Good afternoon, everyone. Welcome to Efecte's 2022 financial results webcast. My name is Lari Nikkanen, and with me today are our CEO, Niilo Fredrikson, and our COO, Steffan Schumacher. During this results webcast, we will be making some forward-looking statements. We encourage all participants and investors to review the disclaimer from our presentation materials. As for today's agenda, we have one full hour for this webcast. We'll start with our CEO, Niilo, presenting our 2022 results. After the presentation, we will have the remaining time for our Q&A session. You may present your questions during the presentation by using the webcast portal's Q&A feature, and we'll answer your questions at the end of the presentation. This session will be also recorded, and a recording of the session will be made available on Efecte's investor website. With that, I will hand over to Niilo. All right. Thank you, Lari. Hello, everyone. 2022 was already my fourth full year at Efecte, and what a year it was. At Efecte, as you know, what we do is we help people to digitalize and automate their work. Last year, we were able to do that on a larger scale than ever before, posting record growth as a listed company and making significant progress towards our ambitious vision of building the clear European leader in service management software. As we often put it, becoming the leading European alternative to the global Goliaths in our space. I want to thank all our customers, partners, all Efectians, and all our shareholders for being part of that story and for making all of that happen. What we'll do, in the next half an hour or so is first give you a little bit of additional flavor on the results we announced this morning. Stephan will join me as always, then we'll get to the Q&A, where I'm sure you'll have again plenty of great questions that we will love to address. Where I would like to start is our strategy. We talked already about our vision, where we wanna get. We put some numbers behind it. We are on track to growing the business to EUR 35 million by 2025 and eventually to EUR 100 million, which really, you know, is the bar against which we measure ourselves when we think long term. We have a strategy based on four cornerstones of growth, product, people, and M&A. Now let's look at how did we do against that framework in Q4. First looking at growth. Obviously, growth came in well, as I already mentioned. SaaS growth in Q4 was 27%. Total net sales grew 22%. We had good new customer traction, which made me particularly happy. International SaaS grew nicely. That growth is based on our product. Of course, it's based also on what we do in sales and marketing and support, but it all starts with having a competitive product today and tomorrow. A large investment that we have committed to and that we started last year and that we are gonna continue this year is renewing the user experience of all Efecte main user interfaces, both on the self-service and on the agent side. We were able to release the first generally available version of the new self-service in Q4, which was a big, big highlight. There were other important developments there as well. We did maintain very good employee satisfaction and what I would call super low attrition also in the middle of a relatively hot job market last year, which I think is testimony to the culture of Efecte and just the great people we have been able to find and who have wanted to commit themselves to the Efecte journey. We grew significantly in terms of headcount to almost 200 people in terms of full-time equivalent employees. We did slow down the pace of recruitment towards the end of the year, as we communicated earlier, and obviously this year, the recruitment pace will be significantly slower than what we saw, in 2022. The InteliWISE transaction, which was the first acquisition we did as a listed company, we did that last summer, and we were able to more or less conclude the integration during Q4, which is of course, great in the sense that we were able to not just keep the existing business going, but also launch the first new joint product called Efecte Chat for service management and get it also in the hands of first customers already. What you don't see on the slide, but we commented it on the report is that we also in the background kept working on the next opportunities. While InteliWISE was the first acquisition, we don't think it will remain the last one we do. We gave guidance in the beginning of the year, pointing to over 20% SaaS growth, and then middle of the year we updated that a little bit saying that it will be approximately 25%. Against that guidance and against that profitability guidance, as you see, we were able to deliver. I mean, the guidance was given for the full year, and full year SaaS growth was 26% eventually, and the adjusted EBITDA margin came in at 2%. Looking at some of the SaaS metrics, the ratio between lifetime value and customer acquisition cost is of course one of the key ones in a, in a way, showing what kind of return we're getting for the marketing and sales investment we are making, whether it makes sense to invest more in that space or not. Our LTV CAC ratio has been very high in recent times and it remained so during Q4. That was driven by super low churn, which bumped up the lifetime value expectation and also, while the customer acquisition cost was also relatively high, still the ratio remained at the high level at about 10. The recurring gross margin, I always like to point that out just because to me what it tells about is the inherent profit-generating ability of this business. I mean, it doesn't make sense to scale an equation which can't be highly profitable at the end of it. With the recurring gross margin that we've been able to maintain at that healthy 80% or so level, that ability and that potential for the type of high profitability levels that we have indicated also in our longer term guidance, that's definitely there. Now profitability today and in the short term, we always said that we're not in the business of maximizing it right now, not quite yet. That said, we've always believed in balanced growth and profitability. Posting a positive adjusted EBITDA margin and being able to do well on cash flow are just concrete proof points that we are able to grow this business organically based on just the cash flow generated from the business. That's of course a healthy situation to be in and puts us in a good position for, you know, what may come. Now in absolute terms, of course, the InteliWISE acquisition and the price we paid for that acquisition is visible on the cash side. Cash went down a little bit, but it was all obviously part of the plan. Now shifting gears a little bit and saying a few more things about what we did in the product space. I mean, we had these three areas: service management, identity governance and administration, and then the latest addition through InteliWISE, what we call conversational AI. In all these three areas, there were some important developments during Q4. In the service management space, as already mentioned, I think the most significant one is definitely what we do with the user interfaces and the modernization and renewal on that side. It will significantly improve and has already improved the experience that our end users can get, and of course it helps also in front of new customers as well who evaluate different systems and think about, you know, whether they go with Efecte or something else. In the IGA space, in the identity governance and administration area, it was a year and a quarter of deployments and breakthrough in that sense. We were able to deploy IGA successfully in so many customers into actual production use and get those proof points for it's actually a business that can scale and a product that works in various types of environments. Of course, we added also some capabilities like strong authentication, partnering with Signicat, et cetera, but to me the main point was that we were able to not only sell, but also deliver IGA into so many customers. Finally, conversational AI. I was pleased that we were able to launch the first integrated product so fast after the acquisition, but even more pleased that we got it into use at our customers during Q4. Because with software, as you know, what happens is you get something in the hands of the customer and then it starts developing because you get feedback, you see how it works, and you get new ideas, and so forth. I think we're on a good track there as well. Now this is something fresh out of the oven. This is from a company called Research in Action, a German analyst, who've been for years publishing reports in the service management space, the German market. This year latest study, which I believe got publicized only as recently as today. I was happy to see that as Efecte moved from position 6 to position 4 this year in the study. Something I'd like to point out here is the four ribbons, kind of bottom of the slide, where you can see, for example, us getting recognition for the best price versus value, and also recognition for customer satisfaction. It's all things that we think are important differentiators for us, an important part of, you know, how we sell and how we grow also in the future. It's of course always nice to get some external validation for those things. Coming back to growth and in a way decomposing, like, what were the elements of our growth and specifically the SaaS and MRR growth that we were able to generate. I already mentioned churn was exceptionally low and as we remarked in the report, we do expect now in 2023 that churn to return to normal levels, which means that there will be increasing increasing churn, though we don't expect anything out of the ordinary there. Based on that super low churn as well as the strong growth from existing customers, the net retention rate was again strong with 114% for the rolling 12 months period. At the same time, we were also able to add new customers at a nice pace, including of course what came in through the InteliWISE acquisition. All of that mounted to another 14 percentage points of MRR growth. Overall, I would say a very balanced picture this time when you look at the growth from existing customers versus the growth from new customers. Now, let's see. Where is Steffan? Can you join me here, please? Yes, I can. Hello, everyone. My name is Awesome ... Stefan. Stefan. Stefan. Hello, I'm Stefan, the COO of Efecte, and I thought I'll cover you quickly the, our go to market and some of the highlights of our execution out of Q4, and then I think we are gonna head off to the future. Sounds great. Good. Good. Go ahead. I mean, I'm really proud of our Q4. We had a really strong finish to the year. Our SaaS revenue growth finished at 27% during Q4, out of which 23% was organic. If you look at some of the underlying numbers, our MRR grew by 28% into the end of the year, and that kind of gives us a good starting point for next year. We already talked about in the Q3 release that we're gonna focus a bit more on the public sector and Finland, and I think that bet paid off. We worked with multiple, for example, multiple well-being countries in Finland, and we helped the customers to digitalize and automate their work, automate digital identity management, and other things as well. You know, we had a solid services performance driven by a lot of go lives, both in the commercial and in the public sector. I think that then drove to that SaaS revenue growth we saw in Q4. We also discussed about the slowness in some of the customer decision-making across our markets. Despite that, I'm really proud where we finished. You know, we talked about adding 40 new customers during the year. Just in Poland, we added 9 new customers on top of that 40 customers with the conversational AI solution. I think a lot of things to be proud of. During the year, our new markets investments started to turn into meaningful contribution into our new orders. We started to see more and more significant deals coming in. I mean, if you then kind of combine all of that performance and all of that goodness in Q4 with the churn that was exceptionally low at 2.3%, I think I'm really proud where we finished, and I think we're in a good position to move forward into 2023. Sounds great. Sounds great. I'm sure there will be, you know, a few questions later on in the Q&A. Why don't we talk for a second about this year. Mm-hmm ... before we get there. The guidance for 2023 that we shared is that we expect SaaS growth that will be over 20%, and we expect a positive adjusted EBITDA margin. The guidance is one thing, right? There's always the question of, you know, what are the drivers that help us- Mm-hmm ... actually make that growth once again happen. Mm-hmm. I mean, if you think about it, what is it now? I believe this was Q4 was the 21st. 21st quarter in a row ... quarter in a row of, posting over 20%- Mm-hmm SaaS growth. Of course it might look, kind of easy from the outside, but of course, there is always work involved. Mm-hmm ... in making that happen. Mm-hmm. I thought that maybe we can have a chat about some of the drivers- Yes ... that make us confident about this year too, despite all that's happening out there. Mm-hmm ... in the economy and in the macro environment. Let's start from there. I actually confused myself. I talked about next year, but I was actually talking about this year, confidence about this year. Good. I mean, what are the growth drivers we see happening in 2023? I mean, the first starting point is the question of the market. Are we in a market that is declining or are we in a market that is growing? We are in a market that is growing. If you look at all of the analysts across the universe, the ITSM, ESM, identity governance and access and conversational AI market is growing. I mean, depending on the analyst, you know, anything from 15% to higher numbers. We are in a market that is growing, and we wanna take our share of that market growth. That's the first driver. The second driver is really where we have been excelling in the past years. We are really good at working with our customers to expand the usage of the Efecte portfolio inside the customers. We expand and sell more things into the customer, but at the same time, we also sell more users when the customers expand and they the customers grow. I think that we have good drivers there. Both selling more use cases, but also more a broader portfolio. I mean, in Q4, we were, I think, pretty successful in new customer acquisition, and I think in Q3, we also saw a bit of a, kind of a uplift and increasing of that motion, and we feel comfortable that we're gonna continue that new customer acquisition motion, both with our direct sales teams, which now cover many countries in Europe, but also with the partner channel. Mm ... we have been investing in the past years. We have a confidence that that's gonna happen this year as well. We are also looking at, you know, the world is, you know, prices are increasing. We're gonna kind of adjust our prices to address inflation with the customers. We're gonna do that in a respectful way to cover the adjustments that are needed. I think another driver then that maybe drives down, kind of the, drives down a bit kind of the on the driver side is that we do expect the churn to return to normal levels. We have been on pretty low levels, especially on H2 of the year. I think those are some of the drivers. Anything to add, Niilo, from your side, like a bit of more reflection and insight? No, Stefan, thank you. I think you summarized it really, really well. maybe just for the whole audience, just sort of noting that, these are some of the things that make us confident- Mm-hmm about this year. You know, it's not to say that there wouldn't be things that we're also worried about. You know, there are customers where we've seen decision-making slow down. We've seen even, you know, a customer essentially go out of business because of the situation. Mm-hmm in Ukraine. Russia's attack- Mm ... to Ukraine is causing these kind of things. You know, we are seeing customers who say that, "Hey, times are tough. We need to, you know, think about saving." They might not need as many licenses extra as they would have needed if their growth would have been continuing. Sure, there is that side of it too. Of course, we are managing it all the time. Mm looking at what's happening and how to kind of maximize what we can do in this environment with the type of bets like, for example, this added focus on public sector. Mm ... which has now helped us adapt and thrive in this environment. While all of these things are happening around us, there is also a lot of confidence based on these fundamental drivers and this makes us believe that we can continue growing again in 2023 and make us look forward with confidence. Now, another completely different thing but, very exciting thing as well is the ESG report that we published now. Mm ... for the second year. I think this is one of the better-kept secrets of Efecte. I don't think everybody even recognized that a company, such small as Efecte might have this, so I really encourage you to read it. We are quite proud of it. Yes, we are. We're not just proud of the report but even more proud of the things that we describe in there. I mean, we really. Mm to do things in the right way. Do we always succeed? Of course not. We really try and in the report, we capture some of our impact on the environment. Mm ... and the society at large and our way of thinking about it. I think that's an important part of the Efecte story and Efecte culture. You know, please have a look on the investor website. With that, I think it's time to move on to the Q&A. On the bonfire. With the bonfire. With the bonfire. Gathering around the bonfire. Thank you, Niilo and Stefan. We have again a healthy pipeline of questions. Great let's start with one on the long-term target. Your target has been to reach EUR 35 million revenue by end of 2025. How much do you believe of the EUR 13 million gap to be closed will be received from existing customers, and how much from new customers? Well, you know, we don't know the exact split, how it's gonna play out, but I do want to point out is the split, now looking back. In the last 12 months, the split was... roughly 50/50. Of course, slightly impacted by the InteliWISE acquisition, so kind of discounting for that, the existing customers accounted for, you know, slightly more than the new customers. I don't know, what do you think, Steffan, in terms of the split? I would imagine we want to extend and continue. Mm ... the good motion with the existing ones. Mm ... and then of course on top of that add as many new as we can. Exactly. I mean, both are important levers, and we've gotta maximize both. Mm. Thanks, Niilo and Steffan. Next we have a question on our average customer size. Can you please describe what is your average contract value per client? Sure. Sure. I think there are two important angles to that. There is what's the average value, and there is a, you know, what's the typical or mean value. Just to give you the range, I mean, the largest customers of Efecte, you know, they start to be big. I mean, we're talking about tens and tens of thousands of EUR of MRR. Yeah. From a customer count point of view, of course, that's a smaller population. Mm. Then on the lower end, we've typically sort of put the limit at about EUR 1,000 per month. Mm. That it doesn't make sense for us to actively pursue deals that go beyond kind of below that in terms of the SaaS revenue. That's roughly the range from EUR 1,000 per month to tens of thousands EUR. Then when you look at the typical case, what would you describe, what would be the typical incoming new customer in terms of SaaS MRR? I mean, typically a mid-sized enterprise with, let's say, 40 agents, 50 agents. I mean, we license the agents on our core platform, so user or agent per euro per month. I would say maybe around EUR 3,000 a month. Yep ... MRR. Then on top of that you have the kind of the services consulting, professional services implementation and after the implementation there's gonna be a follow-up and all of that. I think we covered, by the way, this topic pretty well in the CMD we did a year ago. Mm-hmm. I remember presenting, two or three slides on Yeah, that's true. what's the life cycle of a customer? How does it start? How does it grow? How does the revenue build up? If anyone is interested hearing about that a bit more, I think if you go to the CMD, look at my session there are actually a few, two good slides about that. Yeah. That's great point, Steffan. Mm. Thanks for pointing that out. In a way, there is the element of what's the average or typical customer- Mm ... coming in, Also what's the customer journey afterwards? Mm. How do we grow with that customer? Mm As you know from the numbers, that's been a big part of it. Mm ... recently. I mean, in this economic situation, I think the benefit we have is that we can go aggressively and get the project started, and then, you know, during the lifetime of the customer, we're gonna increase the customer size and help the customer to kind of digitalize and automate their processes broadly. I think that flexibility and benefit of the platform is really playing to our benefit in the current market environment compared to some of the other... Mm ... players that might have more constrained licensing structures or something else. Yeah, it's kind of land and expand- Yeah, yeah. ... type of strategy. Thanks, Niilo and Stephan. We'll continue on questions regarding customers. Question on the churn. Is the assumption that the churn will increase in 2023 based on just normalizing rates, or what drivers are behind the increase compared to 2022? Well, there are multiple- Maybe we talk first about what creates churn, right? Yeah, that's a good idea. Yeah. So what creates churn? Which we don't want to happen, by the way. I mean, one is natural. There could be a merger and acquisition kind of situation at our customers. For example, the subsidiary of a company is using Efecte here, and they get for example, in Finland or Germany or Sweden, they get acquired by a bigger company that's running another service management platform, and then during that kind of integration phase, they then move into the global system- Mm ... using something else than Efecte. It could be also the other way around, by the way, but typically this happens. That's one. There's just organic change in, at the customer environment. The second kind of source of churn is that sadly not every time we are meeting customer expectations. Our platform, it's not anymore fulfilling the customer's needs. There's something that has happened, and we lose a customer. They don't wanna continue with Efecte. Then maybe the third one is, I mean, you already alluded to the, you know, stuff just happens. You know, customers stop using. Go out of business or. They go out of business or some-. Don't need the system anymore. Yep. Exactly. Those are maybe the three sources of churn. Then maybe getting back to the question, like, what are our assumptions for 2023? Yeah. No, no. I mean, that was really good to start with the different kind of actual ways it happens. Why it is so important is that we're talking about such a small number of customers churning that what happens is that it's not a statistical thing in that sense. You know, it's not that we have tens or hundreds of customers leaving us all the time. Mm. It's more like, you know, individual customer every now and then, and then it becomes a factor of. One, why are they leaving? Two, what size of a customer it happens to be. I mean, these things you, Stefan, covered can happen to any size of a customer. Mm-hmm. If during a particular quarter or a year it happens to be a large customer. Mm-hmm ... our churn number goes up. If during a quarter or any period it happens to be just by chance smaller customers, the churn number is slow, is lower. That's really the driver to me behind what's what we expect to happen now during this year. We obviously, due to the nature of our business with the SaaS contracts and often long-term commitments, we have pretty good visibility into what's going to happen, you know, in the coming months and so. Based on that, we just know that there is a couple of churn cases which just happen to be bigger from a EUR point of view, which are gonna drive up that churn. People... When our churn has been previously higher, people have asked if I'm concerned, and I've said no, that I think it naturally fluctuates in that roughly 5% or below area. Now that it's been 2% or even below 2%, you know, people have congratulated us, you know, like, "Well done, Efecte. Such low churn." We've been trying to say that, "Yeah, you know, it's been maybe exceptionally low now." Now this year if we're at that roughly 5% ballpark or below, you know, I won't be concerned. Yeah. Thank you, Niilo and Stefan. Maybe an additional question on the churn. What do you consider a normal level in the long run? Is it the 5% level you just mentioned? Yeah. I think, you know, any B2B SaaS company like us with similar characteristic, if you can, you know, long-term average out your churn to be around the 5% ballpark, you're doing a great job. Thanks, Niilo. Next we have a question on international growth and new customer acquisition. New customers represented around 14% SaaS ARR growth, up from 7% in Q through 2022. If we take out InteliWISE and Kela, is the new customer acquisition now on a stronger trend compared to early 2022? The question was if you take out one of this large deal and InteliWISE, is our new customer acquisition on a stronger trend than in H1 2022? Well, maybe just to start with, you know, we are not disclosing kind of the components of that new customer acquisition per individual customer or so for us. You know, we don't have an exact number as an answer. I think what, in a way the spirit of the question was just overall get the sense of the new customer traction. Mm-hmm. On that one, thinking about H2, you know, I definitely felt good about what we were able to do. Yep, me too. The good thing, I think we commented on that. Didn't we comment that in the report as well? I think we did. Was that, I mean, we definitely, like you mentioned- Mm ... we had a good performance in Finland. Mm. But also, so some really good things in our international markets. The one example I think we highlighted. Mm-hmm ... was the nine new customers during just Q4 for the conversational AI. Mm ... business in Poland. Thanks, Niilo. next we have a follow-up question on the, on the InteliWISE Q4 performance. as you said, nine new customers came via InteliWISE in Q4. Was this an exceptional event, or do you see this high interest from customers in Poland as sustainable? Well, just to start with describing some of the differences in what we see in that business. Mm ... versus our traditional service management business. The kind of customer life cycle is faster in that space, so there is more churn. And also, it's a slightly lower threshold for customers getting started. The sales cycles are not always that long. We don't really have that historical data now against the Efecte, in a way, reporting framework to be able to with confidence say, you know, whether it was exceptional or not. That. I mean, Q4 was the first quarter that we really tracked it with the same rigor and the same kind of criteria that we track the rest of the business. That's the first data point, so it's a little bit difficult to give any definite answer on, you know, how it compares historically. Definitely I felt that it was a good number, and we were happy about it. Thanks, Niilo. Next a question on the, on the international growth. Your international growth has been roughly at the same level as your growth in Finland for the last 2 years. With the more significant share of new customers coming from international markets now, do you expect international growth to improve from current levels? Well, we are not guiding separately international growth versus growth in Finland or anywhere. Our guidance is based on the total SaaS growth. We are committed to making that happen. Of course, like also Steffan pointed out earlier, I mean, we are leaving nothing on the table in the sense that, you know, we're maximizing everything we can do in Germany, in Sweden. Mm ... through the partners in the new markets in Poland, in Finland. Yeah That's the approach. Yep. Yeah. Let me assure you. I think our team, every single salesperson, every single marketer, we are going after every single new customer that is in the market, and we try to win as much as we can with our product. Mm ... and our solution. I'm pretty happy on what we did in Q4. You know, we had a really strong finish to the year, and we feel really confident about our guidance for this year. may be useful to, just talk, briefly about the split- Mm at the moment. I mean, today, still roughly, three quarters of our business. Mm ... come from Finland in terms of absolute euros, total net sales. Then the rest, roughly one quarter, from outside Finland. That also in a way guides us in the sense that we cannot say that, "Hey, let's forget about what we do in Finland. Mm. Let's just focus international," or vice versa. Mm. Both are important, so it's not a either/or. It's a power of and. Thank you, Niilo and Steffan. That was a good answer. Next, we have a question on Efecte's new market. Could you give us an update regarding your partner network? Based on Efecte's LinkedIn profile, the intake of new partners seems to have been quite strong. Yeah, I mean, that's a really good question. I mean, we are actively kind of working with our partner network. There are two things we are doing. One, we have existing partners that we have signed off, and we are kind of focusing very sharply to ensure all of our partners can run a good business on Efecte. We help them to market, we help them to sell, we help them to kind of deliver Efecte solutions. That's one thing we wanna do really, really well. The second part of the story then is that we are actively looking for new partners that wanna work with the leading European alternative in the, in the service management space. That's another angle. Holistically, we wanna have a really good and well-oiled transacting partner ecosystem, and that's kind of the end goal. Sometimes you have a partner that doesn't perform. You look at your portfolio and you say, "Okay, I wanna have a new partner into the portfolio," or then you want to expand that. I think that's what we wanna do, run that in a very, kind of... How would I say it? In a very structured, well-oiled manner to ensure every single partner has enough business, so they can be successful with Efecte. Yeah. That's so important. Mm. There's been a shift, right? Mm. You know, when we started this, year and two ago, started investing into. Mm ... obviously the focus was on partner recruitment. Last year we saw also in a way the fruits of that. Mm ... happen in terms of new partners, in so many different locations. During the year, we started shifting our focus to enabling the already signed partners Mm-hmm ... through the sales and marketing- Mm-hmm ... and other activities that you described. Yeah. Yes, we are really happy that the new partners wanted to join our path. Thanks, Niilo and Steffan. Next, we have a question on the cost side. Your materials and services spend as a share of revenue increased quite clearly in H2. What was behind the development, and is this the new normal for Efecte? Well, let's first talk about, you know, what is that cost, right? That cost is if I simplify a little bit, it's two things. It's the cost of running our cloud operation in the sense of infrastructure cost, third party software, et cetera. Then, it's the cost of subcontracting resources we use for delivering professional services. Looking at these two components, I would say that the cloud cost, in a way, the cost of goods sold, has been relatively kind of consistent in developing with the revenue. That's also visible in the recurring gross margin, which has been very stable over the years. Then, the bigger element kind of fluctuating. Mm ... quarter to quarter or year to year is on the professional services side, where we've been using, and are using on a continuous basis some subcontractors to fill in, you know, resourcing-. Mm and help our customers, where needed. I mean, keep me honest here, Stefan, but I believe that in H2 specifically, we did face a little bit of a resource crunch in certain areas- Mm ... which probably drove up that, more on a maybe temporary. Mm ... than continuous basis. Yep. Maybe, I mean, and you see that also in the Q4 services revenue growth numbers, right? True. That then flows to the top line as well. Yep. Thanks, Niilo and Steffan. Next, we have a question on the guidance. Considering your 20+% SaaS revenue growth target for 2023, I assume you believe the market conditions for your offering are quite decent despite the macroeconomic uncertainty. Well, it's a combination of two things. One is that, of course, there needs to be a market, and there need to be customers out there buying. I mean, without that, nobody can grow. That needs to be there. At the same time, it's also based on how we think about our execution and ability to win, those available deals. It's an interplay between the market and our confidence in what kind of a share of that market we are able to grab. Then as noted before, we do see some signs. Mm ... nothing dramatic, but some signs of the market, slowing down a little bit here and there. There are differences in different sectors. There are differences between different countries giving us opportunity also to adapt and optimize that mix. That's for sure. At the same time, when we look at then, at our track record and our plan of how we are able to compete in that environment, the combination of that makes us confident about our guidance for this year. Yep. I mean, especially in these times when there's a lot of uncertainty in the environment, I think our agility to meet customer demands, the flexibility of our platform, and that we can offer our platform with a cost that makes sense to our customers, which was actually also kind of in the Research in Action market study. I think those three unique points really give us a competitive edge in this market. True. Thanks, Niilo and Steffan. Next, we have a question on the other side of the guidance, the EBITDA. In the CEO's comments, it was mentioned that after a year of investment and growing our head count, we are confident about our team. We believe we can work increasingly smarter and leverage economies of scale. This should start to be visible also on the bottom line towards end of the year. The question is: For year 2023, you guide positive adjusted EBITDA. Does it mean that, at the beginning of the year, adjusted EBITDA will be negative? I always love it when somebody reads to you the words that you wrote. You know, always a little bit scary experience. Yes, that's what we wrote in the report. Then to the actual question, I mean, we're not guiding individual quarters. It's, it's obvious, of course, that with the added cost, that came in through all the recruitment and head count increase last year, we're gonna see the biggest, in a way, burden of that in the beginning of the year when the growth has not yet, in a way, caught up and is not addressing or mitigating all that cost. That's the background for the comment, with the idea being that, we do expect that, in relative terms, and of course accounting for seasonality factors, we do expect a growing trend, meaning that in the beginning it's worse and then in the end it's better. Thanks, Niilo. Next, we have a question on Efecte's pricing power. Is it reasonable to assume a positive effect from index adjustments on the MRR in Q1? Can you please repeat the question? The question is: Is it reasonable to assume a positive effect from index adjustments on the MRR in Q1? Oh, okay. We're talking about price increases. Yes. The question is, do we expect a positive impact? I guess the simple answer is that, yes, there is a positive impact because some of the prices, like Steffan mentioned. I mean, we are reasonable and respectful, so we're not gonna do anything crazy. There are some price increases that we implement, so of course that increases the price we get. If the question is sort of, does that mean that we see some exceptional growth now suddenly in Q1 because of that? I think that would be the wrong expectation. Anything to add, Steffan? No, I'm totally in line with your answer. you know, maybe another point is that while we do this adjustment, it's not like every agreement starts on the first day for January. Oh, that's actually a important-. Yeah point. You have, you have agreements with different terms, different validity. It's not, you know. While we do it, you cannot see that rolling up during the whole year. By the way, we have done these adjustments already last year. True The year before that. True It's been a standard practice. it's more on a rolling. Yeah ... rolling basis- Yeah ... we do them as opposed to, you know, it all suddenly changes first of January. Yep. Thanks, Niilo and Stefan. We have a question on our customer base. Do you have any customer concentration? What percentage of total MRR does your top 10 clients represent? That's a good question, but I think we haven't really kind of probably guided or kind of provided information on that. I would not remember that out of my head either. Yeah. Well, what we have said and which remains true- Mm is that, I mean, there is no single customer, you know, who would account more than for, you know, single digits% of the total MRR. No, I don't have a number to give for the top 10. Overall, I would say that the distribution of revenue is quite broad. Mm. It's not like, you know, it's massively concentrated. Of course, we are super grateful for, you know, that group of top 10 customers, with whom we work very closely and with whom business has been going very well. Thanks, Niilo and Steffan. Niilo, okay, Lari's getting more and more questions. Do you think the heat is the bonfire is getting warmer? Yeah, I can sense it. By the way, the background is kind of representing the city of Lublin, where we have an office now. Yeah ... through the InteliWISE acquisition, in case somebody wondered about the background- Mm ... in the picture. Thanks, Niilo and Steffan. Good to hear that the bonfire is warming up. Next we have a question on Efecte's M&A strategy. Is Efecte still actively looking for possible acquisitions to broaden its offering? What type of acquisitions are you interested in, and can you elaborate on your target geographical areas? Sure. The short answer is yes, we are continuing to screen for potential acquisition targets. We continued that last year, and we're gonna continue that this year. We are keeping the bar high, as we've always said. We don't think that M&A is kind of the end goal. We're not here to do M&A. Mm. We are here to build the leading European alternative- Mm ... in our space, and M&A is a means to an end. Mm. For it to be successful, we've set super strict criteria that need to be met. Mm ... do something. We, we have lots of conversations. We have relatively broad pipeline. We talk to a lot of potential targets and through that process, then sooner or later, at some point I expect another one, another deal to emerge. Whether it's this year or next year or whenever, we don't, we don't know. When the right type of opportunity comes along, then we're willing and ready to proceed. When it comes to the different types, I mean, generally speaking, there are two different types. One is an add-on acquisition to our, in a, in a way, current platform, so we add some technology that strengthens the platform. InteliWISE would be a prime example of that. Mm. We added the conversational AI capability on top of our- Mm ... platform, through that. The other type of acquisition would be to expand our market, presence, and/or reach in a particular geography or a particular customer segment or ecosystem. And that could be an acquisition that could come in the form of a company who just, you know, have technology and a product that operate with a different type of target market. Or it could come in the form of a company who might not even have a product, but they might have expertise in the ITSM space. Mm. They might have consulting power. They might have sales power- Mm ... existing customer relationships. It could be even a consolidation play where there is a company like ours where we just, you know, get access to market and are able to consolidate the market. Thanks, Niilo. We have a follow-up question on the M&A strategy or M&A topic. Can you elaborate on the key learnings, what you have learned from the InteliWISE integration, which according to your comments has proceeded well? Oh, great question. Maybe with that, I mean, I've been quite deeply involved in that, and of course you as well, but you've been looking at it from the kind of- Mm customer and our field team point of view. How, what would you say, Stefan? Overall, we have been taking a very systematic approach to that integration phase. We've really nominated a program manager, program lead to lead that transformation project, and we build up clear transformation streams. Each of those streams then kind of executed together as one team, both from the InteliWISE and from the Efecte side, to kind of come into the expected outcomes. I think everything starts from the people. I think we really have spent a lot of time together with the InteliWISE team to talk about, you know, our values, the way how we work, where we wanna go into the future, and there's been a lot of communication. I would say if you look at three things I'm taking away from this is systematic approach, clarity on the goals, where we wanna get, the importance of people, and then communication. Great summary. I mean, I can only echo all of that and maybe just to emphasize the people and culture element in our type of business. Even though it's technology business. Mm. ... it really is based on the human capital and. Mm ... all the individuals who choose to be part of Efecte. Mm. I mean, this is the reality of our type of business, that people choose where they want to work. We are super fortunate that we have this group, and this team at Efecte who have all chosen to be here and then want to be part of the journey. I think a key consideration with the InteliWISE acquisition was that, okay, we qualified the technology- Mm ... and realized that, hey, this would be something valuable to us. At the same time, we got to know also the people and the team and realize that, hey, this could be a group of people that could not just fit in at Efecte, but who would want to be here, and who would be able to bring their own contribution to the rest. Mm ... rest of the team. So far, so good. We've been able to benefit from that. Of course, it's still lots of work ahead for us to realize all, you know, the great things that we've been planning for together. Mm. Definitely a good start. Yep. I mean, it's six, seven months. in a way- Yeah, it feels like such a long time. Yeah. It's, I mean, you're right. It's only half a year so far. Yep. So far, so good. Thanks, Niilo and Stefan. Next we have a question on Efecte identifying itself as the European alternative. Is being European a real differentiator or competitive edge? You're stressing it a lot of in the slogan. Yeah, that's a great question. Do you want to bring in the customer point of view? Like, well, how are the customers looking at it? Yeah, I mean, in a way, I mean, nobody's gonna buy you because you are European, right? I mean, that doesn't bring any value, and everything start from the customer value. What can we bring on the table from Europe? I think the first thing that comes into my mind, which we talk a lot with the customers, is the flexibility, agility we have as a European player. We know the rules of the game. We operate in the local countries. We provide services in the local languages. We have the flexibility of, for example, of the cloud to have that in the places where our customers want that to be. I think it's that flexibility and understanding of the customer situation, environments, and kind of working really close with the customers from the local markets, and I think that's just one example customers value a lot. No, absolutely true. I think it's important to note that we don't think that, like Steffan said, we don't think that somebody buys from us because we are from Europe. We think that we need to do a better job than the competition. Mm-hmm. The customer buys from us. For us, emphasizing that European element just captures many of the things. Mm ... things that you just described. Of course, there is the geopolitical element where we have seen a slight move in the recent, let's say, you know, 12-18 months, where customers have become more aware of things like privacy, data security, location of data. Mm ... et cetera. In those areas, the combination of us being a player who builds and operates a cloud service out of Europe and at the same time is able to provide from a technology point of view those flexible- Mm cloud deployment models. Mm. Mm. Mm. That combination for sure is something that attracts a certain segment of customers which is especially visible in sectors like defense, financial services, and some critical public sector agencies. Yeah, healthcare is another good example. Healthcare, another good example. Thanks, Niilo and Steffan. As the time reserved for this webcast is slowly coming to end, it's time for final questions. Niilo and Steffan, can you both tell what were your personal highlights from last year, and what would you have liked to do better last year? I mean, it's always easy to look at the numbers and say, "Hey, look at these numbers, what a highlight it was." I think the highlight really is that we were able to increase the size of the Efecte team with over 40 people. We have 40 new Efectians in the company that all wanna work in this company and wanna contribute to the success of the company. I've been in many onboarding meetings, introductions, and I think there's a lot of energy in that team. I think I'm really proud of that. I think that's something I'm proud of last year. Surely, the numbers need to be good as well, and, you know, what could have we did, what could we have done better? I mean, it's the biggest room in the house. There's a lot of things we can improve. Where I feel always the worst is when we let our customers down. You know, something happens in our customer management process or in our support process or somewhere else and afterwards, after we, you know, we let the customer down, and we fix it, then after we do a postmortem to learn what happened, we many times see that, okay, we could have prevented that thing happening in the first place. I think in those moments, I always feel kind of that I should have done a better job. Maybe a quick reflection. Yeah, great. I gave you a bit of time to think about it. Yeah. Thank you. Thank you. Well, you know, you said some things I could have said as well. I'll pick something else. Mm Just to make it a little bit more interesting. Mm-hmm. So, um, for, for the highlight- Mm ... I just pick the fact that we were able to make, once again, significant progress towards our vision. The reason I am at Efecte is that I want to be part of building that clear European leader in service management software. It's a bold goal, a big goal, but also something that's super exciting. I think it's important from a business point of view, from a shareholder value point of view, but even more so, from an overall, you know, what kind of a contribution do we. Mm ... as Europeans and from Europe bring to the whole world in terms of the digital platforms on which our lives and businesses run in the future. For our own small part in the service management space, we are doing that at Efecte. Mm. That, that's something I feel really passionate about, and the fact that we were able to take big steps towards that vision in terms of numbers and in terms of intangibles last year, that makes me super happy. Where we could have done better at, I always, I'm a work smarter type of person, so I always like to think about the productivity. Mm. Like, you know, are we doing as well as possible? Mm ... kind of get everything out of the system and avoid unnecessary processes and, you know, just be super effective. Mm. I think with adding so many people, both organically and inorganically last year, there were situations where we realized that, hey, we have not been working as smart as possible. You know, we could do this thing more productively in the future. That's also why I think we have a great opportunity. Mm ... this year now that, you know, we have the team in place, a lot of resource- Mm ... in place. If we succeed in working a little bit smarter, really leveraging the new scale, we have the new economies of scale and making all of that happen. Mm. It can definitely help us, help us when we think about, you know, what's the productivity and profitability... Mm ... equation, of this company. Very well said. All right. Larry, does that mean that we're at the end of it? Yes. Unfortunately, all things, all good things come to an end. Even the bonfire-... goes out. All right. Hey, so with that, just once more, thank you all for listening in. Thank you all for being part of the Efecte journey, and look forward to talking soon again with you in just a couple of months' time once we get into the Q1 earnings. Thank you, and take care. Thank you.