Conference 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions- and- answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to the speakers. Please go ahead. Welcome to today's web conference regarding the transaction and merger between ACQ and Yubico. My name is Henrik Blomquist, and I'm CEO of ACQ. With us today, we have also another presenters representing ACQ, Chairman of the Board, Patrik Tigerschiöld, and Deputy Chairman, Caroline af Ugglas. We will also listen to Yubico and its founder, Stina Ehrensvärd, and CEO, Mattias Danielsson. After the presentation, there will be a Q&A. We initiated ACQ and listed it, a little more than two years ago. Since then, we have actively been screening huge amount of companies and different investment situations. Today, I'm therefore very happy and excited to announce that we found a company which fulfills all the investment criterias that we set up and communicated two years ago. This company ticks all the boxes. It's a high-quality unlisted company with international presence in an attractive market segment. It has a leading market position and an impressive history of growth. The company has also a sustainable business model and has a superior value proposition to its customers. Last and not least, it is a fantastic entrepreneur and strong management team. The company is Yubico. It's a Swedish-American cybersecurity pioneer founded in 2007. Yubico is an entrepreneur-led company now ready for the next phase and next step as a listed company. Yubico's solution solves the number one cybersecurity problem: authentication. Yubico has an impressive track record of growth and is today one of the market leaders on a global basis. Yubico is also one of the inventors behind the FIDO Alliance, which is an open standard and supported by hundreds of top online partners and tech giants. The company has its own proprietary technology and cutting-edge production in Sweden, high margin, high security, and high automation. The company also has a unique blue-chip customer base with significant opportunity to continue to expand with current customers. The management team has extensive sector experience and are now ready to execute on a long-term plan of growth and profitability. With that, I hand over to the chairman of ACQ, Patrik Tigerschiöld. Thank you very much, Henrik. Before you get to see Stina and Mattias talking about the Yubico and their proposition, I would like to highlight the thing that I think is important to understand, that's the relationship between ACQ Bure, and Yubico. Bure has been an owner of Yubico since 2017, and Bure was also the one that took the initiative to start ACQ and listed it in 2021. This means, of course, that there is a conflict here and a challenge that we need to address. Bure is owning both the company that ACQ is buying and is also one of the biggest owners of ACQ. You might ask yourself, ACQ has been looking for a company to buy for two years and end up buying a company that Bure already owns and has a stake in. This fact has been a challenge for me and the whole team. Therefore, we've had to handle this with great care and respect that there is a conflict of interest. The majority of the non-conflicted board members in ACQ has been the decision-makers. Why do we go through all of this with this challenge? The reason is Yubico is an extraordinary company where ACQ can fill a very important role in creating a stable future where Yubico can thrive in success in the years to come. I strongly believe that this is a fantastic opportunity for ACQ shareholders, and therefore, the proposal is now to take this to a vote and a decision at an extra general meeting in ACQ in June. Without further ado, I would now introduce to you Stina Ehrensvärd, the founder and biggest shareholder of Yubico. Stina, please come up. Thank you so much. Thank you everyone. Thank you all customers and partners and team who is listening to this. Yubico. Our word is inspired by the word ubiquity and the vision of enabling one single security key to access all computers, phones, networks, and online services for everyone from anywhere. With that mission, we, Jacob and I, my co-founder and husband, father of my three kids, we decided to invent the Yubico and move to Silicon Valley. 11 years ago, we packed our bags. We won Google as our first customer to help create with them and pioneer an open standard that is now integrating all leading platforms and browsers. A few years later, we contributed the standard to the FIDO Alliance. Google announced support in Gmail. A couple of years later, I was invited to meet President Obama at the White House and started a conversation on how we could protect 300 million Americans with this technology. Microsoft makes support. Then a few years later, President Biden puts out a new directive for all U.S. government services requiring phishing-resistant technologies, pointing to our technology as the most secure and one of two approved technologies for authentication in 2024. This year, Apple makes support for the Yubico. With that, we were ready to take the next step, which is here in Sweden. I just moved back to Sweden together with my husband, and I'm gonna just share, here are the cyberattacks that we are seeing. What most people don't know is that 90% of all cyberattacks are based on the fact that there are people are using weak username and password or other authentication methods that are no longer sophisticated enough for the modern attackers. Yubico do not stop all these attacks, but we do stop the most common. If you look at some other attacks, like ransomware and malware attacks, the hacker can't do anything if they don't also have access to the login credentials to the systems where the sensitive data is stored. That's where we indirectly protect. We do not protect against denial-of-service attacks. Why isn't everyone on the planet today using the authentication technologies that stop these attacks if it is the biggest problem? Historically, strong authentication have not combined ease of use with security. We got the high security technology, smart card, advanced bank authentication tokens that actually do stop even today today's modern attackers. They're too difficult, too complicated, too expensive to deploy. Instead, people are using the simple bank authentication tokens, phone apps, SMS or passwords, and they do not stop the attackers. How do we, you know, how do we address this problem? That's where the Yubico comes in. Combining security and ease of use. This is how it works. You enter a PIN. Here's my phone. Here's my Yubico somewhere. I just tap this to my phone to register this to my enterprise applications. From there, I log in with my phone, with my fingerprint, and from my fingerprint, I have access to all my internet services. I don't have to use my key again. I can put that back in my pocket. I haven't used my Yubico for three months. It's not only the most secure because it is. The security is integrated directly into the hardware with most advanced encryption. The hackers technically need to have the key in order to get in. It also works everywhere, and it just works. I don't have to download any software, any client. I don't have to have a reader. We're not hacked. Here is a case study from Google. I can say that this technology is good, our customers saying it, that what. This is the difference. When they deployed YubiKey for all their staff, they had zero account takeovers. They did a report that came out with where they tested the Yubico with other authentication method they were also using at the time. With 350,000 hijacking attempts, online push apps, the authentication push apps from a phone, they had 10% successful hacks, 24 successful hacks with SMS, 21 with some other email and 50, you know, where the exec, you know, the phone number was another means of two-factor authentication. The cool part, and this is why when this report was released, Microsoft and Apple and Amazon and all the other came and also said, "We also need to make support for this." It's because they had 92% support reduction. Here is the secret. A lot of people think, "Oh, I have to send out a separate key, a separate thing. I don't wanna do that. I have my phone, I have my computer, like, I don't wanna bother with something else." However, if you only log in with your phone, you're gonna lose your phone, you're gonna break your phone, and your employees, they want to lose and break their phone 'cause they want a new phone. What they did at Google, they gave everyone two keys or three keys, and they reduced their support calls that cost less than a YubiKey, with 92%, and that is more than $50 million in ROI after a couple of years. It was also four times faster to log in because they don't have to fiddle with codes and phones and stuff, so now people could be more productive. From this platform and with the help of Google, we've created this fantastic ecosystem where the YubiKey today works with more than 800 applications. I only use one single key to log into everything. I'm Swedish American. I log in to my computer, to all my enterprise applications, to my social media, to my U.S. government services, and I log into my U.S. bank account with this key. It just works. Okay, what are we doing? What are we selling? What is the Yubico solution? In the bottom, we sell hardware. We manufacture these hardware pieces here in Sweden, majority of them. On top of the hardware, we've put on software, and we charge differently depending on what software it is. The price range from $25 to, I think, like, $100, depending on a form factor and the different features and the different number of features we put on the key. We charge additionally for the different certifications that are required for different, you know, different compliance reasons from different... in different countries. We allow our ecosystem and partners to make support for these products through open source servers, SDK libraries, third-party services and hosted services that we offer. On top of that, we charge and offer for professional services, support, customization. We have a subscription-based services and delivery where we can send the key to many countries in the world directly, not only to the enterprise headquarter, but directly to people's houses. It was very useful during the pandemic. Okay, I am soon gonna give the word to my trusted advisor and friend since 13 years ago, Mattias Danielsson, who I gave my job to a couple of months ago. As someone said, in the early days when I started Yubico, that in order to be successful in a company, you need an evangelist, a ambassador, and a Napoleon. You need someone who can really build fantastic product that is a technology genius, and then you need someone who has a good business sense, who can put things in order, understand financials and operations and, you know, execution, and that's us. This team picture, this is the press image, anyway. If any press is here, please use this image. Don't continue to use pictures over only of me, 'cause that's not fair. We are a 400 man amazing team around the world, located in more than 10 countries, this is the trio that have built this company together since the last 13 years. Please, I wanna give a big round applause to Mattias, my amazing CEO. By the way, before he joins this stage, he knows all his credit cards numbers, all three credit cards number in his head. All the numbers. Like, isn't that sort of amazing? Mattias, the stage is yours. Thank you, Stina. Good morning. On the note of teamwork, I wanted to start with highlighting the team we've got. We are a truly Swedish-American company, about half of the management team is based in Sweden and half in the U.S. and we, of course, travel in between. We have 400 people now in the company, employees. The biggest groups are in tech, and the second biggest one is in sales. We have about two-thirds of our employees in the U.S., mainly in California and the state of Washington, but across the country, and about a quarter of our employees in Sweden, mostly Stockholm. Then we have sales representatives and specialists across the globe. Short thing about the management team. You recognize a few of the faces. A lot of us has been around for good and bad for a long time, but we've had some new additions that we're very happy to help us continue build this company. I'm a numbers guy. Stina made that clear. I wanna highlight some numbers today. Most of it you can find it in the press release, still I wanna highlight it. Last year we recorded revenue about SEK 1.6 billion, and we've had a pretty consistent growth over the past seven or eight years. Our average growth since 2016 has been 50% on a yearly basis. Fundamentally, our core product is a YubiKey. We sell hardware, but because of all the software which goes on the YubiKey's and all the solutions that we provide, we're able to maintain good margins. We've had a consistent strong growth margin of typically 80%. Something that I'll return to, and Stina start out by talking about this, we've had our first initial success. To a large extent in the U.S. Today, 19 out of the 20 biggest U.S. tech companies are our customers in some shape or form. It's also very nice to note that we have a lot of returning customers or recurring revenue. We'll talk a little bit more about our subscription offering a little bit later, but I wanna highlight that even before we started selling the YubiKey on a service basis or on a subscription basis, we saw a lot of returning business from our existing customers. When we had different snapshots, and the most recent one was based in 2017 when we looked at, okay, so what does the annual repurchase pattern look like for our top 25 customers? We noticed, measured on number of YubiKey' s, that the annual repurchase rate was 132%. That means if you bought 10,000 keys in 2017, you would buy on average, or the median, 13,200 keys the next year, and so on. Because of that, we've been able to ship, a little bit over 22 million, sell and ship a little bit over 22 million YubiKey's worldwide since we started the company. This is one of our, one of the things I want to highlight about customers. These are our public references, and as you can tell, it includes some of the biggest tech companies in the U.S., but, we've broadened that customer base. We're very happy to be working with this customer because it makes us understand what the security problems they're facing. It's nice to see that these companies that are usually very tough competitors are able to work together with us to make sure that we stay one step ahead of the security threats that they're seeing. I'll talk a little bit more about the customer composition now. I'll start at the very left, lower left end of this. As you can tell, we had a very strong industry focus on the high-tech sector. Still in 2018, about two-thirds of our sales was in the high-tech sector. Since then, we've broadened our reach. Last year, even though it was a very strong year in tech, it was about 40% of our sales. We've managed to grow our footprint. A major reason for that is the fact that when we started out the company, Fundamentally, we're selling a key, it needs to fit into all the locks. As Stina said, because of all the work that we've done with Google and our other partners, now we can ensure that our key fits into most locks that are out there in an easy to go way for the user. This means that we are now able to work across much wider set of industries and users because our key fits into all the most common locks. I highlighted some of our public references customers on the previous slide. I should say that there are a number of customers that we cannot talk about because they, yeah, they wanna keep their security secret. If you look on an aggregate level, we've had a lot of success with some of the biggest enterprises and organizations in the world. When we looked at it back in 2018, we had about 12% of the Global 2000, i.e. the biggest listed companies in the world, as our customers. That grew to 26% in 2022. Don't get me wrong here. In most of these cases, it's only a very limited deployment this time, and that's typically how we work with a customer. We get in, get our foot in the door, make sure that we can support them in a critical use case, and then as the customers realize, "Wow, not only is this super high security, but it's actually really good user experience," that's when we expand. For most of these, the 26% of the Global 2000 companies I work with, we've only got a foot in the door, and now we need to work with our land and expand approach to make sure that all the different links in the chain are secure. As we all know, the weakest link in the chain is what matters when it comes to security. Great. I've already highlighted the fact that we see a very big repurchase rate, and part of that is, of course, due to the fact that we do this land and expand. There are a few cases where we've seen the initial deal being a cross-company deployment, but the typical use case is that you start out with a number of 100 users, and then you grow from there. In terms of numbers, Stina set the bar high for me there in terms of how I should talk about numbers. But I still wanted to highlight, you can find all of this information in the press release, too, of course. We've had a pretty consistent growth. It's hard to tenfold in one year when you're selling hardware, but we've been on a steady growth trajectory. We had very strong growth in 2022. Measured in dollars, it was lower 'cause we had some currency effects there, but it's all in the reports. The other thing I wanna highlight is the high margins, which have been pretty consistent. We had a drop in 2019. Sorry, yeah, 2019, when we were trying to increase the share of our manufacturing done in the United States. Now we have realized that Sweden is a great place to do manufacturing of high security products. We have high automation, and we work with great partners there. With that, we're able to maintain a solid gross margin, which funds our growth. I mean, the mirror image of that is if you look at it in profitability. Since the start of the company, we pretty much had as our ambition to make sure that we're a self-financing business. We've been profitable most years over the past 10 years. We did a number of investments in 2019 and 2020, some which are really paying great dividends today, and others, I mentioned the manufacturing earlier, where we actually decided that this was not the right path to go. We had a drip, we had a dip in profitability in 2019 and 2020 because of that. Again, a very strong profitability last year. We're not gonna be able to repeat quite that trick this year, we definitely aim for maintaining a profitable business. One thing that I wanna highlight when you read the financials is that, as I mentioned, we have a lot of repeat purchases. About three years ago, we launched our subscription service, which is you buy strong authentication as a service. Now, the traditional business model is that we, i.e., when you sell on a perpetual basis, is that you ship all keys, and then you recognize the revenue as that happens. You recognize the revenue and all the cost, and that has a direct impact on your top line and, of course, on your profitability. With the subscription model, which is as attractive, instead what we do then is that we recognize period over the entire usage. A typical contract is three years, so even if we have just about the same cost in that we're getting the hardware out in the first year, it means that we can only recognize a third of the revenue if we sell it on January 1st or a 6th of the revenue if we sell it on July 1st, which means that even if it's an attractive business model, it has a short-term impact on our revenue growth and our profitability. As we continue exchanging financial information, you need to keep in mind what share of our sales bookings are in the shape or form of subscription. We have pretty consistent growth there, which again has a negative impact short term on both revenue and profitability. It's a good business model. Sorry, I'm clicking the wrong place there. This is what we've accomplished so far. If you look at the market conditions, I think we have a pretty strong tailwind. We are seeing a growing market because of the security threats ongoing and the increasing realization that it actually quite easy to address one of the major problems when it comes to cybersecurity. This is a research report saying that the market for advanced authentication solutions is expected to grow on an annual basis with 14%, and we're seeing high growth on that as we're gaining new markets, we feel that the conditions are there for continued strong growth. I'll close up with some guidance numbers. Like we said, we have had a pretty consistent growth over the years. Our long-term financial goals is to continue growing with on average 25% in terms of sales bookings. Now, how revenue is impacted is also impacted what the share of subscription is of those sales, just to be clear. We target a 20% EBIT margin. Again, there's a short-term effect as more sales happen in, in the subscription form there. For the foreseeable future, we will not be paying any dividends, to our shareholders, but we'll re-continue to reinvest in our company and its continued expansion. With that, I'll hand it over to Stina again. Thank you so much, Mattias. Here is the question. Why listing? Why Sweden? We have known and collaborated really well with Bure since 2017, building that long-term trust with investors matters because investments, investors and entrepreneurs, it's sort of like a marriage. You wanna work together, you need to like each other. That's a good start. The main reason for being listed is that we are now ready to grow up from being a startup. After 16 years, we, you know, have a longer-term stability, trust, and transparency towards many of our enterprise customers, towards many of our tech partners, to compete in their league. We wanna bring in some capital, and we wanna be able to ensure that some of the early investors and team members who've been critical for our success, we will be able to give them some liquidity. It's been a long ride for them. I'm also really excited now that Yubico fans, we do have fans around the world that loves our product. We are now inviting them to become part of our future success. We gave the standards away to the world. Now we're opening up and inviting everyone to be part of Yubico business in the world. Jacob and I are back in Sweden. Mattias is here. 25% of our team is in Sweden, so it makes sense to continue to build from Sweden. However, it would also make sense to continue to build from U.S. We will continue to build from U.S. We have half of our board there, 75% of our team, more than 75% of our revenue. I mean, we are in no way letting America, and America's not continue to be one of the most important strategic partners to us and locations. As Mattias said, we have been better at manufacturing here in Sweden. For some reason, Sweden is fairly advanced when it comes to automation. We know it's the best country for security and quality. We are ramping up our production, and we are making about 1 million keys per month with the current rate, and it's growing. Here is another reason I felt not only wanna come back to Sweden but transitioning to my new role as a Chief Evangelist. The biggest problem in cybersecurity is not that the technology isn't there. The standards are here now. We need to educate and bring awareness to the market, and I feel very committed to that while Mattias can run the daily operations of the company. What I recently learned would make me sad because Sweden used to be really in the forefront of cybersecurity, in forefront of digitalization. I mean, Sweden was the first country in the world to fully embrace online banking 20, 30 years ago. We are behind now in Sweden. It's listed, unfortunately, as one of the countries in Europe with the most poor cybersecurity. Yubico, of course, now when we have, you know, fully back here in Sweden, we are gonna change that. Be sure. With that, I am going to give the word back to our friend, I think, yes, it's Patrik. Thank you very much, Stina and Mattias for a very inspiring and interesting presentations. Thank you. What's the next step? Well, today we have the 19th of April, obviously, the announcement, and then the next step is to, for the board of ACQ to call for an extra general shareholders meeting that we plan to have on the 20th of June. Provided that, of course, that we get your support, the ACQ shareholders, we will then start the merger process. The legality around it is quite cumbersome. We expect this to be finished mid-September this year. At that time then, the ACQ will be renamed to Yubico, so you will see the Yubico ticker on the Swedish Stock Exchange, something we're looking very much forward to. I think it's actually time now to move over to the Q&A session. I invite all the speakers up here. Andreas, please kick off the Q&As. Thank you. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Henning Eklund. Please go ahead. Hey, Henning Eklund, Svenska Dagbladet. Can I ask a question in Swedish or should we do it in English? English, I think would be preferable. Thank you. Okay. Question for Henrik Blomquist, Patrik Tigerschiöld. How would you describe the climate for IPOs within tech right now? Well, the general climate has been kind of poor for this year and last year. In this case, it's something special, it's something unique, and I think this will be hopefully be very welcomed at the stock markets this time. If I may add there, I think, you know, no one is selling any shares. I mean, this is a company where we all want to keep owning the shares. There's not a situation where there will be a huge outflow of shares that someone needs to pick up. That's a big difference from a normal IPO where you have a big placing at the time of the IPO. I just also wanna add, we're not just a tech company, we're a cybersecurity company, and cybersecurity is in no way, like, going down. Just add that. Okay. Stina, what's your view on the timing right now with the market climate? I mean, we sort of founded in the worst economy ever. In 2008, we were started to grow this company and tried to look found for funding. We are not in any way, we don't see the economy around us as a barrier or opportunity to do anything. We're just on this track. We were offered this opportunity a few months ago by Bure. My first reaction was sort of similar to your question, is this the perfect timing? Could we get other terms in a different environment? We looked at it and said, "This is actually good timing," 'cause we need to start making the five-year plans. I've been making five year... One year plans for the last 16 years, my team has said, "Stina, when can we get a five-year plan?" I said, "I don't really know. You know, let's take it." I just realized I could, you know, this company needs five-year plans. That's why I needed to change, you know, to a CEO who's ready to make the five-year plans to start with. We need a structure that allows us to make those longer terms investment, but also allow early team members to move out and new people to come in who wanna be part of our future success. Yes, we could have waited a year. We don't have to do this now. We are in a really strong position. We're not doing this IPO because we have to. No one is forcing us. It's not like it's our... This was, the timing from Bure's perspective was now, and we said, "You know, why not? I mean, we're in it for the long haul. Things are going really well at the company. Markets are in turmoil, that's clear, but I'm hoping we can focus on our own business and the long-term success of it. To me, this is the natural next step when you grow up as a company. I'm actually quite happy that we're doing it in Stockholm too. We have an ambition. Mattias, you have to say what is gonna happen in one to two years. Yeah. As is listed in the press release, our aim is to go for the main market in 12-18 months from closing. There are a number of things that we need to do in terms of our maturing journey there, IFRS and a few other things, but we're getting there. In terms of size and, you know, the companies, we could. You know, we are in pair with a lot of other companies on the main market, but we haven't met the financial requirements at this time. We have some homework to do there. Financial reporting requirements. Reporting. Okay. Okay. Should we take next question? Okay. Thank you. The next question comes from Simon Granath from ABG. Please go ahead. Thank you, operator. Thank you so much for the presentation. Just a couple of question from me, if I may. As you point out, the gross margin is reached above 80%, and looking at the historical trajectory, it has been rather volatile on a yearly basis. How do you view the mid to short-term margin trajectory, particularly as it relates to your five-year EBIT margin target? Have you seen any impact on the gross margin from recent supply chain disturbances? Thank you. It's a great question. Actually, if you look at the snapshot that I presented there, you could see that we had a dip for our gross margin in 2019, if I remember right. That was the one time that we fell below 80%. We took a number of investment which we treated as cost in that year as we set up manufacturing in new locations. We scaled back from that, and we have instead continued investing in Sweden. Of course, there's inflation going on, and there's a tight supply of certain components, so there is price pressure on it. I feel that we're in a very good position to maintain and to reach our long-term financial targets. Some components have become more expensive because of the automation and the scale, there are other costs that have gone down. In total, it's just that's, I mean, there is no really big cost change. What, just to be clear, the biggest impact short term on our gross margin is how much we sell on a subscription basis. 'Cause again, there virtually all the costs occur or charged first year, whereas for the hardware, whereas we only recognize typically a sixth of the revenue. That of course has a short-term impact on our gross margin. Over the duration of the customer relationship, it's pretty much the same as when you sell on perpetual basis, typically a little higher even. Thank you so much. Can you talk just a little bit more about the pricing strategy? Have you historically made any price changes, and do prices vary a lot depending on the size of the company you target? i.e. relating to price discounts, et cetera. If you go into our webpage, please do. You can buy Yubico's directly from our web store. You can also buy it at partners, including amazon.com. You can see what kind of our list prices are there. We've had a pretty consistent policy of maintaining our prices and not offering big discounts. Actually, one of the first disagreements that Stina and I had when I joined the company was that I said, "There's no way we can maintain these margins long term," and I was proven wrong. We've actually been able to increase our margins from then, and we've been pretty consistent in offering new products with new functionality and thereby also charging the right price for that. Over time, we've actually had a per unit price increase, and I don't see any reasons why we shouldn't be able to do that if we continue leading this market. As we continue. We will continue to do this. as we continue to lead this market. I thank you. Small comment there. Please don't care. If you buy on a subscription basis, of course, you instead pay on a typically yearly basis for your authentication service. Thank you. That's very clear. Just a final one from me. Could there be any M&A opportunities for you to exploit? If so, what type of acquisitions are you looking for? Should this mainly be seen as some organic equity story? Thank you. Our focus has been organic growth. We haven't done any acquisitions in the past. I'm not saying that we won't ever do, but our focus is on our organic growth. It's impressive organic journey since the beginning. No M&A, nothing. Here's also a challenge. If we would decide to grow our offering by acquiring maybe one of our partners, then, some other partners may be not so happy. It's always. Love all, serve all. Exactly. You know, it's, it could be a trade-off, but so we would wanna find something that is clearly complementary to what we do without disturbing the amazing partner network that we have built, because they are really our extended sales force. Thank you so much. Thank you. The next question comes from Joachim Gunell from DNB. Please go ahead. Thank you, and good morning. Welcome back to Sweden then. Two, yeah, two or three questions for Stina and Mattias. Can you comment a bit on in what way you think your strategic priorities will be different over the coming three years and then. What will capture most of your focus here into 2023 as you become a listed entity? Strategic focus the next coming years. Strategic focus for the coming years, Okay. I mean, Stina says that she's had one-year plans, but I think if you look at it, we've been pretty consistent in our offering and our approach to market. I don't see any radical changes, neither in our product offering or in our go-to market because of this. As we mature as a company, we of course need to improve a lot of things. The fact that we're being listed, of course, as we mentioned, it opens up for credibility. We're being independent, and we're in it for the long haul. I think that is really great as we work across different platforms. To me, I'm sorry to say this, but I'm hoping to continue building the business in the way that we've had with Bure as a very active owner in the past six years. There are some product development that is really a long-term investment, ensuring that we, you know, we build things that are, you know, future cyber threats, like, what you call it, you know. We need to stay ahead of the game. Quantum computing. Yeah. Quantum computing. We have already initiated that, but that's more being on R&D. Now when we say, "Hey, we need to have something that is bulletproof in five years from now," we need to start, you know, really double down on those longer term product development investments at this time. I think that is a little of a different. We've been more focused on what do we need to do here and now. When the standard is established, which they are, we can rise above and think about, okay, how do we build products and solutions that support and make us even more compelling and differentiate ourselves from other competitors in the market? We have a lot of proprietary solution around the standards because that's a common question. Like, how did you build a company based on an open standard? There are other companies who've done that too. It is actually a good strategy if you also build proprietary solutions and services and cutting-edge innovation, you know, a few years ahead, because that's how we see that we will continue to be. A lot of people also ask me when in the future a lot of these things will be built in directly to computers and phones. Apple just released this year saying, "Hey, if you wanna be really secure," there's a blog out there from them. You really wanna ensure that you have the best security, go and get an additional security key. It's not only the security, but also, there are some other reasons to have this external key, and that's where we are leading. The strategy about the standards is to get to every online service on the planet, 5 billion people. We don't have to win all of them, but they need to implement the standard, and then we got the opportunity to win all of them. As I mentioned, in a typical enterprise environment, a lot of the investment actually goes into making sure that it's more of a turnkey solution, ensuring that the key fits into all the locks, i.e., that all the systems are accessible day one. Yeah. access. Here in Sweden, of course, one of my super goals will be to win BankID. Just so you know. I wouldn't say we are there yet, but it's an opportunity to evolve BankID. BankID did an amazing job, 20 years ago, wherever they started it with. There are new threats, and we can continue to help them evolve. Thank you. With regards to that there are some software-based or app-based solutions in the market, and then you commented that perhaps a Yubico could act as a complement to ensure that higher level of security. Can you just say anything about where you think the largest value or the largest market opportunity for you is within advanced authentication and how you expect that mix to, say, shift over the medium term? Where do you see, like, the hardware elements of authentication be from a three to five year perspective? If I start by noting that, I mentioned that we have a web store, and that's actually typically how most our customers get to learn of us. Every time we go into an enterprise, or go into a discussion with an enterprise customer, we typically have supporters in the basement, so to speak. People who have already purchased YubiKeys and are using it and are happy and they're behind this from a technical point of view, which is great. The, let's say, prosumer or consumer part of our business is still very limited. The vast majority of our sales goes into big company, midsize companies, government organizations, et cetera. Short term, I would point to the biggest growth opportunity being in expanding that footprint. Working with the about a quarter of the Global 2000 companies where we got a foot in the door and making sure that we expand the user base there. Longer term, I would love to see a closer cooperation with some of our biggest customers being partners in reaching their end users. That's a huge opportunity if we're able to develop that right. That's of course, it takes two to tango there. I mean, it goes everywhere from making sure that government agencies support our products, as Stina mentioned, or making sure that big financial institutions recommend that their customers protect their money using our products. If we do that right, that's a huge opportunity which reaches all the way up out to the consumers. Thank you. Can you just say anything about how technical you believe the sales process are for your solutions currently, whether you could start to target the security experts within organizations or is it how high up in the organizations do these sales processes need to be? Yeah. Well, it really depends on the use case. In some cases, a customer is using a back end, which has been tried and tested so many times before, and it's kind of clear-cut implementation. In those cases, we've had a few big bangs, as we call them, where we go from zero to wall-to-wall deployment in only a couple of months. The typical sales process, however, is something that evolves over more than a year. You have that first initial, typically online purchase, get supporters, have an initial conversation about a specific user segment, deploy for that segment with specific application, and then you work with the customer as they find out, "Wow, this is great security, great user experience. How about if I expand that use case?" Then it takes years. Then, yes, in many of those scenarios, to answer your question, you need technical sales. Yes. In all our big enterprise sales, we have experienced sales leader, and we have a technical sales engineer, solutions engineer, all, you know, as a pair. We won Google with no salespeople. Jacob was a solutions engineer at the time, and I was the evangelist. Mattias came after and ensured that there was an agreement. Depending on how, just like Mattias said, depending how technical the organization is, they may have figured out that all themselves, 'cause we have a community. We have a webpage where all developers can come in and find all the technical information they need, so they don't necessarily need to talk to us. One of the coolest opportunities we got was a major tech company, it's one of the top 5 in the world, who had bought first 10 Yubico's online, then they came back and buy 500, and then they just said, "can we get a quote on 20,000 keys?" They had already figured out everything. We didn't have to talk to them. I wanted to send in a salesperson, but they didn't know we didn't need to talk to any salespeople. The technical sales, as Stina highlights, is as important in sales in a lot of the conversations. It typically is a year-long process to go to full deployment at least. Great. Thank you very much. Thank you. Thank you. Thank you. The next question comes from Daniel Thorsson from ABG. Please go ahead. Yes. Hi. Thank you very much for the presentation. I follow up with two questions, after my colleague Simon had the first ones here. My first one is on how is the company financed today, and do you expect to do any changes on the capital structure ahead as a listed company in conjunction with this process? Historically, we've been self-financed. The only debt we have on our books is from Svensk Exportkredit, so big kudos to them who supported us a couple of years back. In general, it's equity. We're keeping some of the money currently with ACQ Bure as part of this transaction in the company, which means that it's very well-financed. I think that one of the benefits of being listed is that there's a lot of transparency about your financials and your financial reporting. I'm hoping this will finally unlock our opportunity to work closer with Swedish banks, making sure that we don't finance everything with equity, but there are no kind of short-term requirements or needs for additional financing. Yeah. Some of the money will come in. I don't know. Are we disclosing that number? To the experts here. Yeah. No. We said that, we communicated that, ACQ is gonna leave about $20 million in Yubico. You had a cash balance at the year end of. Oh, year end is something. 20-something. $28 million. ... probably we'll have a cash balance of the transaction around $50 million, I would say. Yep. SEK 500 million gross. Okay. Okay. That's very clear. Thanks. Thank you. The second question. This year. Okay. For this year, We're on par with the target, sales target that we set, so far we're profitable and cash flow positive. Yeah. Mm-hmm. Okay. I see. I see. Thanks for that. The second question related to the 20% EBIT margin target that you have longer term. I can see that in 2021 and 2022 you developed strongly in sales and EBIT, and the incremental EBIT margins seems to have been around 40%-60% in those two years. What is basically the reason to target the long-term target well below this? Is it from the gross margin going down in the future or that you expect to need more OpEx to reach the targeted growth level ahead than in the previous two years? I'm gonna sound a little Silicon Valley focused here. We need to invest in our engineers and our developers to stay ahead of the game, to make sure that we can offer the best product. That's the one area where we need to invest to stay competitive long term. It's not about that we don't think we can maintain good gross margins. It's about making sure that we reinvest enough money to make sure that we continue being the world leader in this area. Yeah. If I may might add there, of course, if our service offering really takes off, that will have an impact on the EBIT level. Short term. Short term. Thanks for clarifying. We won't get the money up front. It will be sort of, divided between many years. Delayed. Yeah. I see. It's mainly R&D developers, product development investments more than sales reps and marketing, if I understand it correctly, in OpEx ahead? I, we, with our plans, I mean, we don't see a need to do a significant increase in the share spent on sales and marketing. Yeah. for sure. It's not about increasing that share of the pie. Yeah. Thank you very much. We have five minutes left, so maybe we have time for one or two more questions. Please go ahead. Please state your name and company. Please go ahead. Hello? Hello. Is it my turn to ask questions? Yes. Hi. Good morning, and thank you for the presentation. We have a few questions here from the side of SEB. Well, you talked a little bit about the growth you have with tech companies, and it's been very extraordinary, indeed. What opportunities do you see within other sectors? If, if I look short term, the sectors where we or the industry segments where we see the highest growth right now are within financial services and government. Short term, I think you can see those two sectors growing their piece of the pie. Otherwise, it's about really diversifying our footprint. We're seeing growth and in client interest in sectors that we hadn't worked in a couple years ago. Again, that comes back to the fact that our keys fundamentally fit into more locks, which means it's relevant for more types of organizations. Without having to be a world leader in tech, you can actually have good security. We're seeing a good growth also with U.S. government services because of the Biden new directive, and the hack on the Colonial Pipeline, where government, are seeing that vital infrastructure is now under attack and can disrupt, you know, millions of people if the cybersecurity isn't haven't been upleveled. All right. Got it. There's been a little talk about, of course, your transition to the subscription sales model and what that'll mean on growth levels and on margins. If you look long term, where do you expect subscription sales to end up as a share of total group sales once this transition is completed? Are we talking 90%, 100% or more like 50/50? What do you think? I don't. We haven't even set an explicit target on that. I mean, I think long term we're probably seeing something in 40%-50% range. Typically, this is an offering which works really well for one type of customers. We see it in certain customer segments like financial services or government agencies. They're used to paying for authentication service on a monthly or yearly basis, whereas other customers, typically our high tech customers, they just wanna buy it on a perpetual basis. That's the model they're used to. We try to listen to what is best for the customer. If they're looking for more of a service offering, making sure that the authentication is up and running and where we offer support and services, they should go down the subscription route. If they're looking for, "Yeah, I've got this," then it's perpetual, which probably fits you best. We're agnostic. Okay. We want to level serve all. Okay. Then finally, I think you mentioned that you have manufacturing capacity primarily here in Sweden of about 1 million keys per month. Is that something that you can scale up significantly, or what's the max capacity that you have in terms of manufacturing today? That's one of the beauties. We talked a lot about Jacob today, and he's the engineer also behind how we scale up manufacturing. He's now got a fantastic team supporting him in that effort. For the critical components, we've actually established modules, which means that they can be replicated. We're increasing the level of automation as we add new models, which means that it scales really nicely. Now we've also broadened the set of suppliers there to avoid being dependent on one single source. We have great potential to scale our business in line with our sales projections or for the next foreseeable future, and beyond. It's a very cleverly engineered manufacturing solution in all ends to it. Okay, great. That's all from me. Thank you so much. Thank you. Okay. It's one minute to 10:00 A.M. We said we would be finished by 10 o'clock. I think this is a good time actually to say thank you very much for your questions, for your interest, and hopefully for your continued support. Maybe soon you can even buy shares in Yubico. Thank you very, very much for us and over to the to Andre.