Good morning, welcome to the earnings call for Upsales, second quarter of 2023. My name is Daniel Wikberg. I am the CEO and founder of Upsales, and I will hold this presentation today together with our CFO, Elin Lundström. The agenda for today, I will do a company presentation talking about Upsales in general and our strategy. We will do a sales update, talking about the ARR growth and the strategy for growing the business in the future. We will do a short product update with some highlights on what's going on in the product. Elin will cover the financial highlights from the second quarter. After that, we will have a Q&A session. To submit a question, just click the Q&A button at the toolbar at the bottom of the Zoom window, and you can ask these questions throughout the entire presentation, and we will answer the question in the Q&A session at the end. Introducing Upsales. Talking about the problem we address and our position in the market. We believe that sales is the top reason why B2B businesses fail. All companies start out with great ambitions and ambitions growth plan. In reality, of all the companies founded 10 years ago, only 9% have a revenue of more than SEK 10 million. The number 1 reason for this is the lack of sales. We give companies the tools they need to turn their business into a revenue engine within 60 minutes. Upsales, we are a software as a service company, and we build a sales and marketing platform. We have been doing this since 2003, a purely bootstrapped company with a long track record of profitable and organic growth. The product addresses a couple of different problems that our customers have or that all sales organizations have. The first one is the need to find new leads and new opportunities to fill the pipeline. We do this in numerous ways. We help our customers with marketing tools to reach out to potential customers. We also give them access to a lot of data, enabling them to find potential customers that are a good fit for them, to work with. The second area is helping our users and customers to keep track of the deals they have in their pipeline and to build an effective selling process so they are able to win more deals and to drive a an effective sales organization as a whole. The third area is about existing customers and how you can find additional revenue in your existing customer base. I think this is an area that has been underutilized in a lot of companies, and many CRM providers, like Upsales, in my opinion, have not spent enough time developing the necessary tools and features to fully utilize this potential. This is an area that's very exciting for us, where we have been investing a lot of time and money in the last few quarters to become better at helping our customers find the Upsales and expansion revenue. The final area is about helping management, CEOs and sales managers to keep track of everything that's going on in the sales organization and in the customer base as a whole. In this area, we build reports and dashboards and enable our customers to keep track of the most important KPIs needed to create sales effectiveness. Looking at one of the differentiators, what we hear from our customers, why they choose Upsales instead of any of our competitors. To solve the problems you need, if you are a growing sales team, typically with most of our competitors, you need to spend a lot of time or money configuring and customizing the platform to have it solve the problems you need to hold. Our approach is different. We try to invest a lot of time and money into building a very scalable platform, because we don't want to build a consulting business. We want our customers to get up and running as fast as possible. We work with customers. Our typical customer is a company between 50 up to 1,000, maybe 2,000 employees. On the smaller end, there are a lot of other providers where you can buy them online with a credit card, or you might use a spreadsheet. In the Fortune 500 end or the enterprise sector, you have these mega providers that typically these customers opt for. In the mid-market, the companies that just hired their 10th or their 20th sales rep. You need something that's a little bit more sophisticated than the spreadsheet you've been using or the service you bought online. You're not ready to invest millions of kronor or thousands of hours into one of these mega platforms. Upsales is a very good fit. Talking about the growth drivers, where does the growth come from? We have a land and expand strategy, where we bring in a number of clients every week and every month. We try to make the kind of the threshold for, or the barrier for entry, so to speak, for the client, as low as possible. We grow the customer over time, by selling more add-ons and more seats. Our ARR is currently at SEK 141 million. We believe that only in our existing customer base, there is a potential of growing this number to SEK 500 million, through add-ons and, cross-selling, and then, and more seats to existing accounts. Looking at the market as a whole, if we look at the primary target customer, and looking at how many of them do we have and how many of them are there out there in total, we estimate that we only have 3%-5% of the market in Sweden. There's a long runway of growth for many years in the future for Upsales. Unfortunately, there's not trustworthy data exactly on the market size, this is our own estimates that we have done. Currently, I will talk a little bit more about this when I do the sales update. We have customers in a total of 10 countries and have been working with an international expansion. This is something we will continue to do in the future, for the time being, we are focusing more on building sales capacity in general. We put a little less emphasis on our international expansion for the coming months and quarters. I often get the question as to how is Upsales able to grow revenues for many years, and at the same time produce a 20%-30% EBITDA and free cash flow margins? I think the best answer is the culture and how we work with the team. We try to build a world-class team, and we invest a lot of time and money into training, and making sure that we have the absolute best team and the absolute highest effectiveness. We usually talk about these three core values or principles, if you will, which is the essence of the culture at Upsales. We like to move fast and get a lot of stuff done. We wanna have a culture where each individual can take a high level of responsibility. We talk about take extreme ownership. We are a flat organization that like to get stuff done and that don't end up in bureaucracy or prestige. We also talk about no prima donnas allowed. I think these three core values is probably the best explanation as to how we are able to continue to grow revenues and do it with good profit. Talking about sales, obviously, we've had two quarters with slow ARR growth. The focus now is to building better sales capacity. We are in a period of transforming the sales organization and transforming the way we work with customers and the way we work with sales. The main objective here is to increase the average deal size. We believe that the best way to grow Upsales is to build a team, but also invest in the product and in our processes, so we can increase the average deal size, targeting larger deals and larger customers. We are in the process of going towards this new way of working. In Q2, we hired our new Chief Revenue Officer, Christian Nyberg, who will join Upsales after the summer. We've also added another member to the management team, Linn Sterby, who will be our new Head of People, responsible for scaling our hiring, recruitment, and making sure that we continue to have a high-performance kickass culture in the company. We're also adding several new members to the sales team, joining us actually next week. We have a very ambitious hiring plan for the second half of 2023, with the aim of having a significantly higher sales capacity at the end of the year, to support our growth targets for 2024 and onwards. As I mentioned, as has been previously communicated, we don't expect an improvement in ARR growth expected in Q3. Looking at the product, as I mentioned, we are working tirelessly to add relevant features and add-ons, with the aim of retaining all of our customers and also making sure that we have additional services to sell to our existing customer base. Two of the things I want to highlight is I've talked about this previously as well, we launched our Swedish cloud in Q1 specifically for companies in sectors where data privacy and GDPR is of high importance. In Q1 and in Q2, we continue to close deals specifically because of this feature. This has been an edge and a differentiator for us for a certain segment of customers. We're also in the final stages of releasing our CPQ offering, which is. CPQ stands for Configure, Price, Quote, which is a feature used for companies that have complex quotes or complex orders or complex configurations of products. This is an add-on that we will start selling in the fall. We think also that we've identified a segment of customers where this is a crucial problem, and not many CRM systems are able to solve this in a straightforward way without these complex and costly implementation projects. Before I hand over to Elin, I also want to talk about resilience, given the macroeconomic environment we find ourselves in. Upsales we have zero debt, and we are a net cash company with a long track record of driving growth with profitability. Looking at the product and the risk of customers cutting costs and stop using Upsales, I believe that risk is very low because I think that driving sales effectiveness and working with sales in general is more important in a slower economy than in booming times. I think that in a way, the product we sell is in a way, anti-cyclical because now all companies need to work harder to make sure that they find the business they need. We're also seeing that the scalability and the ease of use and the speed at which you get started using Upsales is very effective for companies that need to do something now, but that are not ready to do these mega investments into our larger competitors. We actually have quite a few discussions with companies specifically looking to switch to Upsales from other providers because of this reason. Also another point related to resilience is that having more than 90% recurring revenue creates a very strong stability in the business because we don't have to defend a large consulting business every quarter. All right, now I will hand over to Elin for some financial highlights. Thank you, Daniel, good morning, everyone. Let's begin to look at the annual recurring revenue. ARR grew by 9.4% compared to Q2 2022. ARR changes in Q2 was 0. ARR, as at the end of the period, was SEK 141.4 million, compared to SEK 129.3 during the same period last year. Net sales increased by 13.9% to SEK 36.7 million, compared to SEK 32.2 million in Q2 2022. As Daniel mentioned, when looking at revenue, we divide our revenue between recurring revenue from our subscriptions and one-off revenue, such as onboarding and other consultancy services. In Q2, recurring revenue accounted for 93.5% of total net sales. Let's look at our profitability. EBITDA was SEK 11.9 million compared to SEK 7.6 million in Q2 2022. EBITDA margin was 32.3% compared to 23.4% during the same period last year. EBIT was SEK 9.8 million compared to SEK 5.8 million in Q2 2022. Net income of this quarter was SEK 7.9 million. Looking at cash flow, during this quarter, we had an operating cash flow of SEK 7.2 million compared to SEK 3.3 million in 2022. Net cash as the end of the quarter was SEK 45.1 million. As Daniel also mentioned, we do not have any debt. If you look at the cash flow statement for the quarter, you will also see that we paid a dividend of SEK 2 per share during this quarter, which of course, had an effect on net cash. Yeah, this was all of the financial highlights. Thank you. Let's continue on to the Q&A section. Again, if you'd like to ask a question, just click the Q&A button at the toolbar in your Zoom window. Let's start. We have a question regarding the sales team about the number of hires we will make in the next few months, and how many we think we need to drive 30% ARR growth. I think there's a quantity aspect, and there's also, above all, a quality aspect. I mean, a top salesperson can produce 3 to 4 times the revenue of an average salesperson. It's just not about the numbers. Having said that, I think we have three or four people joining us after the summer, and we have a plan of adding as many people in Q4. I mean, obviously, we have a model where we build the growth plan and then the number of people we want to add. In the end, it's only a spreadsheet. I think the most important thing is to do the important work that Christian, our new CRO, will be doing, and also Linn, who will be working with HR and the team, to make sure that we have the right training, the right processes, and then the right foundation for new people to be able to succeed. Having said that, I mean, a successful salesperson can produce SEK 5 million or SEK 6 million or SEK 7 million in ARR per year. I mean, the exciting part of being a small company is that only a handful number of people can make a big difference. We have a question about the churn rates and net retention. We don't report churn as a KPI. There's also a question, why has churn picked up over the previous periods, and what measures did you take to lower churn and drive up sales? I would say the main explanation as to why the ARR growth has been slower in the first half of 2023, the main reason is not the churn. The main reason is the sales capacity, and the changes we are doing in the sales team. Obviously, we're always working with improving retention rates. I would say one aspect is what we're doing in the product to make sure that the product is more sticky and even more easy to use. The other aspect is to make sure that the expansion team and customer success team are making sure that all of the customers get exactly the help they need. We have a question about larger clients and the sales approach, and what measures did we take, given that the results winning over larger accounts have not been satisfactory? All right. I would say that I wouldn't say that we have failed in selling to larger accounts. We have always been selling to larger accounts. It's more that we are changing the way we are working, and we've done a lot of changes in the sales team. All in all, when you do a large change in any organization, you get short-term effects that are negative on the performance. I wouldn't say that it hasn't been satisfactory. It's more that the transformation we're doing, unfortunately, takes a little longer than we wanted. All right. We have a question about the competitive landscape, and there's a question about Lime and Microsoft and Salesforce. The most common competition we face when talking to potential customers are Salesforce and HubSpot, not so much Microsoft, and I would say not at all Lime. I think they target different sectors than we do. I think, again, Upsales has a very strong position for companies that have outgrown their spreadsheet or the simple solution you found online. You're not ready to spend $1 million and 12 months implementation to start use Salesforce or Microsoft. For this segment, Upsales has a very competitive offering. We have a question about headcount, the number of employees in Q3 2021. Fewer employees basically working at Upsales now compared to a year ago. Could a lower ARR growth be due to underinvesting in R&D and sales and marketing? I would say absolutely not. I think it's a common misunderstanding that if you just throw money at the problem, then you will get the growth back. In reality, it's a lot more complicated than that. I think I'm very happy with the organization we have now, especially in the product team. I think that, I mean, in a scale-up or in a small growing company like Upsales, stuff changes all the time, so it's far from a static environment. It's not like we had 70 people and 10 left, and now we are 60. People join the company, and people leave the company all the time, I think this is the reality in any growing business. What I'm very proud of and very happy to see is that the revenue per employee is a lot higher than it was a few years ago. Growing headcount per se, is not a KPI that we are tracking. It's more about quality aspect and building an effective organization, finding the right people. Obviously at the end of the day, you only get so far with 5 or 10 sales people, so you need to add more sales capacity, which is what we are doing now. Okay, we have another question about what was not working in terms of ARR growth in the last 2 quarters and what you will do going forward. I think we've already talked a lot about that. I mean, it's about making sure our new team is in place with, especially with our new CRO, getting our new hires up to speed, and getting everybody up to speed with our new way of working and our new selling process. We have a question about our EBITDA margin. Is there a reasonable assumption that EBITDA margin would decrease given the recruitment in the coming quarter? I think that what I've always say when we talk about growth versus margin is that we want to run Upsales as a profitable business. I don't believe that running the business in the red for two years with a hope of being profitable in the future, that's not the kind of company we are. Having said that, we will always prioritize growth over short-term margins. If we see a project or if we see an initiative that we believe is a good thing to do for the long run, and if that initiative would take our EBITDA from 25 to 10 in two quarters, we will absolutely do it. Everything we do is always long term. Having said that, I don't wanna give any more guidance about specific margins. Obviously, if we invest heavily, there is always a risk of margins being lower in specific quarters. All right, we have a question about increased churn. We track churn, and we track churn in numerous ways. As I mentioned in my CEO comment in the report, we have not seen a systemic increase in churn due to macroeconomic conditions or we're not seeing a slowdown. We don't think that the slower ARR growth has nothing to do with a weaker market or poor customer satisfaction or anything like that. It's 100% related to changes we have done in the sales organization. We have a question about the churn from smaller customers that we acquired from the Fortnox partnership. I mean, the total ARR from all of the customers from the Fortnox partnership is very, very low. We still have, if you look at churn in terms of number of customers, that number has always been higher for us. It's hardly noticeable in the ARR as a whole because these customers pay a few thousand kronors per year. Even if you lose 100 of them, you hardly notice it in the ARR as a whole. We have a question about pricing structure. Do we sell at different prices depending on the customer? We absolutely do that. We recently launched our enterprise offering, where we target larger customers and where we also include the Swedish cloud. We have a few different price lists, depending on the type of customers we talk to. We have a question about how does this new selling process looks like, and how did it look like before? I mean, I think that there's not a short answer to that question. Obviously, if you want to have a 3 or 4 x higher average deal size, you have more steps in the selling process. You need to talk to more people, to more stakeholders in the customer's organization. You need to do a more thorough job with building a business case and producing the right kind of documentation. There's not like a 1 or 2 thing changed. There's more like a 1,000 things that you need to do. I think that what I have seen in specifically in Q2, I'm very optimistic about what this will mean for Upsales in the future. I'm quite happy with the progress we are making in the organization. But obviously, I'm not happy with the ARR growth rate. All right. That was all the time we had for today. Thank you, everybody, for joining us today, and hope to see you next time.