had spent more than seven years with Salesforce in different roles, where he has been taking on more and more responsibility for the EMEA cloud sales and ending up being responsible for all cloud sales for Salesforce in the entire EMEA region. Adding Alwin to the executive team brings a lot of additional cloud business as well as especially cloud sales experience into the executive team which is a very nice addition. Sales execution remain our number 1 focus area. Now we have new executive sales leadership in place, the leadership changes we did earlier in the year in the U.K. and in Scandinavia will eventually also show results. Didn't happen in Q3, it will show results at some point in time in the future. We continue our efforts to improve our sales efficiency, we know that there is room for improvement here. Focus is on demand generation and efficiency in pipeline generation. We are focusing on our business development set up right now, we are working on our brand awareness, especially brand awareness in the U.S. We have started to increase our marketing spending now, and the level of activities has increased compared to the previous quarters. We will continue to do so as long as we see proper return on investment. Marketing activities are still somewhat affected by local restrictions and guidelines, but also this area is slowly normalizing. Our focus when it comes to direct sales continues to be to make it as easy as possible for our salespeople to close business. Clear territory planning and territory management supported by efficient tools. We are rolling out HubSpot across all regions right now just as an example of what we are doing on the tooling side. We are looking at the way we conduct inside sales and renewals with the aim to increase the time our sales reps can focus on new logo deals and larger expansion sales. Our partner strategy continues, and the focus, very high level, is to get the delivery partner initiatives that we launched this summer fully operational, and then consequently start to see an increase in the partner-sourced pipeline generation. Our sell-through strategy is to continue to grow with our existing trusted reseller partners and to expand our network of reseller partners to increase our market reach, both geographically but also in some areas from a segmentation perspective. A couple of times previously, I've talked about our innovations, and this time, I would actually like to go back to some of the innovations we've talked about before and give you a little bit more insight into where we are with these innovations and how far we are in the rollout of the initiatives that we have previously talked about in these sessions. Let's start with Basware Procurement. The procurement module of our purchase-to-pay solution is on a really good trajectory. It's gaining momentum now in the market. We have today 120 customers live, and when we measure the adoption of our procurement module, we very much measure it on how many customers do we have who are live with a procurement solution. That's very important to do it like that because procurement is fundamentally different than accounts payable, because procurement is not necessarily something that you have to use. It's a different implementation project and a complete change management project you have to go through when you implement procurement. Whereas the AP automation is much more part of the core financing business, so you cannot not use the AP automation solution. Whereas the procurement solution, even though it's available, you can actually in many situations decide not to use it and do your spending outside the procurement. Procurement is not sticky in the same way as AP automation is, and that's why we are very keen on measuring how used it is in real life with our customers. Our customers are going live with our procurement solution, and as you can see here, we have been achieving significant growth over the last year. With 120 customers now live and a portfolio of implementation projects of around 25-30 projects ongoing, we are making progress here. The number of customers live has grown with 40% year-on-year, the volumes that is going through the procurement solution right now has grown 75% on a year-on-year basis. This year we have sold our procurement module to 17 existing customers, and we have sold it five times to completely new customers. I think that tells me two things. First of all, the expansion possibility we have in the existing customer base with the procurement module is starting really to show tangible results. Taking into account that we have more than 500, 600 customers who doesn't use the procurement module today tells you a little bit about the expansion possibilities we have with the procurement module. The other thing, that we are able to compete in full P2P cases is also very encouraging. The fact that we have sold five completely new customers where we have sold P2P in directly from day one, tells me that within the procurement space, we are getting more and more competitive. All in all, I would say pretty good rollout of the procurement, and there's more to come. AP Pro rollout, we have talked about many times. For those of you who have participated in these calls before, it's a little bit of a repetition, sorry about that. For those of you who haven't participated before, I'll do it very quickly. This is our next-generation user interface and user experience for the professional accounts payable users, and it's based on top modern cloud technologies, fully HTML5-based, and using Angular and Google Material Design as the main components in the technology. We are now so far in the rollout here that two-thirds of all our users are using only AP Pro as their user interface. We expect that we, at the end of the year, will be almost done with the rollout. We also expect that there will be a number of customers who have not moved at the end of the year, but we would then have to look at that on a case-by-case basis. Just to put this in perspective, on the Basware purchase-to-pay platform, we have more than 500,000 end users. Of course, not all of them are AP professionals, but we are talking about moving tens of thousands of users from one UI to the next-generation UI. Getting them all moved is, of course, a goal for us because that would straight away lead into the fact that we could close down all these servers that is today driving the old user interface in our production environments, and we could reduce our software maintenance costs because we don't have to maintain then the old user interface. SmartPDF. We have talked about Smart PDF many times before, and especially the Smart PDF AI service, we have talked about many times before. We are now seeing real accelerated growth in our Smart PDF business. We have 18 customers live with the AI part of Smart PDF, and we are now processing volumes, which is on an annualized basis, 2.4 million documents, which is an increase from January 1st of more than 400%. This is really gaining momentum. Our Smart PDF solution, where the Smart PDF AI is a component of it, but not all of it is AI-driven, can now handle 56% of all incoming documents. That's documents that we would have sent to manual validation before. 2.4 million documents are now processed through this service that we would have otherwise sent to scan and capture. The advantages of this service is clear. From a customer's perspective, it's real-time delivery of the invoices, and it's of a much higher quality than the quality you get out of manual validation. A very significant milestone that was reached late this summer was the fact that we are now able to take on completely new customers directly onto the SmartPDF solution, and we don't have to onboard them first on scan and capture and then move them to SmartPDF. That was a significant milestone for me, and it also tells you a little bit about where we are from an operational maturity perspective. We will now continue the journey and ensure we get to a point where onboarding of new suppliers is seamless and the solution is resilient enough to gracefully handle smaller changes to invoice layouts. When we have that in place, then we're there. With that, I would like to hand over to Mar to take us through the details of the financial performance for this quarter. Thank you, Klaus. Good afternoon, good morning, good evening also on my behalf. Always, I will start with the financial performance overview for the quarter. In terms of our order intake, we delivered EUR 2.6 million on a continued basis to an extent both deal timing and deal structure is now impacted by market uncertainty. We then take into consideration this large enterprise agreement in U.S. that we are very pleased about, we can see that incorporating this deal, our Q3 order intake, would have been significantly above last year's level again if this deal would have been at Basware standard terms and conditions. Our net sales, modest growth at 20% on an organic constant currency basis, broadly in line with our expectations. Executing our sustainable, profitable growth strategy also continues in the Q3. From a bottom-line perspective, we delivered operating profit of EUR 2.4 million ahead of last year. Again, a solid contribution, a robust contribution by our employees around the world in executing and making our strategy real one quarter at a time. Our cash position, ample cash available to execute our strategy, though significantly down on a sequential basis relative to the end of the Q2. All this is attributable to our refinancing transaction that provides, on a to-go basis, the earlier announced EUR 12 million cash benefit over the remaining three years of the respective facility. All in all, a robust performance in terms of our key financial metrics, then when we take into consideration the large enterprise deal in U.S., also from an order intake perspective, a solid quarter. As we look a little bit further into cloud order intake, also good to recognize that in addition to the comments already made, that we had new logo sales in all regions. We have expansion sales that covered approximately 50% of the total, though on a total as-reported basis, when we put the numbers together, new logo sales as well as expansion sales declined year-over-year. This goes back to the point that Klaus was talking about, that naturally we see continued room for improvement in our overall pipeline generation as well as sales productivity. Partner-related sales progressing in line with our expectations, approximately 1/3 of the order intake this quarter impacted by partners. Especially pleased from a country perspective with the development in France and Australia. In terms of our net sales, very much as expected at this point, 2% growth on a year-to-year basis at organic constant currency at EUR 37.1 million. As we look first of all into cloud growth, that is at 9% now for the quarter. Underneath the cover, SaaS growing at 11%. That is a two-point deceleration compared to the Q2. Again, this is in line with our expectations, and as we have said before, there's a certain amount of deceleration in the cloud revenue growth as a function of the order intake that we have seen over the last seven quarters before we then midterm get back to the growth trajectory and even above the 10% level. A momentary impact in terms of the cloud revenue growth deceleration. Good to recognize transaction services revenue growing at 5%. Q2 was a high quarter, double-digit growth for us. There's 2 impacts now this quarter. First of all, when we look at the in-quarter execution volume mix of that Network revenue continues to shift more towards more digital channels. This means that unit prices there in average are coming down slightly that provide a slight headwind. A more important point, related to the revenue growth deceleration this quarter is, of course, the volumes of the comparison period. Q2 of last year was clearly the lowest that Basware has experienced in a long time in terms of the volumes, given that Q2 last year was the quarter when pandemic was with us. Now, Q3 this year, we again are up against a more normal comparison period, which then puts the total transaction services growth at 5%. In our consulting business, we were down by 5%, 5.4% to be exact. This is very much a function of the implementation services and again, also attributable to the order intake performance. On the other hand, it's very important to note that underneath the covers of our consulting services performance, both continuous consulting as well as change request business towards our existing customers are growing strong. This talks again about the stickiness of this business and our existing customers buying more from us, and we are pleased with the performance of our change request business as well as our continuous consulting business, and we are driving for more and more of that. Again, as an element of driving value for our customers from our enterprise solution. Finally, to put a wrap on revenue performance, maintenance revenue is very much as expected, now down 58% at EUR 1.5 million. Again, especially important as we, on the next page, talk about our profit performance, the fact that we are growing our bottom line by EUR 0.3 million when we are up against a EUR 2.1 million headwind from a year-to-year perspective on this extremely high margin contribution maintenance revenue line. As a company, we are pleased with the performance, how our engine in terms of our cloud EBITDA contribution continues to progress to the right direction. Specifically on profitability, few additional words. Overall, very much this EUR 2.4 million, EUR 0.4 million more for the quarter, again, a function of our systematic strategy execution. Cloud gross margins expanding by 0.7 points, rounded one point, now at 69%, approaching 70%. As we have said before, we are targeting one to two points of cloud gross margin per year. Again, this one point still, or 0.7% to be exact, more towards the lower end of that range. Again, also for the year, as previously commented, we do see the cloud gross margin expansion more towards the lower end of the bracket than clearly upper end of the bracket for this year. Underneath our gross profit, when we look couple of words about expenses, especially on sales and marketing, also connecting what Klaus Andersen said earlier, even in total, our sales and marketing expenses are down by 1.3%. It is important to understand that marketing spending, especially targeted at demand generation, is growing substantially. The reason that our overall sales and marketing expenses are down are also attributable then to our incentive cost, given our order intake performance on a year-over-year basis. Underneath the covers, we are clearly investing substantially, significantly more in the quarter into demand generation under the covers. On R&D spending, very natural thing we have moved as also in the prior quarters this year, certain development projects into amortization mode, and that drives the cost increase. Related to G&A, the reason we are so substantially down our quarter 25% on a year-over-year basis is that we had a certain bonus cost, incentive cost in our Q3 actuals last year. This year we don't have such cost, that is the main reason why G&A is down on a year-over-year basis. Also, G&A is impacted by capitalization of previously expensed consulting costs related to our refinancing transaction. Overall, strong quarter of profitability performance to the right direction, including the fact that we are investing more into demand generation, and that's all included in the P&L. Briefly on net income, especially this quarter, a thing that I don't usually cover, but for clarity, wanted to again recap this point and also address the more new run rate on the refinancing cost or sorry, finance cost on a to-go basis below EBIT. Total finance income and expenses for the quarter at EUR 12.9 million. As previously announced, approximately EUR 11 million now on an as-reported basis to be exact, EUR 11.2 million one of cost related to the extinguishment accounting treatment of our prior loan. When we are looking at costs, finance expenses attributable to Q3, this is EUR 1.8 million, which reflects approximately the new run rate on a go-forward basis. Most significantly, this EUR 1.8 million represents a EUR 1 million reduction on a per quarter basis compared with the financing Basware had in place before. This all again, a result of the refinancing transaction, and we are pleased with the fact that we managed to bring this down to 1.8. We understand that the 6% cash interest rate level still is something that we as a company continue to work on. Again, a clear EUR 1 million benefit on a per quarter basis on a to-go. Finally, on cash and balance sheet. Cash and cash equivalents at hand at EUR 26 million, almost EUR 26 million at the end of the quarter. First, a brief comment on cash from operating activities, which is now EUR 4 million for the quarter. A key item on a year-to-year comparison basis why that is down, is the fact that we have now moved into cash interest payment mode after stopping the peaking of the interest at the end of last year. The interest attributable to the H1 is EUR 2.8 million, which was now paid in July. Naturally, we did not have such interest payment in our comparison period numbers, which drives down the year-over-year comparison. The remaining delta is largely attributable to payables. On receivables, we progress to the right direction, whereas in the payable side, as one would expect, given all the activities that we took with our suppliers last year, especially under COVID, that is normalizing to an extent. Naturally, that drives a certain working capital impact. Overall, we have now as a company moved into a situation that we drive in over EUR 4 million of cash from ops, even including EUR 2.8 million of cash interest payment, which again talks to the fact that the financial profile of a company every quarter continues to progress to the right direction. Brief comments on the EUR 15 million approximate reduction on the cash flow related to refinancing. As previously announced, EUR 10 million related to executing the transaction, and that's really made up of exit fee settling at EUR 8.3 million transaction costs of EUR 1.6 million and a further EUR 5 million reduction related to changes in the covenant terms related to the guarantee the company has from Garantia related to its multi-issuer bond and related to removing a negative pledge from that agreement to be in a position to execute a secured transaction together with Macquarie. Overall, also from cash perspective, ample cash available to execute our strategy on a continued basis, even with a lower cost of financing now in the bank, which then brings us to the end of the finance update for the quarter. With that, Klaus, back to you. Thank you very much. Good. Outlook for the rest of the year. Based on the development that we have seen so far this year and our internal projections for Q4, we will keep our guidance unchanged despite the continued uncertainty in the market. Our full year guidance is, I'll remind you on that, modest, positive net sales growth and EBIT approximately at the same level or better than the previous year. To put a little bit more color on this, I would say net sales growth is expected to be modest, and the likelihood that EBIT will be better than last year has increased compared to a quarter ago. Let's go back to the key takeaways and just summarize how we saw the quarter. Robust and consistent financial performance, especially our profit performance, is trending well, and the fact that our recurring cloud revenue is now 80% of total net sales means that we are very close to being a cloud business-only company. Our order intake of EUR 2.6 million does not reflect our ability to close business. We get a true picture of that by including also the enterprise agreement we signed with the large fast food chain in North America. EUR 2.6 million in itself is not a great number, by adding the other deal to that equation, I would say that gives a much better and true picture of our ability to close business this quarter. If this deal had been on normal terms and conditions, or let's say completely standard terms and conditions, then this quarter would have been significantly better than the same quarter last year, and it would actually have been one of the best Q3s that we would ever have done. New leadership in place in our go-to-market organization, bringing a lot of cloud business experience from especially Salesforce to Basware, was a great milestone to reach. I'm confident that will accelerate our journey towards better sales execution, which continues to be a focus area for us. With that, I would actually like to hand back to Katariina to open up the lines for questions. Okay, dear participants, we can now start taking the questions from this meeting room here at Espoo. Antti, please go ahead. Thanks, Katariina. Hi, Antti Luiro from Inderes. On the market, a little bit on your commercial side. The uncertainty in the market, it still continues, and some companies have reported that, for example, the component shortages, logistical challenges might continue for multiple years. Two-way question. This quarter you also reported a deal where you had done some adjustments to the deals. Do you see a risk that the uncertainty might last longer, multiple years? If so, how prepared do you feel that you are to tackle that? I can answer first, and then you can add in, Maro, if you want to. How long this will last, I don't know, and I don't think anyone knows, right? It's very, very clearly that there is a slightly different dynamic in the business environment now. You could say it's not that different a dynamic than what it was a year ago. Some of the root causes have actually changed, right? Because we have come further out of the pandemic, then the derived effects starts to make an effect in the business environment. What we have been doing with this special agreement that we have made with the fast food chain in North America is to accept the engagement terms that a customer like them were asking for to be able to enter into an agreement. That is flexibility. We also have to adapt to reality, so we have to adapt our terms and conditions to reality. Of course, it would have been better to sign deals on completely standard terms and conditions, but we also have to get the business going and get contracts signed. Just the fact that contracts are signed, I think is then a matter of can we deliver the value that we have promised to the customers? From a delivery perspective, we have a fantastic track record. I would say the risk on not delivering the value that we have promised is relatively small. Only thing I would perhaps add to Klaus' point is a further point on value creation and Basware solution relative to some other solutions that once the solution is implemented, the stickiness of the respective solution is there. Now with the respective commercial models, which we obviously continue to pay close attention to in making sure that we strike the right balance between customer value and our company's interest. We believe that we have a way to accelerate, again, the point of value creation for the end customer in a way that actually meets both parties' needs in a balanced way in this environment. Ultimately, it is a balance of both parties facing the economic realities, and at the core of that is really the value we deliver for the customer. Again, that need for that value creation is even higher, as we have discussed, as a result of pandemic. I think operationally, it just reinforces the need and gives us a facility to drive forward. Thanks. That's really helpful. Maybe continuing on the value point and something you've done on the product side. You mentioned that the procurement solution, Basware Purchases, is gaining momentum. Yes. Can you give some color on, when you're giving this to your current customers, what's the current impact on your cloud order intake, roughly from that solution? I can give you another number, and that is that the estimated ARR revenue, so the estimated cloud revenue coming from that component, for the full year of 2021 is roughly a little bit below EUR 4 million. Right. Thanks. That's helpful. Continuing on the procurement side, I guess traditionally some of your competitors have been strong on that side of purchase-to-pay. Yes. With this product moving forward, do you see there's still a lot of catch up to do versus competitors, and how do you see your competitiveness on the procurement side with the current solution? I would say if you stick to the scope that we have defined, this is the scope of the procurement space that we want to cover, and we're not going outside that. If you look at the scope that we've decided to cover, then we are getting really strong now, right? Of course, the next step and the next question we have to ask ourself is that do we want to step out of that and broaden the procurement solution, or do we want to stick to where we are today from a scope perspective, and then make it even better and deeper, and then use and continue the ecosystem play when customers are asking for more specialized procurement that we don't have? I think that question is something that we will answer ourself probably beginning of next year. Okay, thanks. That's all from me. Okay, good. Once we have no other questions from the room, then we can open the conference call lines, please. Thank you. We have a few questions on the conference call lines. The first is from Matti Riikonen of Carnegie. Please go ahead. Your line is open. Hi, good afternoon. It's Matti Riikonen, Carnegie. I would like to continue with the procurement part of your product. You said that you would have EUR 4 million annual revenue of the ARR coming from procurement. Did I hear right? Yeah. Revenue in 2021. Correct. Revenue. Okay, good. Because that gives some clarity to the relative numbers that you gave. Now, regarding the AP Pro rollout, since you are now moving on to the new one, has there been a big problem with the earlier one so that you were kind of forced to bring the AP Pro to basically all your customers? Yeah. No problems. One part of the old user interface is based on a Microsoft technology which will go out of support, which means that the timing is actually correct for us to move away from the old user interface to the new interface. Right. Good. Regarding the Basware SmartPDF, you gave the volume that the annualized volume would be 2.4 million, naturally significantly up year-over-year. That is still only, let's say, below 2% of your annual invoices. Was it achieved, this 2.4 million volume, during this year, or in what timeframe have you generated that? It grew with, I think 400% was the number here. It has grown with that since January 1st, this year. The EUR 2.4 million, what I compare it up against is actually the EUR 24 million documents that we are today still sending through scan and capture services. We are now at a point in time where we can cover 10% of the volumes which we are today sending through scan and capture. It's completely correct, Matti, that we have on an annual basis more than EUR 150 million documents going through our network, but by far the majority of that is, of course, real e-invoices. Then we have the Basware SmartPDF, which is the latest innovation and the most modern part of processing PDF documents. We actually have another PDF service which at some point in time will merge into the Basware SmartPDF service. Getting to an annualized volumes of 2.4 million is, from my perspective, a really satisfactory growth rates compared to where we were in the beginning of the year, where it was relatively small volumes that we processed, and we have now really managed to get that up, because we have more control over the operations of the platform and how to manage an AI-based service and things like. I'm very happy with these growth rates, I would say. We are not that far away from having a solution where it's significantly easier to onboard new customers and to take new suppliers in a much easier way than we are doing it today. Right. Assuming that 24 million is the volume that you are generating from scan and capture, in what timeframe do you think that you could basically do that all with Basware SmartPDF? How long would you expect that ramp-up to be? Yeah. I'm a little bit reluctant to give you a firm timeline on that, because our focus is actually more towards new customers and getting new customers onboarded on the Basware SmartPDF service, more than it is to move existing flow from scan and capture to Basware SmartPDF. Of course, we are moving flow from scan and capture to Basware SmartPDF, unless we are spending our time on onboarding new customers. That is priority one. Priority two is to move existing flow. There is a gross margin benefit by moving flow from scan and capture to Basware SmartPDF. There's absolutely a benefit on the bottom line doing that, and there's also a huge benefit from the customer's perspective because the quality is completely different on this service compared to manual validation. Yeah is new customers first and existing flow as priority number two. Yes, exactly. Regarding this large deal with the U.S. smart food chain. You said that it would've been significantly better year-over-year if you used the old terms. Could we say that it was roughly EUR 1.5 million deal using the old metrics? Is that very far off? It's actually deliberate that we have not sort of shared all the details of the deal because that's not appropriate from a customer's perspective to share the deal details to that level of detail. I would say a good steer is exactly what we have said, that had this deal been on standard terms and conditions, then this quarter would have been significantly better than the same quarter last year. Actually, this quarter would have been amongst the best Q3s ever for Basware. Fair enough. steer I can give you. Okay. That's good. Were there any other customers that you would've used this kind of new kind of tiered or, let's say, ramp-up coming in stages? Is this a new behavior from all customers or many customers, or was that this just isolated to this one particular customer? Do you want me to take it? Yeah. I'll continue then. It's a trend, I would say, that we see with many customers. When the deal sizes and the level of engagement is a little bit smaller, it's easier for us to push back and say, "We need to go on standard terms and conditions," and so on. When the deal size and the engagement is of the magnitude that we are talking about here, then you of course more flexible. As a business, we would prefer standard terms and conditions. That's very clear. We also have to adapt to reality. The world, especially for these larger engagements, they are looking for this flexibility. We adapt to that. I think that's the absolute right way of doing it. We have actually previously in the year, signed a few contracts, which is also not added to the order intake, and they will come later. The reason why we have not disclosed that is because they were not significant in the same way as this deal is. Right. If we look at the geographic split of your order intake, this actually would make it significantly larger in the U.S., wouldn't it? Correct. Right. If this behavior continues from your customers and you have this model, how you instruct us to think that cloud order intake will generate into future revenue, do you think that you would need to change that formula so that we should now use another type of formula to think about your net sales in the coming years? Does this change anything on the revenue side? Yeah. Future revenue, I mean. I think, Matti, you spot on the depending how this respective phenomena will develop in size and scope, is that we are obviously internally in a process of looking at that how do we provide you transparency, obviously related to the run-out of the order intake that we report as hard numbers. As it relates then overall, more related to pay-as-you-go related estimates and what our point of view as a company is on those. Effectively, as Klaus pointed out, a very simplistic way, which doesn't do all the justice to all the complexity here, but effectively this level is in a simplified way, a pay-as-you-go model. Obviously, as an example, certain proxies related to how economic activity will progress, how this pay-as-you-go related revenue will develop. That is something that we internally are evaluating at the moment. Right. Basically, if we think about price levels in your industry, are you experiencing any price erosion in your software or network sales? I would say, Matti, at least to an extent that I am involved, which is knowing and having coverage across bigger deals. I would not say, and at least in my time at Basware, the phenomena, broadly speaking, has been the same. We are subject to pretty much exactly the same kind of a pricing pressure. Customers usual thinking about price productivity over a couple of years, and then us agreeing, in tough cases, a certain level for three years, and then having the ability to increase prices. Obviously, I think it's more a question at the moment about this operational flexibility, like we're talking in this case, where big customers are not per se necessarily on a unit pricing level, being any more aggressive as they have been. It's really a question about then spend commitments for the first three years. Right. If we think about this new kind of order booking method, if you see no change in price levels, and basically it doesn't change your revenue recognition going forward, it just changes the level of order intake number that you report. I see basically fairly little change in the kind of effective numbers that we are going to see in the future. Would this be correct to assume? Yeah, I think, Matti, broadly speaking, again, then of course it is dependent on the ramp-up speed. Given that in the deal there's a ramp-up structure, and that is the only caution I would give and what we Models ramping up, then that could potentially drive a delta. As of now, based on this deal, I wouldn't see that on a standalone basis. There's a significant enough of a difference relative to revenue modeling, what we have and what you, in my understanding, have had in place. If this becomes that we have 10 deals or 20 deals suddenly like this, which obviously would be a positive problem to have to an extent, maybe it'd be more than happy then to try to provide you more steer in terms of how to think about the revenue pull-through related to those deals. All right. Thank you. That's all from me. Thank you, Matti. Always appreciate it. Thank you. Our next question comes from the line of Felix Henriksson of Nordea Markets. Please go ahead. Your line is open. Hi, Klaus. Hi, Matti. Felix Henriksson from Nordea. Firstly, on order intake and sort of trying to get a sense of whether we're going to be looking for a sustainable improvement for Q4 onwards, so perhaps a twofold question. Did you see any large orders slipping from Q3- Q4? Secondly, how do you see the development in the order pipeline over the recent months? Let me start with that. It's sort of touching. It's on the borderline of what we disclose. I see no significant sort of change to our pipeline inflow, outflow. It's relatively on a stable level, so nothing has fundamentally changed there compared to last quarter. That's it. Deal slippage, it's difficult to say. I would say we saw it in this quarter, but we have also seen it in other quarters. Did we see a little bit more of this this time? Yes, maybe. Not so that we would say that this was completely different than the quarter end of Q2. Okay, great. Thanks. Perhaps continuing on the topic. I think you're being fairly transparent with your room for improvement in terms of your sales efficiency. Perhaps, I want to touch on the competitiveness of your product. How do you view that at the moment? Are you seeing any sort of changes out in the market when you think of the competitiveness of your product solutions, for example, related to AP Pro and the rollout of that? Is there a chance that the early version is still missing some features compared to the previous ones, or have you been able to fulfill customers' needs from every perspective with the rollout? I would say that it's close to a big yes on that question. The feedback that we have continuously been getting on the AP Pro rollout has been extremely positive, and we have continued to react on the feedback and provided the functionality and the features that people were missing, and so on. At this point in time, we are not aware of any, you could say, significant gaps or major roadblocks or whatever for not moving all customers to AP Pro. I would say, in general, we are getting even more competitive with our solutions. The AP side is getting stronger and stronger, and we have good development in certain areas of our network business, including the SmartPDF service. Also the procurement is getting better. Our challenges is not the software and the services, and it's also not the scalability and our ability to take on more business from an operational perspective. Our challenges are exactly what we talked about 20 minutes ago, and that is we can gain more momentum on the sales execution side. If you look at our customer acquisition costs and so on, then they are too high, and that is what we very systematically are working on getting down. Right. Thanks. That's clear. Finally from me, any plans for a capital markets day or a strategy update in the coming quarters? I can take that, Klaus. That is a topic that we have systematically, consistently under evaluation, and Felix come back to that when we have more news. It is a topic we recognize we have, so to say, debt, and we will serve it when the time is right. At this time, no confirmed plans, but certainly topic which is high in Klaus' and my agenda. Got it. Thanks, guys. Thank you. Thank you. Our next question comes from the line of Paul Kratz of Jefferies. Please go ahead. Your line is open. Hi, everyone. Thanks for taking my questions. I guess I just have three questions on my end. I guess it'd be just good to understand a bit the contrast here. On the one hand, you're making a point that the demand environment still remains relatively uncertain. On the other, I tend to see that you guys are actually having some really good momentum, and it actually builds on what you guys had in the Q2. It'd just be good to contrast those two and maybe give us a little bit of a steer over how also we should think of next year, and maybe are you seeing any incremental green shoots over and above what you guys have already executed on? I think the other thing that would also just be helpful is on that QSR deal. Could you give us an idea of how that should ramp over time and maybe when that deal plateaus or reaches maybe its maturity? Finally, I think, Klaus, you made a comment around the Procurement Product, that it didn't seem to be maybe fit for purpose for all use cases. Could you help us understand today, if I just look at that product, what verticals or what areas of your customer base can it serve, and maybe what are the areas of incremental investment? Those are the three questions I have on my end. Yeah. Let me start with the last question, and then you can take some of the other questions so I'm not talking all the time. Our strategy in the procurement space, because the procurement space is very wide, right? It's everything from contract lifecycle management to contingent workforce management and all sorts of very specialized procurement functionalities and so on. Our scope is not to cover the entire spectrum. Our scope is to cover direct procurement, sorry, indirect procurement primarily, and then be very open to other procurement platforms as well. If our customers are using particular procurement systems for particular areas, which they do in some verticals, especially when it comes to service industry and transport and logistics industries and so on, they have very particular solutions for parts of their procurement space. What I'm saying is that within the space that we have defined as the space that we want to cover from a functionality perspective, we are very far in the journey. That doesn't mean that we cover the entire procurement space if you compare us to a competitor who is coming from the procurement space originally. Like Ariba, for example, we cannot cover the same breadth of functionality that Ariba procurement can cover. That's also not what we are trying to do. We're trying to be very strong on the part of procurement that we can cover and then ensure that our platform is open and can be easily integrated with specialized procurement systems if the customers have that need. That's what I mean with that. Yes. Hey, Paul. Thank you for the question. I believe there was two ones. First, combining current lay of the land and I'm projecting that into 2022. I'll answer that, and then second of all was the revenue trajectory of this large enterprise agreement. On the first one, we are not yet in a position to talk about next year. I think as we look at what we can say, that we look at the ins and outs, and the trajectories going into next year, thinking about cloud revenue growth, as well as our profitability development overall relative to the existing trends. Projecting off of that basis into next year, the models, what you've got. As such, let's remember, we are into the third year of our sustainable profitable growth strategy execution. That is what we are committed to execute on. The respective trajectories off of our existing financial performance relative to the trends that we are seeing in the marketplace. As such, it's relatively straight math, going into next year. Again, considering that our external world is approximately as it is right now. Again, we are not yet obviously in a position to give you exact guidance about next year. I would more, Paul, think about it as in third year of the existing strategy period, and then again, the underlying thinkings on that. On the enterprise agreement we signed, there is an initial period in this contract of approximately 12 months, during which we already have certain level of revenues which have not been reported as order intake. We expect after this initial period of approximately 12 months, gradually see the order intake ramp up. That is then exactly this structure with the contract on a layered basis, that exact ramp-up schedule remains to be confirmed. Also then, of course, subject to economic activity. Again, already during now the first initial period of 12 months, there's revenue out of this deal. Just maybe one small follow-up to that point, because there's a ramp and I guess it sounds like there's a variable component. Is it safe to then assume that the drop-through on that variable component that you will get as it ramps is significantly higher than what you'll be getting in the first 12 months? Yeah. That is safe to assume. The volume of the deal, the annualized view, what we have for the initial period relative to, for example, then again, further times after that, is that the volumes will ramp up. That was very clear. Thank you. Thank you. Thank you. The last question we have from the phone so far is from the line of Shezad Okhai of Pinetree Capital. Please go ahead, your line is open. Hello. I've got a few questions here. Maybe first we could start off with a walk down memory lane, so to speak. I'd like to learn a little bit more about the decline of the legacy maintenance business. Back in 2016, you had about EUR 40 million of maintenance. We estimate that maybe EUR 10 million or so of this converted to SaaS, maybe EUR 10 million was part of the business that sold to Verdane, which leaves us with churn of about EUR 20 million or half of that total. For a mission-critical product with high switching costs, this feels like very high churn. Could you help us understand a little bit more around what happened with the transition off the maintenance base? I can start with that, Klaus. I think actually, to answer your question, the key assumption you're making there is the EUR 10 million assumption, relative to the EUR 40 million. We've not disclosed an exact number against that EUR 40 million, that how much transformation that we've converted. What I can share with you is that it is more than that. To begin with, that assumption, what you have there is something that would need to be adjusted. Second of all, as it relates to the type of service, what we're talking about here, what you need to take into consideration is that yes, obviously some of those are mission-critical. We are not a hospital, we are not an energy grid. It is still not that mission-critical. Customers do obviously exercise, as they move from legacy solutions, but they have a lot of more features and functionalities, especially now on the back of the strategic decisions what we've made, that what is Basware's core product focus. We've been very clear, for example, now in U.S., as an example, with our product portfolio decisions, and we've been very targeted on what kind of a business we want to do and want not to do. The fact that you could say that the churn rates are a little bit more high than what they historically would have been. To us as a company, it's really all about the strategy of sustainable profitable growth, and again, those decisions that have been taken over the year to come out of this cloud transformation with a product portfolio that is fit for purpose in our point of view. Okay. Maybe we could just chat a little bit about the order intake and the conversion to revenues. If we look at the latest quarter, SaaS excluding transaction is down sequentially. If we look at cloud SaaS plus transaction year-over-year, you're up by about EUR 9 million on an annualized basis in this quarter versus the same quarter last year. I'm trying to reconcile that against the order intake that's ranged, say, between EUR 17 million-EUR 20 million on a trailing 12-month basis for the last two or three years. I guess it seems to me that either the conversion to revenues from cloud order intake is different from what you previously communicated. Do you know the 25%, 50%, 100% rate over 36 months? Perhaps churn is going higher. That's the only way the math seems to work. Could you help us understand that a little bit more, please? Yeah. I think first of all, it sounds like questions that I would like to spend more time with you offline, and I think Katariina and myself can take the follow on. Extremely valid questions and certainly valuable, perhaps not exactly related to Q3. Again, excellent questions. Number one, let's do an offline follow-up. Related to your numbers, there's a couple of things that you need to take into consideration. Number one, now related to network volumes, as we look at our business over the last two years, especially comparison between periods, the business has been quite heavily impacted by COVID and there's been quite a substantial variation in that. Equally in the SaaS side, we have had certain big customers coming on board, some with a little bit slower ramp-up schedules in the subscription models and some a little faster. Effectively, it really is a mixed bag of many things. Then, as it relates to churn, we have been external reporting, and the churn trend lines are broadly aligned with what we reported for last year, also this year to date. I think what would make sense actually that if we sit together and we look at your model and then kind of see if the conclusions that we're making here are kind of mutually understandable. It sounds like you've got an excellent model that you're looking at, and I think it would be helpful for me to understand that as well. Okay. That would be great. Maybe just one broad high-level question, not model specific, if I could just follow up with one last one here. Sure. When you look at the trend of order intake on a trailing 12-month basis, of course, it's going to vary a lot quarter by quarter. On a trailing 12-month basis, it's been coming down pretty much every quarter since the end of 2019. I understand the focus you now have on sales and marketing. It's great to see Alwin on board and the specifics you've communicated in this deck on the changes you're making to your sales process. Broadly speaking, I guess, do you feel that either the market is shrinking, or is your market shrinking in terms of new deals coming onto the market? Or do you think that your win rate or visibility on those deals is declining? I actually don't think that the market is shrinking, to be honest. It is a little bit difficult, whether we like it or not, but to draw sort of massive mathematical conclusions based on what we have been through over the last two years, because there's so many factors that has played in. I think on a very high level, I think the easiest answer to what you are asking there is that there is a reason why our sales efficiency and sales execution capability is on top of the agenda, I would say. We can do better than what we have seen in some of the quarters over the last period. I would say that's probably as good as I can answer the question. Okay. I really appreciate the responses. Thanks very much. Thank you. Thank you. We've had one sort of further follow-up on the phones. It's from Matti Riikonen of Carnegie. Please go ahead. Your line is open. Hi, it's Matti Riikonen still from Carnegie. I'm still going back to the large U.S. customer and the new type of order intake recognition. What is the actual benefit to the end customer for that flexibility? I was thinking that is it just that they can postpone some ramp-ups if the economic uncertainty continues? On your side, is the risk mainly in the kind of natural revenue risk, but then also the capacity utilization risk that you're seeing? Is there anything else that would be different compared to the old way of recording order intake? I think, Matti, to begin with, the most substantial difference is that in our traditional model, and if you remember, subscription versus pay-as-you-go, again, the simplest way possible to think about this is that this deal structure with the tiered structure, the ramp-up structure, effectively it is a pay-as-you-go model. Benefit to the customer naturally is that in case their volumes don't develop as expected based on what would be committed as a subscription, they don't end up paying for that difference for the, so to say, underutilized volume of the subscription model. Especially for big enterprise customers, when Klaus and myself are looking to make decisions for Basware, we certainly look the same things. How do I optimize the unit economics and get a better unit discount as opposed to committing to a certain volume to our service providers? At least I don't see any other magic on high level than that. Of course, there's delivery things and how do we ensure that we have the right delivery capacity on the right time as the volumes come on board. That's why, again, we as a company have been on the scalability journey, and we have an operating model and a technical architecture, and as well as an infrastructure where we can scale up our service. Okay, good. Thank you. Regarding the sales execution issue that you have also brought up. In your experience, Klaus, how soon do you think that you could basically solve this problem? It seems, I think many investors will share the same view that that part of your business and execution has not been on the same level as in other areas. Of course, it's a crucial part. Would you expect that sometime during 2020, maybe in the H1, you would be getting these things done? Do you think that it will take the whole of 2022? I would expect that we could see gradual progress during the H1 of 2022. All right. Thank you. Thank you, Matti. Thank you. There are no further questions from the phone, so I'll hand back to our speakers. Thank you. We have quite a few questions also from the chat. We have six questions in total. The first two questions comes from Veikko-Pekka Silvasti from Danske Bank. The first question is: can you please describe how much the annual revenue per customer grows when an average-sized customer using AP automation takes up the usage of Basware Purchase? Can you say that a little slower again, Katariina? Yeah. Can you please describe how much the annual revenue per customer grows when an average-sized customer using AP automation takes up the usage of Basware Purchase? I can give an answer on that, but it will not be a very precise answer because the way we price the purchase module of the P2P solution is based on the numbers of purchase orders that they're sending through the system. That's the pricing model we use today. Of course, it is a little bit related to the size of the AP automation, but not completely. It varies a lot, I have to say. Of course, it's a smaller module than the AP automation, but it's still a sizable, I would say, module in our portfolio of modules. Yes. The second question from Veikko-Pekka is a little bit more broad, but it is the following: can you discuss the opportunities that you see around Basware Network? Oh, yeah. That we touched upon in Q2, right? Where we talked about global compliance and e-invoicing mandates coming up and so on in different countries and so on. That continues, and that will be an advantage for us, and that will generate opportunities. The latest news, which is bad news actually, is that France, which we had really much focus on, they have postponed their e-invoicing mandates plans with 18 months, where they expected that they would mandate it from 2023. They have now postponed it, which is not good news for us, but nevertheless, it's probably that area I would say that is going to generate the most advantage for us because we are already so well-placed in this relatively complex landscape of global compliance in the e-invoicing landscape. Yes. Two questions from Jason from Briarwood as well. First question is the following: how much risk do you see there is to fully ramping up the North American enterprise deal? That's impossible to say. That's completely impossible to put a number on that. If you look at our delivery success and our ability to actually deliver what we have promised, then it's very high. We have, to my knowledge, no projects where the projects were stopped and so on because of lack of capabilities on Basware side of not delivering. That's, I would say, is what I can answer to that question. Yes. The second question from Jason is the following: you mentioned in quarterly report that you expect gradual normalization to continue in Q4 2021. Does this mean we should see an improving order intake trend in Q4? There's always a lot of questions circulating around our expectation to the order intake for coming quarters. We do not guide on that. That is my answer to that question. Yes. Then Kimmo Stenvall from OP Markets. On order intake, do you still have same kind of win ratio in deals, or has there been any changes on that? Not significantly compared to what we have seen previously. Maybe a little bit of a trend in the right direction, but I would say not a step change. Yes. The final question, which comes from three parts, and it's from Elias. Elias asks, "Are you losing bids because of the current scope of your procurement offering or not?" Maybe you can answer first. I can answer that. Yes, we do, because if customers are looking for something we don't have, then we in some cases lose. In some cases, we also actually win, but then it's typically together with somebody, which is then integrated into the Basware solution and blocking this functional gap that we cannot deliver with our own IP. The second question from Elias, sales leadership changes. Does this include the U.S. market? Can you comment on your competitive position in the U.S. and significance of recent partnerships announced with Comdata? Let's start with the Comdata first. That's the easiest one. We've had a long-lasting relationship to Comdata, which is, by the way, part of FleetCor, for those of you who don't know them that well. Primarily around the travel and expense part, but also on the payments part of our AP solution. That relationship we have had for many years. This is now being expanded into a company that FleetCor has as well in the U.K. I think they're called Cambridge. That we have capabilities also to interface to their payment solutions, and the ultimate goal is to be able to interface into their InvoicePay, I think FleetCor is going to call the solution that they offer too, where they have integrated all their payment solutions into one solution. That's an existing relationship which has been strengthened. Now I forgot the first question. Yes, it was about sales leadership changes. Does this include the U.S. market? Can you comment on your? position in the U.S.? Okay. First of all, on the leadership changes, I think for now, we have done the leadership changes that we think we need to do, and that's in place. The changes that we will see going forward is, of course, if we decide that we need to do more, then of course, we will do that as and when required, and then it would be normal changes. If people leave us or people retire or whatever, then we're doing changes. It's not what I would call structural and deliberate changes that we need to do. We have done that. Yes. The final part from Elias' question is that notable improvement done on the refinancing cost front, is any further progress possible? What we said as part of the announcement and then is that, first of all, we have a 24-month non-call in the respective facility. Beyond that time period, naturally, our point of view as a company is that 6% cash interest rate what we have is something that we'll continue to drive to the right direction. This financing agreement that we now did with Macquarie was very much also a function of the original facility, what we had in place originally dating back to 2019. Further, we have this EUR 15 million super senior basket in the existing facility, as previously commented, and that is something that the company continues to look for ways to utilize, potentially even during this first 24-month non-call period. At this stage, no other comments than that. The EUR 15 million super senior opportunity is there, and we continue to look for ways to potentially utilize that even within the remaining 21 months of the non-call period. Yes, and I think then we will take the final question, and that is from Pinetree. Understanding that you're working on the sales efficiency, are your sales teams split between those working on transformations versus new business? If so, how much of your current sales and marketing spending has been going towards transformations? Will that spend be reallocated to new cloud business as the transformation reach their conclusion or pared back? The way the sales organization is running today is that people have actually a mix between They also handle the transformation cases as well as net new cases, right? We have not had a special team that took care of transformations. The transformations are coming to an end, so it will go away by itself. Of course, all the time that people have spent on transformation discussions with customers will go straight into generating new logos, new sales, or expansion business with existing customers. That's the thinking. Yes, as said, this was the final questions. We are very happy to receive so many questions in Q3 2021 results conference and webcast recording. Now I would like to conclude this meeting. Thank you for your participation. Thank you for the good questions. Remember that this webcast has been recorded and will be available in the investor relations sites later today. Thank you very much and have a nice rest of the day. Thank you. Thank you. Thank you.