Earnings call transcript: Senseonics Q4 2024 sees revenue dip, strategic shifts

Senseonics Holdings Inc (NYSE:SENS). reported a decline in revenue for the fourth quarter of 2024, with strategic investments and market expansion efforts highlighted during the earnings call. According to InvestingPro data, the company’s financial health score stands at 1.88 (FAIR), with particularly strong price momentum metrics. The stock showed a slight pre-market increase following the report, though it has experienced a 14% decline over the past week.

Key Takeaways

• Q4 2024 revenue fell to $198 million from $221 million in Q4 2023.
• Full-year revenue for 2024 saw a slight increase to $631 million.
• Senseonics made strategic investments totaling $75 million in Q4.
• The company projects 2025 revenue between $700 million and $800 million.
• CEO Ivo Muninc announced his resignation, effective October 1, 2025.

Company Performance

Senseonics Holdings Inc. experienced a challenging fourth quarter, with revenue decreasing by 10.4% compared to the same period last year. Despite this, the company managed to grow its full-year revenue slightly to $631 million, up from $624 million in 2023. The company has been focusing on strategic investments and expanding its market presence, particularly in the U.S.

Financial Highlights

• Q4 2024 Revenue: $198 million, down from $221 million in Q4 2023
• Full Year 2024 Revenue: $631 million, up from $624 million in 2023
• Gross Margin: 36% in Q4, down from 42% in Q4 2023
• Q4 EBITDA: $28 million, down from $45 million last year
• Full Year EBITDA: $69 million, down from $85 million in 2023

Market Reaction

Senseonics’ stock price saw a pre-market increase of 1.69%, reaching $0.84. This movement comes after a 5.69% decline in the previous trading session. Despite recent volatility, InvestingPro data shows impressive gains of 112% over the past six months. The stock remains within its 52-week range, having hit a high of $1.4 and a low of $0.25. With 12 additional ProTips available on InvestingPro, investors can gain deeper insights into SENS’s market position and future potential.

Outlook & Guidance

Looking ahead, Senseonics has set a revenue target for 2025 between $700 million and $800 million. The company expects an EBITDA margin of 12% to 14%. Analyst consensus from InvestingPro suggests mixed sentiment, with price targets ranging from $0.30 to $2.50. Despite delaying its original $1 billion revenue target, Senseonics remains focused on expanding its U.S. market and increasing recurring revenue streams. The company maintains a healthy current ratio of 2.47, indicating strong short-term liquidity. Get access to the comprehensive Pro Research Report for SENS and 1,400+ other stocks to make more informed investment decisions.

Executive Commentary

CEO Ivo Muninc expressed confidence in the company’s strategic direction, stating, "Despite the delay, Sensor Khatsou has made significant progress in several key areas." He added, "We are confident that these actions will position us to deliver on our ambition in the near future."

Risks and Challenges

• Revenue Decline: The decrease in Q4 revenue highlights potential market challenges.
• Debt Management: The company issued a €30 million bond to reduce long-term debt.
• Leadership Change: CEO Ivo Muninc’s upcoming departure could impact strategic continuity.
• Market Expansion: Ongoing U.S. expansion efforts may face regulatory and competitive hurdles.
• Economic Conditions: Broader economic pressures could affect consumer spending and investment.

Senseonics is navigating a period of transition with strategic investments and market expansion efforts. The company remains committed to its long-term growth strategy despite current challenges.

Full transcript - Senseonics Holdings Inc (SENS) Q4 2024:

Conference Operator: Welcome to the Census q ’4 ’20 ’20 ’4 report presentation. For the first part of the presentation, participants will be in listen only mode. During the questions and answer session, participants are able to ask questions by dialing 5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now I will hand the conference over to speakers CEO, Ivo Muninc and CFO, Simon Mulder.

Please go ahead.

Ivo Muninc, CEO, Sensus Hutso: Good morning, and welcome to Sensus Hutso’s market presentation of the fourth quarter and year end of twenty twenty four. My name is Ivo Muhning. I am the CEO of Sensor Hatzl and I will be presenting to you together with Simon Mulder, our CFO. In this market presentation, I will provide you with an update on our business for the fourth quarter and year end of 2024. We then follow-up with a financial update by Simon.

And finally, I will finish this presentation with a summary and our financial outlook for 2025. Let’s now look at an update of our business. In this business update, I will take you through our order intake, the progress we are making with the major contracts in Sweden and The Netherlands, the recurring trials revenue development, update on the legislative changes in Iowa, updates on our Saudi customer and our Ghana joint venture project, our global revenue distribution, the strategic investments we are making mostly in The United States and finally, our margin development. Order intake and procurement awards during the fourth quarter came in at 161,000,000 compared to $212,000,000 in Q4 twenty twenty three. Of the total order intake, 79,000,000 or 37% is from extended trial services and maintenance contract from the state of Victoria in Australia.

Year to date, the total order intake including procurement awards amounted to $992,000,000, 30 2 percent higher than last year at seven fifty four million. In the full year 2024, no less than $655,000,000 or 71% came from Truss order intake, predominantly from 13 new and extended contracts signed with cities in our strategically important U. S. Market. The substantial share of recurring Truss revenue within our 2024 order intake indicates that we have successfully implemented our strategy to establish a solid foundation of recurring revenue for the future.

The backlog from our two large contracts secured in our home markets Sweden and The Netherlands amounts to 1,000 million. The development phase of the Swedish order of $850,000,000 has been completed during Q4 of this year with final acceptance by our customer in January 2025. This followed extensive testing required to align and integrate our new flux speed enforcement system with our customers’ various IT systems, some of which are also new or updated. The commencement of the Swedish project rollout is now anticipated in the first half of twenty twenty five encompassing the replacement of existing systems and the installation of new systems in the field. The service and maintenance component of the contract will be initiated incrementally and is projected to endure for the next twelve years.

Implementation continues for the Dutch order, which is worth 400,000,000, split between 200,000,000 in system sales and 200,000,000 in repairs and maintenance over a six year period. The systems installation rollout started in 2024 and continues during 2025 and is expected to be completed in 2026. Service and maintenance for the Dutch order is slowly phasing in starting in 2024 and ending in six years with potential contract renewals for another six years thereafter. Of the combined Swedish and Dutch twelve fifty million dollars contract value, approximately 15% has been delivered today, leaving more than 1,000 million dollars still in the backlog of just these two programs in our home markets. Total (EPA:TTEF) revenue for the quarter arrived at 192,000,000, whereof, trough revenue is 100,000,000 and system sales 98,000,000.

The decrease in system sales was mainly related to timing of deliveries in Sweden and delay of anticipated orders from The Middle East. The recurring trust business equates this quarter to 51% of total sales. The trust revenue is primarily driven by our trust managed services business in The United States. For the full 2024, our trust managed services revenues grew by 2% from 363,000,000 in 2023 to 371,000,000 in 2024. This is notwithstanding the negative impact on the trust managed services revenue caused by the legislative changes in the state of Iowa in The USA.

For the full year 2024, our recurring trust business accounted for 59% of our total revenue. Talking about Iowa, as of May 2024, new legislation in Iowa led to a permitting process for automated speed enforcement systems issued by the Iowa Department of Transportation. Unexpectedly, only 11 out of 140 existing fixed speed locations permits were approved, including seven out of 75 for Sensor customers. 95 out of 148,000,000 speed deployment location applications were approved. Red light enforcement cameras were not affected.

We are working with our customers to find solutions to reestablish the operations of the speed systems that did not receive a permit. This process is both time consuming and laborious, but consequently slow revenue recovery for our programs in Iowa. The estimated negative impact of the legislative changes on our 2024 revenue is 20,000,000 krona. Adjusted for this, the full year growth of our managed services business would have been approximately 14%. In April 2024, we signed a memorandum of understanding with our customer, Tahakom, in The Kingdom (TADAWUL:4280) Of Saudi Arabia.

Following this, our customer provided technical qualification for our automated traffic enforcement solutions. And during the fourth quarter, SensorCastro has signed framework agreements for fixed and mobile speed fixed red light enforcement as well as a framework agreement for the service and maintenance on the delivered vehicle in motion systems. With these four framework agreements in place, detailed pricing and logistic terms and conditions, Sysco (NYSE:SYY) is now in a position to receive purchase orders under these agreements. In January 2025, we received the first order for the maintenance of the in vehicle systems in Saudi Arabia. This was a first order for one year under a three year framework work agreement.

This purchase order is worth 27,000,000 and executed execution is expected to start in q two twenty twenty five. The expectation is that we will receive new purchase orders for the remaining two years under the framework agreement with an increased level as more systems will be added for service and maintenance. In 2022, we entered into an eleven year contract with the government of Ghana for our 40% pension share in nationwide traffic management and enforcement LTD. The contract involves the design, building, financing, operation, and maintenance of a nationwide road safety program. The total revenue for the joint venture is projected to be approximately 800,000,000 over the contract period.

The project rollout is progressing well with the first test citations issued in 2024. Social media is picking up on this in a positive way. Due to parliament elections in December, the formal confirmation of the legal framework has been delayed. The issuance of citations is expected to commence no later than July 2025. In our financial reporting, we show results from the project as results from joint ventures.

SensorGasso is a globally active European company with a balanced sales mix across different regions. In 2024, revenue was distributed amongst The Americas with 30%, Europe with 43%, and APAC MEA with 36%. Compared to full year 2023, the region APACMEA contributed less in twenty twenty four four due to the completion of the deliveries to Saudi Arabia. This has been compensated by the increased revenue in Europe mainly through the rollout of the Dutch tender. Our global presence helps us at times to even out the volatility that is inherent to the one off system sales part of our business.

As we grow our recurring trust revenue, our total revenue growth will become even more stable. During the fourth quarter, we made strategic investments totaling $75,000,000 This included $24,000,000 allocated to fixed assets in operations, primarily for equipment and construction to support our managed services programs in USA. Additionally, we invested 44,000,000 to repurchase a minority shareholding from former employees in our SENSKAZO USA entity, securing 100% ownership of this key driver of our growth strategy. Looking at our margin, our gross margin this quarter was 36% compared to 42% in Q4 twenty twenty three. This is lower than our run rate margin of 40% and is driven by the relatively large contribution this quarter of system sales from the Dutch project.

System sales margins from this project are typically lower and precede a higher margin service and maintenance recurring revenue, which is expected to continue for at least six years. The overall gross margin of the contract will gradually recoup during this phase. Year to date, the margin was 38.2% compared to 40.5% in 2023. Our EBITDA for the quarter arrived at $28,000,000 compared to $45,000,000 last year. And year to date, 2024, the EBITDA arrived at $69,000,000 compared to $85,000,000 last year.

On that note, I hand over to Simon Melner.

Simon Mulder, CFO, Sensus Hutso: Thank you, Ivo. I will go through our consolidated income statement, the performance of our segments and finally, our financial position. Looking at the consolidated income statement, we focus on revenue, margins and profitability. The revenue for the quarter came in at 198,000,000 compared to $221,000,000. During the quarter, trans sales were stable at 100,000,000.

The system sales came in at 98,000,000, 19 million lower than last year, mainly due to delay in deliveries in Sweden and less sales from The Middle East. The full year revenue amounted to $631,000,000 compared to $624,000,000 The full year increase of trash sales by 3% is mainly attributable to growth in the first half year in The USA. The group’s gross margin arrived at 36% for the quarter. For the full year, the margin landed at 38%. Lower margins compared to 2023 are mainly attributable to a lower margin on initial system sales in projects such as the Dutch tender.

The operating expenses totaled $61,000,000 an increase of $3,000,000 compared to Q4 of twenty twenty three. The full year expenses totaled $222,000,000 compared to $214,000,000 The increase in expenses is driven by sales expenses related to Inter Traffic Fare in April of this year, increased sales activities in The USA as well as costs relating to the acquisition of the minority shareholding in our U. S. Entity. Our operating profit for the period came in at $50,000,000 compared to $34,000,000 in Q4 twenty twenty three.

The full year operating profit landed at $23,000,000 compared to 39,000,000 Our managed services segment predominantly reflects our U. S. Business, including the costs related to development and maintenance of our software suites Xyleum and Pulse. During the quarter, the segment did not receive any order intake. However, from a full year perspective, the order intake grew from 134,000,000 to $575,000,000 in 2024.

Revenue came in lower due to less volume on existing programs, mainly related to the Iowa legislation. The revenue for the quarter amounted to $54,000,000 compared to $60,000,000 in Q4 twenty twenty three. The lower revenue has impacted the EBITDA for the quarter amounting to $7,000,000 compared to $50,000,000 From a full year perspective, demand and services sales is stable moving from $192,000,000 in 2023 to $194,000,000 with the EBITDA amounting to $23,000,000 compared to $26,000,000 Now on to the segment system sales starting with order intake. The segment has seen a good order intake during the quarter with 161,000,000 in order intake and procurement awards compared to $212,000,000 in Q4 last year. From a full year perspective, the order intake came in at $417,000,000 compared to $620,000,000.

The rollout of the Dutch speed and wet light project has continued in the quarter. Due to a lower activity level in Saudi Arabia and delayed deliveries in Sweden, the revenue for the quarter came in at $144,000,000 compared to $161,000,000 last year. From a full year perspective, the revenue has increased from $431,000,000 to $437,000,000. On a lower revenue level in the quarter and due to the initial deliveries on the Dutch project, the EBITDA came in at CHF 21,000,000 compared to CHF 30,000,000 last year. Full year, the EBITDA came in at $45,000,000 Discussing the financial position of our company, I would like to focus on cash movements, interest bearing debt and available cash.

The largest movements in our available cash position are increased funding through the bond issue and investments. In September, the company has secured a EUR 30,000,000 bond to finance investments for future growth. With this SEK 30,000,000 corresponding to SEK $332,000,000, the company has repaid a large part of its long term debt as well as reduced the revolving credit facility totaling SEK $112,000,000 Investments during the year, mainly in fixed assets and operations for The U. S. Programs, amounted to $93,000,000 In the fourth quarter, Sensors Gutsor purchased the minority shareholding in Sensors Gutsor USA for $44,000,000 The net interest bearing debt has increased from $109,000,000 at the opening of 2024 to $270,000,000 The available cash has increased from $84,000,000 to $2.00 $3,000,000 at the end of the period.

On that note, I would like to hand it over to Ivar.

Ivo Muninc, CEO, Sensus Hutso: Thank you, Simon. Due to recent market dynamics such as extended customer testing phases and legislative changes in The U. S, Sensor Khatsou sees a delay in achieving its ambition of reaching $1,000,000,000 in revenue with an EBITDA margin of more than 15% in 2025. Despite the delay, Sensor Khatsou has made significant progress in several key areas, including obtaining first contracts in new states in The USA, expanding of the managed services business model into other geographical areas such as Australia and Ghana, and a strategic partnership in Saudi Arabia with the first quarter in hand. Our order book and remaining backlog of more than SEK 1,000,000,000 is robust and will provide solid revenue well into the future.

We expect our trials business to continue delivering profitable growth driven by our strengthened US team and our groundbreaking Flux roadside platform. While we are disappointed to not meet our ambition within the original time frame, we are resolute on our commitment to achieving this goal. Our long term strategy remains unchanged, and we are taking proactive steps to address the challenges we’ve encountered. We are confident that these actions will position us to deliver our ambition in the near future. For 2025, we expect our revenue to arrive between $700,000,000 and $800,000,000 and due to additional sales investments to accelerate growth within The U.

S. Market, we anticipate to realize an EBITDA margin between 1214% in 2025. As mentioned, our long term strategy remains unchanged, and we are taking proactive steps to address the challenges we’ve encountered. We are confident that these actions will position us to deliver on our ambition in the near future. Before we go to the questions, I want to comment on the press release that was issued this morning about me stepping down as CEO of Sensorskutso by 10/01/2025.

I started my tenure at Sensorskutso on 10/01/2017. After serving Sensus Hutso as CEO for eight years, it’s a natural moment for transition in leadership. Sensus Hutso is well positioned for its next phase of growth, and the board is committed to finding a leader who will drive continued innovation and expansion in global traffic safety solutions. I will help with this process and with the onboarding of the new CEO. I want to thank the global team at Sensors Hutso and the board for the trust they have put in me leading this great company.

We achieved a lot with a new strategy and a new organizational structure, delivering strong double digit revenue growth and consistently positive EBITDA. With an experienced leadership team in place and a company on solid footing, Sensorschadso is in a good place to accelerate growth further under the leadership of a new CEO. As mentioned, our long term strategy remains unchanged and we are taking corrective steps to address the challenges we’ve encountered. We are confident that these actions will position us to deliver on our ambition in the near future. On this note, I now open up for questions.

Conference Operator: The next question comes from Urian Rodin from Carnegie Investment Bank. Please go ahead.

Simon Mulder, CFO, Sensus Hutso: Good morning, Urian. Ariel?

Arjan, Analyst, Carnegie Investment Bank: Yes. Hello, everyone. First question is related to the

Conference Operator: Your line is now open. Please go ahead.

Arjan, Analyst, Carnegie Investment Bank: Good morning. Sorry, to the traffic market order. Do you see any changes in the rollout plan right now? Or is that in is the rollout plan intact?

Ivo Muninc, CEO, Sensus Hutso: Yes, the rollout plan is intact. As I mentioned, the major obstacle has been the approval we call the golden sample, sort of technical approval by the customer.

Arjan, Analyst, Carnegie Investment Bank: Okay. There were some strange things happening here. So repeating the question, the order to traffic the rollout plan, yes.

Ivo Muninc, CEO, Sensus Hutso: Okay. Now the rollout plan remains unchanged. Do you hear me, Arjan? Just please confirm. Hello?

Tim Ehlers, Analyst, Kepler Cheuvreux: Hello?

Ivo Muninc, CEO, Sensus Hutso: Hello? Can you hear me, Urjan? Operator, can you please step in?

Arjan, Analyst, Carnegie Investment Bank: Yes, yes, now I hear you.

Ivo Muninc, CEO, Sensus Hutso: Okay. Now the rollout plan remains unchanged. The major hurdle we had to overtake was the acceptance of the Golden Sample and from there on the rollout

Simon Mulder, CFO, Sensus Hutso: plan Hello?

Arjan, Analyst, Carnegie Investment Bank: Yes, I hear

Ivo Muninc, CEO, Sensus Hutso: you. I’m not sure, operator, can you step in if there’s an issue with the line?

Conference Moderator: Yes. There seems to be some delay between the questions online and the speakers. So, Arjan, can you please try to repeat your question one more time? There seems to be some problems on the telephone line. So,

Arjan, Analyst, Carnegie Investment Bank: Okay. It was about the rollout plan for the traffic market order. Is there any changes to that as you see today relative to before?

Ivo Muninc, CEO, Sensus Hutso: The short answer is no.

Conference Moderator: Okay. Let’s try with the next question and see if the line is working better.

Conference Operator: The next question comes from Tim Ehlers from Kepler Cheuvreux. Please go ahead.

Arjan, Analyst, Carnegie Investment Bank: The second question, the reason for the buyout of The U. S. Minority stake?

Tim Ehlers, Analyst, Kepler Cheuvreux: Okay.

Ivo Muninc, CEO, Sensus Hutso: Okay. Maybe check with another

Tim Ehlers, Analyst, Kepler Cheuvreux: Hi, good morning, gentlemen. Can you hear me?

Simon Mulder, CFO, Sensus Hutso: Yes. Yes, we can.

Ivo Muninc, CEO, Sensus Hutso: Can you hear us?

Tim Ehlers, Analyst, Kepler Cheuvreux: Hello.

Conference Moderator: We have a problem with the telephone line. So I think we hand the conference back to the speakers for any written questions at this time.

Tim Ehlers, Analyst, Kepler Cheuvreux: Yes. Okay, great. Yes, I think there’s a little bit of a delay. But okay, I’ll just ask my questions and then step back.

Simon Mulder, CFO, Sensus Hutso: Yes.

Conference Moderator: So Tim, can you just repeat your question and see if we can have the speakers answer? If that doesn’t work, I think we go over to any written question. But let’s try one last time.

Tim Ehlers, Analyst, Kepler Cheuvreux: Okay. Then I just have three questions that I’m going to ask them and then step back. So the first question would be, you already mentioned the investments you’ve done in 2024, especially in The U. S. Could you elaborate a little bit where we stand at with the investment plan?

So what can we

Conference Moderator: Now let’s go to any written questions. So I hand the conference back to the speakers. Okay.

Ivo Muninc, CEO, Sensus Hutso: I hope you can hear me. Let’s maybe go first to the question was asking, which was about the rollout plan of traffic fare get. I answered there is no delays or the delay is caused by the acceptance of what we call the golden sample by the customer. We are past that gate now. And from there on, the rollout of the installation of the systems and the service and maintenance part of the contract will remain unchanged.

And that will start happening and the rollout will start happening in Q2. On The U. S. Minority shareholding, what needs to be understood here is that these were former employees, they were holding a minority share. We had a core option to buy the stock, so it was not an obligation, but we decided to execute on that core option and paid the $44,000,000 in order to get 100% ownership in this very strategic entity for us.

There was another question, are there any one off costs related to this? The answer there is, of course, they are. They are in the P and L. I would say that’s approximately SEK 5,000,000 in Q4. On the investment plan on the fixed assets in operation, I guess, in The United States, maybe that’s something you

Simon Mulder, CFO, Sensus Hutso: can talk to, Simon? Yes, Tim asked that question and when he fell off, so I presume he was wanting to ask how do we see the investments for 2025 happening. Yes, I would say that we will continue in a similar level of investments like in 2024 with the expectation of course, of new orders coming in, we will need to invest in construction and in technical equipment to support those programs in 2025 and thereafter. I hope that answers your question.

Ivo Muninc, CEO, Sensus Hutso: Please put your questions in writing. That probably works due to the bad line probably better.

Simon Mulder, CFO, Sensus Hutso: Okay, we have questions from Tim. What can we expect with regards to the investments in 2025, similar levels than 2024 or lower? I think I just answered that, it’s going to be similar levels and let’s hope that it will be similar levels because it means that the order intake will continue as it has done. Saudi Arabia, is the in vehicle project already part of the new agreement? And is it fair to assume that if you have agreement about the other systems, it will be very substantial and are the projects already secured and signed?

Okay.

Ivo Muninc, CEO, Sensus Hutso: Let me take that one. It’s actually three questions. On the Saudi project, the Infahippe project, that is the first order we got under a framework agreement for the service and maintenance of the 1,200 in vehicle systems we have delivered to Saudi Arabia. The order was SEK 27,000,000 for only one year with a fairly limited amount of vehicles under that. The framework is for three years, so we would expect a year two, a year three to come in, but also a somewhat higher value there because more vehicles will be under the framework agreement.

And saying that it’s for three years, but you can imagine that that might be prolonged going forward because the technical lifetime of these of our products are typically quite long. Okay. So that’s one question. Is it fair to assume that if you have agreements about the other systems, it will be very substantial? I commented to that before.

There is four framework agreements in place, one for the in vehicle, one for the fixed speed, one for the mobile speed and one for the red light. Saudi Arabia is right now in a phase of investing in their infrastructure or part of their efficient 02/1930. Whatever they do will be very substantial because they almost start from zero. And we are one of the few suppliers that are qualified to deliver and we have the framework agreements in place meaning that all the pricing, commercial, logistics, obligations and commitments are already agreed upon with the customer. So it’s waiting for the orders and that is a timing thing.

Okay. So that I think also answers the other question and are the purchase already secured and signed? No, the framework agreements are signed. So from that perspective, yes, signed. The orders will come under these framework agreements.

Okay. Iowa, are there plans in place already how to overcome the issues here and any updates on the timeline? Yes, there are plans in place. As with any governmental customer, you can imagine that these processes are not very swift. So it takes time for these to be executed.

But concretely, we are installing or actually ordering new trailers that can go on the mobile locations, which are still open. So we can and we have the red light enforcement still in place. So there is some recoveries going on, but I do not expect us to recover the full business in Iowa within 2025. I cannot say anything about 2026, but 2025 we will see part of the shortfall in the revenue in Iowa. Notwithstanding that, we have grown our managed services business in 2024.

And I do foresee this also to happen in 2025. Another question coming from Silver Schneiman. Could you give some more color on what the drivers are behind Iowa and higher end of your lower end and higher end of your guidance range and that we should watch out during 2024? Yes. I think if you look at the guidance, we say we arrive between SEK 700,000,000 and SEK 800,000,000.

And but also we retain the ambition SEK 41,000,000,000 going forward. It’s all about timing. So I think the most impact is actually coming from the Saudi orders when they will come in and the size about those, of course. And we will also see the impact of the timing in traffic fare guide. And, yes, that’s it.

And the recovery we see in the new cities and the going life of the new cities in The United States.

Simon Mulder, CFO, Sensus Hutso: Yeah, I think, Tim, you asked the question that in the guidance we don’t mention the part of the trash recurring part of the revenue. And that’s right, we didn’t provide any guidance on that. But I would say that in the ambition, we have 60% of trans recurring revenue. We are at that level almost when you look at 2024. So that is still something that we are targeting very much.

Of course, that being said, that if we end up on the higher end of the guidance, you can imagine that that is more system sales driven. So that could push down that metric towards the end of the year potentially. But on average, I would say similar kind of revenue distribution between recurring and non recurring. And I believe those were the questions in the

Ivo Muninc, CEO, Sensus Hutso: I think so. Operator, if you don’t have any other people waiting in the queue and there are no more written questions, Then I want to thank everybody and we’re hold on. There’s a new question coming in last minute here. Do you think the market is overreacting? I guess you’re talking about a stock market.

How are you going to get the stock to increase and not fall like it has recent years 56% in the last five years and 60% today? Yes, Matthias, I haven’t looked at the stock price quite frankly. We have a strategy in place, a plan in place how to grow this company in a sustainable way, a profitable way focusing on our recurring revenue. And we keep to that strategy because it’s creating value for the customer for our basically our shareholders, our investors. Overreacting, I don’t know.

We will see what happens in time.

Conference Moderator: There are no further questions at this time, so I hand it back to the speakers for any closing remarks.

Ivo Muninc, CEO, Sensus Hutso: Okay. Yes. Thank you very much for attending this meeting and looking forward to meeting you again in the next quarterly report. Have a nice day.

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