Earnings call transcript: Leaddesk Q4 2024 earnings miss EPS, stock rises

Leaddesk Oyj reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $0.0354, which fell short of the expected $0.04. Despite this, the company’s revenue met forecasts at $7.89 million. Following the announcement, Leaddesk’s stock price rose by 5%, closing $0.34 higher than the previous day, indicating positive investor sentiment. According to InvestingPro data, the company, valued at $39 million by market cap, has shown revenue growth of 5.4% over the last twelve months, though it remains unprofitable during this period.

Key Takeaways

• Revenue met forecasts at $7.89 million.
• EPS fell short of expectations, coming in at $0.0354.
• Stock price increased by 5% after earnings release.
• Continued investment in AI and market expansion.
• Leadership transition with a new CFO starting in March.

Company Performance

Leaddesk demonstrated solid financial performance in 2024, with total revenue reaching SEK 31.6 million and an annual growth rate of 7.9% in comparable currencies. The company’s Annual Recurring Revenue (ARR) grew by 3.4%, reaching €26 million, reflecting steady demand for its services. The EBITDA margin approached 15%, while operative cash flow improved significantly.

Financial Highlights

• Revenue: $7.89 million, meeting forecasts.
• EPS: $0.0354, below forecast of $0.04.
• EBITDA margin: nearly 15%.
• Operative cash flow: SEK 4.5 million, up by SEK 1.3 million.

Earnings vs. Forecast

Leaddesk’s EPS of $0.0354 missed the forecast by approximately 11.5%, while revenue aligned with expectations at $7.89 million. This suggests a need for the company to address cost management to meet earnings expectations consistently.

Market Reaction

Despite the EPS miss, Leaddesk’s stock rose by 5%, closing $0.34 higher. This positive movement indicates investor confidence, likely driven by meeting revenue expectations and potential growth from new AI products.

Outlook & Guidance

Looking ahead, Leaddesk projects revenue growth between 23% and 33% for 2025, with an EBITDA margin target of 14% to 19%. The company aims to achieve €100 million in revenues and a 20% EBITDA margin, focusing on profitability and strategic market expansion. InvestingPro analysis indicates the company maintains a FAIR financial health score of 2.5, with particularly strong marks in growth potential despite current profitability challenges. Get access to the comprehensive Pro Research Report for detailed analysis of Leaddesk’s growth strategy and market position.

Executive Commentary

CEO Oli Noxkoivister highlighted the company’s efforts in profitability and market positioning, stating, "We’ve done a lot of hard work regarding profitability in 2024." He also noted the impact of their European identity, saying, "We are a European company and that is something that I see having an impact."

Risks and Challenges

• Leadership changes with a new CFO may introduce transitional challenges.
• Competitive pressures in the European CCaaS market.
• Potential integration challenges following recent acquisitions.
• Dependence on successful implementation of AI products.

Q&A

During the earnings call, analysts inquired about the synergies from the Cision acquisition and the company’s AI strategy. Discussions also covered market dynamics in Germany and potential future M&A activities, providing insights into Leaddesk’s strategic direction.

Full transcript - Leaddesk Oyj (LEADD) Q4 2024:

Oli Noxkoivister, CEO, reTest: Welcome everybody to our call, Earnings Call for 2025. Sorry. So welcome everybody to our Earnings Call for e Test for 2024. My name is Ollie Noxkoivister. I’m the CEO of re test and I’m super happy to be able to present to you our 2024 numbers.

As we’ve published today, we had a strong profitability in 2024 which now lays a good foundation for us for an ambitious 2025 which is a transformational year for us. And I’m super excited now to be able to tell you more about it. Together later on the call, I also have Kaisa Renker, who is our CFO, who will be deep diving you into our numbers for last year. More detailed on the agenda. First, we take a deep dive into Lead Desk.

What do we do? Who do we serve? Then we look at some key takeaways from last year. We do a deep dive into Schishen, the acquisition we did late last year in Norway and then we’ll briefly look at our guidance before then deep diving more into last year’s financials together with Kaisa. After that, I’ll be walking you through our strategy and the market outlook.

And at the end, we’ll have a fireside chat and a chance for your questions then later on there. But let’s get to business, so retestk in brief. So for retestk we have two main markets. One, our home market in The Nordics and our growth market in Continental Europe. So our whole market Finland, Sweden and Norway especially now with the Cision acquisition represents a major part of our revenues, while at the same time Finland through the Cision acquisition has become the second largest market with Norway surpassing Finland as the largest market for eDesk now.

And this change is transformational of course as we are more and more now a European company and we can focus on the broad market firstly in our home market and then also in Continental Europe. Looking at the journey, deep diving into journey since our IPO, we’ve managed to grow well and now we’ve also managed to grow our profitability well in line with both organic growth, but even then surpassing that so we can really show profitable growth for last year. Last year’s EBITDA 15%. We are super happy about that and we see this as a development we want to continue forward. Key takeaways from last year from my perspective.

So firstly, the profitability improvement we did a lot of work concerning profitability last year. And now we can really build a solid foundation which we can expand further. International growth as said going forward Finland is no longer our largest market. Norway has surpassed that and we see that well under 30% of our revenues come from Finland. Acquisition wise, so Cision at the late part of the year is going to be transformational for the company and 2025.

And this was also supported by our early acquisition in the summer of Telemagic also in Norway. And now with these acquisitions and with organic growth, we can really excel in that market. We’ve continued investments into AI. We’ve had follow ups on that in our releases throughout the year. Last year, we’ve released five products to general availability on the AI field.

And now all our customers for example have access to AI based transcriptions of all the voice calls on the retest platform. This really a great achievement which then allows us for further development in 2025 for example, text analysis and AI training of other systems. So this is a great achievement and I’m super happy about it and we can offer it to all our customers as a standard included in the standard product. As Ervijo said, Cision is a transformational transformation deal for us. We’re super excited about it.

We get great access to healthcare and public sector for example now in Norway, but this also allows us more scale which we can then use for benefits on both efficiency but also growth going forward. Last year, some 15% EBITDA, super happy about that. We did a lot of hard work, a lot of hard decisions and a lot of dedication involved in that. We reached the very high end of our guidance. And on the other hand, on the revenue growth and sales side, we managed to work on that as well.

Of course, majority of the focus was working on profitability, which we see also going up in the future as you will see in our guidance. Short deep dive then into Zysun. Zysun is a really a growth catalyst for us. It’s transformational in the sense that we are really now a true European player. Our whole market is strong.

It’s very strong and we can both grow and be profitable here, which is super exciting. And at the same time, we get better access to for example the public and the healthcare sectors now in Norway which then is combined with our Finnish healthcare success is a great synergy in itself. We will be also able to provide LeadDesk AI services to Cision customers going forward. And at the same time, Cision has great products such as for example social ports which will then benefit existing lead test customers. In a nutshell, Cision, before the recent 2024 profitability measures was around NOK 9,000,000 in revenues.

As we stated that we’ll have there will be a decline in that now and there was one in 2024. So that’s something we’ve taken into account. It’s under control and handled. They’ve, for example, run down a product, whereby then they were, they’ve been able to now concentrate on more profitable business. On the EBITDA side, there’s a lot of development in Zscission as you’ve seen from the previously published numbers.

Zscission has been hardly working on their profitability and we see these effects also then in 2025. There’s of course going to be one of costs relating to the integration, but nevertheless, we are very confident enabled to be guiding a lot higher EBITDA margin than for 24%. Super exciting and I think that this is going to be really transformational for us. Looking at then the guidance for 25%. So for 25%, we are guiding 23% to 33% in annual revenue growth.

So this is of course helped by the Zschen acquisition, which we will see for roughly eleven months of this year. And then on the profitability side, as you saw, we reached a very high end of our guidance for 24%. So now we can really be confident in hiking that up to 14% to 19% for 25%. So big things happening for Vitesk in 25%, very excited about that. Then let’s do a bit of a deep dive into the financials and the numbers.

But before that, we did have a leadership change going on now. So Kaisa is now leaving the company and we have Temu, Healthi, INES starting as our CFO in late March. And this Kaisa’s last call, but I’ll let her in now to present the great numbers we had for last year.

Kaisa Renker, CFO, reTest: Thanks, Oli. And it’s great to end my lead test career with such good numbers. Now let me share the main highlights of last year’s numbers with you. First, let’s have a look at the revenue side. Now 2024 was a year of stable revenue growth with total growth of 7.9 in comparable currencies.

This year, we also exceeded the SEK 30,000,000 milestone with full year revenue reaching SEK 31,600,000.0. Relative organic growth was again strongest in Continental Europe, especially in Spain and Netherlands. Then in absolute terms, growth was strongest in our Nordic home market, and this growth was led by Norway even without the impact of the Telematics acquisition. For the annual recurring revenue contract base, our growth for last year was 3.4%, reaching EUR 26,000,000 at the end of the year. And this growth was somewhat slower compared to previous years, mainly due to our conscious decision to focus on more profitable clients.

Then if we move on to the profitability side, and this is what I’m most proud of. I’m very proud of the development we’ve done over the past couple of years and especially during 2024 when we reached almost 15% of EBITDA margin. The improvement in EBITDA margin was driven by the scaling benefits as revenue grew and also our other profitability enhancing measures, such as the previously mentioned decision to focus on more profitable clients and also our strong focus on efficiency improvement. And naturally, we’ve continued to keep the strict cost control that we initiated some while ago. Then, of course, this profitability improvement is also visible in our cash flow.

The operative cash flow for the full year reached SEK 4,500,000.0, which is SEK 1,300,000.0 improvement from previous year. And of course, we managed to keep the net working capital in control while growing the EBITDA. In addition to the positive cash flow from operations, our overall cash position was further strengthened by the sale of the minority stake in ProFinder at the November, and this had a positive cash flow impact of NOK 2,600,000.0. Now this was all from the main financials, and I will now let Oli to tell you a little bit more about our strategy for this year.

Oli Noxkoivister, CEO, reTest: Thank you, Kaisa. So we’ve softened our focus and we’re now focusing firstly on profitability and then on growth, but I’ll tell you all about that now. So on our targets, they remain the same. So we want to be the number one in Europe. We want to be the number one contact center software in Europe with 1,000,000,000 customer interactions annually with 100,000,000 in revenues and with a nice 20% EBITDA margin.

So this is our target, be number one in Europe, NOK 1 Billion interactions per year over NOK 1,000,000 in revenue and a 20% EBITDA margin. Exciting target, so how do we reach that? So that’s going to be reached by both the home market growth, so Nordic, Finland, Sweden, Norway, we’re going to be growing here and we’re going to be doing it profitably and this is a core foundation for our other activities. The Continental market is huge and we see that by excelling in that market with focused efforts, we can really then do nice growth there going forward. And as we know inorganic growth is important to us.

It’s a very good market now for M and A and nonorganic growth. They are double the amount of competitors on the European market compared to U. S. There’s a lot of local champions. The European market has been very fragmented and going forward you need Continental scale that we have in order to excel and that’s why the inorganic growth part is very good for us.

On top of this, we see there’s going to be a lot of opportunities for us to take the extra step in AI with new AI tools helping our customers out in handling the customer interactions and it’s a huge potential for us going forward. We are currently successfully executing on the strategy that we’ve communicated. So now we’re focusing on strengthening our profitability. This will enable us to have an even stronger financial foundation going forward then on the next step, which is then a larger growth and larger focus on organic growth, but it also allows us to execute successfully under M and A strategy. We’ve been doing good acquisitions where we’ve been able to then get scaling benefits and work on our profitability together with the scale.

And now that’s something we really want to continue. And at the same time, we are looking at also high selling to organic growth going forward then especially in the later part of this year and going to ’26. Our Northern Star, NOK one hundred million in revenues, 20% EBITDA margin With the current setup, I feel comfortable with this target and very excited to be able to strive for that and the whole organization is behind reaching these targets. Then when we look at the market, so let’s look at the market a bit. So the CCaaS market, the market we’re in contact center as a service, It’s over €1,000,000,000 market in Europe, in the markets where we’re at.

With then the split between SME enterprise roughly fiftyfifty, but especially in the Continental market still some over 40% of the potential customers are working on an on premise solution. This is a lot different in The Nordics, still the Continental market is relying quite a bit on legacy on premise solutions. The market in itself is then divided into outbound contact centers, call centers and contact centers. So the outbound typically sales side that’s still quite a bit one channel. So that’s still telephony.

Then we have the call centers, which is telephony going in and out, especially for example, transportation, healthcare sector, public sector, they are focusing quite heavily still on the call center market. And then you have the contact center market, which is all channels social media, messaging, telephony all combined. And we can service all these different segments. Looking at then the growth levels in the markets and why we’ve decided on working on more profitability in The Nordics and having the growth market focus more in the Continental market. If we look at the numbers these are by Frost and Sullivan.

So Frost and Sullivan expects 16% growth in the Continental market going forward, while at the same time The Nordics is at 8%. And we of course need to be a part of this growth and are part of this growth intercontinental market and this is where we will excel also in the future, while of course we at the same time need to grow in The Nordics, but we need to be more conscious of the profitability choices we make here. So simply put, Continental market, it’s a huge market growing faster, the Nordic market growing slower, but here we can really work on our profitability together with growth. On the short term outlook, this remains largely the same. So there are some tailwinds and there are some headwinds.

And going then to the first tailwind here, there’s still quite a bit of enterprise investment debt. The market situation for mid size and large companies is still hard, which means that they have to look at their cost base very tightly and of course then that builds up the investment debt that we can help. Redesk is very easy to take into use. It has great potential to help customers with the profitability and efficiency targets. But at the same time, of course, on the headwind side, there’s still the economic situation and companies are slower to move and make these investments.

On the headwind side, on tailwind side, there is a great need for efficiency, especially in The Nordics we see this. This has changed a bit now in Continental market, but especially in our largest market, in our home market in The Nordics, there’s a lot of need for operational efficiency and we can really help in that. At the same time, of course, the flip side of the coin is that the customers they want to curb costs. And on that then we see for example, over subscription levels at the really low level. So customers are really tight on like having just the right amount of user accounts activated and all that.

So they are really looking at what they are paying for and that’s then of course a headwind for us. But at the same time we are the ones to provide the efficiency. For example, with the one of the AI tools, the AI diver, we saw a 20% increase at enterprise customer after taking that into use. So that’s the kind of thing that we can then help out with. AI adoption, it’s a big topic and AI adoption especially in contact centers and here we see that we can help our customers out with their AI needs.

Our customers are relying on us for their customer communication. We have the strings connected to our system. We have the data which we can then use to provide these services back to the customers. So they don’t need to go to a separate provider, think about master data and all that. It’s all here, easy to take into use, get the efficiency gains and get the benefits.

On the flip side, there’s a lot of regulation coming especially from EU regarding AI, the digital act and so on, which of course then makes especially the larger customers hesitant into taking these new features into use, which we can of course as a major player now in the European market, we can help with as well. But there’s still the hesitance that we see. All in all to summarize up, we had very good progress in the second half, especially super happy about the profitability. We did a lot of big work on that in 2024. Decision acquisition is transformational for us.

Norway is our largest market and now we can address the public sector healthcare even better in all our home market countries. And we can now confidently guide revenue growth of 23% to 33% together with nice EBITDA margin of 14% to 19%, which is a clear increase from our previous guidance for 24%. So very excited about ’25 and happy especially on the profit development in ’24. That concludes this part of the earnings call. We’ll continue with a chance for you to ask questions and we’ll have a fireside chat going forward.

Thanks, everybody, and see you in a minute.

Kaisa Renker, CFO, reTest: You you and

Lotta Buckland, Moderator/Host: Fireside chat. My name is Lotta Buckland. I’m here to host this fireside chat and ask my questions and yours from Oli and Kaisa. Some housekeeping to begin with. The webcast that you are watching has a little chat box, so please deposit your questions there.

I will be keeping an eye on the chat room and, conveying all of your questions to Oli and Kaisa. But first of all, thank you for the presentation. Congratulations on the strong profitability development. So you exceeded analysts’ forecasts in terms of revenue and profitability. Is that correct?

Yes. Very good. Now, in fact, your EBITDA margin target for 2024 was 10% to 15%, but now for 2025, it’s up. It’s 14% to 19%. Now looking into the future, where is this margin boost going to come from?

Kaisa Renker, CFO, reTest: Yes. Well, first of all, we’re already at 15%, so within that new guidance. And going forward, we’re just going to keep doing what we’ve done so far. And as our revenue continues to grow, we will enjoy the scale benefits. And we will be also benefiting from the Chizen acquisition, helping with the scale from that.

Of course, there will be some one off course related to that integration, but those are taken into account in that guidance. And we are very confident with that new guidance.

Oli Noxkoivister, CEO, reTest: We’ve done a lot of hard work regarding profitability in 2024, And I see that this will keep on benefiting then for 2025. And then as Kaisa said, the scaling benefits of Cision also really helped there. So very confident in that.

Lotta Buckland, Moderator/Host: Cool. Lots of questions coming in, in the chat I can see. But let’s talk about Zixin a little bit first. It was a big acquisition. Can you tell me a little bit more about the synergies that you expect both in product development, in revenue and cost savings?

Oli Noxkoivister, CEO, reTest: Yes. So looking at Syshun, they have a great product, especially in the public sector, health care sectors, where we also have a great product in Finland for the health care sector. And here, I see a good combination happening and we can really like focus on that area, public sector, the healthcare sector especially is going to be a big thing going forward together with Cision. On the other hand, Cision had a great product called Social Boards, which not only handles the private social messaging, which we already have on our platform, but also on the public messaging side, which has become more and more popular in the last years, so including like TikTok and Instagram and all that. And we can really leverage that for cross sell and up sell going forward then as well.

Lotta Buckland, Moderator/Host: All right. Very good. There’s actually a Zissen related question here. So are you seeing the improved access to health care sector more as an up sales opportunity? Or do you think you can win new clients in that segment with the combined forces?

Oli Noxkoivister, CEO, reTest: I think that it’s both, of course, so we can service better and wider. But at the same time, this really like helps us to win new customers. As combined we have an even better product. So especially in the Finnish healthcare sector, Copax systems and the functionality related to Copax has been a key, while then in Norway it hasn’t yet been played as big of a role. So there’s great opportunities then for the combination of bringing some of the learnings from Norway, combining that with the learnings in Finland and then also addressing the Swedish market better.

Lotta Buckland, Moderator/Host: All right. How significant of a revenue contraction are you expecting to see for Zissen still in 2025 due to the product ramp up is on this question.

Oli Noxkoivister, CEO, reTest: Ramp down, I guess. So yes, so as part of the efficiency measures, Zixen has ramped down a product they had, but that was already done some time ago. And now the last customers are leaving or have left that platform already. And we know and we’ve modeled all that it’s in our all our financial calculations, so it’s well handled and it’s well taken into account in our guidance for ’25. And I feel very comfortable with the guidance there and that takes all these into account.

But of course, profitability measures have the price and then we are happy to see a stronger decision now than it was previously.

Lotta Buckland, Moderator/Host: All right. We have some numbers questions. The ARR decline in Q4, what was the main reason for this is Jakko’s question. Did you see some large customer or customers leaving? And if so, in which geographic area and what was driving this competition?

Oli Noxkoivister, CEO, reTest: So in 2024, we’ve had to work a lot on our profitability and that includes also more concentration on the profitable customers and modeling our ideal customer profile, ICP, better, so that we can really address those customers which are profitable for us and where there’s least effort, of course, then for us in the onboarding. And that’s something we’ve really worked on and have to make conscious decisions on like who do we serve in order to get to the profitability levels that we’ve been able to achieve and of course then the profitability levels that we are now guiding for 2025.

Lotta Buckland, Moderator/Host: So there’s a question here. Your revenue grew much faster in Q4 than earlier in the year. What were the drivers behind this? Is that what you were talking about here with more profitable clients?

Oli Noxkoivister, CEO, reTest: Yes, more profitable for clients who have also the possibility then to for more professional services as part of the onboarding and like the and looking at the total dynamic of the customer relationships. So that’s a big item for us and has been a big item for us in the second half especially.

Kaisa Renker, CFO, reTest: And we’ve previously talked about some the onboardings of some larger enterprise clients. So those are visible in the H2 numbers.

Lotta Buckland, Moderator/Host: Right. Some M and A questions. You have some capacity left after Zysen. However, are you ready to make next steps already in 2025? Or do you need to digest Zysen transaction first?

And let me just combine it with another question, which are you still focused on M and A to gain market share in The Nordics or has your focus started to shift towards Continental

Oli Noxkoivister, CEO, reTest: Europe? Yes. So looking at ’25 the first part of the year, we need to concentrate on decision integration and we really need to execute fast on that to enable us then to look at more M and A opportunities and to execute on that. Of course, we have to now really concentrate that we get the benefits that we are looking for in the decision merger. And after that, we can then start looking at other opportunities.

So I think that M and A for 2025 is totally on the table, but we, of course, have to do it diligently and we have to execute well on the Cision integration now and get those benefits that we are looking for.

Lotta Buckland, Moderator/Host: And then there was the other part of the question on whether your focus has started to shift towards Continental Europe or are we still looking at the Nordics?

Oli Noxkoivister, CEO, reTest: Yes. So looking at that, Nordics is still super interesting for us. It’s our home market and here we can really excel as we do have already teams both back office, front office in all the Nordic countries, Finland, Sweden and Norway. Also these integrations are a lot easier and we do get scaling benefits faster. So Nordics is very interesting to us in the future as well.

And then when it comes to technology, for example, technology acquisitions and product acquisitions, complementary product acquisitions really make sense in The Nordics where we already have that development capability, the product management capabilities and so on. And we have a great customer base to leverage.

Lotta Buckland, Moderator/Host: There is a quite specific question about the Continental growth, which is from Jakko. Your continental European growth is driven by Spain and Netherlands. How is Germany performing given the legacy of low SaaS penetration?

Oli Noxkoivister, CEO, reTest: Yes, that is true. And it’s also visible in basically all the like market statistics that Germany is a slow grower in market adoption. But at the same time, we do see that the adoption is heightening. I was just this week I was visiting the contact center World Congress in Berlin together with the board. And what you see there is that it’s changed now.

So still last year, you would see hard phones on sales, those traditional hard phones, landlines and all that. This year, I didn’t see any of that and AI message and the code message is like crisp and clear now also in Germany, which is different from last year few years back especially. So with the advent of AI, I think the German market will change as well and they will adopt more cloud.

Lotta Buckland, Moderator/Host: Well, I’m glad you mentioned AI. Obviously, I don’t think there’s a single results call this year that doesn’t mention AI in any company. Jaco has a question. Regarding your largest customers who seek efficiency gains via AI, do you see them developing own AI tools to improve efficiency or is LeadDesk able to deliver the AI related efficiency with the features you have created?

Oli Noxkoivister, CEO, reTest: Both. Both I see that the very large customers, they are very conscious of AI and they own their own AI like vision. But then when it comes to executing on that vision, we see that especially in the customer communication setup, we are then the partners who can provide the technology to support that. For example, with our AI transcriptions included in the packages, with our conversational AI and so on, we are very important part of that. If you think about customer who runs the customer service on Lead Desk, they have all their emails, all their calls, all their customer interaction on our platform and we can then help them leverage their own data straight away.

So you don’t have to call and train somebody else’s conversational AI. You have all the data already in the system and then it’s just about turning features on and doing fine tuning instead of a large project. So, I think that this is the dynamic that’s happening now that we can really help when it comes to the customer interaction part of the AI vision. Then with the mid sized small companies is of course different. They are asking us and having us then help them gain the efficiencies.

And for them, they are not so much buying AI, but rather now the conversations with customers has turned to the benefits and it’s just like that it’s provided by AI. So the dialogue has changed a bit to talking about the benefits instead of the features.

Lotta Buckland, Moderator/Host: So you did mention in the presentation that five AI powered products were in production by the end of twenty twenty four and more were to be launched during 2025. So what kinds of new product features do you expect to launch in 2025?

Oli Noxkoivister, CEO, reTest: So, of course, there’s going to be multiple. One of the things that I’m very excited about is what we can do now that we have all these transcriptions happening for our customers, what kind of analysis we can build on that. So now we have the base capability. All our customers have the base capability of texturalizing all the conversations on telephone. And through that then we can provide, for example, agent coaching, AI based agent coaching, automatic quality assurance and helping them out in summarizing the calls for their CRM, for example.

And this is super exciting stuff that really helps our customers out. I actually just heard this week that we were invited to a large customer. It’s a Norwegian a large Norwegian customer where they wanted to bring us to the board to show the great stuff that we’ve been helping them out with. So I think this is the kind of message that I’m really happy to hear.

Lotta Buckland, Moderator/Host: That’s really exciting. A very specific question coming from Arne. What was the churn in 2024?

Oli Noxkoivister, CEO, reTest: We haven’t given any churn figures per se, but on the AIR growth for last year was

Kaisa Renker, CFO, reTest: 3.4% in comparable currencies. So there has been some churn. But as Ole mentioned, we haven’t disclosed that specific number and we are not disclosing it at the moment. Aida?

Lotta Buckland, Moderator/Host: There is a question about organic growth. So your organic growth in 2024 was some 5% to 6%. Given that the growth was driven by the European market, could you describe the reasons for muted growth in The Nordics?

Oli Noxkoivister, CEO, reTest: Yes. As we said, so we are focusing our growth efforts and have been focusing the growth efforts in 2024 on the Continental market. And we’ve been focusing our profitability actions on the Nordic market. So that’s been the focus and that’s also in line with the results. So the focus point has been quite heavily as you can see in the great results on profitability and that’s been driven by the Nordic profitability.

And then we’ve been focusing on growth in Continental Europe.

Lotta Buckland, Moderator/Host: So geopolitics these days affects everything. Jake has a question here, maybe Jocke, Jake. Will Trump administration have any effect on the business going forward?

Oli Noxkoivister, CEO, reTest: So, for us, we are focusing on the European market. And this is the geopolitics are actually a great point here. There’s a huge moat to enter the European market from U. S. Due to the high regulation that we have here and the very varied market.

We have many countries, many languages and the local laws, regulations, a lot of different tele operators. There’s a lot of different competition in different countries. And by being a Continental champion and focusing on the European market, we can work with our strengths here. Just in actually CCW, I was meeting up with a prospect.

Lotta Buckland, Moderator/Host: What’s CCW?

Oli Noxkoivister, CEO, reTest: In the context of the world that I mentioned. So in the Congress, I was meeting up with a prospect who was anxious to change to us because we know the market and we have everything they need in the European market. They had a good solution, but it wasn’t fitting to the local needs. And this is something that we can really provide for European companies.

Lotta Buckland, Moderator/Host: All right. Arne has another question, which is the share has a muted interest. And what will you do to increase the interest and increase traded volume apart from doing the good operational work you do?

Oli Noxkoivister, CEO, reTest: I think it all comes down to the operational work. So showing the profitability, higher profitability now together with the revenue hike, there’s going to be more interest because of that being more international. So Norway being our largest market now having more visibility in Norway and then of course Sweden going forward these very exciting things. Investors of course are typically also conscious of their local markets. And for example, after decision acquisition, I’ve had more interest from these kind of companies that are these kind of investors that are more international focused.

And this is I think some dynamic that will continue as we are less of a Finnish company even though our HQ is here and our DNA comes from here. We are a European company and that is something that I see having an impact.

Lotta Buckland, Moderator/Host: So, the Continental European growth then, could you open up a bit more of what kind of customers you are winning and from, what from what type of competition are you winning these clients?

Oli Noxkoivister, CEO, reTest: So we are winning more on the mid and large side. So that’s the market where we’re more winning now and that’s due to the conscious decisions of working on the more profitable markets. And I’m happy to say that we are, for example, winning from The U. S. Competitors who’ve managed to win, for example, enterprise customers in Finland.

We’ve been able to win them over to us, partly due to AI and our capabilities there, but also that we know the local market, we know the needs, we have the perfect product for these markets. And that’s something that I’m super actually excited about is that we can move upmarket now. And we are really a credible player with a great product on that market as well.

Lotta Buckland, Moderator/Host: Okay. Antti here is trying to find out something that I’m not sure you guys are going to be able to talk about. But his question is, have you discussed share buybacks with the board? Obviously, you have strategic interest in M and A, but with increasing cash flows, this might not be an issue. Can you talk about what talks you’ve had with the board?

Oli Noxkoivister, CEO, reTest: Yes. So, of course, it’s all about capital allocation. Like, where do we see, the best capital allocation, from the point of view of the shareholders and point of view of executing on our strategy. And in our strategy, of course, now we are looking at profitability and that’s the first phase that we’re now in. And that allows us of course to work on inorganic means in many ways.

But we also see that the market is transforming and we have a really good track record of M and A. And that’s the other option then, like do you want to invest in organic growth, in M and A or do you do on share buybacks? And that’s the capital allocation question, of course, that the board always has to consider.

Kaisa Renker, CFO, reTest: And so far, there is that Northern Star of reaching that NOK 100,000,000. So keeping that in mind, maybe that answers the question also.

Lotta Buckland, Moderator/Host: Right. So, so the 100,000,000, you had actually a very interesting investor presentation in November. I watched it online and so can you. If you just go to investors.leaddisc.com and just scroll down on the page, you can find the video titled Investor Day twenty twenty four and all the accompanying materials. And there you talked about strategy a lot.

There and today you mentioned that you will strengthen profitability and focus on growth. How’s that going to happen? Do you want to talk about that a little bit?

Oli Noxkoivister, CEO, reTest: Yes. So that’s going to be two phased. So now we are looking at profitability and especially like now if we cause a trade on ’25, we’re going to be focusing on the benefits we get from the scale together with Cision and with the new market focus. So that’s something we’re now working hard on. And then going forward once we reach a level of profitability that we are comfortable with that this is the great foundation we can execute higher organic growth and more M and A on as well, then we’ll start investing more highly even on that.

Of course, we’ll be continuing efforts throughout the first phase as well, But now the focus is really on profitability.

Lotta Buckland, Moderator/Host: All right. I think those are all the questions that we had in the chat. Thank you so much for being very active and for writing in all of your questions. Now I hope everyone’s just gonna go out and buy a bunch of shares. I can say that because I don’t work for you.

I think you should do that right now, while you’re at your keyboard. So thank you so much, Oli and Gajsa, for this chat and congratulations on a great year. Thanks, Nipta.

Oli Noxkoivister, CEO, reTest: Thank you. Thanks, everybody.

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