Welcome to this presentation with BTS after the Q2 results. With us today, we have Jessica Skon, who will do a short presentation, and then we will move on with some Q&A. Please go ahead, Jessica. Super. Thank you. Hi, and dear investors, hope you are having a nice summer. Calling in today from San Francisco. Pleased to report our second quarter results. Basically, one more quarter of profit growth. Across the group, 9% revenue growth, currency adjusted, 13% profit growth, and EBITDA margin improvement from 11.7%- 12.3%. Reasons for that, BTS North America is back to strong profitability. Maybe I will pause and see if someone can mute the lines. Is that possible? Should I keep going or shall I pause? Okay, starting again now. Sorry for that interruption. Q2, one more quarter of profit growth. Revenue 9%, EBITDA 13% growth, EBITDA margin an improvement from 11.7%- 12.3%. BTS North America continues to perform, back to strong profitability again in the second quarter. BTS Europe continues to deliver really strong growth. BTS Other Markets, still struggling in the second quarter, similar to the first, but we believe is on track to recover. AI continues to drive really fast revenue growth for us, and we feel very differentiated as an AI partner to our clients. If we double-click into BTS's biggest unit, BTS North America, where we had the turnaround starting in the middle of last year. Second strong quarter in a row, back to strong profitability. Revenue is super nice to see the biggest unit go back to double-digit organic revenue growth. Profitability up 60 percentage points, back to 37.5%. EBITDA margin, nice improvement from last year, and we still expect that to continue to increase. I can explain more in a bit. We expect North America to continue to be strong for the second half of the year due to several dimensions. As I mentioned, our ambition is to get back to higher profitability margin levels over the next coming quarters. I will just say one thing that happened in the second quarter in North America was we had one of our smaller businesses that was unprofitable. We actually shut it down in the second quarter and had about 400,000 of in-quarter severance related to that. Another business, we had another big AI diamond-level breakthrough that really is revolutionizing the way that the team works across our custom certification and content offerings. So we also decreased the size of that team. Those costs were hit in the second quarter, and it took out about a little over $1 million in run rate cost to be realized over the coming quarters. Our client demand continues to strengthen in the energy, financial services, and healthcare sectors. We expect continued growth to continue during the second half of the year. So we feel really good about the North America turnaround and continuing to perform. BTS Europe had amazing growth in the second quarter, 25% revenue growth with a 38% increase in profit. With that growth, we have seen a nice improvement in the EBITDA margin at 16.2%. What is behind the growth? Well, it is big deals that we had won in the past that continued to perform. Smaller deals that came in actually grew in size, bigger than the initial order intake. BTS Europe, in the second quarter, saw no project cancellations or delays across their clients. We also see increase in demand from the defense and manufacturing sectors. All of our offices in Europe, except one, delivered double-digit growth. Given their fast growth rate in the first half, we expect Europe to continue to grow in the second half, but at a slower clip. BTS Other Markets was basically flat in the second quarter. A decrease in profit of negative 26%. That is due to the same problems we talked about in the first quarter with some of the really low-performing units in BTS Asia. EBITDA margin, 12.5% drop from 17.9% Q2 2025. All of this is due to the continued headwinds in Asia Pacific. We addressed those head-on in the first quarter. We have shifted different partners in the region, partner-led activities across different countries. We have had a big increase in AI marketing events, which have been perceived very strongly in those countries, which has led to a stronger opportunity pipeline. We have consolidated some of the offices where we just have less people and we do not need them, and some headcount adjustments to make sure we have the right team moving forward. All of that said, we expect BTS Other Markets to have a strong recovery in the second half of the year. AI continues to be our friend. It continues to differentiate us, and it is a source of revenue growth for the firm. First, we continue to innovate across the portfolio with AI, and that makes our core services more differentiated and helps our clients experiment within their functions of new tools and services that are available to keep their functions on the leading edge. Also, we shifted this quarter for services where our clients are hiring us specifically to drive AI adoption, AI workflow reimagination, AI innovation across the firm. We are going to report those out now in terms of revenues rather than bookings. It is simply a reflection of it is becoming a more significant part of the total revenue of the business. In the second quarter, it hit 10% of total revenue, and the growth of the revenue associated with helping our clients with their AI implementations grew 221% compared to the same quarter the year before, at SEK 76 million. Why invest in BTS Group? We have a history of sustained profitable growth, and we believe we are back to performing in line with those principles. AI is creating more opportunities for us, not less. The whole market seems to be realizing that AI is primarily not a tech issue. It is a people and a change and an innovation issue. With that understanding, it fits with BTS Group's core capabilities. Our growth, as you know, as a business model, is capital light. If we double-click into those very quickly in terms of sustained profitable growth, sustained growth is in our DNA. At 13% revenue, we had 9% in the second quarter, and I believe we are on track to get back to our historical levels. We are back to growth in our biggest unit, which hit double- digit and 60% profit growth in the second quarter. We have an amazing list of global clients, and our win rates continue to be strong. BTS Group has a brand in the market as a company who has been innovating how companies learn, change, and perform for 40 years. That is what every company on the planet needs right now as they retool every person in the company with AI and expect them to reinvent their roles. We only have 1% global market share ahead of the competition. We believe we are in the sweet spot for this AI era, given that it is a people change and an innovation problem, and it does not resemble the similarities to digital transformation or ERPs of the past. We continue to realize that we are in the top 5% of companies who have had three different major AI breakthrough and innovations across our operations, spanning new products and services all the way to the back end. We can take those learnings of what is required to invent with AI and what is required to mandate the new ways of working to our clients. We continue to do that with many client events and opportunities and proposals in our pipeline. As I mentioned, it is now 10% of total revenues and growing rapidly. Given the AI innovations of the past, I expect we will have many more coming in the future quarters across our functions. In particular, we have already realized SEK 74 million in productivity gains related to AI innovation and change implementation. All of this, while our core remains in strong demand. Clients are investing in getting actually people together to make sure that they understand the strategy, that they know how to act, and that they are accelerating the innovation of what they are able to do with AI. They also are using us to scale change at big scale and speed. Some of the AI companies right now, the AI native companies, are our clients. I will give you an example of our work with Anthropic. You can see a quote from the Chief Commercial Officer, Paul Smith. We brought BTS in early. They rolled their sleeves up from day one, modeled every stage of our sales cycle, built the playbooks across market segments, full simulations of how we go to market. Incredibly high impact, hands-on work. Now they are part of our Claude Partner Network, and our customers get the same. We continue to learn at the epicenter of how AI is evolving by helping them with our core services and taking those learnings out to the market. Finally, as you know, for long-term investors, our growth is capital light. Since our IPO in 2001, we have had 12% revenue CAGR. Roughly two-thirds of that is organic. That has been able to fund one to two, on average, acquisitions a year for the last 20 years. Despite the acquisitive approach to our growth, in addition to organic, we typically pay between 40%-65% of profit after tax through dividend. We have done all of that without asking for additional capital from our shareholders. We continue to have a strong net cash position with our cash conversion rate at 84% over the last 12 months. As a result of the strong first half and what we can foresee in the second half, we are raising our outlook to be significantly better than 2025. With that, I am happy to answer questions. Great. Thank you so much, Jessica. I think I will start with a couple of questions. Just feel free to write the questions in the chat, or you could raise your hand if you wish to ask a question to Jessica. First of all, obviously very strong on the top line with improving growth to 9% here. I just wondered, looking into H2, when you talk about these outlook statements, both from North America and Other Markets to improve. What can you say about bookings, or is it more that you expected a continued momentum to remain? For BTS North America, we expect the momentum to continue in the second half. For BTS Other Markets, we expect them to get back to growth. All right, perfect. Then just on the costs in North America specifically, I think that was the segment or division where the margin didn't really live up to the expectations. You talked a little bit about severance cost, et cetera. Not sure if you quantified this exactly, but can you just clarify a little bit what the sort of underlying margin you think was in the quarter if you exclude those? If I exclude the two businesses that we either shut down or was that your question? Or just more details on the margin? Yeah. Just if you could add some color on the underlying margin development, if you exclude the more one-off related items. Sure. Okay. If I exclude the one-off items, and keep in mind that those two businesses that we either canceled or reduced the team because the AI innovations were actually hurting our profit through the first half, so now they will be profit accretive in the second half. The third reason for the lower margin was the Sounding Board acquisition from a year ago, called for skilled coaching, was basically an unprofitable tech company. So by bringing them into the firm, they naturally reduced the margins in North America by a bit compared to the old service model that we had. So that was a strategic decision. If we actually remove those two unprofitable businesses in the first half and the Sounding Board one, our margin would've been up 4 more percentage points. So my guess is that's probably more what you were expecting, and that would explain it. Perfect. That's related to North America margins? Only North America. Yes. Correct. I think we had some questions from Daniel Thorsson at ABG. I think the first one we have already answered a little bit. The second part of it I think is interesting. It's about the token cost. Given that you obviously can reduce your headcount quite a bit by improving the efficiency with AI, how has the token costs evolved? Yeah. Is this a part of margin pressure, et cetera? Not this year. It will not be a part of margin pressure. Next year, we expect it to increase quite a bit, so I can tell you more details under our hypotheses there. We switched from ChatGPT to the Claude suite for the whole company in May of this year. The deal we struck with Anthropic for the Claude suite was a typical total enterprise license for the first 12 months. We did not shift to a token consumption model, and that gives us time to learn by function and by role which modes to use and at which levels for the tasks that our team needs. So we have time. We have time for our leaders to learn this and as a company to learn it, and we have some hypotheses in the IT function that we're testing out across our teams. However, that said, given what we're learning, we expect our token cost with Anthropic to go up 4x probably next year. For us, that's a magnitude of, let's say we're spending $400,000 with them this year, we think then it might be $1.2 million, $1.5 million, $1.6 million next year. That is not our total software cost. That just would be the cost associated with token consumption from Claude. We're doing a really good job of reducing our other software and SaaS costs on a regular clip to try and balance out keeping our total software spend. Maybe it will grow next year a little bit, but it's not going to grow 4x. A percentage of that is going to go up. Then we have more pretty big innovations hitting our operations in the second half of this year. We have a major platform that supports almost all of our work for our clients, and we're launching a new one just this month, and it is an absolute breakthrough in efficiencies and productivity and ease for our teams and so forth. As the new platform comes online and the old one starts to go into maintenance mode, and we let that run out with the existing clients, the cost savings from that would easily make up for the increase in token cost next year. The timing of all this will be playing out over the next four quarters. Perfect. A related question on the efficiency, another question from Daniel here. The number of employees on a group level is down for the fifth consecutive quarter. Any question on when do you expect that to trough? Also, the second part of it is if it's sustainable to continue to shrink employees when growth recovers to almost double- digits on an organic basis this quarter. First of all, we are increasing the number of billable consultants that we are hiring, and the total number of billable consultants is going up. The group of employees that is declining and has primarily been the operational back-end office functional staff of the company. For a while now, you'll probably see that reality play out, and at the same time, we will continue to hire as we need. But we're just balancing the impact of the AI innovations, specifically on the operational side with growing billable consultants. My guess, it's hard because we need both of those things to be true. Probably we would start to see. It's hard to say. I would give us another four quarters of this back-end, front-end balancing to play out before we would see total net adds, unless we make more acquisitions in that time. Sorry, I think we have a question from Jon Hyltner, if you want to unmute yourself. Perfect. On the same topic, net reduction of employees, but it also say that you've added billable consultants. If you just look at the cost impact, is it negative so far? Because you pay severance for the one you lay off, and then you don't get a reduction on the total salary cost because you add on the other end, so to speak. Did you understand what I tried to ask? I think so. There's been a couple waves of these initiatives. The reductions that we did in last year, right now, are net positive on the P&L. The ones that we just did in the second quarter that are resulting in about $1.15 million in annual run rate, those will only start to be positive in Q3, Q4, Q1, Q2. But you said you added billable consultants. We are adding them. We are now adding them. Our recruitment pipelines are, we have open recs across the system. So we will only start to see those coming in now in the second half. Okay. So overall cost levels, what should one expect, really? Will they kind of grow with your top line, or otherwise, I thought you have kind of fixed cost on regular consultants and developers, but then you have pretty variable cost if you have an offsite event, et cetera, where there is just a lot of variable costs. So how should one view your ability to scale the margin if you continue to grow? The biggest factor in growing the margin right now is the continued AI innovations across our back-end operations. Okay. Because we still have well over 30% of our total employees in back-end operation roles. But yes, in terms of growing billable consultants and number of sellers, those costs will pretty much grow in line with our top-line growth. Then final from me here, the impact on pricing, given that you can develop a simulation, I think some over a day, which took two weeks a while ago. Do you still bill the same? Do you charge for the value you give them despite you being much quicker to develop? Yeah, two things have happened. One, we're still doing price for value, especially for the simulations that are around new strategy creation and strategy execution, and we're doing a lot of working sessions with the clients. But we've also been able to say yes to deals that have a fast turnaround time that we weren't able to say yes to before. In those deals, okay, maybe it takes us three weeks to work, but then it's getting deployed for many people. So the total deal size is very-- at least the rollout, which is the most profitable part of our project, is the same size as before. So we've done a lot more projects with very fast turnaround times, being able to meet our clients' speed expectations. And then just a final, if that's okay. Yeah. You mentioned 10% of revenue is now in direct AI-related sales. Yeah. It sounds like that's more traditional consulting. Or do you use your normal building simulation type of work style with this AI, or are you just telling your customers how to use AI? No, it's a mix. It's a mix of our core capabilities and core simulation services with helping them get hands on keyboard and starting to work activity through their work. So for example, there's plenty of companies who want to introduce new AI tools to specific teams, and they need to just drive early adoption for that. In order to do that, those workshops will feel more like both simulation and hands-on keyboard, a combination of both. We have clients that are giving us 22 different workflows to begin with and working with those teams for each workflow that need to reinvent their work. In those cases, it's a combination of workshops. We simulate what's possible together with them. We do ongoing coaching for the teams in terms of continual AI innovation and the change management associated with it. We're doing our executive advisory work like before. It is a big mix of core capabilities and some net new. All right. Thank you. Yeah. We had a question from David at [Plurum Invest]. If you could elaborate on the direct AI service revenues. What does that directly mean, and what kind of services are included in that? It means our clients are saying, help us with our AI ambitions. Right now, what those demands sound like are, we are not happy with the adoption of the tools per team or per role or for every employee in the company, so help us drive the adoption up. It is also, we are realizing this is a cultural leadership issue. So help us get our leaders to shift to create the type of environments where their teams can experiment and innovate with AI. It also sounds like, as I just mentioned, we want to have workflow-specific AI adoption. So can you help us figure out who should be doing the workflow innovation across the team, and then how do we make sure it gets done over the coming weeks and months? And then when a team actually drives an innovation that is so profound that we would need to change the ways of working, help us with the change management associated by getting everybody on board with the new way of working. Then the final piece, which is at the end of that process, is help us understand what it means for our teams to wake up every morning and manage agents. That gets to token consumption and agent management and just how does that look and feel? Help us understand that and help our leaders understand what is coming. So those are the four different buckets that we have been asked to support so far this year. Right. Are there any specific types of projects that are driving the vast part of the 220% AI revenue growth, or is it broad-based? It is across all four of those categories. It just depends on what the companies are prioritizing right now. Most of our clients, other than software engineering, still do not have very big innovations to look at and say, this is what it takes to reinvent how a function works or a workflow works. So I would say maybe as a generalization, they are shifting from one size fits all to specific functional workflow support. Right? That means that those teams could have different AI tools than other teams, and IT has to work differently with those business units and functions. As they make that shift, there is a higher likelihood that they will start to reap the benefits of AI. Great. Then I had a question on the cash flow or more like the drivers behind it. So you tied up a little bit more working capital, specifically in Q2. But given that it was increased receivables, could we assume that the revenue growth accelerated throughout the quarter and that June was a little bit better than the start of the quarter? Yes. That is correct. Perfect. On another sort of cost item, I think you talked a little bit about the global conference. Is there any specific types of costs that you maybe do not have regularly in Q2? If you are able to quantify anything of that. Yeah, that is correct. We have a history of doing conferences for our people. But in the last five years, it has been a smaller group than the group we brought together in June, and normally our conference is in Q1 as opposed to Q2, right? So you are right in terms of the costs hit our second quarter. However, it basically gets somewhat balanced out because there is less profit pool that goes to get shared to the employees. So it is not a one-to-one hit in the quarter. Right? In terms of the total cost to the bottom line. But yes, just a rough range, even after we balance out what goes. Just probably a rough range there was $500,000-$600,000, something like that. All right. Then just on the guidance upgrade or the wording upgrade you had in the full-year guidance. So I think we talked about on earlier conference calls, or specifically in Q1, that you were tracking pretty well on this. But did Q2 surprise you on the positive note, making you upgrade the guidance, or did you feel comfortable from the beginning? Well, I think given North America's turnaround was only one quarter old, right, in the first quarter, we wanted to make sure we got through all of the second quarter and feel really strongly about the second half of the year. Also, we have a history of changing guidance now as opposed to the quarter before. So sticking with that consistent, what's expected of BTS Group in terms of when we change guidance, we chose to just stay with consistency of our historical approach. So it was more the latter. Right? It's also always helpful to have another quarter and see how the turnaround continues. Right. Great. Then just had a question on how the markets, given the recovery that you expect that in the latter part of 2026. So can you give some color on how the sort of shift has started? You always talk about maybe three quarters before you see the actual turnaround. I think we saw a step in the right direction with improving organic growth from the lows in Q1. But can you elaborate a bit on how you've seen the development there? Yeah. I would say it's improving faster than we normally see. As a result, we expect them to get to growth earlier in the second half than the end of the second half. Yeah, a couple of the countries in Asia that had a really rough start are turning around quickly, which is really helpful. Then the other ones that are moving more slowly, we're taking out some costs in terms of office closures and all of that. But more importantly, actually, the pipelines are growing. The in-market activities that we've done since February are bearing a strong pipeline, and we've had some good wins. So, you're right about historical, it typically takes three quarters, and right now, from what we can see, it will be faster than that. Then the rest of the unit is performing well. Great. We had a specific question here from the chat. Do you expect a better growth in other markets in Q3? I do. All right. The other part of that question also was related to the balance sheet. So, looks healthy, obviously. If you had any comments on potential M&A or any other types of capital allocation possibilities, maybe. Yes. We continue to be fans of making acquisitions in order to round out or to strengthen our geographical footprint, find great talent and add to the portfolio. So, we will continue to do that. Our current pipeline of acquisitions, I would say there's one in particular we're interested in. We need to build up the pipeline again right now. The last 12, 15 months have primarily been partnerships and trying different AI tech across the portfolio as needed. But yeah, we have a nice list of countries that we'd love to make acquisitions in. So nothing immediate, but we expect that to continue. A follow-up on that, do you need any sort of specific services, et cetera, to add or that you hope to acquire, or is it more geographical expansion or to reach other types of customers? First priority is geographical expansion. Second priority could be, if we could bolster it probably with a boutique firm that is good at systems integration. I know that sounds similar to an ERP or digital transformation of the past, but for some of the workflow work that we're helping our clients with in really complex cases. They need to have more support, and the way that we're balancing that right now is they're getting the support from their primary tech providers. They're getting the forward deployed engineers from Palantir or from Anthropic or OpenAI or whatever to supplement. I don't mean that we would go that deep and technical, but that could probably help. We haven't lost deals because we're lacking it right now, but I can imagine that scale. Consultants who are more able to do that would probably be helpful. Great. I think we had another question from Jon Hyltner. Could you unmute, please? Yes. The change in provision from The Boda Group acquisition on that earn-out adjustment. Yes. Is this the final one, or could it be more if it- No. Even- No. This is the final one. It must have developed really, really well then. They are the max targets, or? Incredible. Absolutely incredible. Probably most successful one we've done ever. They're hitting- After this earn-out, is the whole team left, or how does it look? Yeah. The founder is moving to a part-time full seller for us and wants to continue to be the coach. We have two successors that are stepping up in her place, and that was part of the earn-out rules. Not that she would move to part-time, but that we would have two successors, one who will be head of sales and one who is running head of operations. We are going to start. They know about it now. We are starting the transition real time, but the earn-out is not over until the end of April. We are thrilled that she is staying on as a seller and a coach. Good. Thank you. Yeah. Great. We have another question from the chat that reads, as unit economics improve and your way of changing workflows continues, how should one expect your sales mix to change? Licenses are still quite low percent of revenue, which one could expect maybe to increase given what you are saying. Yeah. Right now, I do not see something that is really changing the mix so dramatically in the short term. If I think about across all our deals and projects, they tend to be a mix still of consulting, facilitation, license, ongoing consulting, as our clients need more and more support around changing the ways of working. At the same time, the license is still driven by the cool new AI stuff that we have been working on the last couple of years and keeping our simulations modern. So I think right now I would expect the mix to kind of continue as is. Perfect. I think that was all questions I had. If there is anyone else that has a question, if you could just please write it in the chat now or raise your hand. Can just wait a few more seconds to see. All right. Jessica, do we want to have some final remarks? No, I do not think so. We are happy with the momentum. We feel like we have some wins at our backs. Our win rates are strong. We are excited for the second half. I am happy to see BTS Other Markets, I think, turning around relatively quickly. So, yeah, for us right now, we are focused on the fourth quarter and setting up next year. So that is how it feels inside BTS right now. All right. Thanks, everybody. Perfect. Thank you very much, Jessica. Okay. Thank you all for listening in. Okay. Bye.